INDUSTRIAL RELATIONS IN UNITED KINGDOM:

United Kingdom: Industrial relations profile

Facts and figures
Area: 244,820 square kilometres Population: 60,943,912 Language: English Capital: London Currency: British pound (1 = GBP .86 as at 15 July 2009)

Economic background UK
GDP per capita (in purchasing power standards, Index: EU27=100, 2008) Real GDP growth (% change on previous year) (annual average 20042007) Inflation rate (annual average 20042007) Average monthly labour costs, in (2005) Gross annual earnings, in (2005) Gender pay gap (Difference between average earnings of male and female employees as percentage of earnings of male employees, 2007) Employment rate (1564 years) (2007) Female employment rate (1564 years) (2007) Unemployment rate (1564 years) (2007) Minimum wage (2007)

115.5
2.68% 2.0% 4,071 46,051 (2007) 21.1%

71.5% 65.5% 5.3% Hourly rate of GBP 5.73

Sources: European Industrial Relations Observatory (EIRO) and Eurostat

Industrial relations, pay and working time UK

Trade union density (%) (Union members as percentage of all employees in dependent employment) Employer organisation density (%) (Percentage of employees employed by companies that are Sources: EIRO and Eurostat

28%

40%

Background:
The system of industrial relations in the United Kingdom (UK) is traditionally characterised by voluntary relations between the social partners, with a minimal level of interference from the state. In the context of very early industrialisation and a liberal political culture in which the state seldom intervened in the affairs of private actors, trade unions gradually consolidated their membership and power base throughout the 19th century. Various legislative developments also allowed trade unions the right to organise workers and engage in industrial action. In 1868, the UK Trades Union Congress (TUC), the confederal umbrella body for UK trade unions, was formed. The 1871 Trade Union Act recognised trade unions as legal entities as corporations and granted them the right to strike. Subsequently, the 1875 Conspiracy and Protection of Property Act allowed the right to peaceful picketing, while the 1906 Trade Disputes Act allowed UK trade unions to engage in industrial action without the threat of being sued for damages. In addition to this body of legislation, a minimal level of legal regulation that stipulated basic health and safety conditions in workplaces was also built up during the 19th century. The economic context throughout this time was also favourable to the development of trade unionism. Owing to the pace of industrialisation and the existence of substantial colonial markets for UK industry, the 19th century and early 20th century were characterised by extensive economic growth. This economic climate facilitated the development of a system in which some of the fruits of economic development could be designated for collectively bargained wage increases. In terms of the role of the law, collective bargaining was far more important than the influence of legal regulation. For employers and trade unions, the role of statute law was to support and extend collective bargaining rather than to comprehensively regulate the system. Notably, the law provided trade unions with a series of immunities from UK common law. These immunities covered the right of trade unions to engage in industrial action with employers, which would otherwise have been illegal under UK common law. The membership of UK trade unions grew markedly in the post-war years. The era also represented the golden age of British pluralism, where the role of trade unions in securing industrial peace and efficiency was emphasised. In the private and public sectors, sectoral level collective agreements were also typically reached that covered whole industries. By the late 1960s, however, concerns emerged about the efficacy of a system in which shop floor industrial unrest appeared to be rising. This led to the Donovan Commission, a government commission that attempted to investigate the causes of workplace disputes. Industrial conflict grew
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markedly in the 1970s, partly as a result of the economic crisis that affected western countries after the 1973 oil shock. The era was characterised by trade union militancy and high levels of industrial action, and attempts by successive left-wing and right-wing governments to regulate the system largely met with failure. The period culminated in the 19781979 winter of discontent, where public sector trade unions engaged in regular and lengthy industrial action over the incumbent Labour governments policy of public sector pay restraint.

Main actors:
Trade unions:
Trade union density has fallen markedly in the UK since a peak of 56.3% in 1980. Despite occasional small rises in membership since 1997, statistics over the past decade would suggest that union density has reached one of its lowest levels at just under 30%. A large difference in trade union density rates is evident between the private and public sectors. As of 2008, trade union density in the private sector was 16.1%, while it reached 59% in the public sector (Department for Business, Enterprise, and Regulatory Reform, 2008). Trade unions in the UK are organised both horizontally and vertically, with some organising particular occupations, such as teachers; others organise in particular industries, while a few operate in particular companies. The sole trade union confederation in the UK is the TUC .There are 6, 471,030 members in TUC affiliated unions, down from a peak of 12,172,508 members in 1980. However, the TUC does not conclude or have the power to conclude collective agreements at any level. In response to declining membership figures, UK trade unions have engaged in many mergers in recent years. In 2008, there were 167 trade unions in the UK this was down from 238 unions in 1998 and 326 in 1988. In 2007, the UK trade unions Amicus and the Transport and General Workers Union (TGWU) merged to form Unite the Union (Unite). This is the UKs largest union, with a membership of about 1,900,000 workers. The largest public sector trade union is Unison, which has a membership of 1,344,000 persons and organises workers in all areas of the public sector.

