Co‐operation or Control? Capital Restructuring and Labour Relations on the Docks
| Author | Peter Turnbull,Syd Weston |
| Date | 01 March 1993 |
| Published date | 01 March 1993 |
| DOI | http://doi.org/10.1111/j.1467-8543.1993.tb00383.x |
Britrdi
Jourricil of Indiivtrial Relations
31
I
March
1993
0()07-1OKO
Co-operation or Control? Capital
Restructuring and Labour Relations
on the Docks
Peter
Turnbull
and
Syd
Weston
*
Final version accepted
7
February
1992.
Abstract
The abolition
of
the National Dock Labour Scheme
in
July 1989 resulted
in
a massive restructuring
of
Brituin‘s ports which in many respects hus
mirror-imaged that
of
the rest
of
the economy over the previous decade.
In
this context, the growth
of
stnall firms
in
the port transport industry since
1989, and in purticulur the emergence
of
workers’ co-operatives, can only
be explained as a process through which
cupitul
has sought to regain
or
strengthen control over rhe luhour process and offset the (highly variable)
costs
of
fluctuuting labour detnund. The result has been increased
productivity and control for the port authorities that own Britain’s ports.
1.
Introduction
As
the
1980s
drew to
a
close, the last major ‘set-piece’ confrontation
between management and labour,
so
characteristic
of
the Thatcher
decade, unfolded on the waterfront. When the government finally
determined
to
end the registered dockers’ ‘statutory monopoly’
of
all
‘dock work’ in Scheme ports, administered through a system
of
joint
control
via
the National and
20
Local Dock Labour
Boards,
the intention
was quite clearly to restore managerial prerogative:
There are no comparable legal constraints
on
employers’ freedom
to
manage
their work force effectively in any other industry.
By placing key decisions over
employment in
(lock
work
in
the
honrls
of boards
where
unions can block vital
chunges,
the
Scheme deprives rvnployers
of
their responsibility
for
effective
nianagenierit.
B-v
encouraging
the
view
that their
work
wid
pay
is
unrelated
to
the
performance
of
the
bitsiness in which
they
are ernployed,
the
Schurne undermines
*University
of
Wales
Collcge
of
Cardifl
I
16
British
Journal
of
lndustriul
Relutions
workers’
incentives
to
itn~~rove
e&cieti(y.
(Department
of
Employment
1989:3;
original
emphasis)
As
the Government’s White Paper continued, the Scheme ‘serves
to
undermine efficiency and responsible industrial relations’ (p.
32),
and
therefore nothing short of abolition would restore the competitiveness of the
industry and establish, at long last, a direct relationship between
the
individual docker and his employer. On this basis, co-operation and a more
responsible attitude was expected to be forthcoming from the once militant
and supposedly ‘bloody-minded’ dockcr.
However, rather than develop a new relationship with the ex-registered
docker, management has, in the main, sought co-operation
in
the re-
structuring
of
dock work from a predominantly
new
‘port operative’ labour
force, composed of either new recruits from outside the industry and/or
existing workers previously employed
on
‘non-dock work’ activities such as
maintenance
or
other ancillary trades. Without the National Dock
L,
b
our
Scheme, ‘dock work’ can now
be
performed by any grade
of
port worker,
and at some ports (e.g. Swansea and Southampton) even management
grades have been required to work cargoes. Overall, out of a pre-strike total
of
9319
registered dockers, more than
6500
had been declared redundant by
the end of January
1991.
What the employers expected to develop
in
the aftermath of the 1989
national dock strike, ‘and
fast,
is much greater loyalty to the individual
enterprise’ (Nicholas Finney, former Director of the National Association
of Port Employers, in
Port Devefopment International,
September 1989).
From a position
of
ascendancy, and with a ‘green’ labour force, employers in
many ports have been able to impose new work practices with complete
flexibility in respect of both manning levels and allocation/transfer (see
Turnbull
1991).
However, the option of mass dismissal was feasible only
where dock operations were relatively unskilled. Contrary to the usual
assumption that ‘any man
in
possession of muscle and sinew’ can perform
dock work, many cargo handling operations require a substantial degree
of
skill and above all experience
if
the work is to be performed quickly,
efficiently and safely. Many ports were therefore left with little
or
no option,
at least in the short term, but to retain their ex-registered labour force.
In
these ports the ‘peaceful revolution’ of Britain’s ports, as the
Employment
Guzette
(1990:36W)
recently described the ‘transformation’ of the
in-
dustry, was neither peaceful
nor
revolutionary. Southampton, for example,
was
faced with an overtime ban almost immediately after
the
1989 national
strike was concluded
in
the employers’ favour, while Liverpool dockers
struck work
in
February 1990 when a new company, Huskisson Cargo
Terminals, was believed
to
be paying its
22
workers recruited from outside
the industry lower wages than the port average. At a more mundane level.
‘revolutionary’ new terms and conditions were imposed on dockers at
Hull
and Bristol, but to no avail
-
dockers at
Hull
continued the age-old practice
of
‘welting’ (where only half the gang works the cargo although all are being
Co-operation
or
Conrrol?
117
paid), and dockers at Bristol were able
to
exploit the new manning and
bonus pay arrangements such that pay outstripped productivity, leading to
an
increase
in
unit
labour costs. Elsewhere dockers simply refused the new
terms and conditions on offer, the most notable examples being the South
Wales ports of Barry and Newport.
Where co-operation between management and labour has not been
forthcoming, port authorities have sought other ‘solutions’. At Bristol and
Glasgow, for example, the port authorities retained their stevedoring
operations but ‘phased out’ the ex-registered dockers to allow on-the-job
training
of
new recruits. At Glasgow this process took place immediately
after the 1989 national strike, while at Bristol
it
was undertaken during the
autumn of 1990. At Hull, the owner of
the
port and the principal stevedore,
Associated British Ports (ABP), decided to withdraw completely from all
cargo handling and allow new independent stevedores to undertake this
work. These companies recruited both outside the industry and from the 250
ex-registered dockers made redundant by ABP.
But the most unexpected ‘solution’ to managing a recalcitrant dock labour
force with skills and/or experience which make them neither immediately
nor easily disposable has been to allow the dockers to establish their own
company. The
first
report
of
dockers setting up their own company came on
10
July 1989 at Aberdeen, the day the national dock strike commenced.
