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Wednesday 20 June 2018

BREAKING NEWS

Striking out

Written by Peter Davy
August 2010

While this has not been the summer of discontent many feared it would be, employers should not rest on their laurels when it comes to the risk of strike action. Peter Davy explains why

So, perhaps not a summer of strikes after all. It’s probably tempting fate, but nearing the end of July, early predictions of something rivalling the Winter of Discontent have yet to materialise.

Certainly there’s been plenty to write about: the British Airways dispute, strikes on the railways, Royal Mail, the BBC, BT, and the Confederation of British Industry’s (CBI) recent pleas to reform industrial relations law to make it harder to strike. And the unions’ rhetoric hasn’t always helped. “Clegg and Cameron started this fight with the working class and we are up for it,” as the RMT union’s head Bob Crow put it in his response to the budget.

“We say, ‘Don’t fear them. Fight them.’”

The statistics, though, tell a rather different story: other than a blip in March due to BA, days lost to industrial action this year have been at record lows. In 1979, the UK saw 29 million work days lost to strike action; in 2009 the figure was 455,000. This April, the monthly total was just 2,000 days, the lowest since the ONS records began in 1931. Likewise, collective disputes now account for just 90,000 employment tribunal cases a year, against 700,000 in Germany and 300,000 in France.

As John Taylor, chief executive of the government Advisory, Conciliation and Arbitration Service (ACAS), puts it: “The Britain of 2010 is a very different country to the Britain of 1979.”

SUMMER OF LOVE?

There are a number of reasons for this. First, there’s the fact that union membership is vastly smaller than in previous decades. As Taylor points out, at the time of the Winter of Discontent, more than 55 per cent of the workforce was unionised, but that’s now down to under 25 per cent. “There simply won’t be a return to the level of action you saw back then,” he says.

Second, Thatcher’s legislation taming the unions is still largely in place. In fact, before the CBI’s appeals to make it harder to strike, Unite leader Tony Woodley used his union’s annual conference in May to call for the repeal of the UK’s “anti-union” industrial relations laws. “The right to strike is hanging by a thread,” he warned. That overstates it, but the interim injunctions against the union in its dispute with BA earlier this year (since overturned on appeal) and the fact that lawyers forced the CWU to drop its initial ballot in the dispute with BT due to technical breaches of the regulations, suggests Woodley’s is probably the stronger argument.

Perhaps most important, though, has been the attitude of employers, who have worked with unions and staff to find alternatives such as pay freezes, reduced hours or temporary layoffs – anything to avoid redundancies wherever possible, and avoid disputes in any case.

“My guess is that figures this year are not going to seriously alter the conclusion that days lost due to disputes are down, and that’s a success for a private sector that has been to hell and back in the last 18 months,” says Mike Emmott, employee relations advisor at the Chartered Institute of Personnel and Development. “They have managed to keep the lid on.”

CLOUDS ON THE HORIZON

However, employers should probably not relax just yet. For a start, even if everything has run smoothly to this point, there will still be plenty of opportunities for problems going forward. In March, Hewitt Associates’ survey of HR staff showed the proportion of companies foreseeing a reduction in their workforce still at 44 per cent, and cost reduction remained the most important pressure facing managers. That fits in with what the legal expenses insurers are seeing: at Abbey Legal there has been a 46 per cent decrease in the number of redundancy enquiries via its call centre compared to the first quarter of 2009, but the volume is still double 2008 figures. As Claire Birkinshaw, the company’s legal information manager, says, we may have seen the end of the big redundancy exercises of last year but they are still ongoing.

“It’s much smaller scale now but it hasn’t stopped by any means.” Nor should we take too much comfort from statistics that don’t tell the whole story. For example, not every walk out is recorded in the figures. A general strike in the public sector over pensions reform wouldn’t make it in to the government figures because it’s not a trade dispute with the employer. Similarly, action short of a strike, such as work to rule or overtime bans, isn’t recorded – nor unions’ veto of cost saving measures where the employer backs down.

“The days lost are an indicator but one shouldn’t get too excited about them; they don’t always reflect the mood or the level of activity,” says Roger Seifert, a professor of industrial relations and human resources management at the University of Wolverhampton Business School.

Furthermore, it’s actually the relative calm in the public sector that is depressing the collective action figures. Look at the days lost in the private sector alone, and they were up last year. And given that the real pain of public spending cuts has yet to be felt, with the Comprehensive Spending Review still to come, not to mention the TUC conference that will hint at the unions’ attitude, it would be a brave man to bet now on public sector tranquillity continuing.

As Peter Reilly, director of HR research and consultancy at the Institute of Employment studies, says if the public sector unions decide on a full scale assault on the government, they won’t be short of a pretext: job reductions; deterioration of services; and changes to pension funds: “There are lots of causi belli they can choose from.”

How much a wave of strikes in the public sector would influence the unions and members in the private sector to follow suit – particularly if they started to win concessions – is a matter for debate. Reilly doesn’t reckon it is likely, and at law firm Pinsent Masons, partner Lisa Patmore agrees that there’s no automatic follow through. However, past experience shows that it is a risk.

“When you get higher public sector strike numbers, you do also tend to get higher private sector numbers,” warns Patmore.

However, even if public sector strikes don’t lead to union action in the private sector, it’s no relief to most employers; they don’t face unionised workforces. And, unfortunately, outside collective disputes, the number of employment tribunal cases is far from encouraging. For the year ending 31 March 2010, claims were up by 56 per cent on the previous year, to 236,100 – the highest ever level. This year, still, they remain significantly higher than before the recession.

TIME TO TALK

Of course, there’s no secret to what this means for companies. In both union and non-union workforces, the steps for avoiding disputes are broadly similar: consult, communicate, try to explain why the changes are necessary, and if possible secure agreement. As Richard Simpkins, a solicitor with Allianz Legal Protection, puts it, “This isn’t the time to be too embarrassed to show your books.”

If redundancies can’t be avoided, meanwhile, offer as much support as possible to help staff with the transition and finding a new job, and, of course, keep to the rules to avoid gifting an unfair dismissal claim – a step that still tends to trip up smaller companies. Finally, keep records in case it does come to a case.

“Recording everything is critical,” says Theresa Brewes, HR advice and consultancy specialist at First Assist. There is no point following all the correct procedures and then not being able to prove it if it comes to a case.

And, unfortunately, the truth is that it probably will come down to a claim at least some of the time, no matter how well companies handle it. On the individual side, that’s because it remains cheap and easy for employees to bring a claim, and it’s an obvious move for those that have been made redundant and are struggling to find a new job.

“We’re definitely seeing more vexatious claims,” says Simpkins. With the unions, too, reason, communication and efforts at compromise might win through much of the time, but it’s not always going to be the case. As one former union lawyer who’s not optimistic about coming months puts it, “One of the problems with the unions is that they are so politicised. Ultimately it becomes a publicity war. Unions sometimes take disputes and rather than try to find a resolution, try to find conflict to raise their own profile.

“Remember,” he says, “unions have had a problem with falling numbers.” To that extent, companies need to keep in mind that while staff costs are an obvious target when times are tough, the actual impact of cuts are not always easy to measure in advance; staffing costs don’t always end with redundancy. Really, it’s just another reason why jobs cuts have to remain a last resort.


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