Union Exclusion and the Decollectivization of Industrial Relations in Contemporary Britain
| Author | Gary Morton,Paul Smith |
| DOI | http://doi.org/10.1111/j.1467-8543.1993.tb00382.x |
| Published date | 01 March 1993 |
| Date | 01 March 1993 |
Briti
Joiirnal
of
Iniluctriril
Rrlationt
31:
1
March
1993
0007-108(1
Union Exclusion and the
Decol
I
ectivizatio n
of
nd ustria
I
Relations in Contemporary Britain
Paul
Smith and
Gary
Morton*
Final
version accepted
9
December 1991.
Abstract
A
major focus
of
the Conservative government’s employment policy since
1979
has been the reduction
of
union power within the labour market, the
employment relationship and us representatives
of
a separate ‘labour interest’
in society
-
union exclusion. The principal impact
of
the legislative changes is
to deny workers access
to
resources
of
collective po wer, thereby commensur-
ately increasing employers’ discretion
to
determine the terms
of
the employ-
ment relationship. When forming new subsidiaries and establishments, or
purchasing non-union subsidiaries, employers huve been able
to
resist
unionization and rrcognitiori except on their
owti
terms, but comparutively
few huve termiriutrd existing union recognition agreements, preferring
to
marginulize the role
of
unions through the rrdoptiotr
of
partial exclusion
policies
-
joint consultution, direct commirnication, performance-related
pay, and the fragmentation
of
common employment and bargaining.
1.
Introduction
A
major focus
of
the Conservative government’s employment policy since
1979
has been the reduction
of
union power within the labour market, the
employment relationship, and
iis
representatives
of
a separate ‘labour
interest’
in
society
-
union exclusion. This concept
is
derived from
Goldthorpe
(1984).
who argued that governments
in
advanced capitalist
societies have responded to the challenge
of
organized labour through two
distinct political strategies: inclusion, for example the corporatist policies
characteristic
of
Britain during the
1960s
and
1970s;’
and exclusion, which
’Paul Smith is Lxcturcr in Industrial Relations at the University
ol
Nottingham.
Gary
Morton
was
fornicrly the Provincial Newspapers National Organizcr of the National Union
of
Journalists and is currently
ii
student.
98
‘entails offsetting the increased power of organized interests [labour] by the
creation or expansion of collectivities of economic actors, who lack effective
organization and indeed the basic resources and perhaps motivations from
which such organization might be developed’ (p, 329).
Goldthorpe notes that exclusion policies do not require a direct attack
upon organized interests but ‘only the enlargement
of
certain areas
of
the
economy within which market forces and associated relations are able
to
operate more freely than
in
others’ (p. 329), thereby facilitating the
emergence of a dualist economy. But in the event, the Conservative
government vigorously pursued an interventionist policy comprising reduc-
tion
of
the power
of
union and workers in relation to employers, creation of
new rights against unions for non-members and members alike, reduction in
the institutionalization and scope of collective bargaining, delegitimization
of unions within the political process, and rejection
of
all proposals for co-
determination (Crouch 1986).2 This programme constitutes a more immedi-
ate and overt political initiative than that envisaged by Goldthorpe, the
purpose of which is to empower employers
-
both units
of
capital and state
agencies
-
to mobilize exclusion policies in order to permit an intensifica-
tion of the rate of appropriation of surplus value
or
surplus labour (Carchedi
1977). Employers’ union exclusion policies are most visible in cases of union
derecognition, but Claydon concludes that these represent ‘an extreme
reflection of a much wider shift
in
the frontier of control within collective
bargaining rather than a sign of a systematic movement for its rejection’
(1989:222). This paper seeks to integrate
an
analysis of the two distinct but
interdependent dimensions of union exclusion, government and employer
policy.
British Journal
of
Industrial Relations
2.
Conservative Government
Policy
During the 1970s, government policies founded upon Keynesian theories
of
economic management failed
to
create the conditions for profitable
accumulation
(S.
Clarke 1988:
15-72),
while labour was strengthened
by
the associated corporatist policies (Goldthorpe
1984)
and the reform
of
workplace collective bargaining (Terry
1983).
The Conservative govern-
ment’s critique
of
British economic performance laid particular stress upon
the negative
role
of union power and labour market inflexibility (Depart-
ment of Employment 1988) and was indebted to the neo-classical economics
paradigm (Fine and Harris 1987; Wedderburn 1989). The fundamental
proposition
of
this model is that the market is the optimal expression of the
rational preferences of utility-seeking individuals. Therefore any interven-
tion in the pricing mechanism
or
reallocation of factors
or
products outside
the
market cannot increase the sum total
of
utility but, on the contrary, may
cause its reduction. Revenue accrues to factors of production (according to
their market valuation) in the possession of individuals endowed with equal
Union
Exclusion
umi
Decollectivizution
99
market power
(or
at least
no
great disparity); and market relations,
including the employment relationship, are regulated by contract.
