Trade Unions: Skilled Professional Graduate Workers

Lord Hendy Excerpts

Thursday 6th July 2023 Grand Committee

[Lord Hendy (Lab)]

My Lords, I, too, congratulate the noble Lord, Lord Balfe, on securing this debate and on his eloquent opening speech, and the noble Baroness, Lady Swinburne, on her much-anticipated maiden speech. I will speak about something that is of concern both to skilled professional graduate workers and to all workers—collective bargaining.

I start with the definition of a trade union from page 1 of Sidney and Beatrice Webb’s seminal History of Trade Unionism in 1894:

“a continuous association of wage-earners for the purpose of maintaining or improving the conditions of their working lives”.

A union is an institution in which a combination of workers seeks to redress the inevitable imbalance of power in setting the terms and conditions of engagement at the workplace between the worker on the one hand and the employer on the other. Statute recognises this by defining a trade union by reference to its principal purposes, which must include

“the regulation of relations between workers and employers”.

This objective is achieved by the process of collective bargaining, which, to be effective, must include a real threat of taking industrial action. Without that threat, collective bargaining is reduced merely to collective begging.

Seeking to set terms and conditions in combination is, of course, the antithesis of competition. Hence unions have been protected in UK law since 1971 and in EU law since 1999 to permit collective bargaining in the face of competition law. The right to bargain collectively is recognised in international law ratified by the United Kingdom: ILO Convention 98 stands out prominently, as does Article 6 of the European Social Charter. Both are fortified by the obligations that the UK undertook in 2021 in the trade and co-operation agreement with the EU. The European convention also recognises the right to bargain collectively as an essential element of it—that was the case of Demir and Baykara v Turkey.

The Canadian Supreme Court usefully reiterated the purpose of collective bargaining in the Mounted Police case in 2015, which derived the right to bargain collectively from the guarantee of freedom of association in Section 2(d) of the Canadian charter of rights. The chief justice speaking for the majority held that

“we conclude that s. 2(d) guarantees the right of employees to meaningfully associate in the pursuit of collective workplace goals … This guarantee includes a right to collective bargaining … s. 2(d) functions to prevent individuals, who alone may be powerless, from being overwhelmed by more powerful entities, while also enhancing their strength through the exercise of collective power. Nowhere are these dual functions of s. 2(d) more pertinent than in labour relations. Individual employees typically lack the power to bargain and pursue workplace goals with their more powerful employers. Only by banding together in collective bargaining associations, thus strengthening their bargaining power with their employer, can they meaningfully pursue their workplace goals”.

In the United Kingdom, from the end of the 19th century until the 1980s, it was the policy of successive, indeed all, UK Governments to promote collective bargaining, starting perhaps with the Conciliation Act 1896 and Trade Boards Act 1909—those bodies becoming the wages councils—and progressively extending after the First World War.

In parallel to those statutory developments, voluntary collective bargaining was stimulated by government policy following the First World War, with the reports of JH Whitley as part of the post-war reconstruction setting up joint industrial councils, or simply “Whitley councils”, on a sector-wide basis. Those councils had extensive reach in many industries, particularly in the public sector. There were other mechanisms, too: the Fair Wages Resolutions of the House of Commons, the extension of collective agreements to non-parties and obligations placed on nationalised industries to bargain collectively in the Acts establishing them.

By 1975, some 85% of the UK workforce had one or more terms and conditions set by collective agreement. By reason of government policy since then, collective bargaining coverage has been reduced to less than 25% of the UK’s 30 million workers. This is practically the lowest level in Europe. In the EU, it is now law that states with coverage of less than 80% must formulate an action plan to remedy that situation.

I stress that this is not a matter of individual repudiation in the UK of trade unions or collective bargaining, since surveys show overwhelming support among working people for trade union representation. The disastrous decline in collective bargaining coverage has instead been brought about by government policy; restrictive legislation on the ability of trade unions to take industrial action; campaigns for derecognition; abolition of the wages councils; repeal of the extension mechanism for collective agreements; ending the fair wages resolutions; outsourcing; privatisation; and so on.

The consequences have been the degradation of terms and conditions of work, precarity, stress and damage to mental health among workers, and, of course, damage to levels of pay. The average value of wages is lower now than in 2007, and there are more people claiming benefits in work than there are out of work. The current wave of strikes is a reaction to the fall in the value of wages. Poverty among working people is now endemic.

The collapse of collective bargaining is bad not just for working-class people—including professionals—but for business too, since wages are spent on consumption, which increases demand in the economy. Will the Minister undertake to enter into formal dialogue with unions and employers with a view to extending collective bargaining coverage in the future?