Joe Dromey is Head of Policy and Research at the IPA
The UK’s often turbulent relationship with the European Union seems to be getting stormier by the day. With UKIP support rising to record levels, the Conservatives have been pushed into an increasingly Eurosceptic position, promising reforms that look impossible to deliver. Our future within the EU looks more uncertain than ever before.
Leaving the EU would be disastrous for working people. The argument over the importance of the EU for jobs and investment in the UK is well-known; millions would have their livelihoods threatened if we did pull out. Less understood though is the importance of the EU for rights at work in the UK.
Recent research by the IPA has aimed to address this gap. As it has shown, the EU has played a central role in strengthening and expanding workplace rights in the UK. Take for example the right to paid breaks, paid holiday and a maximum working week, or the right to equal treatment for ‘atypical’ workers – the part-time, agency and fixed-term staff who are in fact increasingly typical in today’s labour market. Take the Information and Consultation of Employees regulations that guarantee workers a voice at work, or the TUPE legislation that protects employees whose employer’s business is being sold. These rights have made a real difference to working people.
In fact, this is one of the reasons that the EU is so unpopular with those on the right. Along with the free movement of labour, it is the protection that the EU offers working people that so irritates Eurosceptics. Having these rights enshrined at a European level means they can act as a bulwark against competition driving down employment standards in a ‘race to the bottom’. While the Coalition have pursued a deregulatory agenda and slashed employment rights, it is only the rights protected by EU legislation that have escaped unscathed.
But are we over-regulated and over-burdened by ‘EU red tape’? In explaining why Britain might be better off out, Boris Johnson recently decried the ‘back breaking’ weight of EU employment regulation that is helping to fur the arteries to the point of sclerosis.’ Of course, this is complete nonsense. The UK still has one of the least regulated labour markets in the developed world and employees in this country are far less protected than those in most of Europe. And although employers may grumble about employment regulation, the vast majority see it as a price worth paying for access to the single market.
The union movement has often had an uneasy relationship with the EU. Initially suspicious of the European project, unions were won over by Jacques Delors’ inspiring vision of a ‘Social Europe’ that protects and enhances workers’ rights and prosperity. However, this enthusiasm seems to have cooled recently. With the lack of any significant new social legislation, as well as the role of the EU in supporting austerity and perceived threats to collective bargaining from the Viking and Laval judgements, unions have becoming increasingly equivocal about our membership of the EU. Some, notably the RMT, are actively campaigning for the UK to leave. It’s a strange situation when a supposedly progressive trade union finds itself on the same side of the argument as Farage and co.
It is more important than ever for trade unions to engage with this debate. Unions have a vital role to play in countering reactionary Eurosceptics who would renegotiate or withdraw from the European Union in order to slash employment rights. The union movement needs to speak up for the EU, and highlight the immeasurable benefits that membership of the EU has brought working people. From protection against discrimination and rights for working parents; to paid holiday and voice at work, the EU has made the workplace fairer and better. It has delivered real, tangible benefits for working people. The EU is not perfect, but trade unions need to continue to fight for the vision of a Social Europe.
Joe Dromey is Head of Policy and Research at the IPA. He writes in a personal capacity. The findings of the research will be discussed at an event on 27th November, hosted by Lord John Monks, former General Secretary of the TUC and ETUC. For more details and to reserve a place, see here.
Joe Dromey is Head of Policy and Research at the IPA. He writes in a personal capacity.
The financial crisis of 2008 and the recession that followed were supposed to mark an historic watershed. There could be ‘no more business as usual.’ Yet this is exactly what we have returned to.
Britain’s model of corporate governance – based on the principle of shareholder primacy – is not fit for purpose. Shareholders have proved themselves unwilling or unable to undertake their role as custodians of our large companies. With shares being held for increasingly short periods of time, the system has incentivised a focus on short-term profits over long-term investment. They have failed to curb excessive executive pay or to identify and address unsustainable business practices. And shareholder primacy means that other stakeholders – including employees – are not given a say.
We need to reform our corporate governance in order to give employees a voice at the top table – on both the board and the remuneration committee.
More than anyone, it is employees who have the greatest interest in the sustainable success of the company. Employees understand the business, its services, products and customers – and, with the right training and support, they can really contribute to decision-making. Workers on the board will add a dose of realism to discussions at the top table; bringing an understanding of how things really are at the shop floor. And by breaking the cosy clique on remuneration committees, we could also reverse the process whereby the share of profits going to wages has fallen whilst executive pay has soared.