Employer organizations:
The TUC is paralleled on the employers side by the Confederation of British Industry (CBI). Like the TUC, the CBI has no mandate to collectively bargain and bind its affiliates. In general, the CBI represents large companies in the private sector and is regarded by the government as its main interlocutor with business. Its members comprise individual companies (currently about 3,000) and trade associations (around 150). Owing to the largely decentralised nature of employment relations in the UK, the role of employer organisations in the countrys industrial relations is not overtly prominent. Their role in collective bargaining declined notably during the 1980s, when many existing national sectoral level agreements ceased to function and companies began to negotiate with trade unions at lower levels. Some organisations have disbanded, while others have stopped trying to regulate employment conditions. Current employer organisations that do engage in social and employment affairs are the Engineering Employers Federation (EEF) and the Local Government Association (LGA). Employer organisation density in the UK is approximately 40%.

Collective bargaining:
In the UK, the dominant level for the setting of pay and working time is the company or plant level in the private sector. In areas of the public sector and in a small section of the private sector sectoral level agreements are concluded. There are no national intersectoral agreements in the UK, nor is there any tradition of this, aside from a very brief period in the 1970s. In 2008, the coverage rate of collective agreements in the UK was 34.6%. There is a large discrepancy between figures for the public and private sectors, with collective bargaining coverage for the public sector reaching 72% in 2008, compared with 20% for the private sector (Department for Business, Enterprise, and Regulatory Reform, 2008). Compared with other west European countries, the UK is notable for the disorganised nature of its levels of collective bargaining and the lack of legal backing and promotion that collective agreements are subject to. In line with the UK voluntarist tradition, collective agreements are voluntary instruments that are binding in honour only. However, the terms of collective agreements are normally incorporated into individual contracts of employment that are then legally enforceable. Collective agreements are subsequently never extended by legislation, and there are no voluntary mechanisms for the extension of collective agreements. Moreover, no formal mechanisms exist for the coordination of wage bargaining levels in the UK.

However, in practice, trade unions in different companies and sectors often share information with one another, and agreements in certain companies and sectors often act as informal benchmarks for negotiators in other areas. Collective bargaining in the UK has become far more decentralised since the 1970s and 1980s. In this period, many companies in the private sector left sectoral agreements and, in the public sector, collective bargaining also became more decentralised. According to one study (Visser, 2004), the degree of bargaining centralisation in the UK stands at just 13%.

Other issues in collective agreements:

Collective agreements on issues besides pay and working time are not widespread. While vocational education and training is strong in some professional and technical sectors, it has been historically weak in others. Recent attempts have been made to regularise vocational training through National Vocational Qualifications, and these have been supplemented by further moves to establish lifelong learning routes especially through the university for industry initiative. However, much of the provision of skills training is decentralised to the newly formed Sector Skills Councils (SSC). Currently, there are 25 SSCs in the UK; all of the councils are employer-led, independent organisations, each covering a specific area of the UK.

Features of Industrial Relations of the United Kingdom:

The main features of Industrial Relations of the United Kingdom are:There are two forms of trade unions, one is the Basic Trade Union and the other is Industrial Trade Union. Types of employees are: i. ii. Blue color: It refers to those employees who are directly involved with the White color: It refers to those employees who are not directly engaged with production department of a factory. production but are related to management of the organization.

Climate of Employment Relations in the Kingdom:

United

In a research report on employment relations in the U.K. It has been stated that respondents are not only informants; they are also actors within the workplace, relating to events and practices of which they are a part. Given the contested nature of IR reliance on a single role-holder, such as workplace HR managers, may lead to a partial or biased picture of the nature of Industrial Relations in the workplace. With multiple respondents often asked similar or identical questions about their perceptions of IR, Workplace Industrial Relations Survey (WIRS) has been able to establish the degree of dissonance between respondents within the same workplace and has helped to explain reasons for the differences. This is nowhere more apparent than in the case of perceptions of the climate of employment relations in the workplace. Workplace Industrial Relations Survey (WIRS) made number of contributions to discussions about industrial conflict in Britain. First, it gave a more accurate picture of the incidence of industrial action than other sources. Just as Warwick Workplace Survey had identified Strikes of Short duration and those in smaller workplace were under-recorded so Workplace Industrial Relations Survey (WIRS) provided information on the incidence of industrial action short of a strike where official statistics were either absent or patchy. Furthermore, as Industrial Relations scholars might have anticipated, Daniel and Millward found managers and worker representatives in Workplace Industrial Relations Survey (WIRS) disagreed about the occurrence of industrial action, a finding replicated in subsequent surveys. Second, it supplemented information on the incidence of strike action with other information about conflict at work such as claims to industrial tribunals and perceptions of the climate of IR at the workplace. Management perceptions of climate indicate an improvement in IR since 1990 but, perhaps surprisingly, relations remain poorer than they were in the early 1980s (Table). The table also shows that, whereas managerial perceptions of climate were poorer in union workplaces than in non-union workplaces in 19801990, the gap had disappeared by 1998. In addition to the single-item climate indicator available in Workplace Industrial Relations Survey (WIRS) since the outset, Workplace Industrial Relations Survey (WIRS) includes items such as sanctions against employees (formal written warnings, suspensions of employees, deductions form pay, internal transfers for disciplinary reasons) , and days lost through sickness and absence.

