Reasons for Decline in Trade Union Membership
The main causes of TU’s becoming less popular are because of globalisation and government power, which have affected the labour market and how they operate, thus their overall purpose:
Globalisation is defined by Stiglitz (2002, pp.9) as ‘the closer integration of the countries and peoples of the world’. This economic development means that world trade increases as trade barriers are removed, and when Britain joined the European Union (EU) in 1973 there was even more freedom for Britain to buy and sell across borders. An initial effect of globalisation for TU’s was that the manufacturing industries developed. With increased technology from other countries, skilled manual workers were soon replaced by machines because of the higher productivity and quality of outputs which allowed British firms to be more competitive against foreign rivalry. It is cheaper to manufacture goods in third world countries so this industry moved out of Britain and into the cheaper countries, which resulted in the primary sector experiencing an economic downturn whilst the tertiary sector started to enlarge. In the tertiary sector, more service firms formed that required a less skilled workforce so newer vacancies suited the conventional woman. An example is that the service firm Tesco employ more part-time workers to cover the evening opening hours as they begin to extend their services. This negatively affected TU’s because their membership had been concentrated with fulltime male skilled workers but there are few active male workers in the enlarged tertiary sector. This follows the facts of Bain and Elshiekh (1976) who found that changes in TU membership are closely linked with occupational compositions that differ with the changes in business and economic conditions.
In industrial society today, there is more transfer of trade across countries and as Britain is part of the EU, there have been more EU laws to help regulate the affects of globalisation. With the increase in part-time workers, the EU has revised their laws to include part-time workers having equal treatment as fulltime workers. The EU Social Charter 1989 also includes that firms need information, consultation and participation of employees and that their working conditions and living standards need to be improved. The target is that by 2008, 75% of British employees will be covered by this legislature. But does this ensure that employees will have no conflict in the workplace and that TU’s will play a less significant role in industrial relations?
Globalisation may have contributed to the decline in TU membership, but it also brings with it other negative consequences for employment relations in Britain. With the increased foreign competition, employers are now more concerned about marginal productivity, so wages are now frequently based upon a piece-rate system. Although Blyton and Turnball (2004, pp.23-29) believe this motivates employees as it fulfil their individualistic needs, McIlroy (1995) thinks that firms take advantage of employees who are compelled to sell their labour and abuse them for their own profits.
The deficiencies of British employment relations are also highlighted as foreign companies based in the UK bring with them their own employment relations. In Japan, for example, there are no strike agreements set so that TU’s can help to benefit both capital and labour. Home firms are influenced to change their management of industrial relations practises and can now be characterised by immense variety (Sisson and Marginson, 2003, pp.182). TU’s will still be important in this respect as employees begin to demand more from their employers so that their working conditions match the conditions offered by other firms, and TU’s have to negotiate to achieve their members needs. After all, TU’s still negotiate with employers in 47 of The Times top 50 companies (McIlroy, 1995).
A service that TU’s now offer is educating their members by retraining them, which was briefly described earlier in the essay. This is a more recent activity of TU’s and was proposed when the effects of globalisation began. For the reason that the manufacturing industry contracted, previous manufacturing workers who needed employment had to essentially be retrained in new skills in order to find a job. Heynes has stated that the reorganising of skills has led to the reorganising of power relationships in the workplace; therefore conflicts occur and TU’s have new issues that they now have to bargain for.
The effects of globalisation have caused the labour market to change which has led to the government having to make alterations to reflect these changes. The two political parties that have influenced TU performance are the labour and conservative parties, and the essay will now explore how they have affected TU density.
Freeman and Pelletier (1990) have outlined three phases that laws have changed. Between 1946 and 1973, labour was in power and through the repeals of Trade Disputes and the Trade Unions Act 1927, helped strengthen TU authority. Between 1974 and 1979, the labour government further helped the TU’s by restoring TU immunities through the Trade Union and Labour Relations Act 1974. Throughout these periods, TU density had been increasing and peaked in 1980, but this reversed once the conservatives came into power. Between 1980 and 1988, the conservative leader Margaret Thatcher shifted the legal balance towards employers and restricted TU recognition through the Employment Act 1980.
