The State and Employment Relations

From Voluntarism to New Labour

What is the state?

‘A set of institutions, comprising the legislature, the executive, central administration, the judiciary, the police and local government … (it) is the institutional system of political domination with a monopoly over the legitimate use of violence and over taxation and money supply’

(Hill 1981: 239)

Note also growing importance of pan-national state initiatives – EU (Employment Strategy)

The State and the Employment Relationship

The state influences the relationship between employer and employee directly and indirectly:

Directly – through legislation, dispute resolution and for some, as employer

Indirectly – providing important context

‘Rules of engagement’ in employee relations – boundaries of acceptability and legitimacy

Shaping climate and priorities in employee relations

‘Best practice’ in employee relations ‘setting an example’

The StateSpecific interests and objectives of the State in employee

relations more complex – at various times

Maintenance of order and stability

Protection of employees at work in the absence of alternatives

Maintenance of parity of bargaining power between the main parties

Control of earnings and inflation – incomes policies

Economic growth - Productivity and earnings

Skills acquisition and low unemployment

The State: Objectives in Employee Relations

Achieved through multiple roles

As legislator

As peacekeeper

As economic manager

As employer

Ideological role (hegemonic power)

Importance of each of these roles has varied over time

The State

Legislator PeacekeeperEconomic Manager

Ideology

EmployerCivil Society Civil Society

Contrasting Roles of the State

Statism – State control over major elements of employee relations – China, Eastern Europe (in past), Singapore(?)

Corporatist/Neo-Corporatist/Bargained Corporatist (tripartite arrangements – shared decision-making) Scandinavia, Netherlands, Austria, Ireland, Denmark

Liberal Collectivism – State support for free CB and for trade unions (Voluntarism in C20th Britain)

Market Individualism – free market model (Thatcher 1980s) support for managerial prerogative, constraints on market imperfections (e.g trade unions)

Ideology Areas of Concern and Activity

The State

Market Regulation

Social Justice

Industrial Conflict

Laissez- Faire

Corporatism

Market Individualism

Bargained Corporatism

State Corporatism

Liberal Collectivism

Statism

Trade Union Power

The State and Employee Relations in Britain: Historical Background

Traditional view – limited state role in employee relations for much of C20th - voluntarist period of ‘collective laissez faire’ (Ewing 1998)

State encouraged voluntary collective bargaining

By 1939, voluntary collective bargaining at industry level established in many sectors

Post war social settlements in Britain and Europe

By 1960s state concerns with low productivity, inflation and the role of unions in ‘restrictive practices’ – Royal Commission (Donovan) 1968

The State: Historical Background

Donovan argued for voluntary reforms in collective bargaining

State response more interventionist – In Place of Strife (1969), Industrial Relations Act 1971 – attempts at restrictive labour law but failed

Mid 1970s - return to support for CB – ACAS and auxiliary legislation 1974-79 and ‘Social Contract’.

1970s Present day. Growth of individual employment rights – areas of discrimination law, maternity, equal pay.

Breakdown in 1978/79 – ‘Winter of Discontent’

The State: Historical Background

Recent revisionist work by Howells (2005) argues

State has played the major role in shaping development of employment relations in Britain in last 150 years

Highly interventionist in three key stages 1890 – 1940 and establishment of industry-wide CB

‘voluntarism’ highly interventionist (Ewing 1998) 1940 – 1979 shift to decentralised system of

employment relations 1979 de-regulation of employment relations; neo-

liberal offensive

The State and De-regulation: Thatcherism and Beyond

Thatcherism - break with post-war consensus and ‘social settlement’ – major ideological shift

See now in France, Germany and much of EU

Free market ideology and ‘New Right’ policies but ‘strong state’ in employee relations – restrictive law until 1997.

Unions and collective bargaining ‘market imperfections’ - influence curbed.

Period 1979-97 an attack on the bases of trade union power – and emphasis on managerial prerogative.

The State and De-regulation: Thatcherism and Beyond

Legal regulation dominant post-1979 supplants CB

Six major pieces of legislation 1980-1989 curbed trade union power and influence.

Different notion of ‘model employer’ in public sector – GCHQ, changes to ACAS remit

New Labour and Employee Relations

Concerns with ‘fairness’ but also competitiveness as a route to culture change in employment relations

‘Fairness’ reflected in: NMW, statutory recognition procedure, reduction in

qualifying period for many employment rights and ‘social chapter’

‘Floor of rights’ from EU and from NMW Emphasis on social partnership – win/win employee rels

Competitiveness in: Britain still the most lightly regulated labour market in EU

(Blair 1997 in preface to Fairness at Work White Paper) Retention of most of Conservative governments’ trade

union laws and resistance to some EU law

New Labour and Employment Relations

Individual labour law extended to areas previously untouched by statute law – wage levels, hours of work, holidays

Efficiency wage thesis – higher labour costs force employers to use labour more efficiently

Business friendly – has made changes but emphasis on flexibility and anti – EU initiatives that impose undue burdens on business (I&C)

Blair sees the New Labour project as nothing less than a culture change in employment relations – is he right?

New employment relations for a modern (knowledge) economy

New Labour and Employment Relations

Recent assessment (Dickens and Hall 2006) suggests pursuit of ‘Fairness’ but only up to a point – contingent on business concerns

Others, less generous (Smith and Morton 2006) many of the claimed benefits are rarely attained in practice

Anna Pollert (2005, 2007), highlights continuing problems faced by unorganised workers

Many unaware of their rights but even when they are, unable to defend them through lack of effective representation.

The State and Employee Relations: Some Reflections Role and influence of the state in employment

relations considerable

Sets the ‘rules of engagement’, establishes ‘climate and context’ and sets an example.

Influence on the issues and conduct of employment relations greater than is commonly assumed.

Often does this by appearing to do very little – collective laissez-faire – can be a distant observer at the ‘ringside’ but intervenes when necessary.

At times a more interventionist stance – Industrial Relations Act, Miners Strike, Firefighters dispute.

The State and Employee Relations: Some Reflections

Globalisation threat to power of nation state but

Continuing evidence that national institutions matter (Boyer 1999)

National systems of regulation continue to exert influence even in EU (Rubery et al. 2008)

Legal regulation in nation state continues to be dominated by the laws of that state

Many employee relations institutions remain firmly located within the nation state