Third, workplace Industrial Relations Survey (WIRS) showed that different actors had very different perceptions of the climate of IR at the workplace. Data for worker representatives matched to that of management showed that the representatives had a poorer perception of the industrial relations climate than their managerial counterparts. This finding has been replicated over the course of Workplace Industrial Relations Survey (WIRS). The advent of linked employeremployee data in 1998 meant that analysts were able to assess mangers perceptions of IR climate alongside those of employees in the same workplace. Comparisons revealed that managers tended to view climate more positively than their employees in the population with 25 employees more and the Population with 10 or more employees. Similar finding have been reported for 2004. Fourth, workplace Industrial Relations Survey (WIRS) permitted analysts to investigate workplace-level correlates of IR climate and industrial conflict. Blanch flower and Cubbins (1986) paper using WIRS was the first to use micro data to assess propensities for various types industrial action. Their coverage of the nonmanufacturing sector was also novel. Their findings from multivariate analyses broadly confirmed results from the cross-tabular analyses undertaken by Daniel and Millward. Using WERS98 Knight and Latreille looked at the correlates of individual conflict as measured by workplace variability disciplinary action, dismissals and tribunal and tribunal applications. They showed that both workplace and workforce characteristics explained much to the variance. Analyses of WERS98 and WERS04 have also shown the correlates of positive perceptions of climate differed markedly arced managerial respondents and employees within the same workplace. Workplace Industrial Relations in Britain, 1980-2004; David (Blanchflower Bruce V.Rauner)

Unions and Employment Growth in the United Kingdom:

The effects of unions on workplace-level employment in Britain illustrate two things. First, although changes in workplace employment have featured in the Workplace Industrial Relations Survey (WIRS) sourcebooks reported a preponderance of establishment with declining employment numbers over the recession period (1980-84) the analyses of this issue have largely occurred in academic papers. The impact of current recession (of 2009-10) is yet to be assessed. Second, it illustrates the way in which WIRS can help us understand IR not simply through the mapping of the terrain but by trying to understand the relationship between key variables in the data.

The workplace Industrial Relations Survey (WIRS) literature on unions employment effects has focused on changes in workplace employment levels. Early studies used retrospective data form managers on employment levels in earlier years to estimate union effects on employment change. More recent studies have begun to use the Workplace Industrial Relations Survey (WIRS) panel data, thus obtaining more accurate information. (Workplace Industrial Relations in Britain, 1980-2004; David G. Blanchflower Bruce V. Rauner)

INDUSTRIAL DISPUTES:
Notions of conflict at work conjure up strong images in the popular imagination. Themore familiar images are of large-scale, disruptive industrial disputes; the less common are of individual grievances, most dramatically illustrated by high profiletribunal cases. The past quarter century has seen a concurrent decline in collective expressions of conflict and growth in the individualised expression of conflict, most transparently manifest in a dramatic fall in the incidence of strikes and a rising tide of claims to the Employment Tribunal.

THE PATTERN OF DISPUTES:

Discussions of conflict have traditionally focused on the incidence of disputes and principally on strikes and the rate of applications to the Employment Tribunal (ET).There is a lot to be said for this approach: official statistics on strikes and Employment Tribunal claims have been collated and published throughout the twenty-five year period that is our focus, and indeed strike data in the UK extend back to 1893. Nevertheless, official strike statistics tell us nothing about the incidence of either very short strikes that fall below the threshold for inclusion in official statistics or other forms of industrial action such as working to rule, whilst numbers of ET claims tell us nothing about the overall extent to which employees raise formal grievances at work. In the sections which follow, we examine the pattern of disputes using this broader set of indicators. We first map out the pattern of collective and individual disputes, drawing variously upon data from the official data series, the Workplace Industrial / Employment Relations Survey (WIRS / WERS) and other sources. We then go on to provide some reflections on the changing patterns of disputes and the inter-relationships between
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different types of dispute.However, there is a further concern that statistics on such phenomena provide only a partial insight into the quality of workplace relations. This is because strikes, formal grievances and ET applications are each institutional expressions of discontent, with the incidence of each being determined, in turn, by the strength of trade union organisation, the presence of workplace grievance procedures and the legislative framework of the tribunal system. Accordingly, a further section then goes on to present evidence on the broader incidence of conflict, drawing upon a number of direct and indirect measures of the state of workplace relations. The overall aim is to develop a multidimensional picture of the changing nature and extent of workplace conflict over the period from the late 1970s to the present. We return to the issue of institutional effects on manifestations of conflict later in the paper.

