Assessing Partnership : The Prospects For, And Challenges Of, Modernisation 9781845446246, 9780861766901

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Employee Relations

ISSN 0142-5455 Volume 24 Number 3 2002

Assessing partnership: the prospects for, and challenges of, modernisation Guest Editors Miguel Martinez Lucio and Mark Stuart Paper format Employee Relations includes six issues in traditional paper format. The contents of this issue are detailed below.

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Access to Employee Relations online _________________

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Editorial advisory board _____________________________

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Abstracts and keywords _____________________________

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French abstracts_____________________________________

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German abstracts ____________________________________

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About the Guest Editors _____________________________

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Assessing partnership: the prospects for, and challenges of, modernisation Miguel Martinez Lucio and Mark Stuart ____________________________

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The two faces of partnership? An assessment of partnership and co-operative employer/trade union relationships Sarah Oxenbridge and William Brown ______________________________

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‘‘Working together – involving staff’’: partnership working in the NHS Anne Munro ___________________________________________________

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Partnership and process in the maritime construction industry Jo McBride and John Stirling ______________________________________

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Assessing the principles of partnership: workplace trade union representatives’ attitudes and experiences Miguel Martinez Lucio and Mark Stuart ____________________________

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CONTENTS

CONTENTS

The contingencies of partnership: experiences from the training reform agenda in Australian manufacturing

continued

Richard Cooney _________________________________________________

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Partnership, ownership and control: the impact of corporate governance on employment relations Simon Deakin, Richard Hobbs, Suzanne Konzelmann and Frank Wilkinson ___ 335

Book reviews________________________________________

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Internet news _______________________________________

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EDITORIAL ADVISORY BOARD Professor Greg J. Bamber Griffith University, Brisbane, Australia Dr Boyd Black Queen’s University, Belfast, Northern Ireland Professor William N. Cooke Douglas A. Fraser Center for Workplace Issues, Detroit, USA Professor Linda Dickens University of Warwick, Coventry, UK Professor Hans-Jurgen Drumm University of Regensburg, Regensburg, Germany Professor Patricia Fosh University of Wales College of Cardiff, Cardiff, UK Professor Patrick Gunnigle University of Limerick, Limerick, Ireland Richard Holden British Energy Generation UK Ltd, East Kilbride, UK Professor Ralf Johnson Center for Labor Education and Research, Birmingham, USA Professor Jan Kees Looise University of Twente, Enschende, The Netherlands

Professor Csara Mako St Stephen University, Budapest, Hungary Professor Mick Marchington Manchester School of Management, UMIST, Manchester, UK John Monks General Secretary, Trades Union Congress, London, UK Professor Richard Painter Staffordshire University, Stoke on Trent, UK Professor Nancy Papalexandris Athens University of Economics and Business, Athens, Greece Professor Edward Snape Hong Kong Polytechnic University, Hong Kong Professor Tan Chwee Huat National University of Singapore, Singapore Professor Brian Towers Warwick Business School, University of Warwick, UK Professor Adrian Wilkinson Professor of HRM, Loughborough University Business School, Loughborough, UK

Assessing partnership: the prospects for, and challenges of, modernisation Miguel Martinez Lucio and Mark Stuart Keywords Partnering, Central government, Employee relations, Capital This paper has a dual role. First, it provides an overview of partnership, with particular reference to the present Labour Government and the shaping of its relations with the institutions of capital and business representation. Second, it provides an introduction to the special issue on ‘‘Assessing partnership: the prospects for, and challenges of, modernisation’’ and briefly outlines the papers included in it.

The two faces of partnership? An assessment of partnership and co-operative employer/trade union relationships Sarah Oxenbridge and William Brown Keywords Industrial relations, Partnering, Trade unions, Employers The paper examines the context and characteristics of partnership arrangements currently emerging between employers and unions at the workplace level in Britain. Case studies of 11 firms involving interviews with managers and trade union officials revealed two broad types of arrangement. Those in production sector firms nurtured collective bargaining through informal partnership relationships, while those in the private service sector contained collective bargaining tightly through formalised partnership agreements. We analyse the pressures that underlie relationships, the net benefits to the parties, the scope of relationships, and employer strategies for restricting union influence. A key finding is that partnership relationships can be characterised by a ‘‘continuum’’ of union involvement in the workplace, with unions having greater rights where they have informal relationships backed up with high levels of workforce unionisation.

‘‘Working together – involving staff’’: partnership working in the NHS Anne Munro Keywords Employee involvement, Partnering, National Health Service, Case studies Contributes to debates about employee involvement and social partnership by exploring the ways in which individualist and collectivist aspects interrelate in a single initiative in the National Health Service. Identifies a particular form of employee involvement in which partnership is integral. Draws on a case study of one NHS Trust over a period of 18 months, using individual and group interviews with senior and line managers, union officials, shop stewards and staff. Argues that tension between collectivism and individualism becomes more acute lower down the organisation where line managers are responsible for implementing change. Highlights how understandings of invol vement and partnership change over time and how a climate that is more amenable to union organisation can be created.

Partnership and process in the maritime construction industry Jo McBride and John Stirling Keywords Partnering, Trade unions, Case studies The authors provide a case study of a partnership agreement in the Tyneside maritime construction industry. They focus on the role of trade unions and the complex tensions that emerge between regional and local officials and workplace representatives. They argue that agreements can only be understood within the context of existing employee relations structures. Their conclusion suggests that the agreement had little impact on a ‘‘branch plant’’ of a national company and that it was often received with hostility and little commitment. As a consequence the partnership became a symbolic agreement with potential significance for external customers but no role in shaping workplace employee relations.

Abstracts and keywords

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Assessing the principles of partnership: workplace trade union representatives’ attitudes and experiences Miguel Martinez Lucio and Mark Stuart Keywords Trade unions, Partnering The article examines the attitudes and experiences of senior workplace trade union representatives, from the Manufacturing, Science and Finance Union, against the TUC’s six principles of partnership. The findings suggest some acceptance of the ideological aspects of partnership, such as the need to move away from adversarial cultures and understand the impact of market imperatives and pressures on the firm. The results reveal little support, however, for improvements in job security, transparency and involvement and the quality of working life (the TUC’s so-called ‘‘acid test’’ of partnership). Against a backdrop of job insecurity and widespread work intensification, the article argues that the material and organisational basis to partnership appears to be undermining various attitudinal changes within the thinking of trade union representatives regarding their roles and relations at work. The contingencies of partnership: experiences from the training reform agenda in Australian manufacturing Richard Cooney Keywords Partnering, Education, Training, Skills This paper examines the development of an antecedent model of social partnership, the social ‘‘accord’’ employed by the Labor Government in Australia during the period 1983-1996. The specific focus of the paper is on the implementation of the Training Reform Agenda (TRA) in Australian manufacturing. The TRA was designed to provide for the upskilling of existing employees and the enhanced vocational

preparation of new employees. This was a joint objective of government, business and union policy, and one designed to encourage the growth of high-wage, high-skill industries. The achievement of this objective was, however, limited. Social partnership, in the case of the TRA, proved to be a way of legitimating a work change process which delivered greater gains to employers than it did to unions and employees. The partnerships formed under the aegis of the TRA had a limited lifespan and represented a contingent form of relationship between the partners, rather than a seachange in relations.

Partnership, ownership and control: the impact of corporate governance on employment relations Simon Deakin, Richard Hobbs, Suzanne Konzelmann and Frank Wilkinson Keywords Partnering, Governance, Mergers and acquisitions, Human resource management, Employee relations Prevailing patterns of dispersed share ownership and rules of corporate governance for UK listed companies appear to constrain the ability of managers to make credible, longterm commitments to employees of the kind needed to foster effective labour-management partnerships. We present case study evidence which suggests that such partnerships can nevertheless emerge where product market conditions and the regulatory environment favour a stakeholder orientation. Proactive and mature partnerships may also be sustained where the board takes a strategic approach to mediating between the claims of different stakeholder groups, institutional investors are prepared to take a long-term view of their holdings, and strong and independent trade unions are in a position to facilitate organisational change.

French abstracts

French abstracts

Evaluer le partenariat: les perspectives et gageures offertes par la modernisation Miguel Martinez Lucio et Mark Stuart

Mots-cle´s Partenariat, Gouvernement central, Relations avec les employe´s, Capital L’article que voici remplit un double roˆle. Tout d’abord, il donne un aperc¸u du partenariat, en faisant re´fe´rence tout particulie`rement au Gouvernement Travailliste actuel et a` la configuration de ses rapports avec les institutions de repre´sentation des capitaux et des affaires. Ensuite, il introduit la question spe´ciale traitant de ‘‘L’e´valuation du partenariat: les perspectives et gageures offertes par la modernisation’’ et de´crit en bref les articles qui y sont inclus.