Blyton and Turnball (2004) note that the era of ‘Thatcherism’ deregulated TU power by imposing tighter regulations in industrial relations between 1979 till 1997. Many legislations were introduced to reform the TU with the concern to constrain union power for example, the Trade Union Act 1984 replaced workplace ballots that were in place to gain support for industrial action with individual member ballots (Martin et al, 1995, pp.146). Then in the Trade Union Reform and Employment Rights Act 1993, this regulation became tighter by TU’s needing to inform employers seven days before they were going to conduct industrial action. This meant that TU’s had no power over their members in the workplace as their collective tactics were replaced with individual ones which had a lesser affect. Martin et al (1995, pp.149) showed that when the Inland Revenue Staff Federation had their executive committee election, the postal ballots produced a 30.9% response when previously the workplace ballots produced a 56% response rate. This did though put power in the hands of representative employees because the employees who had genuine opinions would then vote.
Also, there are now legal penalties for strikes and employees risk being dismissed by their employers if they participate, explaining why the number of strikes declined because this was the TU’s main implement of industrial action. Other legislation changes meant that there were restrictions for closed-shop and secondary action, picketing became unlawful, TU’s were liable for industrial action and the shop stewards employed by TU’s were unable to take time off to fulfil their duties (Edwards, 1995). The purpose of restricting the TU’s activities was so that individualism was being promoted which goes against collective bargaining, which is at the heart of the union-employee relationship. It is true for Taylor (1993, pp.319) to say Thatcher’s aims had ‘no obvious role for trade unions at all’.
The reason that Thatcher was so against TU’s was because she believed that ‘there is no such thing as society; there are individual men and women’ (Edwards, 1995, pp.337). She wanted to assert individualistic rather than collective values so that people could operate more freely and to become a more liberal nation. A step into this direction was by reasserting employer power so that they could operate how the wished and this links back to globalisation. Since globalisation bought in more foreign competition, by ‘freeing employers from abuses of union power’ allowed them to conduct business to their best ability so that they had a competitive advantage (Edwards, 1995, pp.275). This allowed Britain to take advantage of globalisation to become a strong economy and competitive in the international environment, which was previously believed to be restricted because of TU’s. To help regulate firms, laws were passed to support the non-union workplace from the 1980s onwards.
However, the labour party have now been in power since 1997 and have conceded more laws to support TU’s. There have been recognition rights passed to help TU’s have an opportunity to recruit members in the workplace, since a reason the decline continued was because employees had not seen an opportunity to become TU members (Blyton and Turnball, 2004). Also, since strikes had been severely restricted when the conservatives were in government power, there had been less media coverage of industrial action and potential members did not see an opportunity to join. However, the labour government have now also passed laws so that employees cannot be so easily dismissed for participating in strike action which Salamon (2000, pp.452) depicts as a step towards a ‘right to strike’. For example, this protected employees of a more recent strike, which was the largest strike to have occurred in the history of the Irish Republic demonstrating how strikes are becoming more prevalent today. This was in 1999 and began when 27,500 nurses stopped work upon pay conditions; they picketed 1000 hospitals and within the first hour a 1000 operations were cancelled and 7000 patient appointments were cancelled (Salamon, 2000). Does this mean that industrial action will become more common and that TU’s will be popular once more?
The essay argues that this depends upon which political party will be next in government power. The decline in membership has slowed which indicates that the laws passed by the current government have helped TU’s. However, trends are cyclical and also depend upon the economic cycle, and Carruth and Disney (1988) found that the decline in TU membership was by 15% and the employment rate fell by 9%; incidentally both fell by 2 million people each. Unemployment peaked at its highest in 1980, which is when TU’s peaked in their membership since the manufacturing shakeout had caused many people to lose jobs (Blyton and Turnball, 2004). It was from then that TU membership started declining and the conservative government imposing laws from 1797 to restrict TU power helped speed up this decline and as Heery (2005) observes, TU’s have had to learn to live with substantial volumes of employment law.
Non-union Workplace
A non-union workplace is defined by Dundon and Rollinson (2004) as ‘an organisation in which management does not deal with a trade union that collectively represents the interests of employees’. The EU Social Charter 1989, mentioned earlier, requiring all firms to include information, consultation and participation of employees has been coordinated into British industrial relations through the laws promoting a non-union workplace. This is also because foreign firms have bought with them better employment relation techniques forcing British firms to advance theirs so that they are able to employ good workers.