There is a wealth of evidence of the benefits of participation at work. On an individual level, it is correlated with engagement and wellbeing. On an organisational level it is associated with productivity and innovation. It should therefore be a serious concern that Britain has the second lowest levels of employee participation in the EU, beaten into last place only by Lithuania. By adopting more participative ways of working – including employee representation at the top – we could improve both the workplace experience and productivity.
So what are the arguments against employee participation in corporate governance? Some might say it is unworkable or radically left-wing. Yet in most other EU states – including Austria, France, Germany the Netherlands and Sweden to name a few – worker representation on the board is required by law. It works well and is largely uncontroversial.
Others argue our adversarial industrial relations and opposition from employers would make it impossible in the UK. But this is to assume that such attitudes are fixed and unchanging. In fact, as the High Pay Centre has shown, employee representation on boards was bitterly opposed by employers in Germany. It was only after implementation that they came to accept and indeed value the measure.
Some insist employees simply aren’t up to the job. In their response to the Government’s consultation on executive remuneration, the CBI claimed employees would ‘add little’ to the process of decision making as they have an insufficient ‘understanding of the business’ compared to non-exec directors. These arguments risk sounding patronising and dismissive. And if workers in Europe are capable of sitting on the board, why should British employees not be?
Employee representation on boards and remuneration committees would be a massive opportunity for the labour movement. It would give employees a say at the top table for the first time. In organised workplaces, it would give unions another channel through which they could influence employers. In those without unions, it could offer the opportunity for them to organise and gain membership.
But it also poses a significant challenge to trade unions. In her exceptional Attlee Memorial Lecture in April, Frances O’Grady highlighted the union movement’s ‘strategic failure’ to embrace co-determination and industrial democracy in the post-war era, focusing instead on fighting incrementally to improve terms and conditions. O’Grady claims that to do so would have meant taking on a role that ‘is not just more ambitions but more demanding, than the one we usually have now. It means accepting responsibility, moving out of our comfort zone of short-termism, to taking the long view and championing the greater good.’
For a movement used to adversarialism, board level representation may require a change of mind-set; from sitting across the table from the boss to sitting around a table together. Unions, as they do in Europe, would still retain the independence to fight for their members both individually and collectively. But they would also be responsible for working collaboratively to set the direction of the organisation. Such a system would only work if there is good-will, trust and commitment to develop a workable consensus on all sides. Of course, such a cultural shift would be required of many employers too, but as the German experience shows, it is possible.
Having employees sitting on boards and remuneration committees would strengthen workplace democracy, encourage long-termism and ensure fairness. It would be good for workers, good for business and good for the country. And after all, what could better define a One Nation Economy than having workers take their rightful place at the top table.
Joe Dromey (@Joe_Dromey) is Head of Policy and Research at the IPA. He writes in a personal capacity.
Joe Dromey is Head of Policy and Research at the IPA
At Labour conference last year, Ed Miliband borrowed from the Tory lexicon and set out his vision for One Nation. A key part of this would be building an economy in which success would be ‘made by the many, not just a few at the top’. But six months on from his Ed’s conference speech, there remains a significant gap in the vision for a One Nation economy. What about Trade Unions?
The Shadow Business Secretary Chuka Umunna recently acknowledged their role as ‘wealth creators for this country’. But what role could unions play in a One Nation economy? And what would a One Nation model of trade unionism look like? With 2015 fast approaching, it’s time for Labour to address these questions.
Unions will obviously continue with their essential work both of representing employees who are mistreated, and pushing for fair pay and good terms and conditions. But in addition to this, a One Nation model of trade unionism might include a greater focus on skills development, on community campaigning and on partnership working.
First, in a One Nation economy, unions could play a vital role in skills development and utilisation. Where they are present in the workforce, unions already do sterling work here, supporting over 170,000 learners each year (1). As a result, the majority of unionised workplaces are ‘high trainers’, compared to just one in three non-unionised workforces.(2)
An incoming Labour government should put unions at the centre of their skills strategy. Working alongside employers, they can help both to identify and remedy skills gaps, and to improve skills utilisation. Giving unions a prominent role here could also bolster their presence in the private sector where, after a sustained period of decline, just one employee in seven is a union member.
Second, trade unions must retain a focus on the community where their members live and work. After all, unions grew out of the community in the early 19th century and they functioned as major providers of welfare services until the state began to take over. Membership helped define working people’s identities and build a sense of community and solidarity at work. Yet the movement has lost some of its community focus in recent years, with some unions concentrating only on industrial issues.
