Paul Marginson
Manchester IR Society 50th Anniversary Conference,
21 November 2014
Warwick Business School
A changed landscape
Lerner et al (1969) Workshop Wage Determination
-
a world of national, multi-employer agreements which shaped wage structures in
most large, and determined them in many smaller, firms
-
focus on relationship increasingly widespread plant-level agreements in larger
companies and national (sector-wide) agreements
-
echoed Donovan Commission’s call for formalisation of plant-level bargaining,
within a two-tier bargaining structure
‘Possibly the most remarkable feature of the period after 1980 in Britain was the
collapse of collectivism as the main way of regulating employment.’
(Brown et al, 2009: 22)
What happened? Why?
Warwick Business School
What happened? Why?
Four feature of collective ER [focus on private sector]

collective representation and organisation

collective bargaining coverage and structure

scope (agenda) of collective bargaining

joint consultation arrangements

΀ĐŽůůĞĐƟǀ ĞĐŽŶŇŝĐƚї :ŽŚŶ<ĞůůLJ΁
Three underlying processes

‘marketisation’: shift from an industrial / occupational frame to an enterprise frame in
collective ER

rise of ‘micro-corporatism’: increased focus on common interests of collective actors
with an enterprise frame

changing nature of voluntarism


attempts at legally-induced or legislatively-prompted voluntarism → meagre outcomes
‘asymmetric’ voluntarism: management decisions increasingly predominant in determining
‘fact’ and trajectory of collective ER
Warwick Business School
Collective representation and organisation (1)
Trade union membership and density

rose from mid-1960s (43%) to 1979 peak (55%)

sharp decline to 1990 (38%), less steep to 2000 (29%), slowed further since (25% in
2014)
Changing demography of trade unionism

numbers of unions declined: 454 (1979), 218 (2000), 162 (2014)

largely due to mergers, resulting in concentration of membership in a few large
unions

decline of occupationally- and industrially-specific unions and rise of the
conglomerate
Employers’ associations

lack of data on membership: some decline during 2000s in employment density of
CBI member companies from 42% to 35%
Warwick Business School
Collective representation and organisation (2)



numbers of EAs declined: 375 (1983), 2003 (178), 2014 (97)
dissolutions (e.g. clearing banks) as well as mergers
;ƌĞůĂƟǀ ĞͿĞĐůŝƉƐĞŽĨŝŶŵĂŶLJƐĞĐƚŽƌƐďLJŝŶĚŝǀ ŝĚƵĂůĐŽŵƉĂŶŝĞƐї ĞdžƉůŽƐŝŽŶŽĨŶƵŵďĞƌ
of bargaining units during 1970s and 1980s [‘marketisation’]
Two dogs that have whimpered rather than barked …

sƚĂƚƵƚŽƌLJƵŶŝŽŶƌĞĐŽŐŶŝƟŽŶƉƌŽĐĞĚƵƌĞ;ϮϬϬϬͿї ĂŌĞƌŝŶŝƟĂůƐƵƌŐĞ͕ ŶƵŵďĞƌŽĨŶĞǁ recognition agreements fell back to 1.5 times mid-90s levels by 2005 (Gall)

non-union forms of representation in the workplace in the face of a growing
‘representation gap’

WERS 2004 and 2011: just 7% of non-union workplaces (5+ employees) reported nonunion reps
Implication: employers less willing to engage with collective representation and unions
less able to pressure them to do so [asymmetric voluntarism], but where they do unionbased arrangements continue to predominate
Warwick Business School
Collective bargaining coverage and structure (1)
Three main developments:

decentralisation (towards company and plant level), (from 1960s onwards)

contraction of CB coverage, only became apparent after 1990

move to ‘single table’ bargaining arrangements (late 1980s onwards)
Collective bargaining coverage

declined from estimated 70% (1980) to 36% (2000) and 30% (2013) [LFS, whole
economy]

WERS (private sector workplaces 25+ employees): 52% of employees (1984), 32%
(1998), 25% (2004 and 2011)
Collective bargaining structure (decentralisation)

shift from multi- to single-employer bargaining [‘marketisation’]