A non-union workplace may have employed TU members, but their main concern is to minimise any need for TU recognition. By having an information and consultation committee, management techniques are better if they successfully understand their employees. They do this by changing their management techniques to improve the relationship; there is more direct communication, individual target setting, performance related pay and individual appraisals. These techniques are more personal which is associated with individualism (Edwards, 1995, pp.339). This fulfils the EU directive and also the post-modern aspect of individualism so employees are intended to be satisfied in the workplace. Edwards (1995) also identifies that increased personal attention produces better performance because employees are more committed to their self-interests. Therefore, non-unionism is ‘increasingly becoming the norm’ (Guest, 1994, pp.1).
A case study offered by Dundon and Rollinson (2004) exemplifies the advantages and disadvantages of the non-union company Delivery Co. Advantages included that the increased communication allowed firms to have more problem solving in the workplace, workers were more productive and there was less conflict as employees trusted their employers more. TU’s were not necessary if employees felt as though they had ideal working conditions. However, the disadvantages were that conflicts were expressed in other actions. Guest (1994) also found along with Dundon and Rollinson (2004) that non-union workplaces had higher levels of absenteeism, labour turnover and dismissals in comparison to unionised firms. Although employees are informed and consulted, is there an adequate measure of how much employees are being allowed to know? Employees trusted their employers but this commitment was deliberately being exploited as they actually had fewer rights and benefits compared to unionised firms.
This creates different concerns for TU’s. They now worry those employees are being misled and that they need to be represented. The problem is that it is hard for TU’s to gain recognition in the workplace so potential members will continue to suffer. The EU legislation only covers British companies that employ more than 50 employees. The TU argue that if it is that important to inform and consult with employees, all companies employing more than one worker should be bound. It has been made visible that employers still do not effectively realize employees’ needs and a TU is still essentially the best establishment to do so. The essay now moves onto discuss the conflicts of pay that TU’s still fight for in contemporary industrial relations.
National Minimum Wage
Wage is a very sensitive matter and is central to the economic relationship that employees and employers hold, so it has to be managed very carefully (Blyton and Turnball, 2004). Employers supply wage to motivate their workers to work hard but at a rate so that there is not a high labour turnover. To them, workers are a cost and they try to reduce this as much as possible. For employees, wage is their main source of purchasing power to be able to survive. It is obvious then that this conflict will always exist so TU’s have a suitable purpose here. For example, a TU strengthens the fair pay orthodox by ensuring that employers are paying the market rate otherwise employees will be exploited (Blyton and Turnball, 2004).
An attempt to avoid conflicts of pay was by commissioning the national minimum wage (NMW) in April 1999. The NMW was introduced after pay continued to be the main reason for conflicts in the workplace as well as the topic of most tribunal hearings, and the TU had been campaigning in favour of fair pay for many years. Although this allowed a standard to be maintained so all workers are treated equally, more individualised pay systems have been developed; 45% of British establishments pay according to each employees outcomes, challenging collectivism. TU’s have also found that this method of calculating pay has strong support from employees (Edwards, 1995, pp.351).
Although the NMW has to be followed, the TU’s are still having to campaign for fair pay. This is because neo-liberal employers are against the NMW and feel that it hinders the economy and does not allow Britain to be as competitive in the global market. Callaghan (2000) says that the TU is still needed to make sure that the NMW is met. Also, it is known that the NMW is becoming the average rather than the minimum and workers other benefits are being cut back on so that their wages meet the law (Callaghan, 2000).
Women, part time workers and the younger workforce are still generally paid modestly and they tend not to join TU’s. However, more recently in 2004, TU’s have won more members since they successfully campaigned for another minimum wage for young people so that they do not get exploited (Inman, 2004). Although the TU’s have achieved this objective, they need to still make sure that the minimum wage is being increased according to inflation and the economic environment which will inevitably change with the effects of globalisation. It is evident that TU’s still have the same purpose as it did when they were first established when it comes to the issue of pay. As they realise they still have a creditable purpose, they have attempted to defeat their decline in membership which will now be explained.
Defeating the Decline in Trade Union Membership
The threats of globalisation and government have changed the purpose of TU’s and they have needed to change the way they function in an era of post-modernism. They have responded to the decline in their membership in a number of ways to renew themselves; mergers, organisations and partnerships will be focused upon.