Shortly after, during the strike itself, dockers at Greenock reached an
agreement with the Clyde Port Authority
to
set up a co-operative. The
largest dockers’ co-operative was established at Southampton
in
February
1990, another ABP port. Two more ABP ports
-
Barry and Newport
-
followed suit, and the last co-operatives began operations
in
January 1991 at
Tees Port and Goole in the North-East.
Between them, these companies cniploy over
400
employees, over
350
of
whom are ex-registered dockers. They range
in
size from less than
20
dockers at Greenock to 100
or
more at Southampton and Tees. Some
compete with other independent companies in the same port, while others
are the sole
or
principal cargo handling company
in
their particular port.
Some handle just a single cargo, while others compete on all general break-
bulk trades. In each and every port, however, the establishment of a
workers’ co-operative represents a complete or partial discharge by the port
authority of its responsibility for cargo handling and, more importantly, the
off
loading
of
(highly variable) labour costs onto the dockers themselves.
Furthermore, the discharge of these responsibilities does not necessarily
imply a
loss
of managerial control. In this respect, a principal characteristic
of
the waterfront co-operatives has been an attempt by management to
sustain,
or
in
some instances to regain, control over the labour process. In
effect, inadequate
labour
control has been replaced by a (more effective)
system
of
commercial
control, and the long-term future of the dock workers’
co-operatives will depend not only
on
their own efficiency but on the
continued support
of
the relevant port authority. The development
of
workers’ co-operatives on the waterfront must therefore be considered
in
1
18
the wider context of capital restructuring
in
the 1980s, and
in
particular
the growth
of
small firms and new (labour-only) subcontracting arrangc-
ments.
British Joiirnul
of’
Iiidusrrial Relations
2.
Capital restructuring and workers’ co-operatives
One of the
most
notable features of economic restructuring in the British
economy throughout the 1980s has been the growth of small firms. In
manufacturing, the number of small firms (with fewer than 100 employees)
increased from 96,768 to 127,219 between 1979 and 1984, and these firms
increased their share of total manufacturing employment from 20.4
to
27.1
per cent and their share of manufacturing output from 17.8 to 22.8 per cent
(Oulton 198753-4). Although the number
of
small firms continued to
increase throughout the 1980s (Department
of
Employment 1990), how-
ever, large firms still dominate the economy. What has changed is the
wuy
in
which they dominate. Restructuring has thus been characterized by both
disintegration and integration, with operations being broken down
into
smaller units but within the context
of
large firms retaining overall control
and command (Amin and Dietrich 1990; Blackburn 1990). lnstead of
controlling productive activity through vertical integration, for example.
many large firms have subdivided their core activities into strategic business
units (SBUs) and moved towards a system
of
‘quasi-vertical integration’,
especially
in
the automotive sector (Turnbull 1988).
More generally, the growth
of
small firms and the development of new,
or
more extensive, subcontracting arrangements has been associated with the
‘unleashing’ and progressive reinforcement of market forces by successive
Conservative governments. In specific industries such as construction and
steel, the growth
of
(labour-only) subcontracting can be more directly
attributed
to
specific government action, such as deregulation and privatiza-
tion respectively (Evans 1990; Fevre 1986). In the ports, however, the
legislative umbrella of the National Dock Labour Scheme (NDLS) checked
the growth of small firms. In fact, it created the opposite tendency: between
1983 and 1987, for example, the number of registered employers fell
from
156 to 141. Collectively, these firms, operating in
60
Scheme ports, handled
around 70 per cent of all
UK
traffic (by weight). In contrast, at ports outside
the NDLS the process of capital restructuring mirrored that
of
the rest
of
the
UK
economy.
In
1987 there were over 600 employers operating in Britain’s
160 ports, illustrating that the non-Scheme ports/employers were both more
numerous and commercially less significant. Moreover, while the number
of
Scheme employers declined between 1983 and 1987, the number
of
non-
Scheme operators increased by over 120 (BPFINAPE, 1988: 13). Overall,
small firms employing fewer than 25 employees accounted for over
60
per
cent
of
all employers in 1987 compared with exactly
SO
per cent
in
1983, with
the number of firms
in
this category doubling over this period. One of the
major effects of deregulation has been to fragment the structure of Britain’s
Co-operation
or
Control?
119
port transport industry,
with
the re-emergence of small ‘labour-only’
stevedoring companies marking a return to
the
operational structure that
characterized the industry prior to the decasualization of registered dock
workers
in
1967
(see Turnbull and Weston
1991:3-8).
The existence of small firms is inextricably linked with the practice
of
subcontracting,
a
situation where the firm offering the subcontract requests
another firm
to
undertake production
or
provide
a
service according to
specifications
or
plans provided by the firm offering the subcontract
(Holmes
1986:84).
Understandably, subcontracting is generally viewed as
being ‘functional’ for larger companies which are able to dominate and to a
large extent determine the environment faced by small firms.
As
a result,
pay and conditions
of
employment are likely to be inferior at smaller firms.
However, size is secondary to the relationship with the client company and
the wider economy, as it is these relationships ‘which determine the
organisational and social frameworks of the enterprise’ (Curran
1990:
130).
The more important questions are therefore
why,
and not whether,
subcontracting arrangements exist,
how
they operate in practice, and
whut
impact
this has on the internal organization
of
the subcontractor and the
terms and conditions
of
employment of its work-force.
Holmes
(1986:89-95)
has suggested three possible explanations for
subcontracting, each of which
is
applicable to the docks. The first is the
structural and temporal stability
of
product markets, where uncertain
demand is
likely
to
favour the development
of
sub-contracting. The ports
are renowned for such uncertainty and instability, the result of which was the
daily or even hourly engagement of labour under the casual employment
system. The second factor identified by Holmes
(lY86:91-2)
is production
technology and labour process organization. On the docks, port employers
were traditionally labour-only subcontractors, who would hire berth space
and equipment from the relevant port authority but would contract directly
with the shipping companies
or
agents
for
cargo handling business.