Individual disputes:
Mindful of the particular nature of matters of dispute that had a foundation in statutory or contractual rights, the Donovan Commission (reporting in June 1968) addressed the need for new arrangements for dealing with disputes between individual employees and employers. The Commission proposed that the industrial tribunals that already handled disputes arising under the Redundancy Payments Act 1965 be given an enhanced role in the administration of labour law to address all disputes between individual workers and his employer and so provide an easily accessible, speedy, informal and inexpensive procedure for achieving an amicable settlement of disputes (Donovan, 1968: para 577). The same Commission proposed the right not to be unfairly dismissed and the Industrial Relations Act 1971 which enacted this right broadened the role of the Industrial Tribunals (renamed Employment Tribunals by the Employment Rights (Dispute Resolution) Act in 1998) to include unfair dismissal.

Collective disputes:
Even the most casual observer of employment relations would be aware of the substantial decline in strike action since the early 1980s. Figure 1 shows a longer time series extending back to 1960 to demonstrate that the decline in the number of stoppages was part of a longer trend which began in the 1970s. However, that is not to suggest that industrial action was a declining problem in that decade. Large

disputes kept the number of days lost high and these increased at the end of the 1970s, culminating in the so-called winter of discontent.

EVIDENCE ON THE BROADER INCIDENCE OF DISCONTENT:

One clear conclusion from the foregoing discussion is that the level of disputes whether collective or individual can be heavily affected by factors other than the underlying degree of conflict at work. This raises a further question as to how levels of discontent as opposed to levels of overt disputes have changed over time? First, it is clear that only a minority of employees experiencing problem at work choose any kind of formal approach to addressing their complaint. For instance, Casebourne et al (2006) report that only a quarter (24 per cent) of those who had experienced a problem at work had put their concern in writing to their employer and just three per cent had brought a tribunal case as a result of their complaints. There are no data available that allow us to chart directly the changing incidence of problems at work among employees across our twenty-five year period. The closest objective indicator is perhaps provided by Citizens Advice, who record the number of employment-related problems raised with Citizens Advice Bureaux each year. This series shows an increase in the number of reported problems through the 1980s and early 1990s, from 312,000 in 1980 to a peak of 882,000 in 1993 (Figure 3). Thenumber has fallen back since that time, albeit with some fluctuations; the most recent available figure (for 2007) stood at 505,000. However, one must treat this series with some degree of caution since it is plausible that the increase in volumes in the 1980s could partly be explained by some expansion of the network of Citizens Advice Bureaux following the introduction of government funding in the mid-1970s, whilst the broad downward trend since 2000 may be partly determined by the introduction of a web-based enquiry service in 1999. As an alternative, one can express the total number of employment-related problems as a percentage of all problems reported to the Bureaux, and this series is also shown in Figure 3. It has its own limitations, since fluctuations in the series may be prompted by the changing incidence of problems in areas other than employment (e.g. social security or housing). However, whilst the mid-1990s peak in the number of problems stands out less in this alternative series,one nonetheless retains the impression of improvements since 2000.

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INDUSTRIAL CONFLICT MANAGEMENT:

The Advisory, Conciliation and Arbitration Service (ACAS) is the main body involved in conciliation and arbitration in the UK. It is an autonomous, tripartite body established by statute and its task is to improve industrial relations. The largest part of ACASs work is individual conciliation. The amount of individual litigations and employment tribunal cases has increased considerably within the UK in the past decade or so. Arbitration is a relatively small part of its work, mainly because it has no powers to arbitrate without the consent of both sides. Arbitration is neither compulsory nor legally binding. The latest available official statistics show that, in a 12-month period to October 2008, some 147 work stoppages were recorded, in which 677,000 workers took part and 837,700 working days were lost. This marked a decline from the figures for the 12 months until October 2007, where 210 stoppages were recorded, involving 878,000 workers and resulting in 989,000 lost working days. These figures are also historically very low. In 1988, for example, there were 781 stoppages recorded, in which 790,000 workers were involved and 3,702,000 working days were lost. The figures for this year also represent a typical year for this period. The general decline in labour disputes in the UK is likely to be attributable to falling trade union density rates, and to the anti-union laws of the 1980s and 1990s. In 2008, large industrial actions occurred in the UK public sector over the governments policy on public sector pay restraint. More complete statistics are available for 2007 regarding the sectors involved in strikes. In 2007, of the 142 stoppages recorded, 55 occurred in the transport, storage and communication sector, while 21 took place in the education sector, and 20 were recorded in public administration, defence and the compulsory social security sector, making these the three sectors most affected by strikes during the year. These sectors were also the most adversely affected in terms of working days lost and workers involved (Office for National Statistics, 2008a).

Tripartite concertation:
Owing to the UK voluntarist tradition, policy concertation has been uncommon, and there are currently few formal mechanisms or forums for tripartite
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concertation in this country. From 1962, a tripartite National Economic Development Council existed, in which the government and UK social partners discussed economic policy; however, this was abolished in 1992. In the late 1970s, consultation between government, employers and trade unions was also growing in importance. However, the Thatcher government, which was elected in 1979, sought to eradicate any forms of corporatism. Since then, tripartism or corporatism has not been re-introduced on a comprehensive or formal basis. However, the UK social partners are regularly consulted by the public authorities on the direction of public policy in the country on an ad hoc basis; they are also represented in a series of committees that are of a tripartite nature. For example, the social partners are represented on the Low Pay Commission (LPC), an independent UK body that issues recommendations for increases in the national minimum wage. The LPC board consists of nine members three trade union representatives, three employers and three labour market relations experts. At the sectoral level, the UK social partners are involved in the aforementioned SSCs, which seek to improve the skills of workers in the UK.

