28th November, 2011
Do trade unions help employers?
The decline in the number of union members, and of days lost through industrial action, has led many commentators to conclude that trade unions in the UK are going nowhere. Critics have asked what unions can do for employees that employers can’t do for them at least as well. They have tended to pay less attention to what trade unions can do for employers.
The story of continued union decline is no longer looking quite so stark, and the reasons have more to do with employer attitudes than those of employees. The answer to Professor David Metcalf’s question in 2005, whether unions can expect “resurgence or perdition”, looks less obvious than it did. The public narrative about trade unions has subtly begun to shift.
This is not because the UK is suffering a worse period of industrial action than for some time, because it isn’t. Industrial action is still at an historically low level, despite the threats of large-scale action on public service pensions. In fact, the current confrontation highlights the unions’ collective weakness as much as it does their strength.
Nevertheless unions have attracted recognition from employer bodies, such as the EEF and CBI, for the positive role they have played in supporting employer efforts to find alternatives to redundancy, such as pay cuts and short-time working, during the recession.
Employers have long recognised – if sometimes grudgingly – the help that unions can give in implementing organisational change, by offering a mechanism for the effective negotiations that are generally needed to help plan and implement major programmes of workplace change. As change has become a way of life, the unions’ contribution has been increasingly significant. Because they are not identified with the employer, unions can reinforce the credibility of employers’ messages and reassure employees that their interests have not been neglected.
Some employers have gone further and made their relationship with trade unions a fundamental part of their business strategy. Once Capgemini UK has been identified as a serious bidder for an outsourcing contract, for example, it holds a series of meetings with the union(s), at which they can get to know one another. It outlines its approach and culture and seeks to create a rapport. This may lead to a recognition or consultation agreement between the company and the union.
Why does Capgemini do it? There is a strong commercial driver behind the company’s interest in having a good relationship with trade unions. When a business is up for acquisition or being outsourced, this inevitably has a destabilising effect on the affected employees. They will fear for their futures and speculate about how things will change for the worse. Capgemini sees this as a major risk to its ability to take over and run a successful business and sets out to mitigate employees’ anxieties through engaging with trades unions and works councils.
But there is also a wider rationale behind the company’s thinking and behaviour. It is not only employees whom employers need to reassure. The ability to demonstrate good employment practice can influence attitudes in the wider community and be a significant source of competitive advantage. Trade unions can be a positive help in this respect. Concern to protect their reputation has helped to drive a number of multinational companies to sign International Framework Agreements (IFAs) with trade unions or non-governmental bodies.
The real message is that employers don’t operate in a moral vacuum: they need to consider how their behaviour will be seen by their stakeholders, including customers, governments and the wider public. Trade unions don’t inevitably hold the moral high ground – they can behave selfishly or short-sightedly – but, in a world where trust is in short supply, unions offer perspectives that go beyond profit-seeking. They are also political players.
Employers know that, in a global and wired economy, their brand and reputation are highly vulnerable to damage from real or perceived failures to observe standards of responsible behaviour. CEOs recognise that having the trade unions on side when the balloon goes up can be a real help in defending their position. Equally running into a serious industrial dispute can look like at best like carelessness and at worst like the result of insensitive and poor management.
Many of today’s employees may not see the value of trade unions, but some employers obviously do.
Mike Emmott is the employee relations adviser at the CIPD