Organizations
of
capital and labour are appraised differently. A company
is an agent
for
providers of capital whose separate identities are not
submerged, and
only
certain monopolistic practices are viewed with
concern.
In
contrast. unions itre conceived as inherently monopolistic
organizations which, through their power
to
impose
;I
'rent'
upon
the hire of
labour. coerce individuals who wish
to
dispose of labour and capital at the
market valuation. As a consequence, the labour market is distorted: either
labour costs are raised
and
profits reduced, causing unemployment,
or
the
wages of non-union
labour
are lowered. The object of state policy is the
enhancement
of
market imperatives through the restriction
of
union tort
privileges, while employers should 'individualize' the employment relation-
ship at the expense of workers' unilateral job controls and collective
bargaining
in
order 'to restore
to
firms the ability to adjust their labour costs
to meet changes
in
the
level of demand,
in
technology,
in
price competitive-
ness or
in
labour market conditions' (Rubery 1987:OO).
During the
1980s
the Conservative government, at first hesitantly but then
with ever increasing confidence, implemented
a
series of initiatives to
restructure central and local government administration and services, and
state corporations preparatory to their privatization, which have included
significant breaks with past employment practice. The Cabinet Committee
on
Public Sector Pay became the directing force
in
the
development and
implementation of the move to local bargaining and performance-related
pay
in
the state sector, and
at
every opportunity government ministers
castigated private-sector national agreements and job evaluation
as
inflex-
ible (Brown and Walsh 1991). The notion of the state
as
a 'good employer'
has acquired a novel meaning
as
exemplar
of
the new industrial relations.3
The Conservatives' comprehensive programme of employment law
reform comprised the removal
of
statutory and administrative supports for
collective bargaining, partial deregulation of the contract
of
employment,
creation
of
statutory rights for members and non-members alike against
unions (including model rules for union government), successive reduction
of
union
tort immunity for industrial action (through
a
narrowed definition
of a trade dispute and its restriction within organizational and geographical
boundaries), introduction of procedural rules for the initiation
of
industrial
action, and tort liability of
union
funds (Wedderburn
1989).
Union
legitimacy has been eroded by sustained criticism of unions' economic
impact and the diminution
of
their role
as
representative institutions
through the abolition
or
downgrading of tripartite bodies.4 All European-
Comniuiiity-inspire~i discussion of worker representation
on
company
boards has met with unfailing hostility: and there has been a continuing,
if
only occasionally visible, political offensive against key sections of workers
such as the National Union
of
Mineworkers (Saville
1986).
The Employment Act
1990
represented
11
significant escalation of this
project
in
three major areas (Carty 1991). First,
all
industrial action outside
100
the contractual employer, except that incurred through lawful picketing at
the place of work, is now subject to tort liability including action across
‘associated’ companies (incorporating into statute the case law of Dimbleby
&
Sons Ltd
v.
NUJ
[
19841 ICR 386); and where a dispute embraces more
than one employer this now constitutes a number of separate disputes and
therefore each must he preceded by a separate ballot
in
compliance with
the
Code of Practice on Industrial Action Ballots (Simpson 1991:433-4).
Second, the 1990 Act imposes a presumption of union responsibility for
unofficial industrial action which unions are required
to
disavow or co-opt
according to a specified procedure. Failure to do so exposes their funds to
claims for damages. Employers may dismiss participants in an unofficial
strike on a selective basis, and any industrial action to secure reinstatement
is outside the statutory definition of a trade dispute. Third, the 1990 Act has
outlawed the pre-entry closed shop by rendering actionable any cmploy-
ment offer contingent upon membership or non-membership of
;I
trade
union. The 1991 Green Paper (Department
of
Employment 1991) includes
measures that further destabilize union security, restrict the freedom
to
strike and provide more opportunities for litigation.
The significance of the Conservative government’s employment legisla-
tion does not, however, lie principally
in
the deregulation
of
the contract
of
employment or
in
the direct restriction of union power and authority.
Rather, its impact is to deny workers access to resources of collective power,
thereby commensurately increasing employers’ discretion to determine the
terms of the employment relationship both within and outside collective
bargaining (Hyman 1990). Thus Conservative legislation and employer
policies combine
in
a
synergistic project
to
create a potent gradualist route to
union exclusion.
British Journul
of
lndustrial
Relutions
3.
Employers and Union Exclusion
In monopoly capitalisms competition between units
of
capital is embodied
within
the
capital market
of
the
multidivisional corporation, the dominant
organizational
form
(Marginson
et
ul.
1988); and independent companies
and subsidiaries that are unable to generate adequate returns upon capital
will
be
either eliminated or restructured
by
the existing or new owners
(following sale or takeover). Competition between companies to reduce
costs in the sphere of production by means of new investment, work
organization or changes in the pay-effort bargain
will
necessitate a
reassessment of the existing accommodation to union power (Terry 1983).
