The fact that the current industrial relations arrangements in the UK are not working will come as absolutely no surprise to those in the trade union movement, who have for years now been driven back – sometimes physically – in their efforts to protect and improve the jobs and the terms and conditions of their members. Indeed ahead of the Scottish Trades Union Congress in April there are calls for a different approach to industrial relations including encouraging collective bargaining and increased industrial democracy. This realisation of the need for a different approach to industrial relations is not just coming from the union perspective however, as we have seen the recent establishment of an independent review group to look at workplace policies. The Cabinet Secretary John Swinney in introducing this new group said: “Together with STUC and senior business partners, the review will help foster a constructive and collaborative approach to industrial relations, helping create stronger relationships between government, employers and trade unions.”
This different relationship was also the basis of a report by the Jimmy Reid Foundation, which under the title of Working Together (www.reidfoundation.org/library) looked at industrial democracy across some of our European neighbours and the impact this had on industrial relations and its broader industrial consequences. The fact that the report found considerable benefit to the employer and the wider economy perhaps suggests why this topic is now being discussed in Scotland. The timing is very significant because the current referendum debate has offered us the opportunity to consider possibilities that would not normally be available. It would be simple and accurate to say that the form of industrial democracy that was being considered in the JRF report is not possible within the current UK constitutional arrangements, as economic policy and much employment law sits firmly in the reserved powers category. This alone might normally be sufficient to terminate any realistic possibility of change, but whilst we are considering what an independent Scotland might look like, we really should contemplate what effect more positive industrial relations might have on the economy of the nation.
It would be accurate to say that the form of industrial democracy that was being considered in the Reid Foundation report is not possible within the current UK constitutional arrangements
The JRF report compared two sets of countries, those with strong worker participation against those with weak worker participation. These were considered in terms of a series of indicators including; labour productivity, gross domestic expenditure on research and development, employment rate, educational attainment and poverty levels. In all of these indicators and more the countries with strong participation did better. If this is the case and business performs better, educational standards are better, environmental impact is better, why is the answer not blindingly obvious? I suggest the problem is deep-seated and is both cultural and structural.
In its simplest form any participation in decision-making by those outside of the management grade is seen as a diminution of power at both a corporate and personal level. This in itself is a weakness however as it leads to a hierarchal decision-making process where the tendency is to defer responsibility and to pass problems up the line for resolution, when the clues to the solution are more likely to be down the line, nearer the point at which they were generated. This top-down hierarchy leads to a command and control culture that produces counter-intuitive weaknesses in an organisation, such as an over reliance on a small pool of brains at the top of a structure whilst ignoring all of the many other brains throughout the organisation. It can also lead to stagnation on one hand or extreme changes of direction on the other as leaders are replaced. This culture can also prevent the dissemination of accurate information, in particular the data required for informed decision-making is often sanitised on its journey in order to provide a positive impression of activity. This disconnect from the ‘shop floor’ can result in delays as excessive hierarchical approval is required for common sense decision-making, with the resultant micro management and inertia costing money.
This resistance to collaboration often leads to more and more detailed plans being drawn up in order to progress a matter. These take time to produce and are almost certain not to result in the expected outcomes. It will be common to see a new plan rolled out and be given an enthusiastic launch, which some time later will have stalled or have stagnant progress leading to increased costly supervision as the assumption is that the plan was not being followed correctly. Again the reality is that the disconnection between the planners and the operators has failed to recognise the on-the-ground situation. In a different environment this would not see the failure as a problem but as an opportunity to improve the system. By holding on to the perception of power managers routinely cut off the best source of accurate data and practical problem solving they have.
From a trade union perspective there is often a desire to seek participation and a recognition that early discussion on a topic can often prove to be helpful. The traditional trade union approach however is almost totally reactive. An issue occurs and the local reps react, there is limited thought – outside of health and safety perhaps – to be proactive. The determination that something is ‘management’s job’ is of course a very simple measure and is clear and easily understood. But what happens if the rep has a suggestion? How does that get put forward and articulated? And do they run the risk of being accused of doing management’s job for them? When faced with a proposal it is considerably easier for the trade union officials to determine to fight knowing they will lose than it is to take responsibility for a course of action that may be the best solution in the circumstances but will be unpopular. Union members expect their reps to be fighting on their behalf but industrial disputes are not resolved on the picket line, but rather around the negotiating table. If the seat at the table is available without the need for the fight to get there, is that better or worse for the trade union and its members?
The biggest single issue in industrial relations is trust and that is a commodity that is in short supply when the industrial relations environment is structured in a combative, positional, side-taking way. The needs of the union and its members as well as the needs of the organisation and its shareholders all become secondary to winning, irrespective of the cost – to either side, the local economy or the national interest. The JRF Working Together report looks at alternatives to the current situation and provides a vision of what those options might provide. In that vision industrial democracy creates an opportunity to develop sustainable employment that can generate decent, well paid, long term jobs in such a way as our nation can start to invest properly in research and development, look after our environment, provide education and start to eradicate the scourge that the current levels of poverty inflicts on us. Industrial democracy does not require the capitulation of trade unions or place constraints on management and good governance, it will not resolve all problems nor remove difficult decisions. It does however provide a basis for more constructive dialogue. It will be no easy task. This is not an off-the-shelf solution that can be picked up from Germany or Denmark etc. and rolled out in Scotland.
In order to deliver industrial democracy there are huge barriers to be overcome including the education of business, industry, corporate leaders, employer, owner and management on why this is good for them. It requires education of workers, employees and their representatives on why there are benefits for them. Business leaders, trade unionists, academics and politicians will have to work together to provide the message that it is in all of our interest to improve the current situation. The first movement to consider adopting some of the ideals put forward will require nurture and support. And that support will be required on a routine basis throughout any process, beyond the setting up and long into the future as this will not be an easy journey for either the individuals or the organisations involved. Any movement towards a new way of working will require help and advice on how to go about making that change, they will need practical assistance and experience in making that change and they will need support and encouragement to maintain progress when it will seem easier to give up. That level of support will require commitment from Government and it is encouraging to see the setting up of the review group and the fact that it contains a cross section of participants.
The final element in terms of requirements will be legislative. Both directly in support of changing the current culture towards industrial democracy but also indirectly by aligning legislation, policy and practise and perhaps even the tax system to be supportive of efforts to embed these new ideas. It may be the case that if people must be forced into doing something then there has been a failure to communicate the advantages fully; however it would give a clear indication of Government intension if all businesses over a certain size had a requirement to place workers onto a management board. Other methods could incentivise the process, for example through public sector procurement, tax incentives, trade union rights, provisions for collective agreements etc.
As I look around our towns and cities and note the jobs, the industries and the workplaces that have been removed from them, I consider we face a stark choice; do we try and recover that by lowering wages to compete with China, by creating low paid, high turnover, unskilled work? Or do we try to create a new industrial landscape supporting the creation of highly skilled, well-waged jobs? If we wish to consider the later then we must also look to replace the old fashioned top down, hierarchical, command-and-control management methods and replace then with a new collegiate approach to industrialisation. In order to do so we will need to educate, to support and to take control of our legislative processes, our taxation system and our economic policy. Industrial Democracy is a desirable feature of a new landscape, but one that is only available to us as an independent Scotland.