Workplace representation:
Traditionally, there have been no statutory works councils in the UK. In line with the voluntarist tradition, workplace representation was solely achieved through trade union presence in the workplace and was not enshrined through the law. As previously mentioned, a considerable decline in trade union presence and power has occurred in the UK over the last 25 years. In 2008, 46.6% of workplaces had some sort of trade union representation (Department for Business, Enterprise and Regulatory Reform, 2008). The EU information and consultation Directive of 2002 (Directive 2002/14/EC) was implemented in the UK in 2004 as the Information and Consultation of Employees Regulations. The regulations lay down statutory procedures for workplace representation, and stipulate that workplaces with 50 or more employees must have a body for the information and consultation of employees in place.

Employee rights:
Employee rights are enforced in the UK through a variety of mechanisms. Firstly, employees have access to employment tribunals that determine whether the rights of employees have been infringed. Trade unions are responsible for the monitoring of collective agreements, and the right of trade unions to engage in strike action is
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decided by the UK civil courts. Health and safety conditions in workplaces are monitored by the UK Health and Safety Executive (HSE), while compliance with the national minimum wage is monitored by the countrys HM Revenue and Customs (HMRC) department. A conservative government, led by the then Prime Minister Margaret Thatcher, was elected in 1979 on an anti-trade union, neo-liberal platform. Successive governments of this political stripe pursued a legislative programme that placed legal restrictions on trade unions ability to engage in industrial action, and that privatised many areas of the public sector, while managing the public sector in an anti-union fashion. During this period, trade union membership also declined markedly, and the majority of sectoral collective agreements in the private sector were dismantled as companies abandoned them. A New Labour government, led by Prime Minister Tony Blair, was elected in 1997, offering a moderately conciliatory approach to the trade unions. The cornerstone of the Blair governments approach to employment relations was the use of legal individual employment rights to protect workers. Most notably, a national minimum wage was introduced. Many of these legal rights emanated from the level of European Union, and the post-1997 period saw a marked increase in the influence of legal regulation in the employment relationship. Nonetheless, trade union membership continued to decline, and in 2008 trade union density stood at 28%. As of 2009, the UK system of industrial relations would appear to exhibit a mixture of characteristics. While the old tradition of the state not intervening in relations between the social partners is still manifest in the non-legally binding nature of collective agreements and in the fact that trade unions and employer organisations have little statutory involvement in public policy and little recourse to bipartite or tripartite forums at the national level, legally established employment rights would now appear to be a permanent feature of the UK system. The global 2008 economic crisis has particularly affected the UK. Unemployment rates have increased markedly, and several financial institutions have had to be rescued by the UK government. As of 2009, the effect of the crisis on the development of the UK system of industrial relations is unclear. Trade unions have responded to the crisis by calling for greater government intervention to support employment levels. At the same time, collective agreements have been concluded by the UK social partners at company level with the aim of reducing working time in order to preserve employment levels (UK0811029I). However, as of 2009, it is too early to identify any concrete trends.

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Pay and working time developments:

Minimum wage:
A national minimum wage has been in place in the UK since 1997. The rate is set by the LPC, which advises the government on low pay and recommends appropriate rates. The current minimum wage in the UK as set in October 2008 for adults aged 22 years or older is GBP 5.52 (about 6.38 as at 7 July 2009) an hour. For workers aged between 18 and 21 years, the minimum wage is GBP 4.77 (5.52) an hour. The minimum hourly wage for all workers under 18 years of age who are, in addition, no longer of compulsory school age is GBP 3.53 (4.08). Some workers undertaking apprenticeships or accredited training may not be considered eligible to receive the national minimum wage for a certain period of time, which varies according to their age and length of time in employment. Other categories of workers who are exempt include au pairs, share fishermen, members of the clergy, those in the armed forces, prisoners and some people working in family businesses. Moreover, the rate payable under the national minimum wage can, in all cases, be reduced where accommodation is provided to the worker.

Pay developments:
In April 2008, the average gross annual earnings in the UK were GBP 25,100. In April 2007, the equivalent figure was GBP 24,020 (Income Data Services, 2008). An increase of 4.5% was therefore recorded. In November 2008, the percentage annual rise in collectively agreed average weekly earnings was 3.8%. In November 2007, this figure amounted to 3.4% (Labour Research Department, 2009). In terms of gender, the average gender pay gap in the UK in 2008 was 12.8%. This gap is measured in the UK on the basis of median hourly earnings, excluding overtime. In 2008, median hourly earnings excluding overtime for men was GBP 12.50, and for women GBP 10.91. Between 2007 and 2008, the gender pay gap in the UK rose by 0.3 percentage points from 12.5% to 12.8%. However, the gender

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pay gap stood at 17.4% in 1998, so the figure has substantially fallen over the last decade.