A
parallel imperative exists within the state sector. Hence
if
an employer
gains a competitive advantage through union exclusion, then other
employers must develop imitative or alternative routes to cost reduction.
Non-unionism has always been an important feature of British industrial
relations. In
1970,
when union membership was at
its
height
of
13.2
million,
some 46 per cent of the employed population remained unorganized; since
Union
Exclusion
urtd
Decollectivizution
10
1
then this figure has substantially increased as union membership fell to 10.04
million by
1990.
Many sectors noted for the concentration of union
membership have contracted, and employers within the expanding private
services sector and at new ‘greenfield’ manufacturing sites have resisted
unionization (MacInnes and Sproul 1989; McCloughlin and Gourlay 1990).‘
Recognition strikes are almost unknown (ACAS 1989:22-3).
A
recent
survey of unionized establishments reported a 2 per cent fall
in
membership
density over 1985-90, commenting that ‘This is perhaps the first systematic
evidence that the aggregate membership decline
is
in part related
to
declines
within individual firms’ (Gregg and Yates 1991:365).
The
same research
indicates that the largest falls
in
density have been associated with the partial
removal of the closed shop. The decline
in
the average number of workers
employed per site has had adverse consequences for unions which require
greater resources to promote and maintain organization, while membership
recruitment campaigns quickly meet severe logistical constraints (Kelly and
Heery 1989) which cannot be overcome in the absence of new resources of
collective power and cohesion.
Derecognition has remained uncommon outside weakly organized work-
ers
or
those whose skills have been made redundant by technological
development (Claydon 1989; Marginson
et
(11.
1988: 140; Smith and Morton
1990). Whereas company-wide union derecognition
is
exceptional, in-
stances of site
or
grade derecognition within multidivisional corporations
are more frequent: a recent survey (Gregg and Yates 1991) found that
13
per
cent of respondents recognizing unions in 1984 reported partial derecogni-
tion during the period 1985-90. Derecognition may be an element of a
strategic policy to ‘individualize’ the employment relationship,’ or an
opportunist response to the collapse of union organization during an
industrial dispute. For employers. the issue is essentially practical: the
saving
in
unit labour costs, the cost of disruption to markets or service
provision, the changes
in
personnel necessary to implement the policy, and
the resources required to overcome union collective power. The latter
remains an important factor- assessed
in
terms
of
membership density and
cohesion, wider linkages. and strategic location within the value/service
process
-
although both multidivisional corporations and the state possess
more than adequate resources to defeat union opposition within subsidiary
units. The potential cost of such
a
policy, however, must be assessed against
the
alternative routes to reduce
unit
labour costs, restructure the company
or
transfer capital investment. During a recession, with the ever-present
threat of closure. unions have rarely impeded the reform of work organiza-
tion and industrial relations, whereas derecognition, although feasible, may
prompt a counter-mobilization (Terry 1989). Moreover, once restructuring
is complete, union organization can be reconstructed (Elger and Fairbrother
1990) and derecognition ceases to be a cost-effective option.
Entailing less risk for employers is the implementation of partial exclusion
policies, the object of which
is
‘to
murginulise’
trade unions even
while
recognizing their continued right to operate. The formalities
of
collective
102
bargaining remain, but its scope and effectiveness are severely restricted.
Workers’ collective identification with trade unions is challenged by
the
cultivation of
internal
mechanisms created and controlled by management’
(Hyman 1989:
12).
Thus the formal organizational indices
of
union repre-
sentative structures may remain intact
or
may even be enhanced (Terry
1986; 1989),
while
employers attempt to demobilize workers’ collective
power through joint consultation, direct communication and involvement,
performance-related pay, and fragmentation
of
common employment. The
first two
of
these have been extensively discussed
in
the literature and need
only be summarized here. The object of joint consultation is to displace the
conflictual bargaining agenda by discussion within a unitarist frame of
reference, whereas direct communication and involvement (quality circles,
briefing sessions, etc.) aim to provide an institutional relationship between
management and individual employees without the mediation of unions. On
occasion, such procedures have been utilized
to
circumvent unions entirely
-
a
form of temporary derecognition.
Performance-related pay (PRP), the latest addition to the lexicon
of
union exclusion measures, rewards the employee’s contribution and worth
as assessed by management
(ACAS
1990) justified by the neoclassical
precept that pay should be related to real differences
in
workers’ produc-
tivity (Rubery 1987). Any resulting decline in workers’ collective solidarity
increases their dependence upon management with the consequence that
individuals are forced
to
compete against each other
in
terms of output
(quantity and quality) and for pay (Dohse
et
ul.
1985). If union organization
becomes sufficiently marginal, then
it
may be displaced altogether;
in
a
non-union context PRP may impede the emergence of a common interest
in
standard wage rates and their absolute level.
