‘Times are hard’ is the message employers are receiving from the news these days. And there are daily reports of job losses as the economy tightens, with talk of another ‘winter of discontent’ as pay budgets become less flexible in both the public and private sectors.
With this in mind, I thought it would be interesting to reflect upon what happened with regard to disputes and stoppages in the last economic downturn in the early 1990s.
Interestingly, what we saw then was trade union officials recommending the acceptance of pay offers, but members voting in pay ballots not to accept and that has already happened in a few disputes recently. When people are generally unhappy about their financial situation and are given the opportunity to express that dissatisfaction in some way, in this case by putting a cross on a ballot paper, then they will do so. This means that there will probably be a slight increase in disputes this time around and Acas is already handling about 10% more disputes than last year.
However, that does not necessarily mean there will be more stoppages. In the last recession, economic hardship meant that when it came to a strike action ballot or actually walking out and losing pay, then people were more hesitant. There was no increase in actual stoppages in the last recession. In fact, the number of stoppages as reported by the Office for National Statistics nearly halved. Again, recently we have seen some industrial action ballots deliver ‘no’ votes or slim majorities below 60%. Could this be a reflection of similar circumstances?
Employers should not be complacent though, for while there may have been a decline in collective action in the 90s, there was a large rise in individual action. The redundancies and workforce reductions in the early 1990s saw an increase in unfair dismissal claims from about 40,000 in 1990 to more than 60,000 by 1993. The Gibbons Review of dispute resolution procedures, enhancing the role of Acas and seeking to reduce employment tribunal claims, could not be more timely.
The current economic uncertainty makes it all the more difficult for managers and trade union officials to predict the course of a dispute. This can lead to tactical errors and cause parties to end up in positions they did not foresee, but which they feel they still have to defend.
This may be exacerbated by the fact that HR professionals and trade unionists may also be handling situations they have never faced before. In the NICE decade (standing for No Inflation Continuous Expansion, I’m told) many will not have had the experience of passing on bad news. They will have been operating in a more benign negotiating climate with pay offers of at least, and in many cases, above inflation and claims being at least partly met.
Union officials who had little problem selling above-inflation offers may now be faced with having to pass on arguments to their members justifying a realistic approach and trying to sell sub-inflation offers designed to help company performance. Managers accustomed to pay deals being accepted with little resistance may now be faced with strong arguments for larger offers due to the rising cost of living. If either or both sides fail these tests, then they can find themselves in a dispute with little experience to fall back on about how to proceed.
So how do parties achieve settlements and avoid getting themselves into conflict situations? I go back to the old maxim which, though simple, is in my experience one of the keys to successful employee relations: no surprises. If companies are facing difficulties then the sooner the realities are communicated and employees and their representatives are involved in helping to find ways to mitigate problems the better. This means treating people openly and honestly.
This can then lead to something else we saw in the better performing companies during the last recession – a spirit of adversity that saw employers, trade unions and employees working together to get through the hard times to reach better times ahead.
Peter Harwood, chief conciliator, Acas