In
general, port authorities would not engage
in
stevedoring, despite the fact
that they were responsible for the provision and maintenance
of
quays and,
in many ports, cargo handling equipment. The main reason for this was that
port facilities do
not
represent the most important capital input in the
process of transferring goods from sea to land. Ship berthing at the quay
represents a greater cost per
unit
of time than either the berth or the
auxiliary assets, and consequently the presence
of
large shipping companies
and other port users
in
the transport process makes
it
profitable for the
complementary factor
of
labour to be under the control of the shipowner
or
port user.
For
example, the ship operator
is
more
likely
to know the
appropriate manning levels and the times at which labour will be required,
and
will
have a greater incentive to ensure that the fastest service
is
used.
Shipping companies would therefore employ their own labour directly at the
port,
or
more usually would contract with a specialist stevedoring company
which would regularly draw from a select pool of labour but would employ
those workers on a strictly casual basis (see Jansson and Shneerson
1982:25).
120
Rritish Journal
of
Industrial IZelariotu
The most important reason
for
the development
of
subcontracting on the
docks, however, was the structure and nature
of
labour supply conditions,
the third factor identified by Holmes
(1986:92-5).
Under this category
Holmes suggests four specific variables, each
of
which was crucial on the
docks. First, subcontracting can be used to minimize and control
1,
‘i
b
our
costs, with the large companies (the ship owners) imposing a price and
norms
of
production which the subcontractor (the stevedore) is obliged to
accept. Second, subcontracting can ensure that labour becomes a variable
cost
of
production. This was clearly the case on the docks under casu a
I’
ism,
but labour became a ‘quasi-fixed’ cost under the
1947
Scheme (as the
employers financed the maintenance of the casual labour pool
on
a collective
basis via a levy
on
their wage bill), and a ‘fixed’ cost under the
1967
Scheme
with permanent employment. Third, subcontracting can facilitate manage-
rial control over the labour process, which on the docks was exercised on
a
daily basis at the ‘call stand’ (hiring point). Again, permanent employment
eroded this particular facet
of
rnanagerial control. Finally, subcontracting
can
be
used to ensure an adequate supply of labour, where reserves of labour
not normally available can be mobilized. Casualism provided such a pool;
permanency did not.
On the docks, then, subcontracting was a response
to
both the external
environment and technologicalloperational conditions, but more impor-
tantly was instrumental in management’s attempts to control cost, ensure an
adequate supply of labour, and preserve inanagerial prerogative. Perma-
nent employment, however, precluded the extensive
use
of subcontracting,
leading to the rapid demise of (labour-only) stevedoring companies and the
concentration
of
cargo handling operations
in
the hands of a small number
of
large employers
or
the port authority itself (see Turnbull
et ul.
1992:61L3).
Unsurprisingly, the repeal of the
NDLS
has precipitated a proliferation
of
small stevedoring companies as part of
a
dramatic process of capital
restructuring (Turnbull
et
af.
1992:
175-213).
Adopting the framework developed by Shutt and Whittington
(1987),
the
restructuring
of
Britain’s
major
port operators, and the port authorities in
particular, can be categorized as one or more
of
three processes.
1.
Decentrulizatiott.
Operations are broken up into smaller units but
are
retained under the same ownership.
2.
Detachment.
Large firms cease to own units but still maintain commercial
links with them through some form
of
franchising
or
licensing agreement.
3.
Disintegration.
Large firms cease to own units of production
but
instead
maintain control through market
or
contractual power and/or the ability
to repurchase.
As
with decentralization and detachment, this need not
imply a
loss
of
control -in fact, quite the opposite.
Restructuring
is
therefore a varied and complex process, especially where
detachment and disintegration are the dominant responses. However,
the
capital restructuring that has taken place in other sectors of the economy
over the past decade has been condensed into less than
18
months on
the
Co-operution or Control?
121
waterfront. Unlike other sectors of the economy, then, where the process of
industrial restructuring has been somewhat opaque, characterized by both
change and continuity in the face of worker resistance and economic
or
structural constraints, the port employers have been able to restructure
the
docks with virtually
no
constraints, especially as many dockers were forced
to return to work on terms dictated by management following the defeat of
the T&GWU
in
the
1989
national dock strike.
In
short, the process of
restructuring has been both transparent and certainly more expeditious than
in
the rest of the economy.
In
this respect, analysis of the docks brings the
processes of capital restructuring during the
1980s
into sharper focus,
especially
if
the focus is directed towards the growth of (labour-only)
subcontracting undertaken by small firms
in
general and by worker co-
operatives
in
particular.
3.
Co-operatives on the waterfront
All the waterfront co-operatives
in
Britain’s ports are ‘labour-only’ com-
panies, operating as a labour agency for the relevant port authority with
varying degrees of autonomy over their own operations (cargo handling)
and (commercial) dependency on the port authority. A distinguishing
feature of these co-operatives is therefore not
so
much their origin
or
structure’ as the extent to which they complement and service the activities
of the relevant port authority. The more complete is the dependency of any
co-operative on the
firm(s)
offering the subcontract, the more
likely
it
is that
‘such co-operatives are
a
vehicle by which capitalist companies can enhance
the exploitation of labour’ (Mellor
etal.
1988:82).
All small firms engaged
in
subcontracting arrangements face this problem
to
some degree, as all small
firms are affected more by, and have less control over, their external
environment. But the impact on workers’ co-operatives can be more acute
if
the co-operative is to be anything more than a typical ‘small business’ and
if
it
is
to
pursue co-operative principles (Mellor
et
ul.
1988:65).
Only by
developing a degree of autonomy and independence,
or
at least mutual
dependency, can this be achieved (although the workers may still be able to
control the labour process within the co-operative itself). As Mellor
et
ul.
(1988:81)
caution,
‘If
the previous employer offers material assistance
or
places orders, there is a threat of dependency.’