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Les deux facettes du partenariat? Une e´valuation du partenariat et des rapports de coope´ration entre patrons et syndicats Sarah Oxenbridge et William Brow

Mots-cle´s Relations industrielles, Partenariat, Syndicats, Employe´s L’article examine le contexte et les caracte´ristiques des partenariats qui se forment actuellement, entre les patrons et les syndicats, au lieu de travail en Grande-Bretagne. Les e´tudes pratiques re´alise´es sur 11 entreprises, impliquant des interviews avec les directeurs et les repre´sentants syndicalistes, re´ve´le`rent deux types de partenariat ge´ne´raux. Ceux que l’on rencontre dans les entreprises du secteur de la production entretenaient des ne´gociations visant a` une convention collective par des rapports de partenariat officieux, tandis que les partenariats du secteur prive´ des services maintenaient la convention collective fermement par des accords de partenariat formalise´s. Nous analysons les pressions qui soustendent les rapports, les avantages nets pour les parties concerne´es, la porte´e des rapports, ainsi que les strate´gies mises en oeuvre par les patrons afin de restreindre l’influence des syndicats. L’une des de´couvertes principales e´tait que les rapports de partenariat peuvent eˆtre caracte´rise´s par un ‘‘continuum’’ d’implication des syndicats au lieu de travail, dans lequel les syndicats ont des droits plus e´tendus, la` ou` ils ont des rapports officieux renforce´s par des niveaux e´leve´s de syndicalisation du personnel. ‘‘Travailler ensemble – Impliquer le personnel’’: travail en partenariat dans le secteur de la Se´curite´ Sociale Anne Munro

Mots-cle´s Implication des employe´s, Partenariat, Se´curite´ sociale, Collectivisme, Individualisme L’article contribue aux de´bats portant sur l’implication des employe´s et le partenariat social en explorant les diverses manie`res dont les aspects individualistes et collectivistes sont e´troitement lie´s dans une initiative unique mene´e dans le secteur de la Se´curite´ Sociale. Il identifie une forme particulie`re d’implication des employe´s, dans laquelle le partenariat est incorpore´. Il fait re´fe´rence a` une e´tude pratique re´alise´e sur un Trust du NHS; celle-ci s’e´tendait sur une pe´riode de 18 mois et se servait d’interviews individuels et d’interviews en groupe avec les directeurs supe´rieurs et les chefs hie´rarchiques, les responsables des syndicats, les de´le´gue´s syndicaux et le personnel. L’article maintient que la tension qui existe entre le collectivisme et l’individualisme se fait plus ressentir aux e´chelons infe´rieurs de l’organisation, la` ou` les chefs hie´rarchiques sont charge´s de mettre les changements en pratique. Il met en e´vidence la manie`re dont la compre´hension de l’implication et du partenariat change avec le temps et de´montre comment il est possible de cre´er un climat qui convienne mieux a` l’organisation des syndicats. Partenariat et processus dans l’industrie de la construction maritime Jo McBride et John Stirling

Mots-cle´s Partenariat, Syndicats, Etudes pratiques Les auteurs offrent une e´tude de cas pratiques portant sur un accord de partenariat dans l’industrie de construction maritime du Tyneside. Ils se concentrent sur le roˆle que jouent les syndicats et sur les tensions complexes qui surgissent entre les responsables re´gionaux et locaux et les repre´sentants au lieu de travail. Ils maintiennent que les accords ne peuvent eˆtre compris que dans le contexte des structures existantes qui de´terminent les rapports avec les employe´s. Leurs conclusions sugge`rent

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que l’accord avait peu d’impact sur une ‘‘installation succursale’’ d’une socie´te´ nationale et qu’il e´tait souvent rec¸u avec hostilite´ et peu d’engagement. En conse´quence, le partenariat est devenu un accord symbolique ayant une signification en puissance pour les clients externes mais ne jouant aucun roˆle, en ce qui concerne la configuration des rapports avec les employe´s au lieu de travail. Evaluer les principes du partenariat: attitudes et expe´riences des repre´sentants syndicaux au lieu de travail Miguel Martinez Lucio et Mark Stuart

Mots-cle´s Syndicats, Partenariat L’article examine les attitudes et expe´riences des de´le´gue´s syndicaux supe´rieurs au lieu de travail, repre´sentant le Syndicat de la Fabrication, le Syndicat des Sciences et le Syndicat des Finances, par rapport aux six principes de partenariat du TUC. Les re´sultats sugge`rent qu’il existe une certaine acceptation des aspects ide´ologiques du partenariat, par exemple le besoin de s’e´loigner des cultures adversaires et de comprendre l’impact des impe´ratifs du marche´ et les pressions de l’entreprise. Les re´sultats ne parviennent cependant pas a` prouver une ame´lioration de la se´curite´ de l’emploi, de la transparence, de l’implication ni de la qualite´ de la vie au travail (‘‘test de´cisif’’ du partenariat, pour employer l’expression du TUC). Avec l’inse´curite´ de l’emploi et l’intensification ge´ne´rale du travail comme arrie`re-plan, l’article maintient que la base mate´rielle et organisationnelle du partenariat semble e´branler divers changements d’attitude dans la fac¸on de penser des repre´sentants syndicaux, lorsqu’ils conside`rent leurs roˆles et leurs relations au travail. Les impre´vus du partenariat. Les expe´riences ve´cues par le programme de re´forme de la formation dans le secteur de la fabrication en Australie Richard Cooney

Mots-cle´s Partenariat, Education, Formation, Compe´tences L’article examine le de´veloppement d’un mode`le ante´ce´dent du partenariat social, a` savoir ‘‘l’accord’’ social employe´ par le Gouvernement Travailliste en Australie pendant la pe´riode allant de 1983 a` 1996. Le point spe´cifique de l’article concerne la mise en oeuvre du Programme de Re´forme de la Formation (TRA – Training Reform Agenda) dans les firmes de fabrication australiennes. Le programme TRA avait pour but d’offrir aux employe´s existants une ame´lioration de leurs compe´tences et de rehausser la pre´paration professionnelle des nouveaux employe´s. Il s’agissait la` d’un objectif commun de la politique gouvernementale, des entreprises et des syndicats, qui avait pour but d’encourager la croissance d’industries a` salaires e´leve´s et a` compe´tences e´leve´es. La re´alisation de cet objectif e´tait cependant limite´e. Dans le cas du programme TRA, il s’ave´ra que le partenariat social repre´sentait une manie`re de rendre le´gitime un processus de changement du travail, qui donnait aux patrons de plus grands avantages qu’aux syndicats et aux employe´s. Les partenariats forme´s sous l’e´gide du programme TRA eurent une dure´e de vie limite´e et repre´sentaient une forme de rapports conditionnelle entre les partenaires, plutoˆt qu’un bouleversement dans les relations. Partenariat, proprie´te´ et controˆle: l’impact de l’emprise des socie´te´s sur les relations de travail Simon Deakin, Richard Hobbs, Suzanne Konzelmann et Frank Wilkinson

Mots-cle´s Partenariat, Emprise, Fusions et acquisitions, Gestion des ressources humaines, Relations avec les employe´s Les mode`les pre´dominants d’actions e´parpille´es et les re`gles qui re´gissent l’emprise des socie´te´s pour les entreprises cote´es au Royaume-Uni semblent geˆner le pouvoir qu’ont les directeurs de donner de la cre´dibilite´ aux engagements a` long-terme envers les employe´s, surtout le genre d’engagements qui est requis pour encourager les partenariats efficaces entre la force de travail et la direction. Nous pre´sentons des preuves reposant sur l’e´tude de cas pratiques; celles-ci sugge`rent que ce genre de partenariat peut cependant e´merger la` ou` les conditions de commercialisation des produits, ainsi que l’environnement re´glementaire, favorisent une orientation vers les personnes inte´resse´es. Les partenariats proactifs et muˆrs peuvent e´galement subsister la` ou` le conseil d’administration choisit une approche strate´gique pour servir de me´diateur entre les revendications des diffe´rents groupes de personnes inte´resse´es, la` ou` les investisseurs sont preˆts a` adopter une vue a` long-terme de leur participation, et la` ou` des syndicats puissants et inde´pendants sont en mesure de faciliter un changement organisationnel.

German abstracts Beurteilung von Partnerschaften: Aussichten und Herausforderungen der Modernisierung Miguel Martinez Lucio und Mark Stuart

German abstracts

Stichworte Partnerschaft, Zentralregierung, Mitarbeiterbeziehungen, Kapital ¨ berblick u¨ber das Thema Partnerschaften und Der Artikel hat zwei Zwecke. Zum Ersten gibt er einen U beschreibt insbesondere die Beziehungen, die die derzeitige Labour-Regierung zu den Vertretungen von Kapital und Wirtschaft entwickelt. Zum Zweiten gibt er eine Einfu¨hrung in die Sonderausgabe Beurteilung von Partnerschaften: Aussichten und Herausforderungen der Modernisierung" und umreißt kurz die verschiedenen Beitra¨ge.

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Zwei Gesichter der Partnerschaft? Eine Beurteilung von Partnerschaften und Kooperationsbeziehungen zwischen Arbeitgebern und Gewerkschaften Sarah Oxenbridge und William Brown

Stichworte Arbeitgeber-Arbeitnehmer-Beziehungen, Partnerschaften, Gewerkschaften, Arbeitgeber Der Artikel untersucht den Kontext und die Merkmale von Partnerschaftsarrangements, die sich derzeit auf Unternehmensebene zwischen Arbeitgebern und Gewerkschaften entwickeln. Fallstudien mit 11 Unternehmen, in denen Interviews mit Managern und Gewerkschaftsvertretern durchgefu¨hrt wurden, ergaben, dass es grundsa¨tzlich zwei verschiedene Arten von Arrangements gibt. Unternehmen des Produktionssektors fo¨rderten allgemein den Weg von Kollektivverhandlungen durch informelle Partnerbeziehungen, wa¨hrend Firmen des privaten Dienstleistungssektors die Kollektivverhandlungen durch formalisierte Partnerschaftsvereinbarungen strikt limitierten. Wir analysieren die Zwa¨nge, die diesen Beziehungen zugrunde liegen, was fu¨r die beiden Seiten unter dem Strich herauskommt, die Tragweite der Beziehungen und die Strategien, die die Arbeitgeber verfolgen, um den Einfluss der Gewerkschaften zu beschneiden. Eines der wichtigsten Ergebnisse ist, dass Partnerschaftsbeziehungen durch ein ‘‘Kontinuum’’ der betrieblichen Gewerkschaftsbeteiligung gekennzeichnet werden ko¨nnen, wobei allgemein gilt, dass die Gewerkschaften dort mehr Rechte haben, wo sie informelle Beziehungen unterhalten und wo ein großer Teil der Arbeitnehmerschaft gewerkschaftlich organisiert ist. ‘‘Zusammenarbeiten – Mitarbeiter einbeziehen’’: partnerschaftliche Zusammenarbeit im NHS Anne Munro