1960s, 70s: company/plant negotiations within framework of ME agreements (Donovan’s two
systems: formal and informal)
1980s onwards: demise of most multi-employer agreements in the private sector; determined
pay for almost 1 in 2 workplaces covered by CB (WERS 1984), only 1 in 6 (WERS 1998)
as a result, many smaller employers, not well organised by unions, fell out of CB
coverage altogether [changes in structure and coverage linked]
Warwick Business School
Collective bargaining coverage and structure (2)
Collective bargaining structure (enterprise-level integration)

spread of single union deals and ‘single table bargaining’ arrangements, in place of
previous multiple bargaining units, indicates rise of ‘micro-corporatism’ under
single-employer bargaining

WERS 1980, 1984, 1990 designed on the assumption that separate bargaining
arrangements along occupational lines (manual, non-manual) [also found
fragmentation amongst these two groups]

CBI 1979 survey of pay bargaining structures: only 22 / 1250 manufacturing
establishments had a common (single table) pay bargaining arrangement

extent of single union deals: WERS 1998: 43% of workplaces recognising unions
had a single union, rising to 50% by 2004 → four out of every ten the result of a
formal agreement

spread of single table bargaining: five out of every ten workplaces recognising 2+
unions in WERS 1998, rising to 6 out of every ten in WERS 2004
Warwick Business School
What accounts for the ‘remarkable’ decline?

sƚƌƵĐƚƵƌĂůĐŚĂŶŐĞƐƚŽƚŚĞĞĐŽŶŽŵLJ͍ ї ƌĞůĂƟǀ ĞůLJŵĂƌŐŝŶĂů;ƌŽǁ ŶĞƚĂů͕ϮϬϬϵͿ

ƚŽƵŐŚĞŶŝŶŐĐŽŵƉĞƟƟǀ ĞĐŽŶĚŝƟŽŶƐ͕ ŝŶĐůƵĚŝŶŐŝŶƚĞƌŶĂƟŽŶĂůŝƐĂƟŽŶŽĨŵĂƌŬĞƚƐ͍ ї evidence patchy and inconclusive (and UK not unique)

role of foreign-owned MNCs, whose employment share steadily increased? → clear
preference for SEB over MEB, but not less likely to recognise unions

lĞŐĂůŝŶƚĞƌǀ ĞŶƟŽŶ͍ ї ŽŶƐĞƌǀ ĂƟǀ ĞůĞŐŝƐůĂƟŽŶŽĨϭϵϴϬƐ͕ ϵϬƐŚĂĚĂŶŝŵƉĂĐƚ͕ ďƵƚ
probably secondary (Brown et al, 2009)

UK legal framework always provided weaker support to MEB than in continental
ǁ ĞƐƚĞƌŶƵƌŽƉĞї D ŵŽƌĞǀ ƵůŶĞƌĂďůĞƚŽĐŚĂŶŐŝŶŐƉƌĞĨĞƌĞŶĐĞƐŽĨĐŽůůĞĐƟǀ Ğ
actors

strategic choices? → from 1970s onwards large companies chose to break away
from ME agreements rather than elaborating / formalising second-tier bargaining
within an ME framework; TUs prioritised local negotiations
Warwick Business School
Scope of collective bargaining (1)
Two main features

hollowing out of collective bargaining agenda

growth in micro-ĐŽƌƉŽƌĂƟƐŵї ƐŚŝŌĨƌŽŵĂƉƌŽĚƵĐƟǀ ŝƚLJ- to a competitionoriented agenda

managerial relations largely disappeared from the CB agenda, and market relations
narrowing to focus on pay only

WERS 1990: aspects of managerial relations (e.g. staffing levels, redeployment) s.t
negotiation in >50% workplaces recognising unions; declined to approx 10% by
1998

WERS 2011: ‘significant diminution in the scope of negotiations’ [over market
relations] since 2004; pay the only majority issue, no longer also hours, holidays
Warwick Business School
Scope of collective bargaining (2)
1960s: rise of productivity bargaining (Fawley refinery (Flanders), chemical and engineering
sectors (Lerner et al))

formalisation of plant-level bargaining intended to secure basis for productivity
bargaining

wages the general equivalent against which other issues (specific working and
employment practices) traded off

negotiations integrative, positive sum, with gains for both sides (Walton and McKersie)
1990s: shift to competitiveness bargaining, and increased emphasis on common interests
between local management and workforce (micro-corporatism)

