Personal Contracts in British Telecom – the union response Up to 1988, 0.5% of M&P workforce on personal contracts (PCs) 1988 BT decided to move 6000 (15%) onto PCs in order to To deunionise To individualise pay system To cut pay bill To test whether possible to extend PCs across whole structure

Personal Contracts in British Telecom – the union response Methods No prior warning to unions – secret, detailed plans Used incentives – money, car, private health And threats – notion of career limiting decision Denied that strategy was to deunionise Speed

Personal Contracts in British Telecom – the union response Union response Meetings Letters and pamphlets Ballots designed to show support for collective bargaining Despite massive support for union – over 90% signed

Personal Contracts in British Telecom – the union response Company strategy to extend PCs incrementally at first No-one could get promoted without accepting PC Those 10% opting to stay with collective bargaining suffered pay freeze Suspected targeting for redundancy External recruits put on PCs

Personal Contracts in British Telecom – the union response Next large group were salespeople – around a further 10% of M&P workforce – in 1991 Same tactics by company By % on PCs By % on PCs by a process of piecemeal regrading and recruiting

Personal Contracts in British Telecom – the union response Not genuine personal contracts – the same contract given to all No genuine individual pay negotiations – just a secret pay structure But accepted as normal Some evidence of reversal of trend in last year

Personal Contracts in British Telecom – the union response Union strategy To win the argument for collective bargaining in principle To maintain membership and continue recruiting To offer services To develop bargaining levers

Personal Contracts in British Telecom – the union response Effects on union – shock waves Division within membership Membership loss Confident employer Demoralised activists Problems of dual approach to Personal Contractors

Personal Contracts in British Telecom – the union response Strategy 1992 – 2003 Individual services Pay research – key bargaining lever Individual representation Read across from collective agreements Specialist publicity and structures Organising

Personal Contracts in British Telecom – the union response Currently 40% of new recruits are personal contractors – around 40% membership 1997 – Labour government – hopeful of new legislation New business friendly government allows employers to bribe employees onto personal contracts But allows for recognition where majority wish it

Personal Contracts in British Telecom – the union response Market research – focus groups – to test “return to collective bargaining” By now – suspicious of “rounding down” Against “one size fits all” pay system A cautious union approach

Personal Contracts in British Telecom – the union response June 2002 pay freeze on all personal contractors but 2% increase for M&P covered by collective bargaining The campaign starts amid very positive signs Aim to build membership to 50% plus one by end 2003

Personal Contracts in British Telecom – the union response Lessons Membership can be maintained but only by taking special measures Bargaining levers do exist Needs flexible and patient union approach BT believes it failed – we’re now confident