Stichworte Einbeziehung der Arbeitnehmer, Partnerschaft, National Health Service, Kollektivismus, Individualismus Der Artikel leistet einen Beitrag zur Debatte u¨ber die Einbeziehung von Arbeitnehmern und Sozialpartnerschaften, indem er im Rahmen einer einzelnen Initiative des National Health Service die Wechselbeziehung von individualistischen und kollektivistischen Aspekten untersucht. Dabei wird eine besondere Form der Einbeziehung von Arbeitnehmern identifiziert, bei denen die Partnerschaft eine integrale Rolle spielt. Der Artikel baut auf einer Fallstudie eines NHS-Trusts auf, bei der u¨ber einen Zeitraum von 18 Monaten Einzel- und Gruppeninterviews mit Fu¨hrungskra¨ften und Linienmanagern, Gewerkschaftsvertretern, gewerkschaftlichen Vertrauensleuten im Betrieb und Mitarbeitern durchgefu¨hrt wurden. Es wird festgestellt, dass die Spannungen zwischen Kollektivismus und Individualismus besonders in den unteren Organisationsra¨ngen zur Entfaltung kommen, wo Linienmanager die Verantwortung fu¨r die Implementierung von Vera¨nderungen tragen. Der Artikel zeigt, wie sich die Auffassungen von Einbeziehung und Partnerschaft im Laufe der Zeit vera¨ndern und wie sich ein Klima schaffen la¨sst, das einer gewerkschaftlichen Organisation sta¨rker zutra¨glich ist. Partnerschaft und Prozess im Schiffsbau Jo McBride und John Stirling

Stichworte Partnerschaft, Gewerkschaften, Fallstudien Die Autoren stellen eine Fallstudie zu einer Partnerschaftsvereinbarung in der Schiffsbauindustrie in Tyneside vor. Sie konzentrieren sich dabei auf die Rolle der Gewerkschaften und die komplexen Spannungen, die sich zwischen regionalen und kommunalen Vertretern und den Arbeitnehmerrepra¨sentanten ergeben. Sie stellen fest, dass sich Vereinbarungen nur im Kontext der

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bestehenden Arbeitgeber-Arbeitnehmer-Strukturen verstehen lassen. Wie die Schlussfolgerung zeigt, hatte die Vereinbarung auf die ‘‘Zweigstelle’’ eines nationalen Unternehmen wenig Auswirkungen und wurde oft mit Feindseligkeit und wenig Engagement begru¨ßt wurde. Die Partnerschaft wurde dadurch zu einer symbolischen Vereinbarung, die potenzielle Bedeutung fu¨r externe Kunden hatte, aber keinen Beitrag zur Formung der betrieblichen Arbeitgeber-Arbeitnehmer-Beziehungen leistete.

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Beurteilung von Partnerschaftsprinzipien: Einstellungen und Erfahrungen von betrieblichen Gewerkschaftsvertretern Miguel Martinez Lucio und Mark Stuart

Stichworte Gewerkschaften, Partnerschaft Der Artikel untersucht die Einstellungen und Erfahrungen von fu¨ hrenden betrieblichen Gewerkschaftsvertretern der Manufacturing, Science and Finance Union im Vergleich zu den sechs Partnerschaftsprinzipien des TUC. Die Ergebnisse zeigen, dass eine gewisse Akzeptanz gegenu¨ber den ideologischen Aspekten der Partnerschaft besteht, z.B. gegenu¨ber der Notwendigkeit, von der fru¨heren Konfrontationskultur Abschied zu nehmen und die Marktimperative und -zwa¨nge, denen die Firma unterliegt, zu verstehen. Die Ergebnisse zeigen jedoch wenig Unterstu¨tzung fu¨r Verbesserungen in den Bereichen Arbeitsplatzsicherheit, Transparenz und Mitwirkung sowie fu¨r die Qualita¨t des Arbeitslebens (vom TUC als ‘‘Feuerprobe’’ der Partnerschaft bezeichnet). Der Artikel argumentiert, dass angesichts der Arbeitsplatzunsicherheit und der verbreiteten Arbeitsintensivierung die materielle und organisatorische Basis der Partnerschaft das Umdenken von Gewerkschaftsvertretern hinsichtlich ihrer Rolle und der betrieblichen Beziehungen zu unterminieren scheint. Notgemeinschaften. Erfahrungen aus der Training Reform Agenda im australischen Fertigungssektor Richard Cooney

Stichworte Partnerschaften, Ausbildung, Schulung, Kompetenzen Der Artikel untersucht die Entwicklung eines Vorga¨ngermodells der Sozialpartnerschaft, des so genannten ‘‘sozialen Harmoniemodells’’, das von der australischen Labour-Regierung von 1983 bis 1996 verfolgt wurde. Der Artikel konzentriert sich vor allem auf die Implementierung der Training Reform Agenda (TRA) im australischen Fertigungssektor. Die TRA wurde konzipiert, um die Kompetenzen von bestehenden Mitarbeitern zu verbessern und eine bessere Berufsausbildung von neuen Mitarbeitern zu gewa¨hrleisten. Dieses Ziel wurde von Regierung, Wirtschaft und Gewerkschaften gemeinsam verfolgt und sollte die Entwicklung von Branchen mit hohem Lohn- und Kompetenzniveau fo¨rdern. Die Umsetzung des Ziels war jedoch nur begrenzt erfolgreich. Im Fall der TRA erwies sich die Sozialpartnerschaft als Weg zur Legitimierung von Vera¨nderungen im Arbeitsprozess, die einen gro¨ßeren Nutzen fu¨r die Arbeitgeber als fu¨r die Gewerkschaften und Arbeitnehmer mit sich brachten. Die unter dem TRA gebildeten Partnerschaften hatten eine begrenzte Lebensdauer und stellten eher eine Art Notgemeinschaft zwischen den Partnern als eine wirkliche Vera¨nderung in den Beziehungen dar. Partnerschaft, Besitz und Kontrolle: die Auswirkungen von Corporate Governance auf die Arbeitgeber-Arbeitnehmer-Beziehungen Simon Deakin, Richard Hobbs, Suzanne Konzelmann und Frank Wilkinson Stichworte Partnerschaft, Corporate Governance, Fusionen und U¨bernahmen, Personalmanagement, Arbeitgeber-Arbeitnehmer-Beziehungen Der allgemein breit gestreute Aktienbesitz und die Corporate Governance-Regeln fu¨r bo¨rsennotierte Unternehmen in Großbritannien machen es fu¨r die Unternehmensfu¨hrung offenbar schwierig, den Arbeitnehmern gegenu¨ber die glaubwu¨rdigen, langfristigen Verpflichtungen einzugehen, die zur Fo¨rderung effektiver Partnerschaften fu¨r das Personalmanagement erforderlich sind. Die von uns vorgelegten Fallstudienergebnisse weisen darauf hin, dass solche Partnerschaften trotzdem entstehen ko¨nnen, wenn die Produktmarktbedingungen und das gesetzliche Umfeld einer Stakeholder-Orientierung zutra¨glich sind. Proaktive und reife Partnerschaften ko¨nnen auch fortbestehen, wenn der Vorstand strategisch zwischen den Anspru¨chen der verschiedenen Stakeholdergruppen vermittelt, wenn institutionelle Anleger bereit sind, sich eine mittelfristige Sichtweise zu Eigen zu machen, und wenn starke, unabha¨ngige Gewerkschaften in der Lage sind, organisatorische Vera¨nderung zu unterstu¨tzen.

About the Guest Editors Miguel Martinez Lucio is a Senior Lecturer at the Leeds University Business School. His research is focused on the changing identity and structures of industrial relations, e.g. the impact of new forms of management and workplace organisation on unions, the emergence of new frameworks of regulation such as partnership, and the transnationalisation of industrial relations. E-mail: [email protected] Mark Stuart is a Senior Lecturer in the Industrial and Labour Studies Department at the University of Leeds, where he is also a member of the Centre for Industrial Relations and Human Resource Management and the Lifelong Learning Institute. His research interests cover the political economy of skill formation, the industrial relations of training, trade union strategy, social partnership and industrial restructuring. He is currently leading a large EC-funded research project investigating the restructuring of the European steel and metal sectors. E-mail: [email protected]

About the Guest Editors

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Assessing partnership: the prospects for, and challenges of, modernisation Miguel Martinez Lucio and Mark Stuart Leeds University Business School, University of Leeds, Leeds, UK Keywords Partnering, Central government, Employee relations, Capital Abstract This paper has a dual role. First, it provides an overview of partnership, with particular reference to the present Labour Government and the shaping of its relations with the institutions of capital and business representation. Second, it provides an introduction to the special issue on ‘‘‘Assessing partnership: the prospects for, and challenges of, modernisation’’ and briefly outlines the papers included in it.

Employee Relations, Vol. 24 No. 3, 2002, pp. 252-261. # MCB UP Limited, 0142-5455 DOI 10.1108/01425450210428426

The politics, institutions and ‘‘‘market’’ for partnership Partnership working has become synonymous with the contemporary political project of ‘‘modernisation’’. It has underpinned the ideology and rhetoric of the Labour Government and shaped its relations with the institutions of capital and business representation (White, 2001). This is clearly evident with regard to Labour’s agenda of public sector and welfare reform, whereby future investment is predicated on the involvement of private sector interests through public-private partnership (Institute of Public Policy Research, 2001). While this broader conceptualisation of partnership does not have any explicit connection with matters of employment and workplace practice, it does nonetheless act as an ideological frame. Thus, since its first landslide election in 1997, the Labour Government has purposely sought to establish the basis for a new accord between capital and labour. In this respect, the modernisation of employment relations via partnership is articulated in terms of the need to move away from adversarialism to cooperation, on the basis of a common interest between capital and labour in enterprise performance and competitiveness. This agenda of modernisation is, of course, nothing new. Indeed, it has been a periodic feature of British industrial relations history (Whitston, 2001). The Mond-Turner talks in the 1920s with their focus on greater collaboration on matters of industrial reform, the Donovan Commission in the 1960s and its attempt to ‘‘formalise industrial relations’’ by constructing consistent company and workplace bargaining systems, and the Bullock Report in the 1970s with its plan of integrating labour into employer decision-making processes all represent attempts to ‘‘modernise’’ and transform industrial relations behaviour. The Blair Government’s concerns with stable, orderly and consensual industrial relations clearly draw, then, from a long tradition. It has sought to advance its agenda of modernisation through micro-level exhortation and via