The fragmentation of common employment can be accomplished by the
displacement of direct employment by contract labour, the sale of sub-
sidiaries, and the incorporation of subordinate units (within multidivisional
corporations
or
state agencies) as the employer (Shutt and Whittington
1987: 17-8).
In
each case the existing employment relationship is annulled
and established collective bargaining structures may be dissolved.
Employers’ ability
to
enforce ‘boundary maintenance’ is enhanced by the
Employment Act 1989 which requires the provision of paid release to union
representatives only for activities specifically included
in
a recognition and
procedure agreement, and, more decisively, by the Employment Act 1990
which confines the scope
of
industrial action
to
the contractual employer.
Contracting has been used extensively in both the private and state sectors,
but the cost of co-ordination and quality control impose limits upon its
application although
it
is entrenched in the construction and North Sea
offshore oil sectors. Subordinate employment units became more pervasive
during the
1980s
as companies, in response to the challenge of contracting
markets, heightened competition, takeovers,
or,
to take advantage
of
employment law, either introduced decentralized structures for the first
time or reformed their existing divisional organization. In addition, the
British
Journul
of
Itidustrial
Relatioris
Uriiori
Exclusion
and Decollectivizution
103
decentralized corporation is the model consciously adopted by the govern-
ment for the reorganization of the state sector.
The devolution
of
collective bargaining
to
subordinate unit level is driven
by the logic of the decentralized corporation, which is ‘not
a
unified
business, but
a
collection
of
businesses’ (Purcell
1989:75),
supervised
through centralized accounting procedures and portfolio planning
(Marginson
et
of.
1988:
1-8;
Purcell
1989:6X-70).8
Hence, ’employee rela-
tions similarly needs
to
be separated and decentralized. Employees and the
unions which represent them must, from
a
management point
of
view, adopt
a unit perspective and be concerned with the parochial needs of the unit, not
the strategic thrust of the enterprise’ (Purcell,
1989:77).
But ‘the fragmenta-
tion
of bargaining is not synonymous with the localized determination of
pay’ (Brown and Walsh
1991:51);
that is, decentralization is one-sided
as
multidivisional corporations and the state retain their strategic control while
seeking
to
restrict the scope and agenda of collective bargaining within
‘business unit’ constituencies. (National agreements are further diluted or
terminated.) Pay is related
to
market profitability or service costs rather
than local labour markets, and demands such as the ‘going rate’ or the ‘rate
for the job’ diminish as an ‘organizational based employment system’
(Purcell
1991:39)
is constructed, providing a foundation
for
a
form of
enterprise unionism displacing national sectional or class-based collective
loyalties (Terry
1989).
Areas of union weakness become visible and
vulnerable
to
derecognition (Gregg and Yates
1991).
Employers’ union exclusion initiatives have
in
practice integrated many
elements of the above policies, as a brief survey of both the state and private
sectors reveals.
4.
Union Exclusion in
Practice
As
befits
a government motivated by a coherent theory and strategy,
union
exclusion policies are widespread throughout the state sector and
a
standard
pattern has emerged
in
service and administrative organizations: the early
imposition of compulsory tendering for ancillary services
-
where neces-
sary by legislation
-
followed by the functional separation of service
provision and purchase, the creation of autonomous employers, unit
collective bargaining, and PRP. These initiatives have since been drawn
together
in
The Cirizen’s C‘hurter
(HMSO
1991
:33-7).
The machinery of central government is being reorganized through
the
creation of statutory agencies responsible for service provision (Efficiency
Unit
1988):
by April
1990
30
agencies employing
66,350
workers
(12
per cent
of the civil service) had been established, and a further
24
others employing
127,000
workers
(22
per cent of the civil service) are in the process of
implementation. For the present, agency employees remain within the civil
service under the umbrella of common employment as Crown servants, but
in July
1991
the government gave noticc of its intention
to
permit
104
departmental/agency bargaining, greater flexibility within national agree-
ments where these remain, and PRP. Her Majesty's Stationery Office (2000
employees) is the first agency
to
establish a separate pay structure (which
includes PRP), and
in
October 1991 the government gave notice
of
termination of six national agreements embracing 550,000 workers. The
strategic power of civil service unions has been further weakened by the
contracting-out of three computer information systems to private com-
panies.q A similar pattern exists
in
the National Health Service (NHS)
where common employment has been fragmented through
the
extensive use
of contract labour for ancillary services and by the creation
of
autonomous
trusts
as
direct employers
(57
established in April 1991 and an additional 99
from April 1992). Although 'derecognition does not
.
.
.
appear to be the
overwhelming and imminent danger once feared' (COHSE 1991 :5), new
initiatives on local bargaining and PRP have been indicated (Corby 1991).'"
In
the BBC, the now standard litany of new companies, an internal market,
subcontracting and casualization have been implemented.
