Against a background of a cost of living crisis impacting on every employee’s pocket, it is not surprising that we are getting regular reports of trade unions proposing to take action to improve their members’ pay.
We are not used to these headlines. The UK has seen many years of relatively peaceful industrial relations. Indeed the spread of a partnership approach in the workplace, where unions and managers find the ‘sweet spots’ which benefit both the employee and contribute to the success of the organisation has become a noticeable feature of our employment relations in both the public and private sector. It would be a tragedy if the improvements in employment relations in the past years were to go up in smoke as a consequence of the current crisis. There is still all to play for when it comes to industrial relations.
In almost every workshop run by the IPA over the last two years that has involved senior managers and trade union representatives, the interests and aims of the two sides have been remarkably similar: establishing a mutual understanding of each other’s positions and challenges, and a desire for authentic engagement to come to mutually agreed solutions.
In the face of ongoing volatility in the labour market, the need to recruit and retain staff and the importance of employee wellbeing, trade unions and employers need to work together as never before. Employers need to accept that unions will be coming under increasing pressure from their members to do something to alleviate the impact of rising fuel and food prices – particularly for employees on lower pay. Unions will also have to calibrate the impact of pay claims on the profitability and future prospects of employers, and make recommendations to members accordingly. So it is vital that employers become more open and transparent in sharing information, and the dilemmas they face and bring trade unions into strategic and problem solving discussions at an early stage.
Employers need to ensure that the architecture for engaging with their unions, and more importantly, that personal relationships between leaders and managers and trade union representatives, are both fit for purpose, based on trust and mutual understanding. If the relationship has lapsed, or been put on the back burner, or unions have been taken for granted, now is the time to inject new life into both. It’s never been more true that unions are for life – not just for Christmas…..
What is the reasoning behind a pay offer?
At the same time, is there a real dialogue with and understanding among the workforce about the strategic considerations behind employer’s proposals on pay? What is the reasoning behind a pay offer? How does it fit into the strategic plan? Is the balance between shareholder return and employee return understood and felt to be fair, or can it be challenged as disproportionate. Does it feel more as if the employer has adopted a lucky dip approach, and come up with a negotiating position because it’s what they hope to get away with? Are senior people receiving bonuses that are out of whack with what’s on offer to ordinary employees. Does the overall remuneration strategy feel fair? Or in the public sector are the pay constraints imposed by government acknowledged – in which case a joint approach by unions and employers to the Treasury to point out the dangers to recruitment and retention of staff from inadequate pay offers, might be needed.
Unions and employees do not have a death wish; if they understand the real constraints and strategic intentions of employers – and if they have played a part in developing the strategy and feel a sense of ownership of it – they are more likely to calibrate pay demands according to that jointly accepted reality. Decisions made a million miles away in boardrooms that are not accountable to the workforce will not get a sympathetic hearing when food prices and fuel bills continue to increase.
For example, did employees across the rail sector understand their employers’ plans to protect and develop the sector post pandemic; where the investment is going to keep the industry viable and secure a future? Has that strategic conversation happened with the workforce or the unions concerned? If I asked a Network Rail employee, would they be able to articulate the organisation’s future plans for a secure future – even if they then rejected them as a reason for pay restraint? How about a BA employee? Or a BT employee?
Trade Unions
The key to a productive working relationship between organisations and trade unions is the sharing of dilemmas. The dilemma for organisations is how to engage and retain staff when they have a finite amount of money to distribute. The dilemma for trade union representatives is how to act pragmatically when they are under severe pressure from members who pay their union dues and now expect to see something from it.
It would be a tragedy of the improvements in employment relations in the past years go up in smoke. Union members en masse tend to take industrial action as a last resort. And trade unions know they will lose public sympathy pretty quickly if disruption to essential services such as transport continues indefinitely. There is still all to play for when it comes to industrial relations.
Derek Luckhurst & Nita Clarke, IPA
June 2022