At Greenock the co-operative is completely dependent on the port
authority
in
both a commercial and an operational sense. The co-operative
was formed by
19
dockers during the last week of the
1989
national dock
strike after the Clyde Port Authority (CPA) had put forward proposals for
new working arrangements at both Glasgow and Greenock. These included
a reduction
in
the number of foremen, variable manning levels (to be
determined by management), complete flexibility of labour across tasks and
grades, the abolition of welting (locally known as ‘spelling’) and other
‘restrictive practices’, reduced piece-rates, overtime orders to be permitted
122
at any time before
3
p.m. rather than 8 a.m., and a much stricter disciplinary
procedure. In addition, the senior shop steward was no longer to be
accorded full-time status. These proposals were vehemently resisted by
the
Glasgow dockers, despite the threatened alternative
-
dismissal. At
Greenock, where the dockers were also informed that failure to agree to
the
new terms would mean ‘the locks go on the dock gates’, the dockers
themselves put forward the idea of a co-operative.
After some initial apprehension, CPA accepted the idea of a co-operative
in which each docker would invest
f4000,
half of which was deposited as a
bond (on the insistence of the port authority). The new arrangement created
considerable friction with the dockers at Glasgow, where
20
dockers were
dismissed on the conclusion of the national strike and the remaining
40
were
‘phased out’ after refusing to agree to the terms demanded by the CPA.
Glasgow now has
only
21
‘port operatives’, including two foremen, with
30
workers employed on other trades but also expected to perform dock work
if
necessary. These men are further supplemented, as required, by
the
Greenock co-operative, which itself holds a register of
a
further
75
men
(including many ex-registered dockers) who are called upon to work the
occasional cargo. During peak periods the co-operative has supplied
65
men
from this list, all of whom were originally vetted by the port authority,
although only 19 men are
in
‘full-time’ employment. All the labour supplied
by the co-operative is supervised and directed by the port authority.
The new working arrangements reflect the massive fluctuations in port
labour requirements on the Clyde. As the operations manager put
it,
’The
system only works because we have two systems
-
the co-op
in
Greenock
and a direct labour force with flexible working at Glasgow.’ The latter are
guaranteed first preference
for
employment, and the co-operative has found
life tough during its first year
of
operation, despite attempts by the CPA
to
attract more trade to the Clyde. According
to
the former shop steward,
‘Downtime is killing us at present’ (December 1990). Nevertheless, for
the
dockers themselves the co-operative was seen as
the
best option. Many
would have ‘volunteered’ for redundancy rather than accept the terms
offered by the CPA, whereas with the co-operative they received
f35,000
severance pay plus the possibility of being a member of a new company and
retaining their ‘old job’. Their pay is much lower than when employed as
permanent workers of the CPA under the Scheme, and they have no control
over when, and
in
many respects how, their labour is to be utilized. But for
many of the dockers there was
no
alternative.*
To
quote the former steward
at Greenock who initiated the co-operative,
British
Journal
of
Industrid
Relations
Many dockers, especially the activists. were
prsonu
nor1
gratis.
There was too
much bad blood for management
to
keep thebe men on, and management knew
that
if
they did they would continue to control the work. The co-op was the only
option.
Labour problems continued to plague the
UK’s
largest port operator,
Associated British Ports (ABP), following the abolition of the Scheme.’ At
Co-operrition
or
Control?
123
many of its
21
ports all stevedoring operations had traditionally been
contracted
to
independent operators, many of whom operated a dedicated
service for their own businesses (such
as
Vickers at Barrow, Pandoro at
Fleetwood, and British Steel at Immingham and Port Talbot). Where ABP
performed some general cargo work alongside these independent operators,
all its former registered dockers were dismissed almost immediately on
repeal of the Scheme
(e.g.
Fleetwood, Silloth and Lowestoft). Where ABP
was the principal stevedore but where cargo handling operations were
relatively unskilled, it was possible to dismiss all the ex-registered dockers
and simply redeploy other port grades
to
dock work (e.g. Cardiff and
Swansea).
It
was only in those ports where ABP retained a substantial
stevedoring business
und
where the company was dependent
on
the
skills
and/or experience
of
the workforce,
or
was commercially bound
to
a
major
customer(s). that the dockers were retained
in
any significant numbers (e.g.
Hull, Southampton, Barry, and Newport). Nevertheless, ABP’s intention
to remove itself totally from stevedoring and become a ‘landlord’ was still
the overriding objective. The process by which this was gradually effected,
witnessed by the fact that ABP now employs less than
20
former registered
dockers out of a pre-strike total of
1720,
has been essentially
ad
hoc,
evolving out
of
a complex matrix of skill shortages, customer relations,
contractual obligations and, most importantly, industrial relations prob-
lems. From out of this matrix there have emerged three dock workers’ co-
operatives: at Southampton, Barry and most recently Newport.
From its inception. the post-strike agreement concluded between the port
management and the T&GWU at Southampton created major problems
over working arrangements, especially in respect of both flexibility and
overtime working. ABP could not at this time simply contract out the
stevedoring operations
to
an independent company, as the cargo handling
operations demanded certain skills which only the existing work-force
possessed. This
is
not to say that such a move was impossible,
as
the dockers’
skills could have been acquired by a new work-force given time. In the short
term, however, such a move would clearly increase turn-round times and
impair the quality
of
service, creating significant customer dissatisfaction.
These problems were compounded by the fact that management could
(would) not guarantee the dockers continuity of their existing work in the
port, arguing that inefficient working practices and customer dissatisfaction
could result
in
customers leaving the port.
It
was shortly after a meeting at
the end of November
1989
that management took the initiative
to
‘sound
out’ the dockers
on
whether
or
not they would like to form their own
company
to
undertake the stevedoring operations they currently carried out
for
ABP. The words
of
the port manager to the local union official were:
‘The dockers have always said that we can’t manage the operations
-
well
now is their chancc
to
manage it themselves.’
This offer came as no surprise to the local union official
or
the dockers,
given the rumours and ample evidence elsewhere that ABP was determined
to absolve itself of
all
cargo handling responsibilities. For the dockers,
124
forming their own co-operative had the advantage of full redundancy pay
and the prospect
of
continued employment. Failure
to
accept would involve
a continuation of the existing (unsatisfactory) agreement and living
with
the
insecurity of knowing that
ABP
might eventually contract out the work to an
independent company. In the longer term there was also the prospect
of
reduced severance pay (f20,000 rather than
f35,000)
after January
199
1,
and it does not take much stretch of the imagination to understand why, at a
mass meeting, all the dockers thought their best option was to take
redundancy and form their own company. The process itself, however, was
not
so
straightforward.