Working time:
Based on a study of 417 company and sector agreements, the average collectively agreed working time was 37.3 hours a week in 2008 (Income Data Services, 2008). Thus, no change was registered on the average of 37.3 hours in 2007. Although virtually all collective agreements deal with working time, because of the low collective bargaining coverage rate few employees have their working time regulated by such a collective agreement. The regulation of working time has been a point of much debate, especially with the European Commission in recent times. The UK has implemented the statutory maximum working week of 48 hours, as set by the EU 1993 Working Time Directive (Council Directive 93/104/EC) in a particular and restrictive way. The regulation allows for exemptions of large numbers of managerial and professional staff and permits individuals to opt out of the regulations.

Pay settlements:
It is worth recalling that, as well as furthering our understanding of pay levels, there is a strong WIRS tradition identifying factors associated with the size of pay settlements. WIRS is a useful source of information on this issue given its representative nature and the general lack of information on pay settlements in the economy more generally. However, its impact in policy discussions is limited given the gap between data collection and data analysis, such that policy analysts often resort to other data.The actual list of influences on pay settlements contained in WIRS would have been anathema to most economists at the time since managers responses indicated that, quite unlike in the neoclassical economists world, employers can be price-makers when it comes to setting wages, not just the takers of prices for labour set by laws of supply and demand to which they are passive respondents. This is a standard observation for IR academics, but was far more controversial for labour economists grappling with early WIRS data.

Variable pay:
Variable pay has been a central issue in WIRS since the outset. This is not
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surprising. IR academics had been studying the role of piece-rates and paymentsby-results in manufacturing for many years and their links with industrial unrest were a cause for concern to the Donovan Commission. Today, variable pay is often viewed as the antithesis of the standard or common rate-for-the-job pay determination principle underpinning union wage setting (Marsden, 2004). The idea, attractive to some, is that pay should match worker performance, not only because this might more fairly reflect employees just deserts, but also because the incentive effects of the link can bring their own benefits in terms of greater worker motivation and loyalty, higher effort and thus productivity and thus,ultimately, improved financial performance

Industrial Relations in Britain under New Labour, 1997-2010:

When the Labour Party came to power in Britain in 1997 its attitude to organized labour was distinctly ambivalent. It had recently rebranded itself New Labour specifically to distance itself from its historic old Labour Party association with trade unions. The following years in office were to prove a period of industrial peace and, almost until the end, of sustained economic growth. But when the electorate threw the Party out in 2010, its attitude to trade unions was no less ambivalent. Furthermore, those years had seen continued decline in both trade union membership and collective bargaining. In this post mortem account we start with New Labours inheritance and then look at the ways in which it sought to promote partnership with trade unions. Unusually rich survey data permit an assessment of some of the consequences. It finishes with a consideration of New Labours own legacy.

The inheritance:
The period between the departure of the previous Labour government in 1979 and the return of New Labour in 1997 had been disastrous for organised labour. The proportion of employees in trade union membership tumbled from 56 to 31 per cent. Beyond public employment, it had been little short of a rout. In the private sector, the proportion of workplaces (with 25 or more employees) where unions were recognized was halved from 50 to 24 per cent. The proportion of employees in the private sector protected by collective agreements collapsed similarly, from around 55 to 25 per cent (Achur, 2010). Politically the picture for trade unions was even bleaker. The influence of their leadership upon government policy, hitherto very substantial, collapsed to non-existent.

