Justify pay strategies to reduce industrial unrest

Mark Leach of DLA presents the key findings of his law firm's annual survey of UK industrial relations, and outlines the implications for HR.

This month saw the publication of DLA's 12th annual survey on the state of industrial relations in the UK, which polled more than 300 large employers, and 27 trade unions with a combined membership of more than 2.8 million people.

The survey included a report on the levels of industrial unrest recently experienced by respondents. Highlights from this year's findings include:

- 32 per cent of employer respondents experienced some form of industrial unrest, compared with 49 per cent the year before

- 18 per cent of employers reported ballot threats and 15 per cent reported actual ballots, compared with 27 per cent of threats and 36 per cent of actual ballots in 2003

- 19 per cent of public sector employers experienced strike action, and 21 per cent experienced action short of a strike

- 3 per cent of private sector employers reported strike action, and 3 per cent action short of a strike.

The results confirm a fall in the number of employers experiencing industrial action, and a big difference in experiences between the private and public sectors.

There is undoubtedly a trend in the UK for fewer, but larger, disputes, and a concentration of those are in the public and recently privatised sectors. The number of strikes has fallen, but the days lost to strike action remains significant compared with recent years. In 2003, 499,000 days were lost. The official figure for the number of days lost during the first five months of 2004 is 623,000. That indicates the potential to reach a 13-year high in the number of days lost to industrial action (although nothing like a return to the levels seen in the 1970s and 1980s).

The experiences of public sector employers contrasts with the private sector, where results indicate greater stability. Levels of industrial unrest are down, and strikes are few. Whether this stability is long-term is likely to be affected by the impact of the National Information and Consultation Directive (NICD) regulations.

Trade unions appear united in their positive approach to the NICD. None of those responding to our survey believe they would be detrimental to the influence and membership of their trade union. This indicates a considerable and positive swing in the attitude of unions towards the NICD. Last year, 20 per cent of trade union respondents said they expected the NICD to have a detrimental impact.

However, many employers predict increased levels of industrial unrest over the next 12 months. What can be done to minimise this risk?

As far as the public sector is concerned, so many issues are influenced by government policy and strategy that there is unlikely to be a great deal that HR professionals and managers can do. For example, political advantage is being sought by politicians pressing for large cuts in Civil Service posts. HR professionals in many private sector organisations must sympathise with their counterparts within the Civil Service. They now have to deal with thousands of job cuts and restructuring in dialogue with strong recognised trade unions with high membership levels.

As for the private sector, our survey confirms that pay and benefits continue to be the dominant factors behind industrial unrest. More than 60 per cent is caused by disputes over pay and benefits (including pensions).

Justifying a pay and benefits strategy must be a priority if HR is to avert industrial unrest. Compliance with the NICD regulations will present just such an opportunity. It will also provide opportunities for the trade unions to become informed about and challenge (in the course of consultation) those strategies in a wider range of workplaces. Effective communication (as well as legal compliance) is going to be of increasing importance to HR professionals.

Go to www.dla.com/irsurvey for a copy of the results.