ABP
stipulated that the licence for general stevedoring operations had to
be won through a competitive tendering process. Submissions would have
to
be made detailing the costs
of
the operations to be carried out by
the
new
company. and
ABP
management laid down various ‘ground rules’ which
a
new company would have to fulfil regarding the takeover of the stevedoring
operations. These rules specified that the new company would be operating
under licence with
ABP
at
a cost currently set at $25,000 per annum. The
new company would need to have a professional management team, and
ABP
spelt out its preference
for
a
company
where the employees had a
firtunciul
equity holding.
The rationale behind this was that
ABP
wanted the
work-force to have a ‘commitment’to the new company, as in the short-term
they could not risk the dockers simply accepting severance pay and
then
quitting the industry, leaving
ABP
unable to fulfil its existing contractual
obligations with shipping companies. Other requirements were that equip-
ment
was
to
be provided by the new company, although
ABP
were prepared
to hirellease at fair market rates all present equipment, including cranes and
buildings; that the new company would take out insurance indemnity to
safeguard
ABP;
and that a detailed plan of the management structure would
be submitted to
ABP
including
the
names
of
all individuals who would be
holding key positions. The final, and possibly most contentious, criterion
stipulated by
ABP
was that the new company had to indicate how it intended
to cover ‘fluctuations in labour demand’.
ABP
itself had been the first major
port employer to promise no return to casualism following the government’s
announcement to abolish the Scheme, although by becoming a landlord the
company had created a fertile environment for casual hiring to re-emerge.
The local port manager
at
Southampton took some pleasure
in
throwing the
ball
back into the dockers’ court
-
as
he
told the local union official, ‘let’s
see you do those operations without reverting
to
casualization’.
The new co-operative fulfilled
ABP’s
ground rules
to
the letter, and the
formation, structure and financing of the new company were agreed at
a
mass meeting of the port employees on
27
February
1990.
The transfer of
cargo handling operations to Southampton Cargo Handling involved the
redundancy of 193
ABP
employees, including 127 ex-registered dockers
(the remainder being madc up from crane drivers, shed clerks, checkers and
foremen).
A
further condition laid down by
ABP
was that
all
redundant staff
should be considered for employment in the
new
company, and all but a few
British
Journal
of
Industriul Relutions
Co-operation
or
Control?
125
wished
to
be part of
the
co-operative, which was to have a total labour force
of
125,
including management. Each individual therefore had
to
submit an
application form for employment which had to be accompanied by a post-
dated cheque for
f10,000.
This wa\ to
be
in
the form of
$2,000
in
shares and
$8,000
in
loan stock. Out of the existing
127
ex-registered dockers,
90
were
chosen to join the new company. Total discretion
in
selection of
the
work-
force was given to the newly appointed managing director, a former ABP
manager.
Throughout the negotiations on the formation
of
the new company and
the tendering process, the local T&GWU officials were fully involved. The
union even gave office space and administrative assistance to the manage-
ment team of the new company during the formation period. At one stage it
was even suggested that one
of
the directors of the company should be the
T&GWU Regional Secretary, but this was overruled after consultation with
the General Secretary. The explicit involvement
of
the local union officials
has produced
a
continuity
of
100
per cent union membership in the new
company, and, just as important, a recognition by the work-force that the
involvement of the union had produced the best possible outcome for the
dockers. An agreement between the new company and the T&GWU was
drawn up and then signed by the two parties. The agreement itself covers
terms and conditions of employment and, according
to
the local official who
signed
it,
encompassed everything that ABP had always desired
in
terms
of
flexibility, shift working and overtime working. While
the
new pay scales are
superior to those that applied under direct employment with ABP, actual
earnings are less favourable once previous bonus payments are taken into
account. Fluctuating labour demand, as at Greenock, is met by ‘casual
labour’ engaged
on
a
daily basis whenever trade demands. In order to meet
this particular condition stipulated by ABP,
a
list of
68
redundant dockers
willing
to
offer their services
has
been drawn up. A significant difference,
however, is that this register
ic
controlled by
the
local
union
official,
reinforcing the involvement
of
the
local union and offering a further
protection against ‘uncontrolled casualism’. According to one local
T&GWU official.
We
were left
with
the choice
of
either using agency
labour
or
ex-registered
lads
made redundant
-
we chose
the
latter.
To
be
honest, the thought
of
reverting
hack
to
this form
of
casualisation
really
hurt,
but
at
least we
were
controlling the
casual element
and
making
sure
that
their pay
and
conditions
are
comparable
with
the
full-timers.
Local union involvement indirectly prompted the establishment
of
a
workers’ co-operative at Barry. Even though the Barry dockers did not
participate in the national strike of
1989,
and despite the fact that
management claimed at the timc to ‘have the dockers over a barrel’, ABP
was unable to negotiate a satisfactory agreement with the dockers. Twenty-
two
of
the
66
former registered dockers were made redundant
in
July
1989
and other port grades had been employed
on
dock work, but management
I26
also wanted the total regrading of ex-registered dockers, with full flexibility
and lower wages. On several occasions agreement seemed near, but, as
one
of
the dockers put it, ‘ABP kept moving the goal posts.’
In
exasperation,
ABP attempted to force the issue of new working practices by writing to
every docker with an ultimatum
-
either accept the new terms or take
redundancy.
On
the advice
of
the local union official, the dockers refused to
sign the new contracts. According to the shop steward, ‘ABP wanted our
souls
-
they didn’t get them.’
This
left
management
in
something of a quandary. Barry is the sole
UK
port of entry for Geest banana ships, and, although
the
work itself
is
described by the Managing Director
of
ABP
as
a ‘grunt cargo’, involving
few,
if
any, specialist skills (Sir Keith Bradley,
Port
Development
Innterm-
tioriul,
September
1990),
experience and familiarity with the cargo and
vessels results in high levels of productivity. The ’productivity gap’ between
registered dockers and other port grades assigned to cargo handling
following the abolition of
the
Scheme was all too apparent to management
(as the two groups continued to work separately, in different hatches of the
ship), and ABP faced severe financial penalties on the contract
if
the
company failed to provide a satisfactory service. In short, ABP could not
simply sack the dockers, and the dockers knew this. In the words
of
one
docker, ‘They could bring
in
new labour but they would have to work the
ships
24
hours a day to turn them round on schedule, and that’s very
expensive.’ At the next meeting between the two sides, management
suggested the idea of a co-operative, an idea again born more of
desperation than careful deliberation.