growing focus on flexibility, internal and external; also on employment and
employability, and trade-offs between these

wages increasingly perceived by mgt as a cost, cf. productivity-enhancing, factor

eŵƉůŽLJŵĞŶƚŝŶĐƌĞĂƐŝŶŐůLJĂŶĞŐŽƟĂƟŶŐŽďũĞĐƟǀ ĞĨŽƌƵŶŝŽŶƐї ĂƐĞĐŽŶĚŐĞŶĞƌĂů
equivalent against which other issues (enhanced flexibility, cost savings) traded off

negotiations integrative, but positive sum outcome less clear cut
Warwick Business School
Scope of collective bargaining (3)

spread of ‘pacts for employment and competitiveness’ (PECs), amongst
internationally integrated MNCs in manufacturing (e.g. automotive) to secure
production and employment at particular sites


‘reverse’ example: Hoover’s 1993 relocation from Dijon to Cambuslang (Scotland)
extent to which employment become a second general equivalent in negotiations
underlined by crisis-induced agreements amongst manufacturing companies in
2009, 2010

pay freezes and shortened working time in order to maintain employment and retain skills
Warwick Business School
Joint consultation
Traditionally viewed as the poor relation to collective negotiation.

1960s (Donovan): ‘Consultation was almost completely overshadowed by CB in practice
and fashionable academic discourse about industrial relations’ (Hall and Purcell, 2013:
15)
Have consultation arrangements become more widespread as CB coverage declines?

1960s, 70s: minority phenomenon but not uncommon (MacInnes); Warwick workplace
survey (1977-78), 42% of manufacturing workplaces with 50+ employees

late 70s/early 80s a high water mark: incidence of consultative cttes at workplaces (25+
employees), 34% (WERS 1980, 1984), 28% (WERS 1998), 24% (WERS 2011)

joint consultation not filled the gap left by the shrinkage of CB coverage: proportion of
workplaces (25+ employees) without either union recognition or consultative ctte risen
from 34% (1984) to 62% (2004)
2004 ICE regulations – another ‘whimpering’ dog

at best, halted decline: workplace consultative ctte at 13% of workplaces in orgns >50
employees (2011) cf. 14% (2004)
Warwick Business School
Quality of consultation

Cressey et al (1985): poverty of the consultation agenda in six company case
studies, ‘consultation was a marginal and unstable exercise’ (MacInnes 1985, 103)

focus in 1990s and 2000s more on direct employee communication and
involvement than joint consultation per se (e.g. Marchington)

Hall and Purcell (2013): minority of ‘active consulters’ amongst 21 case company
case studies, with majority of ‘communicators’


key differences: consultation before the event (options-based); strategic business decisions
with impacts on workforce consulted over; management policy towards consultation
ICE Regulations: a benchmark against which to assess quality of consultation
information in good time, and sufficient to enable employee reps to prepare for
consultation
 WERS: for workplaces in orgns with >50 employees, with consultative ctte, options-based
consultation in 40% (2004 and 2011) according to mgrs, down from 50% (2004) to 26%
(2011) according to employee reps
 ‘a clear indication that managers were more restrictive in 2011 in the way they
approached consultation’ (van Wanrooy et al, 2013: 63)

Warwick Business School
Final thoughts

marketisation of collective ER transformed collective agreements from public goods
with inclusive regulatory coverage of industrial / occupational workforces, to
private goods with exclusive regulatory coverage within those enterprises where
unions still recognised


collective bargaining coverage converging on union density
micro-corporatism and shift towards a competitiveness-oriented agenda blurring
the distinction between negotiation and consultation

consultation arrangements not filling the representation gap, and little evidence that
quality improving where arrangements in place

ŵĂŶĂŐĞŵĞŶƚŝŶƚŚĞĚƌŝǀ ŝŶŐƐĞĂƚŝŶĚĞǀ ĞůŽƉŝŶŐ͕ ŽƌŶŽƚ͕ ĐŽůůĞĐƟǀ ĞZї ĂƐLJŵŵĞƚƌŝĐ
voluntarism

is legally-induced voluntarism doomed to fail?
critiques of ‘light touch’, ineffective framing of SUR procedure (Gall) and ICE regs (Hall and
Purcell)
 counter-example of consultation over collective redundancies regulations

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