Strikes: the implications for the economy and the workforce

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The British Airways cabin crew strikes have dominated headlines this week, escalating from an industrial dispute into a poisonous political row.

As well as causing huge inconvenience to travellers, the strike reawakened unpleasant memories from the 1970s, when waves of strikes brought the nation to its knees.

There have also been other high-profile incidences of industrial action, with the rail workers from the RMT trade union threatening strikes over the Easter weekend and British Gas workers in the GMB union and Hewlett Packard staff also threatening to go on strike.

So will HR directors across the country be bracing themselves for a year of heightened industrial unrest?

Perfect storm

Marc Meryon, employment relations partner at Bircham Dyson Bell, has warned that several factors are working together that could lead to a perfect storm of strikes across different companies and sectors.

In the short term, unions could use the forthcoming general election to strengthen their position at the negotiating table, says Meryon.

“I think the unions foresee that they have an opportunity to make some mischief in the hope that the government will lean on an employer to resolve the dispute for fear that it could have an adverse effect on the general election.

“Unions are exploiting the perception that now is the time to extract deals that they might not get once the election is over,” Meryon warns.

Pay freezes

But in the long term, there could also be potential industrial disputes as unions push for pay rises to match inflation and attempt to make up for pay freezes during the recession.

“There is a way to go – it is a time of restructuring. I would expect over the next two to three years that there will be a lot of activity on the industrial relations front,” says Meryon.

Ed Sweeney, chairman of conciliation service Acas, argues that the state of the economy is the main driver for strikes. Companies may feel the need to change terms and conditions to save money in the more challenging economic times – but may meet with opposition from unions, he says. Pensions could be a particularly divisive issue between staff and management, because firms may look to close schemes to save money.

“Employers may have to look at terms and conditions, pushing them towards potential industrial action,” he warns.

Acas guide

The industrial relations environment has prompted Acas to produce a special guide outlining the main causes of industrial unrest in the coming months.

According to the guide, incidences of official industrial action fell as the recession took hold.

But between July 2008 and June 2009, Acas dealt with 948 collective disputes, representing a 15% increase on the previous year.

Industrial stoppages dropped between October 2008 and May 2009, according to the Office for National Statistics. But in October 2009, industrial stoppages caused the loss of 175,000 working days – the highest figure since summer 2008.

Work together

Sweeney urges any organisations considering making changes to work together with unions to produce a negotiated settlement. “Prevention is better than cure. Talk to your people, be transparent, be clear, don’t try to be smart,” Sweeney says. He urges companies to use Acas if negotiations fail.

However, Meryon warns there could still be further unrest to come in public sector organisations facing budgetary pressures and private sector organisations still suffering following the recession.

“This is something that is going to carry on for some time, we are a long way from getting out of the woods,” he warns.

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