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Those intervening years of Conservative rule, especially the 1980s under Margaret Thatcher, had seen high drama in terms of industrial disputes. There had been prolonged and even violent confrontations, of which the year-long coal-miners strike of 1984/85 had been the most bitter. But by the 1990s the level of conflict had fallen to historically low levels. The number of working days lost through strikes per year, having averaged 930 per thousand union members through the 1970s and 1980s, tumbled to 76 for the 1990s. The comparable figures for numbers of strikes per million union members fell from 175 to 32 (Office for National Statistics, 2010a). It is true that the number of individual grievances registered with employment tribunals doubled over the period, and there is evidence that the intensity of work had been on an increasing trend through the 1980s and 1990s (Brown et al., 2009: 184, 206). But high levels of strikes, so much a feature of Britain for the previous thirty years, were a thing of the past. Part of the reason for these substantial changes in trade union fortunes and behaviour had been legislative intervention by the Conservative governments. British labour lawhad, for over a century, made a virtue of trying to keep out of relations between employers and trade unions, an approach referred to as collective laissez faire. Trade union rights to organise had traditionally been illdefined, and there had been no more legal right to strike than a statutory protection against being sued for the costs of strikes. Tentatively at first, but then more methodically, the Thatcher governments of the 1980s had tightened things up. So far as union organisation was concerned, steps were taken to make leaderships more accountable. Direct elections were required, with ballots and external scrutiny. Members were given better access to information about their union. They were given more choice of whether to join a union and, if so, which one. The scope for strike action was curtailed by a range of devices. The grounds for acceptable strike action were narrowed by excluding secondary and overtly political strikes. Strike procedures were constrained by limiting the use of pickets, by banning union disciplinary action in support of strikes, and by preventing official union support of illegal strikes. Most important, all strike action had to have the support of union members in a tightly regulated balloting procedure (Dickens and Hall, 2010).The combined effect of all these changes was to increase substantially the cost and complexity both of union organisation and of strike action. Far more important in its impact upon collectivism than these direct legal interventions, however, was increasing product market competition. Some of this, it is true, was the result of less direct government policy. The privatisation of much of the public sector during the 1980s and 1990s was particularly important. Many once highly unionised industries railways, steel, electricity, water, telecoms, aerospace, and so on saw union membership and the coverage of
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collective bargaining contract as a result of their privatisation (Bach, 2010; Brown et al, 2009: 41-47)). But a far more widespread influence was the increase in product market competition arising from more global markets and corporate ownership. Just two indicators give the scale of this. British imports of manufactures, as a percentage of home demand, rose from 25 per cent in 1980 to 62 per cent in 2005 (Office for National Statistics, 2008). The share of foreign ownership in the London Stock Exchange rose from 4 per cent in 1981 to 40 per cent in 2006 (Office for National Statistics, 2010b). It has been demonstrated that it was typically those private sector industries which faced most competition and where profits were worst hit which experienced the biggest retreats in collective bargaining over these years (Brown et al ., 2009: 41). Thatchers legal changes undoubtedly hastened the collapse of collective bargaining in Britains private sector, but the underlying economic causes would have prevailed eventually, whatever the government in power.

Changing the law:

Within days of his election triumph, Blair had mobilised the social partners. There were two main tasks, both seen to be highly risky by the new government. The first was to get agreement between CBI and TUC on legislative measures that would go at least some way to meet trade union demands to expunge Thatchers anti-union laws. At risk was the new governments carefully nurtured businessfriendly image on the one hand, and the support of the Partys union financial backers on the other. The second task was to introduce a statutory national minimum wage, an election pledge that had been bounced onto New Labour by its party conference. The Party leaderships anxiety that this might jeopardise growth exceeded any ambition to redistribute income. The negotiations over new trade union legislation were difficult, with the government happy to let the CBIs views have a substantial influence. The outcome, enacted in 1999, brought only a limited reversal to the Thatcher legislation. Some minor restraints on trade union organisation were eased. The main innovation in terms of trade union aspirations was the introduction of a statutory recognition procedure. Union recognition would be required of a reluctant employer if the majority of employees were already union members, or where 40 per cent of eligible employees voted in favour. But the legal restraints on strikes that had been introduced by the Conservatives were retained - on balloting, picketing, secondary action and so on. The only significant changes made by Blair were that strike ballots were made a little more anonymous, and it was made illegal for employers to discriminate against strikers. The government was determined not to be seen to be soft on strikes. And perhaps, strictly in private, many union leaders were grateful for the procedural order that Thatchers anti-

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strike laws had brought to their rank-and-file. There were to be some other innovations which could help trade unions. Employees facing a serious disciplinary matter at work, whether or not unionised, were now entitled to be accompanied by someone of their choice when brought in front of management. That assured unions a formal role in workplaces where they were still present. A new right was introduced in 2003 whereby workers could have learning representatives to facilitate their broader training and education. That underlined the positive face of trade unionism that the TUC wanted to promote. In 2005 a Union Modernisation Fund was created, providing grants (eventually there were 67, totaling over 7 million) to unions to help them make better use of IT, improve communications, enhance activist training and so on. Both directly and indirectly, this had a widespread influence. By the time the Fund was wrapped up by the new Coalition government in 2010 it had brought substantial improvements in the professionalism of most of the larger trade unions (Stuart et al, 2006).