A merger is where two or more TU’s form into one TU. In 1948, there were 750 TU’s but due to mergers they have compacted into just 200. The trend of mergers is explained by Ebbinghaus (2004) who says that due to the TU membership decline, they have had to pool resources together otherwise they would have completely weakened and been pressured to stop operating. This helps TU’s to become more efficient and effective by cutting the costs of having just one TU so that they can benefit from economies of scale and their structure becomes more simplified.
They have reorganised to now cultivate their internal sources of strength so they have changed their priorities and objectives. So, whereas previously their membership mainly consisted of fulltime skilled male workers, since the 1990s they have been aiming to recruit more workers in the tertiary sector, females and part-time workers (Heery, 2002). This is because they have realised that the labour market has a high employment of these workers and to gain membership they need to target them which Heery (2002, pp.26) says that is vital if they want to revitalise British TU’s. However, although potential members are targeted, TU’s give them the impression that their employer is taking advantage of their labour so they have a collective force to go against employers. This is why organising is a minority trend, because employees are more loyal to their employers nowadays.
A more successful approach was the idea of forming partnerships. This is described by Heery (2002) as the interaction between TU’s and employers so that they can cultivate each others resources. A TU, by securing a relationship with an employer, can use this opportunity to recruit members whilst the employer fulfils their legitimate interests. This is since TU’s realised that employee security correlated with the profitability of a firm and TU’s encourage this, so employers agree to join alliances to gain this benefit. This allows TU’s to fulfil their purpose, especially now that training in the workplace is seen as an explicit requirement; it helping employees feel satisfied and employers having the right skilled workforce. Within the partnership, TU’s increase communication, employee involvement and maintains a good performance management and this is described by Windolf (1989) as a ‘productivity coalition’. It was mentioned before that management have improved their human recourse practises in non-union firms, but by having a partnership, the TU would in charge of employee relations. Partnerships have formed in large companies such as Tesco and Asda have a cooperative employer and TU relationship and have found that they benefit from better job creation (Kersley, 2003, pp.202).
The downside is that most managers would rather be union free (Heery, 2002, pp.26). Most employers are worried to set an agreement for fear that TU’s will reduce the effectiveness in the workplace if shop stewards activities are increased. Managers also fear that their legitimate interests and mutual gains will be second priority to their employees and for the reason that TU’s reorganising creates a discrepancy between employer and employee, hence how can employers completely trust TU’s? The rate of decline, though, has slowed and it has been made aware by Waddington (2004) that in the 1990’s, there had actually been a rise in membership. With the help of the laws passed by the labour government, TU’s purpose is beginning to be realised again - to evaluate the essays overall assessment of this, the essay now moves to its conclusion.
Conclusion
The essay has assessed the argument of unions serving no purpose in the 21st century and has concluded to oppose this assertion. The role, functions and industrial relations objectives the TU’s were described to show how they once operated and why they had been so valuable to the British labour force. The reasons for their decline in membership that had triggered this argument were explained, establishing that the TU’s had lost their members due to globalisation but were even more restricted when the conservatives had power in government. This did not prove the TU’s no longer served as a purpose but showed that they had to modify how they operated and that their purpose altered – as Heery (2005) states, unions have to reflect the changing compositions of the workforce.
The issue of pay is evidently still an issue in contemporary industrial relations and employment, a ceaseless conflict between industry and society. The TU’s campaign for fair pay has been successful with the application of the NMW which they need to ensure is being conformed to, especially by neo-liberal employers. There are also other concerns that have arisen and this is in the non-union workplace. Although management practises have improved, it has been found that employers indirectly exploit employees and as a result, TU’s now campaign on their behalf.
The strategy taken by TU’s to combat their declining membership helped to slow the decline and it was stated by Waddington (2004) that there had even been an increase. This certainly indicates that as the restrictions on TU weaken, potential members and even managers are able to see the purpose of TU’s once more. Currently, potential members are dissuaded to join TU’s because there is less union presence in the workplace (Whitston and Waddington, 1994). Women have a higher employment rate than men nowadays and still experience inequality in the workplace yet they tend not to join TU’s, and therefore are potential TU members (Whitston and Waddington, 2004, pp.38). The new concerns bought by globalisation, the non union workforce and the NMW are now the reasons why TU’s still have a purpose and with increased recognition, they will be able to represent more members. So although we live in an individualistic society, TU’s will be able to succeed in the collective environment that still exists (Blyton and Turnball, 2004).
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