The Local Government Act 1988 imposed compulsory competitive
tendering for local authority services, leading to widespread wage cuts and
worsened conditions accomplished with relatively
little
union resistance
(Kessler 1990)." The 1988 Act also made it unlawful to use contract
compliance as an institutional support for collective agreements (Evans and
Lewis 1988), and a number
of
private contractors have refused union
recognition. In the Administrative, Professional, Technical and Clerical
grades agreement, 20 authorities including two county councils (Kent and
Buckingham) have renounced the national agreement.
l2
Local government
services are also being directly privatized, for example transport, docks and
airports. The division of London Transport into
13
subsidiaries was followed
in
1989 by the devolution of responsibility for collective bargaining;
successful opposition to wage cuts and worsened conditions in one
subsidiary (London Forest Travel) have been met by wholesale closure.
These companies will be privatized in the forthcoming programme
of
deregulation of London bus services. In primary and secondary education,
pay flexibility within scales has been introduced and
a
statutory system
of
teacher appraisal is intended
to
facilitate the development of PRP.
The
Education Reform Act 1988 restricted the scope of local authority common
employment and industrial action by investing school governing bodies
as
employers (Freedland 1989) and by the creation of autonomous schools (the
so-called 'opt-out' schools and city technology colleges). In the polytechnic
sector of higher education, the government is actively promoting PRP.
Parallel developments can be found in state corporations. By 1989, British
Rail (BR) had terminated the collective agreement with the Transport and
Salaried Staffs Association (TSSA) for almost 10,000 managerial staff and
had introduced PRP. After its failure to replace corporate bargaining by five
occupational agreements (withdrawn after the National Union
of
Railwaymen's strike in June-July 1989),
it
introduced
a
divisional structure
of devolved business units ready-made for separate incorporation,
unit
British
Journal
of
Indusrriui
Relutions
Uriiotz
Exclusion
und
Decollectivization 105
bargaining. subcontracting or piecemeal privatization
-
as previously
occurred in the ‘non-core’ activities of hotels, shipping, ports, station
catering, and locomotive and carriage construction. The national structure
of pay and conditions
of
employment is being eroded upon
a
‘special case’,
occupational basis; for example, individual contracts have been accepted by
the majority of 7800 signals and telecoinniunications staff.
In
the Post Office, following some disposals, three separately incor-
porated subsidiaries
-
Royal Mail Letters (RML),
Post
Office Counters,
and Parcel Force
-
have been established, each responsible for collective
bargaining. At RML nationally agreed local pay supplements embrace
55,000 out of a total work-force of 130,000 and PRP has been introduced for
13,000 managers. But the most radical change, operational from April 1992,
is the new RML structure of nine regional autonomous divisions and eight
business units (the latter separately incorporated) which provide a
purpose-built structure for an internal market, tendering
or
privatization.
Moreover,
in
perhaps the most explicit union exclusion document yet to
have reached the public domain, RML management has outlined a strategy
to challenge the power of the National Communications Union and the
Union
of
Communication Workers comprising the institutionalization of
direct communication in ‘team working’, the insertion
of
an individual
grievance procedure prior to union representation, complete flexible
working according to business requirements (that is, removal
of
any
unilateral workers’ job controls), and a refusal to negotiate on matters not
specified
in
the contract of employment (that is, on effort). Union facilities
(including the payroll deduction
of
membership subscriptions) will be
dependent upon union acceptance of this programme.
British Coal (BC), in the aftermath of the 1984-5 strike, insisted on a
negotiating structure unacceptable to the National Union of Mineworkers
(NUM), and agreements negotiated with the Union of Democratic
Mineworkers have subsequently been imposed upon all relevant employees
(Taylor 1988). BC has eroded the five-day working week, increased the use
of sub-contract labour, and introduced
(id
lzoc
payments for specific work
tasks (Leman and Winterton
199
I)
which amounted
to
30
per cent of miners’
wages
in
1989. Miners’ collective solidarity remains a vital and continuing
resource, and further exclusionist policies cannot be discounted; for
example, in November
1990
BC
threatened to terminate the payroll
deduction of union subscriptions
if
the NUM imposed an overtime ban.
The privatization programme
(T.
Clarke 1990) has been accompanied by
extensive restructuring of industrial relations (in some cases this has preceded
sale whereas
in
others
it
has followed) embracing individual contracts, PRP,
the replacement of direct employment by contract labour, the devolution of
bargaining, and the formation and purchase of new subsidiaries. Notable
examples are British Steel (Avis 1990; Fevre 1986); British Airways, British
Airports Authority. Associated British Ports (ex- BR ports) and former trust
ports (Turnbull 1991),13 and the road passenger transport. electricity and
water industries (Ogden 1990; O’Connell Davidson 1990).
I06
RritiAh
Jourriul
of
Industrial
Reliitions
To
date, British Telecom (BT) has retained its national structure of
collective bargaining but other reforms have been implemented. PRP was
included
in
the Society of Telecom Executives
(STE)
1987 agreement, and
in
1989
individual contracts were introduced for 4900 junior managers and
are now being extended to field sales staff. Direct employment
in
non-core
activities
-
printing, catering, security, cleaning and transport
-
has been
replaced by contract labour, and an extension to core operations is under
discussion.
