If you were looking for a good news story from the recession of 2009, then the cooperation between employers, trade unions and employees could have been it. In businesses across the UK, employers worked with trade unions to avoid losing valued workers through quick redundancy programmes. Instead they changed working patterns, deferred pay rises, negotiated shorter working hours and cut the number of temporary staff in order to ensure that jobs and businesses survived the downturn.
When their backs were against the wall, unions and employers cooperated closely, but as well as surviving the recession, can they share a vision for recovery, and the type of economy that emerges at the other end?
There are very few voices calling to a return to the pre-crisis economic model; it may have helped to fund the historic levels of public investment, but it was neither socially, economically, nor environmentally sustainable. The financial crisis has drawn media and government attention to financial regulation as a first step on the road to recovery, but in truth there are long standing issues around the competitiveness of certain sectors of the UK economy that are equally important if we are to prosper. The long term challenge is to move the UK economy up the ‘value chain’ so that there are more globally competitive businesses producing high value added goods and services, with high skilled jobs that pay good wages.
There is much in this vision of the new economy for business and unions to agree on. Business want strong and sustained growth and trade unions want more and better jobs. The CBI and EEF are as concerned as the TUC about the high levels of youth unemployment, currently around 20 per cent. This is the workforce businesses will need in the coming years and yet as the 1980s recession showed, long absences from the labour market early in working lives can have long lasting and devastating consequences.
Unions are increasingly interested not just in the quantity of jobs, but the quality too. The IPA is currently working with UnionLearn to explore the role that trade unions can play in skills utilisation – how unions can work with employers to develop the skills of the workforce to meet new business needs, and also how they can ensure that workers are fairly rewarded for the skills they have. Demand for higher skills will depend on businesses moving up the value chain, but where businesses are prepared to expand, innovate and improve, trade unions can play a vital role in helping them to build the workforce skills and relationships they need. For trade unions, this is not an act of altruism; workplace learning is a huge opportunity for trade unions to demonstrate their real value to members and non-members alike.
Trade unions as well as many businesses will also agree on the need for a new relationship between finance and industry. The financial crisis has brought to the fore the vulnerability of financial institutions, but it has also encouraged business leaders to raise concerns about the ‘financialisation’ of industry, and the impact that short term shareholders can have on business priorities. In this environment trade unions have often struggled to penetrate the board room and put workforce issues higher up the agenda. When CEOs spend more of the week with City investors than with their workforce, it is hard to develop the collaborative relationships with trade unions necessary to deliver long term value.
But there are also challenges and areas of potential disagreement. Businesses, if anything, need more from their workforce than ever before. Business in the ‘new economy’ will increasingly rely on the creativity, knowledge and innovative potential of their workforce for success. The command and control management of the Fordist production line is ill suited to the knowledge economy, as are the trade union structures and cultures that developed to counter it. However, the knowledge economy is no good work nirvana, and there is still a crucial role for trade unions in representing worker interests. But for trade unions to prosper here, they must look and sound like the workforce, and be able to speak to their aspirations to ‘get on’ at work, develop their knowledge and skills, and yes, to act collectively on some matters, but to be able to sort out certain issues directly with management.
As UK growth bumps along the bottom, pressure will mount for government to pull any lever it has to kick start the economy. Business and unions have a shared interest in ensuring that the opportunity for long lasting economic reform is not missed.
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Hannah Jameson is head of research at the IPA
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This paints an over-simplistic and somewhat over-optimistic picture of labour relations and the role of the unions. Whilst there may be genuine concern for jobs and growth on both sides, a shift towards a more ‘mutual gains’ or ‘unitarist’ approach is not realistic in the long term. Research shows that unions have previously been forced to compromise their position and values when engaging in partnership agreements with businesses, just to remain on the periphery of these organisations and the employment relationship has throughout history, remained unequal. Moreover, even if businesses look towards working with the unions in these difficult times, research also tells us that when growth does occur, businesses resort to their old practices, playing lip-service to worker and union participation. Whilst there are some exceptions, business and unions remain uneasy bedfellows and always will since the ‘structured antagonism’ of the relationship is deeply embedded within it. Whilst unions need to adopt more innovative strategies for increasing mobilisation and yes, training can be used as an appropriate mechanism, being ‘hand in glove’ with the CEO is a recipe for disaster. If Ed’s plan for board level worker representation is ever realised and codetermination is introduced, this surely provides the most effective and legitimate path for union involvement.