Outcomes:
It is futile to speculate on what might have happened in the absence of New Labour. But we do have good measures of what did happen. Trade union membership density continued to decline, slowly but steadily; from 31 per cent of all employees in 1997 to 27 per cent in 2009 (Achur, 2010). Its decline in the private sector continued; from 20 per cent in 1997 to 15 per cent in 2009. But membership density also declined in the public sector; from 61 per cent to 57 per cent. This was despite a government that was broadly sympathetic to, and financially dependent upon, trade unions, and which had passed substantial legislation in 1999 to encourage employers to give them recognition. A similar picture is evident if we look at indicators of collective bargaining. The proportion of employees in workplaces where trade unions were present fell from 49 per cent in 1997 to 47 per cent in 2009. The proportion whose pay was affected by a collective agreement fell from 36 per cent in 1997 to 33 per cent in 2009. It is not only behaviour towards trade unions that has changed. The behaviour of trade unions has changed. We have already noted the decline in industrial disputes in the years preceding New Labour. This broadly continued up to 2009. The average annual number of strikes per million trade union members, having fallen to 32 for the 1990s, fell further to 19 for the period 2000 to 2009 (Office for National Statistics, 2010a). If we compare average figures over the two halves of the New Labour years, the number of working days lost almost halved in the private sector, although it
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showed no clear trend in the public sector. We have also noted the tendency for collective bargaining to become more consultative. There is ample evidence of a decline in the perceived influence of trade unions at workplaces where they are present up to the end of the 1990s. And this is how they perceived it themselves: in the 2004 WERS survey, local trade union representatives and their managers were in broad agreement that, over the main issues on which they interacted, their relationship was twice as likely to be characterised by consultation and information exchange as by negotiation (Brown and Nash, 2008: 101). If we look at the economic outcomes, this picture of declining trade union influence is confirmed by detailed statistical analysis of the WERS survey and Labour Force Survey (Blanchflower and Bryson, 2009). The wage effect of trade unions diminished between the 1980s and the 2000s, whether one considers union membership or recognition. But workers did enjoy a significantly larger unionrelated wage premium in those (relatively rare) small workplaces with fewer than 25 employees which still had a union presence. Turning to employment growth, the significant negative association that unions had in the 1980s had vanished after 1990. Similarly, unions were associated with relatively poorer financial performance of the firms where they had membership in the early 1980s, but this difference disappeared in the 1990s and 2000s. More amorphously, the perception of managers that unions adversely affected the climate of employment relations at their workplace also disappeared after the 1980s. The decline of trade unions has thus been associated with a diminution of their apparent impact at the workplace.

LESSONS WE CAN LEARN FROM IR OF UK:

A labor agreement in Great Britain is not a legally binding contract. Violations of the agreement by the union or by management carry no legal penalties. British unions are relatively powerful and strikes are more prevalent than in the United States. British union membership has declined in recent years. British labor agreements do not usually include provisions for arbitration of disagreements or grievances. Labor unions are relatively powerful (has decreased in recent years) Strikes are more prevalent than in the United States.

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 Labor agreements typically do not prohibit strikes and the general public is more used to and tolerant of them. System is not geared toward the efficient resolution of problems. British in general still appear willing to accept conflict with resulting strikes and lockouts as the price of protecting the rights of the workers. Industrial democracy in Great Britain takes the form of collective bargaining and worker representation through the use of teams. British work groups elect a chief spokesperson or steward to interface with management. Union councils represent unionized employee to ensure workers are treated fairly by management.

CONCLUSION:
The New Labour government saw no advantage in rebuilding that relationship. Trade unions had become unpopular in the 1970s and Thatcher had played upon that unpopularity with devastating effect electorally in the 1980s. The Labour Party had long been heavily dependent on the trade unions financially 75 per cent of its funds came from them in 1985 and knew that it could not look business-friendly and independent unless it broke that link. By 2002, New Labour had found alternative sources of finance and only 30 per cent of its funds came from the unions. Ironically, by 2008, after a series of scandals linking the Party to the sale of seats in the House of Lords had choked off those alternative sources, dependence on unions was back even higher, at 90 per cent. A panic over the need for union financial support for the 2005 election prompted an agreement with the major unions (notably not with the TUC) called the Warwick Accord. Under the terms of this agreement, New Labour politicians agreed to a shopping list of union policy demands, of which the most tangible was the Union Modernisation Fund. But this was far from the corporatist collaboration with union leaders so characteristic of the 1960s and 1970s. Neither Blair, nor his successor as Prime Minister, Gordon Brown, were close to trade unions or understood them. Although Ed Miliband won the Party leadership in 2010 with union support, there is no reason to suppose him to be in any way different. Whether the discontents that will accompany substantial public sector job cuts over 2011 and 2012 may provoke a change of attitude in the Labour Party leadership remains to be seen. The second question is how the period of New Labour government, so much more sympathetic to trade unions than the preceding Conservative governments, altered

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British industrial relations. Central to answering this is the understanding that the decline of trade unions and collective bargaining owes far more to the intensification of competition in the wider economic environment than to any governmental action. What may endure for British industrial relations from the New Labour years is a strengthening of the practices of partnership and of conciliation. At workplace level co-operative working will continue, whatever it is called. At the national level, the success of the Low Pay Commission in creating and managing the National Minimum Wage suggests that the social partners will, in established EU tradition, continue to be centrally involved in the setting of minimum labour standards. And as competition becomes ever more global, and collective bargaining ever less adequate, statutory labour standards are likely to be an increasing requirement of a civilised democracy. Similarly, the partnership upon which Acass independence is based is likely to provide the template for institutions for conflict resolution. The practice of conciliation is likely to be in increasing demand in a world where the competition for scarce resources will intensify. There is no appetite in British industrial relations to return to the divisive years of the 1970s and 1980s, even if unions had sufficient mobilising capacity. But also the nature of the problem has changed. The extraordinary facility of electronic communications to enable the mobilisation of mass discontents has coincided with the withering of the collective representative structures that in the past would have helped the resolution of those discontents. Whether in Glasgow or in Guangzhou, the challenge will be to nurture worker representation in order to facilitate conciliation. Here New Labour may have left something on which can be built.

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