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Collective Bargaining

 

Less than a third (29%) of all employees in the UK are covered by collective bargaining. In the private sector coverage is lower at around a sixth of and the key bargaining level is the company or the workplace. In the public sector, where almost two-thirds of employees are covered, industry level bargaining is more important.

The framework

The pay and conditions of most employees in the UK are not negotiated. Figures from the Labour Force Survey show that in 2012 only 29.2% of employees were covered by collective bargaining. However, collective bargaining coverage is not even across the economy. In the public sector 63.7% of employees are covered by collective bargaining compared with only 16.0% in the private sector.1

When bargaining occurs in the private sector, its most important level is at the company or individual workplace. There is still industry level bargaining in some industries, such as parts of the textile and furniture industries, but during the 1980s there was a clear move to bargaining at local level and a number of employer federations broke up or ceased to be involved in collective bargaining. In most cases, companies set their own terms and conditions, either for the whole company or specific plants.

Industry-wide agreements are more common in the public sector. However there are some public sector employers, which bargain at the level of a single organisation. The civil service, for example, pays different rates in different government departments. In addition some workers in the public sector, such as teachers, parts of the health service and those in the prison service, are covered by pay review bodies, rather than collective bargaining. These pay review bodies make recommendations on pay to the government, which are then normally approved. However, beginning in 2010 as agreements ran out, a two-year pay freeze followed by a 1% cap on pay increases has been imposed by the government on many public sector workers .Overall, early results from a major official survey of employee relations carried out in 2011 to 2012 (WERS 2011) show that the proportion of public sector workplaces using multi-employer bargaining has fallen from 58% in 2004 to 44% in 2011.2

In any case, where industry level agreements exist they are not considered to be legally binding on the parties who sign them. Employers are not bound by an agreement signed by an employers' federation even if they are members of it.

It is also quite common for there to be different agreements for different grades of worker, most commonly manual and non-manual. This is the case both for industry agreements and for those at company level, although they are less common now than in the past.

There is no legal requirement for the employer to negotiate with the union except where there has been a legally binding decision that the unions should be “recognised” for bargaining (see section on workplace representation). In these cases the union has the right to bargain over pay, hours and holidays. However, such cases are rare and generally it is the balance of forces between union and employer at the workplace that determines whether bargaining takes place.

At national level the TUC has not been involved in negotiations about pay since the end of the 1970s, when there were a series of national deals. There is also no tradition of negotiations between the TUC and the national level employers’ body, the CBI, on other issues. However, in 2003 the two sides reached agreement on how the EU’s information and consultation directive should be implemented (see section on workplace representation), and in 2008 there was an agreement between the TUC and CBI on agency workers which ended the UK government’s opposition to an EU directive on this issue. However, such agreements are the exception.

Who negotiates and when?

Bargaining is conducted by trade unions and employers. The union side may be made up of full-time officials, workplace representatives or a mix of both. Local union representatives are now much more likely to be involved in collective bargaining. The employers' side can be the individual employer or, if at industry level, the employers' association.

There will often be several unions represented on the union side, who normally will have agreed their position together in advance. In the past, where only one union was involved this was usually because the employer has chosen to negotiate with only one union. However, now, there may be only one union present as a result of union mergers.

Collective agreements do not have to run for a specific period although the most common pattern is that they run for a year. Figures from the Labour Research Department database of collective agreements indicate that as at March 2013, 91% of the agreements were for 12 months, 4% for 24 months and 1% for 36 months, with the remaining 4% lasting for other periods. (There are fewer longer term deals than in the past – in March 2011 only 61% were for 12 months.) Agreements lasting for more than a year often have a link with the price index. Anniversary dates are spread throughout the year, although clustered in January and April.

The figures is in line with the results from the WERS 2011 survey, which cover all pay settlements, not just those involving collective bargaining. They show that 91% of private sector workplaces review pay at least once a year. In the public sector, 83% do so.3

Usually union representatives will seek an agreement to deal with pay issues each time there are negotiations but may negotiate over other improvements, for example, holidays, sick pay and so on, less frequently.

The subject of the negotiations

Some negotiations cover all aspects of pay and conditions but others are limited to only a few areas, principally pay, with the employer refusing to negotiate about many terms of employment. A growing number of agreements, particularly for non-manual workers, also give employers considerable flexibility by linking increases for individual employees to a subjective assessment of their performance. Negotiations may also cover other areas, such as the facilities or time off provided to the union.

The UK has a national minimum wage which is set by the government on the advice of the Low Pay Commission which brings together representatives of the unions and employers as well as independent academics.

L. Fulton (2013) Worker representation in Europe. Labour Research Department and ETUI. Produced with the assistance of the SEEurope Network, online publication available at http://www.worker-participation.eu/National-Industrial-Relations.