the wider role of the state as employer. At the micro-level, its partnership agenda has been supported by the Department of Trade and Industry Partnership Fund, which invites project proposals from employers and unions aimed at modernising and improving employment practices. The fund encourages and finances joint working on matters such as involvement, bullying and the quality of working life. This strategy is aimed at providing concrete examples and benchmarks of partnership that can then act as points of reference for other employers. It represents an attempt to coax social actors into new forms of behaviour without directly intervening into the substance of employment relations (Taylor, 1998). In terms of the state as an employer, a slightly more proactive approach is in evidence. The Government has begun to develop a range of partnership initiatives and models with regards to how industrial relations in the public sector should be conducted. This is particularly apparent in the National Health Service (NHS). Since the late 1990s, the NHS has seen a wide range of initiatives developed with regards to employee and union involvement. This has been a bureaucratic and centrally driven approach to organisational change, with an accompanying set of performance indicators and a specified timetable for implementation. The objective is not just the restatement of the philosophy of the state as a ‘‘good employer’’ after almost two decades of Conservative and anti-union rhetoric. Many of these policies are concerned with new forms of individual-oriented human resource management practices and workplace strategies, and not simply union-oriented ones (Stuart and Martinez Lucio, 2000). As far as the government is concerned, ‘‘there will be no return to old centralised command and control systems of the 1970s’’ (Department of Health, 1998, p. 5). What we are witnessing, therefore, is a partnership discourse that attempts to locate new management-union relations within the context of a broader set of interests such as those of the individual and, in particular, those of the employer and the customer. This state policy of partnership is supported by parallel behaviour among certain non-state institutions. The Involvement and Participation Association (IPA) has played a particularly important role, moving well beyond its historic association with concerns of employee involvement to become a major advocate of matters partnership-related. An independent body, the IPA has sought to disseminate partnership best practice, provide guidance and advice and has established an underpinning set of partnership principles and practices (see Martinez Lucio and Stuart, 2002). It is also influential in policy circles, particularly with regard to the Department of Trade and Industry (DTI) Partnership Fund[1]. This represents the nexus of a new type of policy-making and implementation process. This process attempts to create a broad network of knowledge sharing and learning, and includes para-state bodies such as the Advisory, Conciliation and Arbitration Service (ACAS) along with interest groups such as The Industrial Society that have also entered, what could be called, the market for partnership (see Knell, 1999). This political dimension of partnership should not be underestimated.

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The Trades Union Congress (TUC) has also developed its own interest in partnership, as a way of renewing and extending the role of organised labour within the workplace and moving beyond the traditions and legacies of adversarial industrial relations. The TUC has developed six partnership principles (TUC, 1999). These are presented as the vital preconditions required for the establishment of a new accord between unions and employers. Once again, there is an emphasis on recognising the need for a common understanding of market imperatives, but the principles also identify the centrality of voice mechanisms, job security and investments in the quality of employees’ working conditions to sustainable and effective partnerships. The principles represent, in other words, an attempt to marry efficiency issues with social ones – a leitmotif of current partnership practices and interests. The TUC has utilised these principles to gain a legitimate stake in the ‘‘market’’ for partnership and, to this end, has set up a Partnership Institute (PI). The PI sells itself as a labour-friendly consultancy and training body for those employers and unions endeavouring to construct partnership practices[2]. Naturally, the PI is active within the network of actors and discourses that have emerged in and around the state with regards to the ‘‘modernisation’’ of industrial relations. Our discussion thus far suggests that partnership constitutes a significant development in political terms. This is visible from the rhetorical investment in the subject and in the way in which a broad network of interests has coalesced around the partnership agenda in general and the DTI Partnership Fund in particular. The big issue, of course, is the degree to which employers are following this lead. Certainly, the Chartered Institute of Personnel and Development has been less upfront in its endorsement of partnership, accepting the language of partnership as long as it does not replace individual management (EIRO Online, 1998) relations. Questions remain, therefore, over the extent to which the discourse and networks discussed above are impacting on the form and content of industrial relations. What influence, for example, is partnership actually having in the daily routines of trade unionists and managers? To what extent is the partnership agenda being utilised to actually ‘‘modernise’’ workplace employment relations? These questions are briefly explored in the next section, which introduces some of the key theoretical and academic concerns pertaining to partnership. Conceptualising partnership Underpinning the new political discourse of partnership is a set of intellectual interventions that attempt to explain the practice and necessity of partnership. An influential point of departure in terms of the academic partnership debate is Kochan and Osterman’s (1994) The Mutual Gains Enterprise, which presents a number of high profile case studies on the economic and social benefits of union-management collaboration. Kochan and Osterman argue that partnership is based on reinforcing collective voice mechanisms at the strategic, human resource department, and workplace level. Underpinning this commitment to voice is investment in training and development and fairness at

work (Kochan and Osterman, 1994, p. 46). Partnership in this approach means more than symbolic overtures to consultation and union involvement in areas such as job redesign. Rubinstein and Kochan’s (2001) recent study of the Saturn plant in the USA, for example, illustrates the extent to which unions can guide management and influence them on matters ranging from the introduction and actual operation of teamworking right through to the raising of investment funds. While there are alternative voices that would question such positive views in terms of their representativeness in the North American context (Rinehart et al., 1997), the US experience is an important point of reference within the UK. In the UK context, Haynes and Allen (2000) argue, in a previous issue of this journal, that partnership agreements may further trade union workplace presence. In their study of the financial services company Legal and General and the retailer Tesco, they found that a strong workplace union presence facilitated partnership practices, and vice versa. This line of analysis was supported by an increased level of union membership following the signature of a formal partnership agreement: although they do admit that the threat of derecognition could not be discounted as a contributory factor to the decision taken by unions to sign up to partnership. Ackers and Payne (1998) take the argument much further. For them, partnership is not just compatible and symbiotically related with strong trade unionism, but also represents an historic opportunity for unions to remake their own project of ‘‘industrial democracy’’ in a way that is relevant for the new economic and social context. Indeed, this is the only viable alternative open to trade unions. Hitherto, many unions have watched from the sidelines, with undisguised cynicism, concentrating instead on protecting basic wages and conditions . . . (H)ow can unions get a foot in the door, and begin to advance their institutional centrality? . . . Social partnership presents itself as such a strategy, partly because it is a moveable feast susceptible to redefinitions in a more radical direction . . . The strategy is, as John Edmonds suggests, to ‘‘play back’’ management rhetoric about employee participation, and to retain the high ground as proponents of worker rights (Ackers and Payne, 1998, p. 546).

Other commentators suggest that this optimism is unfounded, due to the potential organisational and political costs to trade unions. Taylor and Ramsay (1998) argue that partnership is linked to project of ‘‘HRM’’. Thus management may use trade unions to increase the rate of exploitation of workers through their involvement in such techniques as ‘‘HRM’’ and ‘‘partnership’’. Partnership does not, therefore, actually guarantee a strong workplace presence for trade unions. Indeed, shop stewards may find themselves isolated and placed in contradictory positions by nationally imposed partnership agreements. Danford et al.’s (2002) case studies of the NHS and local government find similar outcomes for unions. They sustain that in contexts where union membership is low, pro-partnership policies may lead to union officers conceding greater flexibility and job intensification to management in exchange for job security. In addition, lack of awareness of, and involvement in, such partnership policies may further isolate workplace representatives and

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override other proactive interventions dealing with union renewal (Danford et al., 2002; Carter and Poynter, 1999). However, the critical debate on partnership is not solely concerned with the impact of partnership on trade unionism. Sharing these concerns, Kelly (2001) has tried to broaden the discussion by evaluating the actual improvements that emerge from partnership, in terms of membership, wages and conditions, and union influence. Evaluating the current data available, he argues that in terms of membership there are only two partnership companies where this has increased (the two companies cited by Haynes and Allen (2000)). Nor is there any support for the TUC’s contention that partnership companies offer 50 per cent higher wages than non-partnership companies. Drawing from Cully et al. (1999) and Guest and Peccei (2001), Kelly sustains that job security is not as widely available in partnership companies as proponents would suggest. Kelly also suggests that there is a poor record of improvement in the extent of union influence over decision making within partnership companies (Kelly, 2001). In order to gain a more sophisticated understanding of the impact of partnership, Kelly (2001, p. 79) makes a plea for more rigorous empirical research, noting that: There are numerous case studies of partnership firms that are often uncritical in tone, excessively reliant on the views of a handful of partisan informants and seriously undertheorised. There are virtually no controlled comparisons between match pairs of partnership and non-partnership firms presenting hard evidence on both mechanisms and outcomes.

While the methodological challenges of the controlled experiment should not be underestimated, the need for more detailed, methodologically rigorous research is undeniable. It is our hope that this special issue will make a small contribution to this task. The dimensions of partnership: an introduction to the contributions in this edition Much of the partnership debate, to date, has been concerned with the impact of organisational change on trade union structures and workplace representation. Yet, we would argue that a broader set of issues are at stake, e.g. the nature of union-management relations, the conduct of industrial relations, the articulation and negotiation of new employment issues, and the strategic capacity of actors within an unevenly regulated system of industrial relations (such as the UK’s). To be sure, trade unions face real problems of incorporation and isolationism when engaging with partnership, but there is more to partnership than that. If partnership is about extending voice mechanisms at work, along with substantive improvements in such areas of working life as training, then academics must be sensitive to the regulatory traditions that underpin representation, the nature of labour rights, and the nature of the complimentary support mechanisms that exist beyond the remit of the firm (see Stuart and Martinez Lucio, 2002; Martinez Lucio and Stuart, forthcoming).

