What should we do about collective bargaining and why?
Kate Bell, Head of Economic and Social Affairs Department, TUC / 17 October 2018
This year’s TUC Congress – our 150th – endorsed a statement from our General Council on the importance of collective bargaining.
Trade unions have always known that collective bargaining on pay, and wider workplace conditions, is not only a fundamental right, but also the best way to deliver lower inequality, better working conditions, and a fair deal at work. But an increasingly wide range of international institutions are now catching up.
Research by the IMF in 2015 showed that – in a finding that clearly came as something of a surprise to the researchers if not to any trade unionist – ‘‘the evidence strongly indicates that de-unionization is associated with rising top earners’ income shares and less redistribution, while eroding minimum wages are related to increases in overall income inequality’. And a significant new piece of work by the OECD – who have long championed dismantling collective rights - finds that stronger unions are associated with better workplace conditions, lower pay inequality, and also better employment for groups who are under-represented in the labour market – including young people.
We know that as the world of work changes - with changes in technology, an ageing population, and the need to shift to less energy intensive industries - collective bargaining and giving people a voice at work will be even more important tool for managing this change successfully. The fall in collective bargaining in the UK should worry everyone who cares about a fairer society.
Understanding this fall will be important to turning it around. It’s impossible to ignore the role of political attacks here – not just the unfair and undemocratic Trade Union Act of 2016, but the attacks on trade union rights throughout the 1980s – including dismantling wage councils and joint industrial councils, removing the fair wages resolutions which required government contractors and sub-contractors to pay the going rate for the job, and removing ACAS’ duty to promote collective bargaining.
That’s why the Labour Party’s commitment to restore collective bargaining is so welcome. But if we’re to make that work for workers/workforce in the twenty-first century, we also need to understand the industrial changes that have made it harder for unions to organise and bargain.We’ve seen a shift to a service based industry, the rise in smaller workplaces, and the increased fragmentation of employment relationships– whether through out-sourcing in the public sector, or the increased use of intermediaries such as agencies or umbrella companies. This has led to ever more complex supply chains, where workers can find it hard to even identify who their employer is, let alone how they could bargain with them.
These changes mean our efforts to expand collective bargaining need to be as comprehensive as the attempt was to reduce unions’ influence and power. That’s why the General Council statement sets out how we need reforms to boost union organisation and bargaining across the board. That means new rights to access workplaces and help unions organise; stronger duties on employers to bargain with us at workplace level, the strong sectoral bargaining that we know is essential to deliver greater equality, and a role for unions to bring workers’ voice to the table in government policy making too.
We’ll be fleshing out in more detail over the year to come how we can deliver those reforms. But it’s never been clearer that they’re needed.