Having failed
to
bludgeon the dockers to accept flexible working and
lower pay, there were now effectively three options available to the
workforce: the new ABP terms, severance and total withdrawal from the
industry, or establishment of their own company. But management could
not countenance straightforward severance and the
loss
of the ex-registered
work-force, as a letter from the port manager
to
each and every docker made
quite clear:
Britidh
Journul
oj
lndustriul
Kelutiorts
It
is essential that you should formally accept the [new] terms
on
offer at
a
very
early date.
If
you are unwilling to do this,
the only alternntive
would
be
for all
former Registered Dock Workers to leave
ABP’s
employment and set
up
a
co-
operative with whom
A
BP
could
contract for the provision
of
stevedoring services
for
the
Geest truSJic.
I
must stress that
you
have no alternative but
to
accept one
of
these
two
options. (Letter dated
4
January
1990;
emphases added)
Unlike Southampton, therefore, where the co-operative secured a licence to
handle cargo for both existing and any new customers
directly,
the
co-
operative at Barry was to be a labour-only contractor to ABP. In short. the
Barry dockers were not to be granted a licence as an independent operator,
and would therefore have no direct commercial links with Geest.
Management uncertainty and frustration was illustrated in the negotia-
tions that took place during the formation
of
the co-operative. In the early
C‘o-operation
or
Conrrol?
127
stages
in
particular, management was less than helpful, refusing to supply
much necessary information. At one stage the dockers even visited a local
dairy
to
determine the cost
of
recharging a battery for
a
milk float, as these
are
a
similar size
to
those used on fork-lift trucks
on
the docks! At this stage
local management seemed more concerned
to
safeguard its commercial
interests than
to
facilitate the actual set-up of a dockers’ co-operative,
insisting on a ‘no-strike’ guarantee, a
f750,000
penalty clause for un-
satisfactory service which resulted
in
the permanent
loss
of the Geest
contract (and
a
f15,000
weekly penalty for temporary
loss
of business), and
a share value
for
the new company of around
g1.5
million (which would
mean that every docker would have
to
invest his
full
severance pay). The
negotiations themselves continued to be conducted in the adversarial style
of industrial relations under the Scheme, and matters came
to
a
head when
the dockers’ representatives attending the meetings arranged with (and by)
management were docked a day’s annual leave. Furthermore. the dockers
discovered that management had actually advised other ABP employees at
the port
to
ask their unions
to
block the proposed co-operative. The
T&GWU branch secretary then wrote
to
the Chairman
of
ABP
to
seek
clarification of the position, and a week later at the next meeting between
the dockers and local management the Personnel Director from London was
in attendance.
The
ad
hoc,
and
to
date ‘obstructive and adversarial’, approach adopted
by local management then gave way
to
a more expedient
and
direct
approach. Membership of the co-operative was now to be extended
to
all
ABP employees
at
the port, and a total of
80
workers was stipulated
to
cover
maximum labour requirements. While the
44
dockers were
to
be made
redundant, the other grades would be ‘released’
to
join the new company.
The engineering grades were informed by ABP that they had
no
future in the
port unless they
too
went into the co-operative, while the dockers soon
discovered that,
if
they were
to
be responsible for maintenance as well
as
cargo handling, they could not afford to subcontract this work and the co-
operative itself would not be viable. At Barry, unlike Southampton, ABP
wanted
to
discharge
all
maintenance
as
well as stevedoring operations
to
the
co-operative. The contrast between these two co-operatives, in respect
of
both membership and operational responsibilities, illustrates the complexity
of
detachment and disintegration
in
the ports since the abolition
of
the
Scheme. At Southampton, ABP provided a maintenance service for
equipment leased
to
Berkeley Handling, an independent stevedoring
company established during the
1989
strike, and
it
was feasible (and
economically viable) to extend this service to the newly formed co-
operative. At Barry, in contrast, ABP had no similar maintenance
obligations, and did not want
to
continue its own maintenance operation to
service just
one
company. Furthermore, the Barry co-operative has only one
major customer, which made
it
much easier for ABP
to
discharge all quay-
side operations. The ex-registered dockers reluctantly accepted open
membership, and Barry Stevedores Ltd, with maintenance grades and ex-
128
registered dockers working the ship together, handled its first vessel on
20
May
1990.
As the negotiations at Barry developed, then, a more consistent and
direct approach emerged from ABP. The company’s confidence in subcon-
tracting to a workers‘ co-operative was indicated by the fact that the Barry
dockers were required to invest only
f5000,
half the amount stipulated at
Southampton. At Newport, the latest
ABP
port to set up
a
co-operative, the
dockers were required
to
invest only
&2000.
ABP sought
a
similar structure
at Newport
to
that adopted at Barry,
with
both stevedoring labour and
maintenance grades included, but the dockers refused to accept this
arrangement.
As
a
result, the agreement at Newport provides for preference
of employment on cargo handling for ABP staff if no other ancillary work
is
available (an arrangement similar to that at Glasgow/Greenock). Further
evidence of
ABP’s
confidence
in
the new co-operative structures has been
their ‘willingness’, albeit under duress,
to
drop the initial insistence on
‘proper’ (e.g. ex-ABP) management at both Barry and Ne~port.~
While the disintegration/detachment process adopted by ABP was
characterized by ‘experimentation’ and uncertainty, Tees
&
Hartlepool Port
Authority (THPA) was able to use a co-operative structure in a more
strategic manner to restructure its cargo handling operations at Tees.