To this end, the contributions in this special issue do not just throw empirical light on the subject of partnership; they also manage to locate it within the broader political and economic context. The papers in this issue are therefore concerned with the following dimensions of partnership: bargaining traditions, employee involvement, trade union strategy and attitudes, the question of training and union renewal, and the broader context of corporate governance and regulation. The demise of collective bargaining in the UK has been systematically documented (Millward et al., 1999), although in relative terms it is still significant as a feature of union activity. Oxenbridge and Brown explore the relationship between this traditional form of activity and the ‘‘new’’ industrial relations of partnership. Drawing from a variety of case studies, Oxenbridge and Brown argue that there is a continuum of styles and relations. On the one hand, there are those production-oriented companies where relations between unions and managers remain structured around traditional bargaining relations. Partnership within such cases is primarily implicit, and nurtured by the role of formal and informal union-management relations. This contrasts with those companies that use partnership agreements to condition and constrain the role of trade unions in terms of their sphere of influence within employment relations. Workplace trade unionism was weaker in these cases, and the authors’ consider this to be a contributing factor to the nature of partnership outcomes. Unions were willingly entering into partnership agreements due to more assertive management strategies and weaker union and participatory traditions. In this respect, partnership appears to be associated with a strengthening of management prerogative, although this depends upon the variable nature of workplace and bargaining traditions. Using a case study drawn from the NHS, Munro plots the complexity of employee involvement strategies. She shows how partnership is but one part of a set of competing strategies regarding the role of employee voice in the NHS. For example, partnership processes contend with more individualistic developments in employee involvement. Partnership strategies also have to confront challenges in the form of line management’s intransigence and organisational skill shortages. These strategies require an investment of resources and time, which in the case of trade unions may not always be possible. Hence, partnership strategies have to be constantly ‘‘remade’’ in the light of these challenges. McBride and Stirling build on this issue of union capacity by also focusing on a single case – this time in shipbuilding. They identify themselves very clearly with a more critical approach to partnership, arguing that it amounts to a serious challenge to the nature and value system of trade unions. First, the partnership agreement was forged in a hierarchical manner. The role of the ‘‘shopfloor’’ in influencing the nature of such agreements was clearly limited. The article explains this in terms of a range of political contingencies. Partnership is undermined by the paucity of economic certainty and the

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weakness of communication cultures: management in the sector is seen to continue working within very bureaucratic and dysfunctional cultures. Intriguingly, towards the end of this paper, partnership is contrasted with the way management and unions have worked together politically in the past on certain economic features of the industry. The politics of joint lobbying and political work between employers and the relevant unions with regards to investment represents an alternative to new forms of partnership. These new forms are seen by the authors to be closer to the non-strike agreements of the 1980s than anything else. The article therefore points to how partnership becomes a ‘‘last chance’’ option, devoid of any serious and systematic content in terms of participation. Martinez Lucio and Stuart use a quantitative methodology when tackling some of the concerns raised by McBride and Stirling’s contribution. They also detect the ambivalence of trade union attitudes and experiences. Based on a survey of senior Manufacturing, Science and Finance Union workplace representatives, the paper examines the basis for partnership as outlined in the TUC’s six principles. The paper finds some support among respondents to the ideological call of partnership to move away from adversarial cultures and embrace a greater need for understanding the market imperatives and competitive pressures faced by employers. However, the results find little perceived support for improvements in employment security, the quality of working life or levels of involvement and transparency. Work intensification was widespread. Martinez Lucio and Stuart suggest that the material and organisational basis to partnership is absent. This question of expectations and meanings of partnership are referenced within Cooney’s contribution on the antecedent model of partnership in Australia. His paper raises some intriguing issues regarding the use of partnership, particularly over training, as a vehicle for union renewal. It argues that there still remain different expectations and meanings with regards to partnership. If anything, employers are using partnership as a vehicle for episodes of restructuring in a tactical and manipulative manner. While training is considered to be a basis for renewal by trade unions in the context of economic and industrial transformations, it appears to be utilised as a sop to unions at key moments of change without any attempt to systematically develop social partnership in the longer term. This raises a theme that is implicit in many of the papers regarding the ability of unions, and the intentions of management, of building new forms of relations at work that are longer term and strategic in focus. The long-term establishment of partnership is challenged by short-term, strategic interventions that are in turn driven by the broader pressures for change. This temporal dimension to the building of partnership must be key to any discussion on the subject of partnership, in terms of the factors that contribute to the long-term and systematic establishment of new collaborative relations in employment. This question is at the heart of the contribution presented by Deakin, Hobbs, Konzelmann, and Wilkinson.

They focus on the issues of ownership and corporate governance, a relatively unexplored issue in the extant partnership literature. The article draws on seven intensive case studies. According to Deakin et al., partnership relations of a stable and proactive nature can emerge when certain preconditions are met. First, those companies with dispersed ownership structures as opposed to concentrated ones, and which consequently have a broader set of stakeholders, are more likely to be predisposed to the question of partnership. Second, higher levels of quality within the nature of the product and service being delivered appear to translate into a greater predisposition towards partnership. This tends to mirror some of the thinking of the Harvard School of Human Resource Management with its view of ‘‘high roads’’ to quality and employment relations. Finally, the inclusion of HR managers within the key decisionmaking forums of the company also contributes to a more positive attitude to partnership working. Deakin et al. try, therefore, to find the structural basis for the emergence of high trust relations at work. This contribution presents the debate on partnership with a challenge that consists of removing the micro-level obsession and approach to industrial relations and broadening our interest in the nature of the firm, its environment and its activities. This special edition aims to provide the reader with a range of studies on partnership. Some common issues appear to emerge in terms of future research. The first is the need to study partnership in terms of a broader temporal framework. We need to track partnership and study how it is influenced by the strategies and processes of industrial relations, such as bargaining relations and forms of communication. We need to look at how collaboration has been structured and developed in a variety of ways, both now and in the past. In addition, there is a need to go beyond the workplace and contextualise partnership in terms of the way the firm is structured and linked to the economy. These studies do not view partnership as a ready made system of employee relations that can be constructed with great ease by managers, unions and workers. According to all the interventions there is a fragility to the practical and attitudinal basis of partnership in the UK, and in the Australian case. In fact, where forms of partnership do exist they are dependent on the presence of support mechanisms such as participative industrial relations and specific corporate cultures. Precise and critical discussion on its presence and meaning is therefore essential in an environment where political symbolics often appear as important as empirical realities. Notes 1. The Director of the IPA, Willie Coupar, is the chair of the DTI Partnership Fund Committee. 2. While the Partnership Institute is a wholly-owned subsidary of the TUC, it claims to act on a specially independent and autonomous basis.

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References Ackers, P. and Payne, J. (1998), ‘‘British trade unions and social partnership: rhetoric, reality and strategy’’, International Journal of Human Resource Management, Vol. 9 No. 3, pp. 529-49. Carter, B. and Poynter, G. (1999), ‘‘Unions in a changing climate: MSF and Unison in the new public sector’’, Industrial Relations Journal, Vol. 30 No. 5, pp. 499-513. Cully, M., Woodland, S., O’Reilly, A. and Dix, G. (1999), Britain at Work: As Depicted by the 1998 Workplace Employee Relations Survey, Routledge, London. Danford, A., Richardson, M. and Upchurch, M. (2002), ‘‘‘New Unionism’, organising and partnership: a comparative analysis of union renewal strategies in the public sector’’, Capital and Class, No. 76, pp. 1-27. Department of Health (1998), The New NHS, Department of Health, London. EIRO Online (1998), ‘‘IPD conference debates partnership at work’’, available at: //eiro.eurofound. ie/1998/country/UNITED.KINGDOM.html (accessed 28 November). Guest, D.E. and Peccei, R. (2001), ‘‘Partnership at work: mutuality and the balance of advantage’’, British Journal of Industrial Relations, Vol. 39 No. 2, pp. 207-36. Haynes, P. and Allen, M. (2000), ‘‘Partnership as union strategy: a preliminary evaluation’’, Employee Relations, Vol. 23 No. 2, pp. 164-87. Institute of Public Policy Research (2001), Building Better Partnerships, IPPR, London. Kelly, J. (2001), ‘‘Social partnership agreements in Britain: union revitalisation or employer counter-mobilisation’’, in Martinez Lucio, M. and Stuart, M. (Eds), Assessing Partnership: the Prospect for and Challenges of ‘‘Modernisation’’, Centre for Industrial Relations and Human Resource Management, Leeds, pp. 79-86. Knell, J. (1999), ‘‘Partnership at work’’, Employment Relations Research Series No. 7, Department of Trade and Industry, London. Kochan, T.A. and Osterman, P. (1994), The Mutual Gains Enterprise: Forging a Winning Partnership among Labour, Management and Government, Harvard University Press, Boston, MA. Martinez Lucio, M. and Stuart, M. (2002), ‘‘Assessing the principles of partnership: workplace trade union representatives’ attitudes and experiences’’, Employee Relations Vol. 24 No. 3, pp. 1305-20. Martinez Lucio, M. and Stuart, M. (forthcoming), ‘‘Swimming against the tide: social partnership, mutual gains and the renewal of ‘tired’ HRM’’, International Journal of Human Resource Management. Millward, N., Forth, J. and Bryson, A. (1999), ‘‘Changes in employment relations, 1980-1998’’, in Cully, M., Woodland, S., O’Reilly, A. and Dix, G., Britain at Work: As Depicted by the 1988 Workplace Employee Relations Survey, Routledge, London, pp. 216-50. Rinehart, J., Huxley, C. and Robertson, D. (1997), Just Another Factory: Lean Production and its Discontents, Cornell University, Ithaca, NY. Rubinstein, S.A. and Kochan, T.A. (2001), Learning from Saturn, Cornell University Press, Ithaca, NY. Stuart, M. and Martinez Lucio, M. (2000), ‘‘Renewing the model employer: changing employment relations and ‘partnership’ in the health and private sectors’’, Journal of Management in Medicine, Vol. 15 No. 5/6, pp. 310-25. Stuart, M. and Martinez Lucio, M. (2002), ‘‘Social partnership and the mutual gains organisation: remaking involvement and trust at the British workplace’’, Economic and Industrial Democracy, Vol. 23 No. 2, pp. 177-200.

Taylor, P. and Ramsay, H.(1998), ‘‘Unions, partnership and HRM: sleeping with the enemy?’’, International Journal of Employment Studies, Vol. 6 No. 2, pp. 115-43. Taylor, R. (1998), ‘‘Workplace revolution’’, Financial Times, 18 June, p. 20.

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Trades Union Congress (1999), Partners for Progress, TUC, London. White, S. (2001), ‘‘Introduction’’, in White (Ed.), New Labour: The Progressive Future, Palgrave, London, pp. 3-17. Whitston, C. (2001), ‘‘The chimera of social partnership’’, in Martinez Lucio, M. and Stuart, M. (Eds), Assessing Partnership: The Prospect for and Challenges of ‘‘Modernisation’’, Centre for Industrial Relations and Human Resource Management, Leeds, pp. 147-52.