A One Nation model of trade unionism must continue to focus on the wider community. TSSA in their Together for Transport campaign have been using community organising approaches to great effect. They are building coalitions of support including railway workers, passengers, and the wider community to fight for common causes such as protecting ticket offices and lowering fares. The strength of the Living Wage campaign owes much to the union movement. Labour’s strategy for a living wage (and indeed for enforcing the minimum wage) must have the unions front and centre, leading the drive for decent pay in local communities.
Finally, One Nation trade unionism must have workplace partnership at its core. Employers and employees have an obvious shared interest in the sustainability, stability and success of their organisation. There will be differences of emphasis and sometimes of interests, but the key is how these are resolved for the benefit of the workforce and the organisation alike.
Despite talk of a general strike (that would be both unworkable and counterproductive), unions on the ground are recognising the need to work together with employers and compromise in order to protect jobs. Far from a new winter of discontent, strikes remain a fraction of the level seen in previous recessions.
Members want to see their representatives play a positive role; yes standing up for their rights, but also contributing towards the organisation’s success.
Working in partnership with employers, unions could help drive up employee engagement. After all, workplaces with an engagement culture are safer; employees are less stressed and have higher levels of wellbeing; they are better managed; they are listened to and know their voice counts.
There are numerous recent examples of where strong trade unions – through pursuing partnership with employers – have really made a difference to members. Take the mothballed former Corus steel plant at Redcar where Community found new buyers, bringing back thousands of good quality jobs to the local area. Or the Vauxhall plant at Ellesmere Port where Unite were instrumental in winning the contract for the new Astra, securing the future for years to come.
Obviously it takes two to tango; there has to be will on the part of employers to work together. And there are things the government could do to encourage partnership; by legislating to ensure an employee voice on boards or by re-examining the information and consultation regulations. Labour might also consider a new fund along the lines of the Union Modernisation Fund – scrapped by the Coalition – to encourage partnership working and a focus on the community.
However, it is clear that the tone and approach of unions matters too. They need to preach and practice partnership.
Obviously it’s not for the Labour Party to dictate how democratically governed unions should behave. But if Labour is serious about building a One Nation economy, it needs to set out its vision for, and provoke discussion on, the role of trade unions within it. A trade unionism focused on skills and training, on campaigning in the community, and on working in partnership with employers could help deliver the One Nation vision, and really make a difference for working people.
Employee voice is becoming increasingly important in the modern economy. If a company does not listen to its workforce, it will not succeed. As Brendan Barber explains “the voice of employees, individually and collectively, represents the day to day experience and views of those who really do know what works and what does not work. Successful organisations are those that recognise this.”
Voice is an important but little understood phenomenon. We know that being able to have your say and feeling that your employer listens to you is crucial both to engagement at work and to wellbeing. Yet there has been little work looking at the wider impact of voice on the organisation, the barriers to the expression of voice and the conditions that support it.
Research conducted by the IPA and Tomorrow’s Company, released today, addresses some of these gaps. It highlights some exceptional examples of where, by supporting employees to have their say, trade unions have made a real difference to the success of the organisation and benefitted all involved. Read More…
Joe Dromey is Head of Policy and Research at the IPA
Ahead of the Chancellor speaking at the Economy Session at Conservative Party Conference (1100-1230), Joe Dromey writes on how unions have helped protect jobs during the downturn.
Despite the right wing press warning of growing union militancy, this recession has been notable for the lack of industrial unrest. On average, there have been 734,000 working days lost each year to strike action. That sounds a lot. But it is the lowest rate of any recession on record. During the recession of the 80s, the figure was 4.3million days per year, and in the 70s it was a staggering 9.9million.[i]
There are two very obvious differences between that era and today. First, union membership has fallen from a peak of 13.2million in 1979 to its current level of 7.3million.[ii] Second, unions are acting within a more restrictive environment following the toughening of labour laws during the Thatcher era. But neither of these factors can explain the scale of the change. With days lost to strikes at just 7% of the level of the 70s, something else is at play here.
Joe joined the IPA in 2012 as Head of Policy and Research. He plans, manages and delivers IPA’s research projects, which focus on employee engagement and social partnership in the workplace. IPA aim to improve workplace relationships and the quality of work so that it supports the wellbeing of employees and increases productivity for the organisation.
Before joining the IPA, Joe worked in policy in local government as well as in welfare to work and as a researcher for an MP.