THPA
was one
of
eight port authorities directly represented on the management
team established by the National Association of Port Employers
in
1986
to
consider the abolition
of
the Scheme, and, following discussions with
government officials, was well informed of both the approximate timing and
implications
of
the
repeal of the Scheme. At Hartlepool, which the
Personnel Manager described as ‘a pick and shovel operation’, the port
authority determined to dismiss
all
or notze
of the dockers
-
they would not
countenance the retention of
a
small group
of
the ex-registered work-force,
so
the ultimatum was: ‘accept the new terms to
a
man, or all go’. All
72
were
dismissed and a
new
work-force was recruited from over
700
unsolicited
applications (Rayner
1990:65),
giving management complete flexibility,
reduced manning, and much lower labour costs. (Wages were reduced by
approximately
30
per cent.) At Tees, in contrast, the handling of steel was a
highly skilled and hazardous occupation, and the dockers’ ability to ‘bash
it
in
and bash
it
out’ resulted in
a
very different outcome. Similar pay,
flexibility and manning arrangements to those at Hartlepool were imposed
on
the Tees dockers via the now familiar ultimatum. One hundred dockers
were initially selected for redundancy from
250
applications. The ‘selection
criteria’, according
to
one manager, was simply to dismiss the ‘won’t works’,
the ‘can’t works’ (the sick, injured
or
disabled) and ‘all those who rode on
the industry’. The remaining dockers were given a choice of either returning
to
work on the new terms and conditions
or
being dismissed without
redundancy pay
(as
at
the time they were still on strike). The initial
‘agreement’, which ran from August
1989
to
January
1990,
was reluctantly
accepted by
the
remaining dockers. But their skills allowed them to retain a
significant degree of control over the labour process and to frustrate
British Journal
of
lridustrial Relutiotir
Co-operation or Control?
129
management’s plans
for
complete flexibility. In January
1990
a new
flexibility concept was introduced. based initially, and predominantly, on
‘functional flexibility’ but later embracing ‘numerical flexibility’ and ‘dis-
tancing’.
New flexible working arrangements had
been
introduced for maintenance
workers
in
1986
at Hartlepool, through the combination of three trades
(electrical, boilermakers and civil), and this experience provided the
‘blueprint’ for further changes.
In
addition to flexibility within the mainten-
ance grades, these workers were now engaged
on
dock work, and
their
work
schedule was divided between emergency maintenance, cargo handling and
routine maintenance (in that order). Further changes were introduced at
Tees along these lines during the early months
of
1990,
along
with
a further
pay cut. In the autumn of the same year
a
complete reorganization was
proposed
by
the port authority, based explicitly on a core-periphery model.
Henceforth there would be a ‘maintenance
pool’
and an ‘operational pool’.
as at Hartlepool, with complete flexibility within and between the two
groups, limited only by available skills and capabilities. But there was also to
be a ‘peripheral’ operational pool, which would act as a (stevedoring labour
only) ‘top-up’. Management suggested that the most appropriate structure
for this pool would be a dock workers’ co-operative.
In
the reorganization that followed, the maintenance
pool
at Tees was
reduced from
100
to
SO
workers.
Of
the
258
ex-registered dockers, only
58
were retained for the
150-strong core
‘operational pool’ directly employed by
THPA. From the
200
redundant dockers. half were selected
by
the port
authority for the new co-operative (Cleveland Multiskills), with each docker
making an investment offS000. (Insurance was paid by the port authority
as
the cost was prohibitive, given the nature of the cargo and vessels involved.) A
former THPA manager was recruited by the co-operative to assist
in
its
running, which was acceptable to the port authority. The co-operative’s
three-year contract with THPA, which was supposedly secured through a
bona fide tendering process, allows the company to tender for other business,
but the contract stipulates that THPA has first call on the men‘s labour.
Preference is of course given to the port authority’s own operational/
maintenance pool for cargo operations, but the co-operative is given
a
weekly
work schedule which specifies (broad) labour requirements seven days
in
advance. Wages are only
f9000
per annum compared with
f18,000
under the
Scheme, and all ‘downtime’costs are carried by the co-operative itself. As far
as
the T&GWU is concerned,
the
Tees co-operative represents a return to
casual employment, as the company operate son a daily basis
(Lloyd’s
List,
22
May
1991).
For
the port authority, however, costs have been reduced
significantly, and simultaneously management has freed itself of the myriad
other problems
of
employing (ex-registered) dock labour. At Tees and
elsewhere, then, the disintegration
of
production through ‘distancing’, the
replacement of an employment contract with a commercial contract, has
proved
to
be a highly effective method
of
both enhancing management
control and reducing labour
to
a variable rather than a fixed cost.
130
British
Journal
of
Industrid Reliitioris
4.
Conclusions: worker co-operatives
or
capitalist control?
Within the industry as a whole, restructuring in the aftermath of the
abolition of the National Dock Labour Scheme has encompassed
decentralization, detachment and, with the emergence of dock worker co-
operatives and other (predominantly labour-only) subcontracting arrange-
ments, disintegration. In this respect, many of the developments in the ports
during
1989-91
mirror developments over the past decade in other sectors of
the economy, such as subcontracting in steel and construction, management
buy-outs in road transport and the public sector which now tender
for
local
authority contracts, and new buyer-supplier relations in the automotive
industry. In the ports, Tilbury exemplifies the strategy
of
decentralization,
subdividing its operations into six separate ‘employment companies’ which
operate as ‘profit centres’ with their own dedicated labour and management
teams. The Uersey Docks and Harbour Company, the port authority and
principal stevedore in the port of Liverpool, exemplifies the swategy
of
detachment by entering into joint ventures
on
its container, timber, grain
and general cargo operations, with the new companies being granted a
licence to operate specific berths. ABP has pursued a similar strategy at
Southampton, where the co-operative was granted a licence
to
operate as an
‘independent’ company and openly tender for business. In all other ports
with co-operatives, however, the dockers have not been granted a licence
and must therefore operate purely as subcontractors of labour to the
relevant port authority. In all these ports, however, the disintegration
of
cargo handling through the establishment
of
a co-operative was pursued
only where no other option was available, either because the port authority
was dependent on the skills of the work-force,
or
was contractually bound to
major customers,
or
because there were no independent companies that
could assume responsibility
for
(general) cargo handling operations. At
several ports where there are other independent operators, such as Garston
and Great Y‘armouth, there are ‘dockers’ companies’ set up by former
registered dockers, but these are private companies and not co-operatives.