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The two faces of partnership? An assessment of partnership and co-operative employer/trade union relationships Sarah Oxenbridge and William Brown Department of Applied Economics, University of Cambridge, Cambridge, UK Keywords Industrial relations, Partnering, Trade unions, Employers Abstract The paper examines the context and characteristics of partnership arrangements currently emerging between employers and unions at the workplace level in Britain. Case studies of 11 firms involving interviews with managers and trade union officials revealed two broad types of arrangement. Those in production sector firms nurtured collective bargaining through informal partnership relationships, while those in the private service sector contained collective bargaining tightly through formalised partnership agreements. We analyse the pressures that underlie relationships, the net benefits to the parties, the scope of relationships, and employer strategies for restricting union influence. A key finding is that partnership relationships can be characterised by a ‘‘continuum’’ of union involvement in the workplace, with unions having greater rights where they have informal relationships backed up with high levels of workforce unionisation.

Employee Relations, Vol. 24 No. 3, 2002, pp. 262-276. # MCB UP Limited, 0142-5455 DOI 10.1108/01425450210428435

Introduction There has been a substantial growth in the pursuit of workplace partnership agreements in recent years. It has been encouraged by both Government funding and ACAS guidance, as well as by a tighter labour market and the EU’s preference for employee consultation (ACAS, 2001). Analysis of this development has so far tended to concentrate on the question of how far partnership agreements have been in the long-term interests of trade unions. Do they offer a valuable means for trade union renewal, or do they threaten to undermine the independence on which the vitality of workplace unionism depends? In this article we seek to establish a less polarised debate by analysing the spectrum of co-operative relationships that is developing between employers and trade unions. There is, we shall argue, a substantial variety of such co-operative relationships, and within this variety lie very different implications for employers as well as for trade unions themselves. The contrasting views in the current debate can be set out simply. On the one hand there is the view that considers partnership to be something of a lifeline for embattled trade unions. For example, Ackers and Payne (1998, p. 546) believe that partnership provides a vehicle for union renewal, enabling them to ‘‘swim among the fishes, and re-enter the mainstream of employment relations’’. In contrast to this position, Martinez Lucio and Stuart (2000) and Kelly (1998) warn that partnership agreements may serve to undermine workplace unionism and weaken the union movement as a whole. Hence the

importance, they argue, of examining employers’ motivations for pursuing The two faces of partnership. Is partnership a vehicle for strengthening the union-employer partnership? relationship, or for reducing union power in the workplace? These writers, and others, point to evidence demonstrating that partnership may result in concession-bargaining, a narrowing of the bargaining agenda, and the introduction of new (often non-union) consultative committees that displace or 263 weaken collective bargaining (Bacon and Storey, 2000; Marks et al., 1998; Martinez Lucio and Stuart, 2000). Most studies are agreed in linking partnership with organisational change initiatives. In many firms, the need to implement change is the pre-eminent antecedent factor driving partnership arrangements, which may entail unions facilitating the introduction of new management practices and workplace reform initiatives (Martinez Lucio and Stuart, 2000), or legitimising change programmes once developed (Bacon and Storey, 2000). In some cases agreements are struck to gain union assistance in managing restructuring and closure programmes during periods of company instability or crisis (Marks et al., 1998; Martinez Lucio and Stuart, 2000). In many partnership companies, change programmes involve the adoption of employee involvement (EI) or high commitment human resource management (HRM) practices. This has caused some commentators to claim that partnership is simply HRM or EI in disguise (Ackers and Payne, 1998; Martinez Lucio and Stuart, 2000; Taylor and Ramsay, 1998). The growth in partnership agreements has also been accompanied by a growth in studies evaluating whether partnership delivers equal, or uneven, benefits to employers, unions and employees. Most research of this type concludes that the benefits flow mainly to management. Guest and Peccei (2001, p. 23) found ‘‘constrained mutuality with the balance of advantage . . . leaning clearly towards management’’. Similarly, Kelly (2001), in a review of partnership research conducted to date, concludes that much research has produced evidence that is highly critical of partnership agreements. Studies show that partnership does not necessarily lead to increased union membership or enhanced union influence, better wages or conditions, or job security guarantees. Unsurprisingly, however, publications produced by the Trades Union Congress (TUC) and Involvement and Participation Association (IPA) highlight the many benefits of partnership flowing to all stakeholders. The TUC (2002), for example, cites enhanced productivity and profitability, lower turnover and absenteeism, and more secure and fulfilling jobs as positive outcomes of partnerships. These published studies of partnership focus on formalised partnership agreements. The subject matter of this article differs from them in that it examines a range of co-operative union-employer relationships. Some do involve formalised agreements, while some are essentially partnership agreements under different names. Others are less formal and are described by employers as ‘‘partnership relationships’’.

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Methodology Our study is based on data collected during 1999 and 2000 as part of the Cambridge ESRC ‘‘Future of collectivism’’ research project. It draws on structured, formal interviews with senior human resource (HR) and personnel staff in 11 companies which, when interviewed, had formal partnership agreements, informal partnership relationships, or were planning to negotiate formal partnership agreements in the near future. Interviews ranged in length from 90 minutes to three hours and discussed partnership arrangements, recognition scope, payment systems, and consultative structures. The 11 cases emerged from the project’s 60 case studies, which had been selected to shed light on changing responses to trade union recognition in anticipation of the 1999 Employment Relations Act. Our cases thus come from a nonrandom, but carefully structured sample. Data from interviews with 31 senior leaders and full-time officials from ten trade unions and the TUC are used to supplement these case study data. Four of these interviews with union officials discussed partnership arrangements in three of the service sector case study firms examined. The remainder of the interviews with officials did not focus on the specific features of arrangements, but covered their experience of changing employment relationships, including partnerships, more generally. Once the interview data were analysed, all interviewees checked drafts which drew on the interviews, and often provided additional or more recent information concerning partnership arrangements. The 11 case studies spanned a range of industry sectors. They included: two outsourcing companies which had negotiated national-level agreements with trade unions after winning public sector contracts; a temporary employment agency; the service divisions of two retail electrical and office equipment supply firms; a financial services company; three printing companies; and two machinery manufacturing firms. Four of these cases had informal partnership relationships with trade unions, and another four had formal written agreements of varying titles. Four (including one of these) anticipated that partnership agreements would be finalised in the near future[1]. There are four further parts to the article. The first explores the circumstances underlying the formation of partnership and co-operative union/employer arrangements and assesses employer motives for seeking partnership relations. The second section reports management and trade union officials’ views on the benefits and drawbacks of co-operative relationships. Third, the specific features of arrangements and relationships are analysed, in terms of the rights accorded to trade unions. The fourth characterises the types of partnership arrangements emerging from these cases and discusses the comparative benefits accruing to the parties to them. The article concludes with a discussion of how far partnership strategies offer a means of survival for both collective bargaining and trade unions, and whether partnership relationships are likely to become established in the longer term, or whether they are temporary, transitional and isolated.

Antecedents and motives The two faces of The development of co-operative union/employer relationships in the majority partnership? of the firms studied was associated with several critical circumstances. First, a long-standing relationship between the parties was a factor in seven of the 11 firms studied. Although it was most common in the production sector, managers from temporary employment and outsourcing companies also 265 described having worked with unions towards partnership over a period of many years. Union officials also agreed that partnerships tend to emerge from ‘‘mature’’ employer and trade union relationships. A second factor common to most firms studied was the appointment of new senior company, HR or personnel managers, or, in some establishments, new owners, who were disposed towards partnership. In most cases, these new managers had worked in unionised industries in the past and had extensive experience in dealing with unions. The appointment of new HR staff usually coincided with a ‘‘culture shift’’, which in most cases occurred in response to competitive crises in which organisational survival was threatened, redundancies were necessary, and workforce morale had collapsed. A third, related factor was new or existing managers’ belief that union involvement was vital in the implementation of organisational change programmes resulting from competitive or financial difficulties, or as a consequence of mergers and acquisitions. Indeed, in some of the firms studied, expansion into new markets acted as a stimulus for partnership. This involved the absorption of unionised groups into private sector companies as a result of outsourcing in the public sector, mergers and acquisitions, or expansion of the temporary workforce in unionised sectors. In the large outsourcing companies, HR managers with experience of dealing with unions were specifically recruited into roles that involved dealing with trade unions ‘‘inherited’’ on winning contracts. In the main, the service sector companies studied had entered into agreements with unions as a consequence of entering new markets, in some cases as a result of company takeovers. Managers in these organisations perceived that union/employer relationships were a fact of life if the company wanted to enter new markets, win contracts, and build market share. In contrast, the production sector firms had long-standing, sometimes adversarial relationships with unions, but these had become partnership relationships as a result of some sort of critical incident, usually financial crisis stemming from competitive difficulties. However, one antecedent factor common to firms in both sectors was management’s willingness to involve trade unions in implementing far-reaching, often difficult, organisational changes. Net benefits to the parties Most managers said that a leading benefit of co-operative relationships was that of union assistance in managing organisational change. They specified consultation, redundancy, and redeployment processes, and, to a lesser degree, the role of union officials in selling or legitimising change