A
number of subsidiary companies have been created with
separate collective agreements, and BT has refused to recognize the NCU at
companies that
it
has purchased
or
established (Ferner and Colling
1991).
In
March 1990 BT announced the replacement
of
its geographical organiza-
tional structure by three service and three market divisions, and a job reduc-
tion programme. The ‘mission statement’ of the new Personal Communica-
tions Division proposed the wholesale introduction of individual contracts
and an incentive scheme constituting
25
per cent
of
earnings.
In the ‘traditional’ private sector, the number of workers embraced by
national sectoral collective agreements fell by 30 per cent from 8,455,000
workers
in
1979 to
5,925,000
in 1989; this decline accelerated
in
the period
1985-90 with the dissolution of some
16
major agreements covering one
million employees (including the engineering and shipbuilding agreement),
and at least nine more national agreements have been reduced in content
or
scope (Brown and Walsh
1991).
This trend is confirmed by Gregg and Yates
(1991).
In
other instances companies have withdrawn unilaterally to
introduce specific agreements. A number of major companies have
devolved bargaining to subsidiaries
-
for example Cadbury, Coats Viyella,
Courtaulds, Eagle Star, Legal and General, Lucas, Massey-Ferguson,
Metal Box, Philips, Pilkington, Prudential, Racal, Royal Insurance, STC.
and United Biscuits. An extreme example is that of Pilkington, which
replaced its company agreement by
59
bargaining units (IRRR,
2
April
1985); and a notable innovation is Philips’ refusal
of
facility time for union
representatives to meet on a company-wide basis. Even where company-
wide agreements continue, they frequently incorporate an element of plant
or
subsidiary bargaining (e.g.
ICI’s
199
1
agreement). None of these trends is
new, but the pace of change has increased.
A
significant development, as yet
exceptional, is the subdivision of previously integrated factories into
separate companies; for example, Cadbury’s has three units at its Bournville
site, while British Cellophane (Courtaulds) has four at its Bridgewater
factory (see also Tilbury docks, n. 13).
PRP is now a more frequent element of employer initiatives to reform pay
systems, but individual awards remain small in proportion
to
basic rates.
Previously largely restricted to managerial employees (Kinnie and Lowe
1990),
it is now endemic
in
the finance sector and there are some instances
of
diffusion to clerical and technical workers, for example in GPT (and the
privatized Associated British Ports) and, on occasion, to manual workers,
as at
ICL.
The dilution of collective bargaining by joint consultation has
been reported
in
case studies (Terry
1983;
1986; 1989); and in Japanese
Union Exclusion and Decollectivization
107
multinational corporations and those companies emulating them it has
been partially displaced by non-union channels of communication (Oliver
and Wilkinson 1989). An exemplary case is IBC Vehicles, formed
in
1987
as a joint venture by Isusu and General Motors out of the latter’s heavy
goods vehicle subsidiary and employing a work-force of 1750, where the
company council is composed of five union and six employee repre-
sentatives and combines responsibility for both collective bargaining and
joint consultation (James 1990).
Union derecognition is more widespread than at first reported (Gregg
and Yates 1991; Jones and Kelly 1991) and is particularly prevalent
in
three sectors: shipping, provincial newspapers, and national newspapers.
In shipping half the total number
of
vessels
of
over
500
tons owned by
UK companies are registered under ‘flags of convenience’, with National
Union
of
Seafarers (now part
of
the National Union of Marine Transport
Workers) agreements terminated and non-UK nationals employed at
vastly reduced costs. Both Cunard and Sealink instituted company agree-
ments withdrawing from the General Council
of
British Shipping national
agreement which was subsequently terminated from September 1990.
Cunard has now repudiated collective agreements in all seven
of
its
passenger ships and introduced individual contracts. In the provincial
newspaper sector. union exclusion has continued to advance since the
account in Smith and Morton (1990). The National Union of Journalists
(NUJ) has been derecognized at seven subsidiaries of United Provincial
Newspapers,“ the Wolverhampton Express and Star, and the Bristol
Evening Post (majority shareholders Daily Mail and General Trust,
Harmsworth Pension Fund). The Society
of
Graphical and Allied Trades
Union (SOGAT) has been derecognized by Northcliffe Newspapers at
the Grimsby Evening Telegraph, Derby Evening Telegraph and the Essex
Chronicle Series (at the latter company this was coupled with the with-
drawal
of
National Graphical Association (NGA) recognition in the
pre-press and print areas); and East Midland and Allied Press has ended
recognition at a number
of
its weekly titles. The Newspaper Society ter-
minated its national agreements with both the NGA and SOGAT from
April 1991. In the national newspaper sector, much of which is owned by
the same corporations that dominate the provincial sector, News Interna-
tional has terminated NUJ agreements at
all
five of its subsidiaries, As-
sociated Newspapers has terminated NUJ recognition for all purposes,
whereas United Newspapers has introduced individual contracts but re-
tained residual bargaining over pay. At Mirror Group Newspapers and
the Daily and Sunday Telegraph the NUJ retains only a nominal role
in
collective bargaining since the introduction
of
individual contracts.