Dock workers’ co-operatives were not, therefore, the first option of any
port authority, as was clearly demonstrated at each of the ports that now
boasts such a company. This is most clearly demonstrated in the case of
ABP. At those ports where ABP retained a significant cargo handling
operation, the options were either complete discharge
of
stevedoring
operations to independent companies
or
the employment of each and every
manual worker, including the former registered dockers,
or
an individual
contract, with all employees surrendering their trade union rights for
collective bargaining. This option was refused by dockers at Barry and
Newport but accepted at King’s Lynn, where ABP dismissed
all
but
ten
ex-
registered dockers. With complete flexibility
of
labour, these workers now
constitute the ‘core’ cargo handling work-force, supplemented as and when
required by other port grades. When similar terms were refused, to a man,
Co-operation
or
Control?
131
by the South Wales dockers, a co-operative became the only viable option,
despite the initial misgivings of the local port management. Ultimately,
however, co-operatives have been established only if this particular
arrangement suits management. At other ABP ports, such as Grimsby and
Hull, the ex-registered dockers approached ABP with the suggestion that
they be allowed to set up their own co-operatives, but were flatly refused. At
these ports other independent companies were already operating in the
port, which allowed ABP to transfer cargo handling to them instead. This
option had the added advantage
of
selective
re-employment
of
ex-registered
dockers by the independent operators, including one company formed by
three ex-ABP managers at Hull, who were able
to
select only the more
skilled, and less militant. dockers. At Hull, as
on
the Clyde, labour control
has been further enhanced by the disintegration of the local union structure
as a result of mass redundancy. In these circumstances, the port authority
has greater confidence in both the commercial stability and the operational
capabilities
of
the subcontractor.
Ultimately, then, dock workers’ co-operatives owe more
to
the problems
of labour control than to the promotion
of
worker autonomy
or
industrial
democracy. In fact, dock workers’ co-operatives
enhance
the commercial
viability and market position of the port authority, and in some cases give
them greater control over the labour process. The
loss
of
a commercial
contract is a very potent threat to hold over the subcontractor, and one that
has been exercised already on the Manchester Ship Canal where a (private)
dockers’ company had its contract withdrawn after less than
12
months’
operation. Thus, the future, as well as the very existence,
of
dock workers’
co-operatives can be seen to be largely,
if
not exclusively, in the hands of the
port authority. On the Clyde,
for
example, where the co-operative was
predominantly a solution to the problem of fluctuating labour demand, CPA
has suggested that
it
may switch back
to
direct employment at Greenock
if
trade increased and labour demand stabilized, as this would give the port
authority greater control over cargo handling operations. At Barry, the
inclusion
of
maintenance workers
in
the co-operative, at the insistence
of
ABP, would allow
a
‘clean break’
if
Geest failed to renew its contract in
1994,
with the option for alternative propertyAeisure development
of
the
port. In short, dock workers’ co-operatives,
to
date, have been pre-
dominantly an instrument of management control on the deregulated
waterfront.
In
general,
it
is uncommon for workers’ co-operatives to be completely
autonomous and independent units, but it has been argued that co-operative
members can still retain control
of
their own labour process (Mellor
el
af.
1988:84).
Co-operative values were not high
on
the agenda during the
formation period of dock workers’ co-operatives at any
of
the five major
ports, and in this respect they may appear to be co-operatives in form rather
than substance. In fact, the main concern of most ex-registered dockers was
simply to secure continued employment in the industry. On the Clyde, for
example, where employment prospects for ‘unskilled’ manual workers are
132
very poor, the former shop steward was adamant that he ‘wasn’t going
to
join the old men in the corner’. Nevertheless, each of the co-operatives has a
democratic structure, many of the dockers display a strong commitment to
co-operative values, and the dockers are
able
to
control their immediate
labour process (even though all the co-operatives, with the exception of
Southampton,
are
dependent initially on the port authority
for
work).
Thus, the origin and form of the co-operatives does not preclude the
development of substance. The latter may
in
fact prove to be vital for the
dock workers’ co-operatives,
as
internal autonomy and industrial demo-
cracy has produced levels of productivity that were unobtainable,
if
not
inconceivable, under the
NDLS.
Thus, by virtue
of
their skills, experience
and above all efficiency, the three co-operatives at ABP ports
in
particular
could well prove indispensable
to
ABP in the longer term
if
the latter wishes
to
retain any general cargo handling operations at these ports. By
all
accounts, both ABP and the customers are more than satisfied with the new
arrangement, which therefore opens up the possibility of mutual depen-
dency.
If
the co-operatives can retain their ‘skilled status’, at least relative to
potential
or
actual competitors, and develop informal networks directly with
the
major
customers of the port authority, as is the case at Barry and
Newport (Southampton already tenders directly
for
business), then dock
workers’ co-operatives may prove to be a more enduring feature
of
the
docks after deregulation.
British Journal
of
Industrial Relations
Acknowledgments
The
financial support of the
ESRC
is gratefully acknowledged.
Notes
1.
As Mellor
et
al.
(1988:64-5) point out, the origin of co-operatives (classified
as
either ‘conversions’, ‘Phoenix co-ops’
or
a ‘new start-up’) tells us only that
workers have chosen the co-operative form
or,
as
in
the case of the docks, had
it
thrust upon them. Categorizing co-operatives according
to
their structure
indicates the degree of commitment of the work-force
to
co-operative principles
and the extent to which they have extended democracy
within
their organiza-
tions. According
to
this criterion (Mellor
et
ul.
1988:65),
the dock workers’ co-
operatives are more akin to either a ‘small business’, with low commitment to
co-operative values and limited democracy,
or
a
‘participative co-operative’,
where there is a commitment to develop some democratic decision-making
within the constraints of the market.
2.
This particular co-operative is therefore more like a ‘new start-up’ under Mellor
et
d.’s
(1988:64)
classification, as the threat
of
redundancy was the overriding
issue. However, while the other co-operatives are more like ‘conversion co-ops’,
where
an
existing traditional company chooses to change its organizational form
to
that
of
a co-operatjve
(p.
h4),
the alternative
in
each case was redundancy.
Co-operution
or
Control?
133
3.
ABP was established in
1983
with the privatization
of
the British Transport
Docks Board.
4.
At Barry the managing director
of
the co-operative does have some manage-
ment training and many years‘ experience
of
supervisory work on the docks,
hut at Newport the co-operative is owned and managed exclusively by ex-
registered dockers, at their insistence.
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