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programmes. In service sector companies, unions were involved in harmonising disparate terms and conditions brought about by successive mergers, acquisitions, or tendering processes. More generally, they facilitated the implementation of flexible working arrangements such as multi-tasking and team-working structures, and changes to shift and payment systems, including the introduction of individualised payment schemes. There was also a general view that union involvement in communication, pay-setting and consultation processes led to greater effectiveness and less management effort, as the union acted as a channel for representation of many employees. However, while employers agreed almost unanimously that their ‘‘partners’’ assisted them in implementing change, there was some evidence of unions also restricting or ‘‘slowing’’ change. They gave examples of trade unions resisting, and provoking opposition to, management attempts to: restructure working hours, enhance flexibility, change working practices, and shift from collective bargaining to performance-related pay systems. In production sector firms, unions had helped managers to recruit skilled employees, establish ‘‘pools’’ of temporary workers, and develop training and health and safety programmes and procedures. In the case of two outsourcing and temporary employment companies, unions also recommended or ‘‘promoted’’ these companies to employers when they were bidding for contracts, and thus helped increase their market share. Indeed, managers from the outsourcing and temporary labour supply companies stated that, when bidding for new contracts in unionised sectors, they positioned themselves as ‘‘union-friendly’’ employers on the basis of their relationships with these unions. It might be expected that a benefit for the trade unions was an ability to extend recruitment and recognition into traditionally difficult to organise areas of the private sector, for example outsourcing, temporary labour supply, and retail. This was true to a degree in certain firms in this study, as unions were permitted to recruit within sites or sectors covered by existing recognition agreements. However, they were often not allowed access to sites or divisions of the company which did not have recognition coverage. This resulted in a situation where small ‘‘islands’’ of unionisation existed within largely nonunion service sector companies, with union officials unable to broaden their membership reach. But while they had only limited opportunities to extend membership into new areas, within existing partnership firms, officials were sometimes able to use these agreements as a means of striking up new deals with other employers. All our trade union interviewees were in favour of employer-union partnership relationships. Like their management counterparts, union officials described how they worked with employers to implement management of change programmes, including involvement in managing redundancy processes. They believed that the main benefits for unions of formal partnership agreements centred around employers encouraging workers to join

the union, as well as better pay and conditions for workers, which also The two faces of provided an incentive for workers to join. Unsurprisingly, views on partnership partnership? varied within unions, with internal debates highlighting differences of opinion. There was general agreement among trade union officials that partnership agreements could and did flounder when companies were faced with severe competitive pressures. Guaranteed job security was often the first component 267 of many agreements to be renegotiated – or sacrificed – in such instances. However, officials agreed that the downsizing process was made easier, with better outcomes for employees, with union involvement. This was because the parties discussed options to try and stave off redundancies, or because employers discussed redundancies with union officials well in advance of making public statements, giving them the opportunity to work through redeployment or job-sharing processes ahead of time. The content of partnership relationships How substantial were these partnership relationships in terms of traditional collective bargaining rights? Much of the partnership literature examines the extent to which union and bargaining rights are bolstered or weakened by partnership agreements. Managers in this study were asked about the scope of union recognition rights, the extent of union involvement in consultation and communication structures, and employer strategies for restricting union power in the relationship. In general terms the scope of recognition rights in these firms was fairly limited. Although nine of the 11 firms allowed some bargaining over pay, in many of these it was restricted to a limited part of the workforce or took the form of simply applying pay increases set in industry-level national agreements. Only seven of the 11 firms negotiated over non-pay terms of employment and working conditions such as hours of work and holidays and, again, some did so only with those ex-public sector workers covered by TUPE arrangements. Training and health and safety were included in all recognition agreements, with the majority of firms consulting rather than negotiating over both. Only a minority of firms negotiated with unions over pensions. The case study firms fell into three main groups with regard to bargaining scope. The first comprised the production sector firms where management negotiated with trade unions over all matters, excluding pensions. For the second group, comprising outsourcing companies, pay levels were set by client companies and there were considerable variations by contract as to whether the company was required to consult and/or negotiate. The third group, all in the service sector, consisted of companies in which recognition agreements accorded limited rights to trade unions. Two firms negotiated over pay but consulted over all other matters. In the remainder, unions had consultative but no negotiating rights at all. In general, production sector firms, and establishments covered by transferred recognition agreements within outsourcing companies, provided unions with fairly extensive recognition

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rights. But the remaining service sector firms had arrangements which provided unions with minimal involvement in employment regulation. Next, data were examined to assess the role of trade union workplace representatives and full-time officials (FTOs) in the day-to-day workings of the relationship or agreement. Two key factors were examined: (1) the nature of dealings between managers and union representatives; and (2) the extent of union representation in first consultation and, second, communication structures. Looking first at the level and focus of contact between managers and union representatives, managers in production sector firms dealt with shop stewards and very rarely, if ever, met with local or national FTOs. Some managers stated that they met stewards ‘‘every day’’. In contrast, the six service sector employers all used senior management meetings with national union officers (in two firms, together with shop stewards) as their main vehicle for consultation with the union. Managers from the temporary employment, outsourcing and finance companies all met regularly with national officials in informal, unstructured meetings in which they discussed company-wide employment relations issues, change initiatives, or company direction with respect to merger, acquisition, or re-branding programmes. In most of these firms, local managers also met more regularly, formally or informally, with local stewards and FTOs to discuss ‘‘bread and butter’’ employment relations issues, such as working conditions or disciplinary and grievance problems. In two of the 11 companies studied, paid, full-time workplace-based union representatives met with management frequently. In terms of the composition of consultative committee or works council structures, the data were mixed. Three production sector firms did not have committees. In all three firms, managers instead met informally with stewards, in groups or individually. A second group of three firms (one finance, two printing) had committees comprised entirely of union representatives, while non-union employees were not represented in any structures. However, a manager from the finance company stated that if the two recognised unions did not ‘‘drastically increase their density’’ in the near future, managers would ‘‘establish other mechanisms to give non-union employees a voice’’. The two outsourcing firms had wholly-union committees in workplaces and accounts where they had recognition agreements, and no committees for their majority non-union employees on other sites. The servicing division of the electrical goods company studied had committees comprised of both trade union and non-union representatives, elected by all employees. The office equipment company and temporary employment agency had largely non-union committees, due to low density levels. Few members put themselves forward for positions or, if they did, not as overt union members (some participated as individuals and did not actively represent views related to their union affiliation).

In summary, employer-union consultation took place mainly between senior The two faces of managers and national level FTOs in service sector firms, and between factorypartnership? level management and shop stewards in production sector firms. The largest group of companies with consultative structures had union-dominated structures, while smaller numbers either had no committee or council, or such low membership that committees were comprised of non-union employees. 269 There was some evidence that companies with consultative structures comprised solely of union members – with no representation for majority nonunion employees – were evaluating ways of redressing the balance to ensure representation of non-union employees. Strategies of control In general, union rights were greater in those companies that had informal partnership relationships than they were in those companies which had formalised partnership agreements with unions. The depth and breadth of trade union recognition rights were greatest in the printing and manufacturing firms where employers and unions had informal relationships. Outsourcing and temporary employment sector employers transferred recognition agreements which varied in depth and breadth, and which in most cases involved union negotiation for only a minority of employees. The remainder of firms, all in the service sector, had developed or were intending to develop partnership agreements which accorded fewer union rights or reduced union strength. Employers in the latter two groups had adopted several common strategies which enabled them to reduce union power. Two of these firms had specifically negotiated, or were planning to negotiate, partnership agreements in order to restrict union involvement in employment relations matters. Others used strategies to manage unions once an agreement or relationship had been established. These strategies included: . Negotiating agreements or changes to existing agreements which explicitly limited union rights and activity in the workplace. . Refusing to deal with ‘‘difficult’’ trade union officials, and dealing only with officials perceived to be compliant. . Endeavouring to reduce the number of unions the company dealt with. . Taking steps to reduce union control over communication and consultative structures and increase management control of both. Six of our 11 case study employers adopted one or more of these strategies. These employers had written, formal agreements or, in the case of two firms, anticipated that agreements would be negotiated in the near future. They shared a number of characteristics. All were large, service-sector employers with employees, establishments or contracts spread throughout the UK. Managers from most of these firms met exclusively or mainly with national union officers. Most had relationships or agreements with multiple unions. The

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use of each of the practices listed above by these firms will be examined in the following sections. Strategies aimed at limiting union rights and curbing union power Employers used various methods to restrict union involvement in employment relations activities. These included designing arrangements that subtly limited or downgraded the status of the union ‘‘partner’’, or which explicitly curbed union power. In the two outsourcing firms, for example, managers were reluctant to call their agreements ‘‘partnership’’ agreements, and used other labels which denoted considerably less union power in the relationship, including ‘‘strategic relationships’’ and ‘‘memoranda of understanding’’. In one outsourcing firm, managers were endeavouring to replace collective negotiation of pay with performancerelated pay, and increase management discretion over other terms and conditions. In the other, managers adopted a strategy of refusing to use disciplinary procedures that involved successive levels of panel tribunals. Instead, they formulated procedures with unions that involved local union representatives dealing directly with company management, in order to resolve disputes quickly, ‘‘in-house’’. Two other companies had negotiated or were negotiating agreements primarily to gain union assistance in implementing and legitimising large-scale organisational reform programmes. In both cases, managers aimed to develop agreements which clearly and concisely spelled out union rights. This reduced unions’ ability to resist change and to undertake certain activities that they had previously been able to. The first of these companies had an agreement which was probably the most detailed and formal of all the agreements or relationships in this study. Yet it was also one of the most limiting, in terms of union rights. Unions were not involved in any aspect of pay setting, and the tightly-worded agreement enabled managers to reduce and more stringently monitor time off for trade union activities. In the second firm, managers were planning to negotiate a partnership agreement that would no longer allow the union to exercise a right to veto changes proposed by management. An interviewee from this company stated that this new agreement would enable managers to ‘‘inform and consult, rather than power-share . . . I used a phrase, ‘management’s right to manage’, but that would be in the context of full consultation’’. Bypassing and choosing union representatives Another aspect of management control over relationships centred on managers’ ability to pick and choose which trade union officials they dealt with. Managers in three firms who had encountered resistance from trade union representatives had developed strategies to deal with such obstacles. These included bypassing and refusing to deal with FTOs or stewards who presented a problem (usually local or regional-level officers), and instead working with other, more compliant, officials (usually ‘‘handpicked’’, national-level officials or stewards).

Managers from two of these firms stated that their relationships with national The two faces of officials were more positive than those with stewards and local officials, as the partnership? latter tended to resist change or generate negative publicity about the company. A manager from one outsourcing company stated: What I’ve found is that at national level – and I guess this is true of every union – you get a commonsense approach, a wider picture, the helicopter view, and they can understand why business is doing what they’re doing. And that’s why, at national level, they’re trying to go down this partnership route . . . whereas local is very parochial . . . We’ve been very lucky in our regional officers generally, they’re really good, they’ve got the wider picture. . . . We’ve had bad ones in the same unions, where . . . we’ve made it clear that we weren’t happy and we bypass them and we use other reps. And the trade union management themselves, leadership, have understood that, and have moved that along . . .

