Improving Industrial Relations

Written by Malcolm Bruce MP and published in Inbusiness Website on Wed 4th Aug 2004

On any occasion that Industrial Relations legislation is mentioned we can expect predictable and polarised views: Employers organisations will bemoan the increase in bureaucracy and 'red tape' and Trade Unions will proclaim that the particular measure does not go far enough.

However this is an area where the judgement of the legislator must achieve a balance. There have been occasions over the past twenty years where abuses of Union power have required 'checking' and also situations, when workers rights have been trampled, have had to be addressed.

As far as the position of business is concerned my Party has made a number of proposals that seek to lessen the cumulative burden of Regulation: for example the inclusion of 'sunset' clauses that ensure that any Regulation is reviewed after a certain period for relevance, considering the possibility that for every new Regulation an existing one is repealed. However some Regulation is needed to protect the rights of workers and achieve equilibrium in the employer-employee relationship.

To balance this an employer must also be protected from irresponsible trade union activity, especially when that activity has only limited support from members. Therefore, in the 1980s we successfully pressed for improvements to the Conservative government's employment bills to ensure industrial action took place only after a secret ballot. We were at the forefront of returning trade unions to their members, a move which has ushered in an era of much more responsible trade union leadership and activity. Few employers are now held to ransom by trade union leaders.

An essential element to harmonious industrial relations is effective communication between management and workers. It is widely accepted that an employer who consults and involves employees in the decision making process will enjoy higher productivity levels than an organisation that adopts a more autocratic approach.

That is why the Liberal Democrats found the Governments initial opposition to the EU Directive requiring mandatory consultation of employees by management both disappointing and confusing. Many will find it surprising that prior to the recent accession Britain and Ireland were the only EU Member States that did not have established practices of works councils and consultation.

Although any legislation should not be prescriptive it does need to encourage greater dialogue between the workforce and management.

I believe that the establishment of works councils or a similar system in larger UK businesses would be a very positive step forward in Industrial Relations. In other countries they have proved to be an important avenue for communication, both upwards and downwards, within an organisation. In addition they have proved to be creatures of the wider workforce rather than, as critics would like to suggest, of Trade Unions.

I accept that consultation does not prevent job losses or closure of plants but at a minimum it provides an opportunity to explore alternatives and enable people to come to terms with what is to happen.

The Government has also introduced a number of 'family friendly' policies encouraging parents to strike a balance between their responsibility to an employer and the family. One of the recent developments has been the right of new fathers to paid paternity leave for a period of two weeks.

No-one can argue that this is an admirable and long overdue development. However it has been entirely unsuccessful when you examine the take-up rates for the first year. It has been estimated that only 19% of those fathers eligible have benefited and I believe there are a number of factors that are responsible for this.

One of these is largely a cultural issue in that somehow responsibility to an employer over-rides that owed to family. There is a responsibility upon all to change this view and accept that the whole society benefits from the success of such policies.

Another factor is the actual or perceived damage that can be done to an individual's career if time is spent with the family. Employers have to ensure that this view is not allowed to prosper and Government must also play a more active role in this respect.

What is also a disincentive is the financial loss suffered by fathers that use their paternity leave entitlement. Although many employers provide 'full' pay, I am sure that in situations where only the statutory minimum is available many fathers cannot afford a drop in income when combined with the inevitable expenditure of an addition to the family.

Other areas that merit further consideration in the area of Industrial Relations are:

· The introduction of 'pendulum' arbitration for essential workers. This should have the effect of moderating the demands and responses of both sides in a dispute as arbitration will come down wholly in favour of one side and will not split the difference.

· Whether there is a continuing requirement for a person who works for a union in a full time, paid capacity to be elected rather than appointed. (Can such people claim a mandate from the membership that puts them on a collision course with elected union executive committees made up of unpaid representatives?)

· The scrapping of the requirement to hold a ballot of members every 10 years on the maintenance of a political fund. Perhaps instead a union should maintain an affiliated fund (where the union has opted to affiliate to a political party) and a non-affiliated fund for funding other campaigns. Each member could have the right to choose the fund to which they will contribute or to contract out completely.