In
1990 Associated Newspapers terminated the SOGAT clerical collective
agreement, and the Daily Telegraph followed suit
in
1991 with the new
Graphical, Media and Paper Union (formed through the merger of the
NGA and SOGAT). NUJ derecognition
is
now spreading within the
magazine and periodicals qector.
108
British
Journal
of
lndusrriul
Relutions
5.
Conclusion
Debate on the character of the changes
in
work organization and employ-
ment relations during the
1980s
became polarized between an analysis that
emphasized discontinuity, marked by the deterioration of union power and
the formation of new social relations, and a more qualified view which
stressed the continuity of union power (albeit subdued), social relations and
formal institutions. But both are
too
restrictive, ignoring the uneven nature,
application and impact of restructuring, and the attrition
of
union power
within collective bargaining institutions and processes (Elger
1990;
Hyman
1990;
Kelly
1990;
Morris and Wood
1991;
Terry
1989).”
We do not dissent from this assessment, but have argued that union
exclusion policies constitute an integral,
if
subordinate, component of the
contemporary restructuring of work organization and the employment
relationship, the object of which is to consolidate the
defucto
redistribution
of power to employers within new institutions for the management of
employment relations in order thereby to counter any resurgence
in
labour’s
collective power.
To
date, employers’ union exclusion policies have been
tentative and exploratory, the legislative framework having only been set in
place by the Employment Act
1990.
The limited economic and organiza-
tional resources of many employers act
as
a major impediment
to
union
exclusion, since in many cases they lack the capacity both to overcome union
resistance and to install effective, individualist systems for the management
of labour.
In
the main, therefore, employers have sought
to
reduce union
power through the adoption of partial exclusion policies including
the
construction of organizational employment systems, and to reduce unit
labour costs through the intensification of labour. But when forming new
subsidiaries and establishments,
or
purchasing non-union subsidiaries,
employers have been able to resist unionization and recognition except on
their own terms.
It
is possible that the cumulative impact of restrictive
legislation and employers’ policies will result
in
a
qualitative deterioration of
union
power, and that ‘the relationship between union growth and
recognition will be reversed and become a “vicious circle”, and the
downward trend
in
union density will be much steeper’ (Bain and Price
1983:33).
Tentative evidence for this is provided by Gregg and Yates
(1991).
But as the content of union power is dissipated and managerial discretion
to
restructure the pay-effort bargain is thereby increased,
so
the pressure to
end union recognition is reduced. Hence a quantitative assessment of union
membership, recognition and the extent of collective bargaining is inade-
quate
as
a measure of the success
or
failure of union exclusion policies.
it cannot be assumed that the outcome of subordinate unit bargaining will
automatically be
to
the advantage of employers. In many instances,
workplace union organizations will remain integral parts of national unions
and will retain
a
complex mix of sectional and class values, subverting any
straightforward progression to enterprise unionism. This will frequently
Union
Exclusion
and Decollectivization
109
lead to challenges to the organizational boundaries and economic criteria
imposed by employers
in
negotiations on the pay-effort bargain. Fears as to
such an outcome,
in
particular an escalation of fragmented wage demands,
have already prompted calls for a return to larger bargaining units. But an
alternativc response is possible, namely a wider and intensified commitment
by employers to union exclusion policies accompanied by renewed calls for
further legal restrictions on union power. The result
of
union exclusion
policies cannot be predetermined, however,
for
the response of unions
-
their success
or
failure in the creation, mobilization and scope of collective
power
-
remains an autonomous factor.
Acknowledgements
An earlier version of this paper
was
presented to the Cardiff Business School
Conference, ‘Enterprise Culture
in
the
1990s’,
September
1990.
Thanks to
John Kelly for his comments and editorial assistance and
to
Nigel Cotgrove,
Steve Davies, Hazel Downing, Ian Kessler, Stephanie Marsden, John
Robertson, Steven Weeks and Nick Wright for their assistance
in
this
research. We are indebted to Industrial Relations Review and Report,
Incomes Data Report. and Labour Research.
Notes
1. Goldthorpe
(1984329)
argues that the central feature
of
inclusion strategies is
the attempt
to
counter ‘the increased power
of
major economic interest
groups
-
and
of
organized labour in particular
-
by institutional developments
designed to involve these interests
in
both the formation and implementation
of
economic policy.’
2.
Crouch (1986) refers
to
‘labour exclusion’, but ‘union exclusion’
is
preferred
here
as
specific to the diminution
of
the collective power
of
unions; labour as
such cannot be marginalized. See also Crouch
(1990).
