1. Current trends in collective bargaining and pay determination Alastair Hatchett Visiting Fellow: University of Greenwich

2. Changing contours of collective bargaining Long-term decline or resilience? IDS experience of monitoring collective pay agreements over 45 years The decline of industry bargaining (2-tier) The rise of large multi-site national companies Sector differences & the size of companies Trade union density: sector, skills & gender

3. Resilience of private sector collective pay bargaining Areas where strong Areas where weak car manufacture small construction aerospace & defence small retail (+ M&S, JL) electricity, gas & oil hotels, fast food etc banking & insurance small manufacturers refineries & chemicals info/communications rail, bus, haulage printing telecoms newspapers Chemical industry employers (CIA) say that of their 150 member companies 85% are unionised (October 2013)

4. Reasons for strengths and weakness Strengths derive from negotiating the rate for the job for particular skills and qualifications – skilled engineers, electricians, radiographers, teachers, nurses, midwives, scientific officers. Require stable employment and larger workplaces. Weaknesses arise from low-paid, unstable employment, high staff turnover, low-skilled work. Small workplaces. Fear of bosses.

5. Jaguar Land Rover, Ford, Honda, Nissan, Toyota, Vauxhall, Rolls-Royce Motors Tesco, Morrisons, Asda, Retail Co-ops RBS, HSBC, Lloyds Banking Group, Santander British Gas, EDF, E.ON, RWE, Ineos Rolls-Royce Aerospace, BAE Systems British Airways, Virgin Atlantic, Heathrow FT, Guardian, BBC, Daily Telegraph, Examples of large companies with collective agreements setting pay

6. Impact of recession and austerity In recession, unions key to negotiating short-time + temp pay changes (eg JLR & Honda) In the crisis, banks forced to merge: all harmonised terms and maintained collective agreements; few had pay freezes! Post recession some larger firms matched RPI Pay freezes more in non-union areas? Government pay policy has weakened collective pay arrangements in the public sector

7. Challenging perceptions of union representation and influence on pay Received wisdom: no unions in private sector WERS 2004: 65% of workplaces with 500+ employees set some pay via collective bargaining BIS 2013 on TU density shows 49% in utilities, 40% in transport, 18% in manufacturing, 17% in finance, 14% in construction A problem with WERS is it is a survey of small organisations (89% of workplaces below 50 employees in WERS 2011)

8. WERS findings: changes in collective bargaining coverage 2004 to 2011 Employees covered by collective bargaining Public sector Private sector All 2004 69% 17% 29% 2011 44% 16% 23% Workplaces 100% collective bargaining 2004 50% 5% 11% 2011 39% 3% 8%

9. National pay in large companies Previous WERS research: long-term shift in pay setting from industry > company > plant But picture more complex: piece-work coexisted with industry bargaining in 1960s National pay bargaining exists today in large companies (banks, supermarkets, BT, JLR) Industry barg today: NAECI, Electrical JIB, LPC Harmonisation: Lloyds Banking + Santander

10. Public sector pay determination undermined by Government pay policy WERS survey in 2011captured frozen pay + bargaining frozen or limited Treasury undermines ‘independence’ of PRBs PRBs = evidence-based collective bargaining? In 2011/12 NHS employers engaged in talks on progression with NHS trade unions Highly unionised: eg female/professionals The future: fragmentation vs collectivism ?

11. WERS misunderstands interaction of employers, unions and PRBs ‘A fall in the % of public sector workplaces using multi-employers bargaining – from 58% in 2004 to 44% in 2011 – lies behind the decline in public sector pay bargaining. The % of public sector employees covered by collective bargaining in Health has fallen from 74% in 2004 to 14% in 2011, in part because the PRB has resumed responsibility of pay after AfC negotiations were completed.’

12. Is the Pay Review Body process similar to collective bargaining? WERS says ‘it is arguable’ that it is similar, but they conclude that it is not (but ambiguous) For the purposes of assessing employment relations it should be seen as similar After all, WERS 2011 finds ‘96% of public sector employees worked in a workplace with at least one union recognised for pay bargaining’ What about schools, the STRB and PRP?

13. Case studies from the recent past JLR: from short-time in 2009 to export success in 2011-2013 Lindsey oil refinery dispute: employers and unions uphold NAECI agreement Electrical contracting: national agreement upheld in face of employer challenge Tanker drivers: from fragmentation to collective action

14. The role of large firms in setting market pay levels IDS research on benchmarking shows large companies in each industrial sector have wide spread influence Smaller firms want to check their pay rates for key skills against those of market leaders Market-based pay very important in the last decade Union influence on pay therefore wider than just where unions are recognised for pay setting