British Journal of Industrial Relations
31:1 March 1993 0007-1080
Union Exclusion and the
Decollectivization of Industrial
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 as 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 power, thereby commensurately increasing employers' discretion to determine the terms of the employment relationship. 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, but comparatively
few have terminated existing union recognition agreements, preferring to
marginalize the role of unions through the adoption of partial exclusion
policies — joint consultation, direct communication, 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 as 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 Lecturer in Industrial Relations at the University of Nottingham. Gary Morton
*as formerly the Provincial Newspapers National Organizer of the National Union of
Journalists and is currently a student.
98 British Journal of Industrial Relations
'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).
Goldthorpie 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 reduction 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 codetermination (Crouch 1986).^ This programme constitutes a more immediate 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 pwlicies in order to permit an intensification 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.
2. Conservative Government Policy
During the 1970s, government policies founded upon Keynesian theories of
economic management faiied to create the conditions for profitable
accumulation (S. Clarke 1988:155-72), while labour was strengthened by
the associated corporatist policies (Goldthorpe 1984) and the reform of
workplace collective bargaining (Terry 1983). The Conservative government's critique of British economic performance laid particular stress upon
the negative role of union power and labour market inflexibility (Department 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 intervention 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 and Decollectivization 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 are conceived as inherently monopolistic
organizations which, through their power to impose a '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 utiion tort
privileges, while employers should 'individualize' the employment relationship at the expense of workers' unilateral job controls and collective
bargaining in order 'to restore to firms the abihty to adjust their labour costs
to meet changes in the level of demand, in technology, in price competitiveness or in labour market conditions' (Rubery 1987:60),
During the 1980s the Conservative government, atfirsthesitantly 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 inflexible (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."^
The Conservatives' comprehensive programme of employment law
refonn 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,'* All EuropeanCommunity-inspired 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 a significant escalation of this
project in three major areas (Carty 1991), First, all industrial action outside
100 British Journal of Industrial Relations
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 [1984] ICR 386); and where a dispute embraces more
than one employer this now constitutes a number of separate disputes and
therefore each must be 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 dp 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 employment offer contingent upon membership or non-membership of a 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 legislation 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.
3. Employers and Union Exclusion
In monopoly capitalism^ competition between units of capital is embodied
within the capital market of the multidivisional corporation, the dominant
organizational form (Marginson et al. 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 1979, when union membership was at its height of 13.2 million,
some 46 per cent of the employed population remained unorganized; since
Union Exclusion and Decollectivization 101
then thisfigurehas 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 (Maclnnes and Sproui 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 workers or those whose skills have been made redundant by technological
development (Claydon 1989; Marginson etal. 1988:140; Smith and Morton
1990). Whereas company-wide union derecognition is exceptional, instances 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 derecognition 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
industria! 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 organization 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 marginalise' trade unions even while
recognizing their continued right to operate. The formalities of collective
102
British Journal of Jndustrial Relations
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 fonnal organizational indices of union representative structures may remain intact or may even be enhanced (Terry
1986; 1989), while employers attempt to demobilize workers' collective
p>ower 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
conflictua! 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 (PRF), 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' productivity (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 al. 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 subsidiaries, 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
Union Exclusion and Decollectivization 103
decentralized corporation is the model consciously adopted by the government 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 al. 1988:1-8; Purcell 1989:68-70).® Hence, 'employee relations 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 fragmentation 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'
(Purceli 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 necessary 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 Citizen's Charter {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
"uplementation. For the present, agency employees remain within the civil
service under the umbrella of common employment as Crown servants, but
'n July 1991 the government gave notice of its intention to permit
104 British Journal of Industrial Relations
departmental/agency bargaining, greater flexibility within national agreements 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 companies." 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.''^ Local government
services are also being directly privatized, for example transport, docks and
airports. The division of London TransjKjrt 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,
payflexibilitywithin 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 artively 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 (T^SA) 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
Union Exclusion and 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 telecommunications staff.
In the Post Office, following some disposals, three separately incorporated 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 institutionahzation 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 ad hoc payments for specific work
tasks (Leman and Winterton 1991) 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 (TurnbuU 1991),^^ and the road passenger transport, electricity and
water industries (Ogden 1990; O'Connell Davidson 1990),
106 British Journal of Industrial Relations
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 tofieldsales 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 organizational structure by three service and three market divisions, and a job reduction programme. The 'mission statement' of the new Personal Communications 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 8,455,0(1)
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 companywide agreements continue, they frequently incorporate an element of plant
or subsidiary bargaining (e.g. ICI's 1991 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 empioyees (Kinnie and Lowe
1990), it is now endemic in thefinancesector 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 amd General Motors out of the latter's heavy
goods vehicle subsidiary and employing a work-force of 1750, where the
cotnpany council is composed of five union and six employee represetitatives 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 agreements 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 withdrawal 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 terminated 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 International has terminated NUJ agreements at all five of its subsidiaries. Associated Newspapers has terminated NUJ recognition for all purposes,
whereas United Newspapers has introduced individual contracts but retained 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
agreetnent, 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
niagazine and periodicals sector.
108 British Journal of Industrial Relations
5. Conclusion
Debate on the character of the changes in work organization and employment 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
fonnal institutions. But both are too restrictive, ignoring the uneven nature,
application and impact of restructuring, and the attrition of union pKjwer
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 de facto 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 organizational 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 inadequate 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
alternative response is possible, namely a wider and intensified commitment
bv 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 (1984:329) 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 'labouT 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 Hanson 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 (1989) notes that in 1986 the largest ICK) industrial companies in the UK
(excluding banking, insurance and finance) had a combined turnover of £34,22
110
6.
7.
8-
9.
10.
11.
12.
13.
14.
British Journal of Industrial Relations
billion and employed 5.3 million workers, some 25 per cent of the insured
population.
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 er a/. (1988:144) note that'Twenty-five per cent [of their
sample of 106 companies] determined pay unilaterally.'
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
intact 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.
Decentralization within multidivisional corpwrations has been related to product
diversification (Marginson et al. 1988:39, 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;
Purceil and Ahlstrand 1989).
Two of the Department of Social Security's computer systems (Livingston, Scotland, and Norcross, Lancashire) will be operated by non-union electronic data
systems (a General Motors subsidiary), and a third (Swindon) by the Sema Group.
Neither the Northumbrian Ambulance Service nor the Lincolnshire Ambulance
Service has recognized public-sector unions for local pay bargaining.
Some 53 per centof contracts have resulted in joblosses, 12percentinpaycuts, 17
per cent in hours cuts; and anumber of direct service organizations (in Berkshire,
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).
Innovations variously adopted include negotiating machinery which combines
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 communication (Griffiths, 1990). Over one hundred local authorities have introduced
PRP schemes for APTC grades (Spence 1990).
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.
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 take an
active role in union affairs was withdrawn following the NUJ's threat to present a
claim of anti-union discrimination under the Employment Protection (Consolidation) Act 1978, S.23.
Union Exclusion and Decollectivization
111
15. Terry (1989:196) 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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