3.
See ‘Managing Government Services
-
The Taxpayer and the Customer’.
Speech
by
N.
Lamont. MP, Chief Secretary to the Treasury, to the Chartered
Institute
of
Management Accountants,
9
May
1990.
4.
Direct meetings between ministers and the TUC are rare and the latter’s role on
tripartite bodies has been successively reduced through the abolition
of
the
Manpower Services Commission (replaced by the Training Agency), the
downgrading
of
the National Economic Development Council, and the dilution
of
representation
on
the Health and Safety Commission. Only ACAS has
escaped unscathed, but Ilanson and Mather
(1988:91)
argue that its terms
of
reference should be altered from the promotion
of
collective bargaining to the
improvement
of
employment relations.
5.
Purcell
(19x9)
notes that in 1986 the largest
100
industrial companies in the UK
(excluding banking, insurance and finance) had
a
combined turnover
of
f34.22
110
British
Journul
of
Industrial
Relations
billion and employed
5.3
million workers, some
25
per cent
of
the insured
population.
6.
The decline
of
union membership is not monocausal although the business cycle
appears
to
be the dominant contemporary factor (Disney 1990; Kelly
1990).
Disney argues. in contrast
to
Freeman and Pelletier
(1990),
that the impact
of
legislation is delayed, and, together with changes in work-force composition,
this is a plausible explanation for the continued membership decline during the
later 1980s. Marginson
etul.
(1988:144)
note that ‘Twenty-five per cent
[of
their
sample
of
106
companies] determined pay unilaterally.’
7.
The individualization of the employment relationship through ‘personal’
contracts is an inherently one-sided project,
for
such contracts are never
‘individual’ in any meaningful sense. No transformation
of
the social relations
of
production occurs; the employer, either a company
or
a state agency. remains
inlact
as
a collective unit
of
economic resource and power
to
which labour is
subordinated in
a
collective labour process.
Only
the form
of
management
of
labour is ‘decollectivized’, that is, reconstituted within a new ‘individualized’
framework.
8.
Decentralization within multidivisional corporations has been related to product
diversification (Marginson
et
uf.
1988:3Y,
215.
219),
but this appears
to be
of
declining importance. Moreover there are wide variations
as
to
the extent
of
decentralization and the nature
of
the central controls (Hill and Pickering
1988;
Purcell and Ahlstrand 1989).
9.
Two
of
the Department
of
Social Security’s computer systems (Livingston, Scot-
land, and Norcross, Lancashire) will be operated by non-union electronic data
systems(aGener~~lMotorssubsidiary),andathird(Swindon)
bytheSemaGroup.
10.
Neither the Northumbrian Ambulance Service nor the Lincolnshire Ambulance
Service has recognized pu blic-sector unions
for
local pay bargaining.
11.
Some53 percentofcontractshave resultedin joblosses, 12percentinpaycuts.
17
per cent in hours cuts; and
a
number
of
direct service organizations (in Berkshirc,
Bexley, Bradford, Hereford and Worcestershire, Portsmouth. North Yorkshire.
Birmingham, Newport, Powys, Suffolk, and Mid-Glamorgan) have not adhered
to
national pay and conditions
(Labour
Research Department, 1990a). One claim
is that the average costs
of
private contractors are
lower
by
22
per cent and direct
service organizations
by
17
per cent (Adam Smith Institute 1990).
12.
Innovations variously adopted include negotiating machinery which cornbincs
both union and non-union representatives. individual contracts, the provision
of
consultants’ analysis
of
pay movements, PRP, and a no-strike clause. Kent
County Council has introduced local pay determination (not local bargaining),
a
flexible grading structure, PRP, and staff consultation through direct conimuni-
cation (Griffiths, 1990). Over
one
hundred local authorities have introduced
PRP schemes for APTC grades (Spence 1990).
13.
At Tilbury key shop stewards were dismissed, collective bargaining terminated,
all unions decrecognized and the
port
divided into six separate companies each
with a staff consultative council.
14.
Following the example
of
the Thomson Corporation, journalists’ individual
contracts contain a ‘continuity
of
production’ clause. An attempt in one
subsidiary
to
introduce
a
clause by which an employee agreed not to takc an
active
role
in union affairswns withdrawn following the NUJ’s threat
to
present a
claim
of
anti-union discrimination under the Employment Protection (Consolid-
ation) Act
1978,
s.23.
Lltiiotr
Exclusion
arid
Decollectivizatiotz
1
1
I
15.
Terry
(3989:196)
comments that 'the extent
to
which union structures and
ideology have been able
to
cope with the issues raised by the dramatically
changed production environment of the
1980s
cannot be answered by looking at
formal indices
of
procedure and structure, since it
is
perfectly possible that these
may remain unaffected while what stewards and managers do within them has
been radically changed'. He argues that in some instances collective bargaining
has become in effect a form
of
joint consultation.
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