Interestingly, a manager from a printing firm with high union membership and extensive recognition rights also sought to bypass branch-level union officials. However, in contrast to the firm above, he did this by dealing only with workplace-based representatives. This manager stated: I see it as very much a partnership with the union here, and we’ve moved away from having to resolve problems at the national level. So the unions here will make decisions up to the point at which they think they can make decisions. Once you get to branch level, then you’ve got a number of pretty much old-style negotiators. All they actually do is use delaying tactics, quite honestly.

Managing multiple union relationships Of the 11 firms studied, four (mainly printing sector employers) had singleunion relationships. The outsourcing and temporary employment companies had relationships with either three or five unions each. One of these outsourcing firms wished to deal with only one union, and had gone so far as discussing with the TUC general secretary the possibility of rationalisation through inter-union membership ‘‘swaps’’. Managers in the four other companies studied also preferred to deal with fewer unions, preferably only one, and had made efforts to this end. They had no qualms about derecognising unions: three had derecognised unions recently or in the early 1990s. In two firms, these were minority membership unions, but in another, a confrontational union with the largest number of members had been derecognised. A manager from the remaining finance sector company stated that managers in his company were also not ‘‘mawkish’’ about derecognising if they felt that unions were acting as an impediment to progress. He explained how the company, which recognised two unions, had decided to recognise only one. They were running a membership campaign whereby the union which recruited the most members over a six-month period would be granted sole recognition rights. Management control over communication Firms were divided into those where managers dominated the communication process, and those in which unions played a significant role but where union communications ran alongside an ever-increasing number of management

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communication devices such as team briefings, all-workforce meetings, management presentations, and newsletters. In most of these firms, managers sought to replace union-member communication with management-employee communication. If we examine service sector employers first, in three companies, communication with the workforce was conducted entirely through and by managers without union involvement. In the two outsourcing firms, unions dominated communication structures where there were unionised contracts. Only one (the finance company) had a communications structure which might be considered to be dominated by the union, where information was disseminated through many layers of paid full-time and part-time union representatives. The findings relating to the production sector firms were of interest. While two of the five firms had communication systems dominated by shop stewards (which ran alongside management-controlled communication devices such as those described above), three companies or establishments had taken active steps to reduce union involvement in communications in recent years. These were firms in which unions had broad and deep recognition rights. In two of the three, managers had decided, while transforming the company culture from one of confrontation to partnership in the early 1990s, that communication with the workforce should be controlled by management, and that employees’ loyalties should be shifted from the union and towards the company. A manager from the first of these (a printing company) explained that although he believed that stewards served as an effective vehicle for imparting information, management had nonetheless shifted the origin and focus of communications: I think it was early ’90s, we decided we needed to change the way we carried out our industrial relations on this site . . . [Prior to early 1990s] the union were very much more the communications focus. We didn’t deal with individuals. Therefore, we saw that there was a need to change, so we started doing things like team briefs . . . In the early 1990s, (employee) loyalty was probably more to the union than the company. We saw the need to change that allegiance . . .

Similarly, a manager from a second printing firm stated, ‘‘We don’t rely on the unions to disseminate information, we do it ourselves. We like the management slant on it’’. In the third (machinery manufacturing) firm, a shift had taken place from managers consulting shop stewards before making changes, to all employees contributing to change processes through teamwork structures. Managers did not rely on stewards to disseminate information, and instead cascaded information down through the workforce. The two faces of partnership A marked contrast between the partnership companies is thus revealed by our case studies. They can be divided into two broad groups. For one, partnership is characterised by the nurturing of collective bargaining; for the other it is characterised by the containment of collective bargaining.

The first, ‘‘nurturing’’ group of cases comprised small or medium-sized The two faces of production sector employers which had developed informal partnership partnership? relationships, rather than formal agreements. These firms sometimes followed national agreements, but also negotiated pay and conditions with stewards, and managers met almost exclusively, and regularly, with workplace representatives. The nature of the relationship in these firms was typically 273 informal, with a high level of unionisation and active workplace representatives. Despite the potential for disputes, which occasionally occurred, relationships were highly cooperative and had resulted from the continuation of a tradition of employer-union relations, combined with ‘‘critical incident’’ factors, mainly threats to company survival. This did not prevent management in some firms seeking greater control over communication structures, and trying to shift worker loyalty away from the union, but unions retained a proactive role in employment regulation. The second ‘‘containing’’ group of cases were service sector employers who had negotiated, or were planning, formal agreements which accorded minimal or reduced rights to unions. These agreements often emerged as employers realised that union involvement was an inevitable consequence of company acquisitions and mergers or tendering for contracts in unionised sectors. Some developed, or were planning, tightly constrained agreements intended to gain union assistance in implementing change while limiting wider union influence and increasing management discretion. Common management strategies included refusal to deal with confrontational union representatives, and choosing other officials perceived as more cooperative. This produced an IR environment whereby confrontation was largely defused or suppressed, in contrast to the production sector firms where outbreaks of conflict and disputes occasionally occurred. These service sector employers were incrementally moulding their union relationships and agreements to better fit their HR strategies. This involved the slow erosion of union rights. In certain respects, the ‘‘containing’’ strategy resembled the strategies of companies seeking to avoid unions through use of HRM techniques (Legge, 1995). Because of the increase in management discretion in the relationship, and the changing nature of union involvement, employers perceived relationships with unions to be improving. Change in union officials – in terms of both turnover and attitude – was also cited as a key factor leading to and promoting partnership by managers in printing and outsourcing firms. In one outsourcing company, many ‘‘old-style’’ union representatives had taken voluntary redundancy during successive restructuring programmes and had been replaced by new representatives who were more supportive of partnership. Thus, the emerging trend towards partnership in the service sector may be a function of change within unions, with the recruitment of new, pro-partnership officials. Certainly, union officials indicated a high level of approval for ‘‘genuine’’ partnership. But it may also be a function of employer strategies aimed at picking those officials they feel comfortable with, often assisted to this end by the ‘‘chosen’’ union partner.

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Alternatively, it may be that unions are becoming increasingly acquiescent in the face of management attempts to undermine agreements because they view an agreement of any description as a vehicle for expansion into hitherto non-union sectors. However, it was not only in the group of large service sector employers that managers actively diluted union power in the workplace. Managers in production sector firms also made efforts to reduce unionemployee communication and enhance management-controlled communication, and to reduce the number of unions they dealt with. It may be that partnership relationships can be characterised by a ‘‘continuum’’ of union involvement in the workplace. At one end were the union/ employer relationships evident in production sector firms, where union power derived from strong unionisation and active workplace representation. At the other is the highly contained trade union activity of the service sector firms. While union influence was mediated by managers in all of the companies studied, it was, to a great extent, controlled by managers in most of the service sector relationships. The unions had greater rights when they had informal relationships backed up with high levels of workforce unionisation. Formalised partnership agreements appear to be more restrictive than loose, unwritten relationships built up as a consequence of years of custom and practice. It may be that the act of formulating a written agreement provides employers with the opportunity to restrict trade unions’ customary rights. It seems that the low level of legal regulation of British employment relations has permitted a broad spectrum of managerial ‘‘partnership’’ strategies to develop. .

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Conclusion What are the implications of this study within the broader IR environment? First, our findings confirm many of those in previous studies. Our employers sought agreements with unions for many of the same reasons as those in other studies: as a result of financial problems; or to gain assistance in winning and transferring public sector contracts, managing change, implementing qualitybased methods, or harmonising terms and conditions. As in other studies, we also found evidence of use of EI and human resource methods within partnership, particularly teamworking, individualised payment systems, and dual communication structures. However, our study differs from others in identifying two distinct types of partnership arrangement. This raises questions relating to the potential for partnership in the long term. If we look first at the type of arrangements emerging within ‘‘nurturing’’ organisations, it could be asked whether the fact that the strongest partnership relationships were born out of negative, crisisdriven circumstances might lead to instability in the long term. Did employers opt for partnership relations because they had no other choice? Or is it simply that they were more likely to be disposed towards partnership in the first place because of their long-standing relationships with trade unions? Indeed, most of these firms had pre-existing, strong recognition arrangements, but had ‘‘re-branded’’ their relationships as ‘‘partnership’’ after working through

hardships together. But once the company reaches stability again, will working The two faces of in partnership remain a priority? partnership? So far as the longevity of ‘‘containing’’ agreements is concerned, the question arises whether the unions party to them will remain satisfied with relatively restrictive deals. For them the prospect of expansion into new, non-union areas of the service sector remains slight. In many firms, union membership is 275 confined to an ever-shrinking ‘‘island’’ of transferred employees while employers’ desires to contain unionisation prevents unions from recruiting within the wider company. Many of these agreements were a product of employer opportunism in that they have enabled private sector firms to win public sector contracts. If there were a change of government, companies may no longer need to be ‘‘union friendly’’ to bid for contracts. This may mean that such partnership is only a temporary phenomenon in these newly privatised sectors. Because employer opportunism appears to be a key factor driving partnership arrangements, they will become an established feature only if employers continue to see some advantage in them. Where there were ‘‘containing’’ agreements, the main beneficiaries appeared to be employers and their durability will depend on employer perceptions of the unionisation threat. This contrasted with organisations where nurturing agreements had been negotiated and the benefits were more evenly distributed. The measure of a mutually beneficial partnership relationship hinges on the union’s ability to oppose management proposals. In ‘‘nurturing’’ firms, the parties came into conflict from time to time, but the relationship remained robust. It was evident from these cases that for partnership to yield benefits for all stakeholders, unions need to have strong workplace representative structures and high membership levels. But while managers in these companies supported union involvement, it was still common for them to circumvent union structures to some degree. If partnership is indeed to provide unions with a means of renewal, or survival, they will have to pursue agreements in the service sector, the key growth area in the economy. For, if our findings are indicative of industry-wide trends, they suggest that the number of ‘‘nurturing’’ agreements will continue to diminish as the production sector shrinks in size. Not all unions may want to pursue agreements in the service sector if they are seen to limit union rights. The challenge for unions will be to replicate in the service sector the strong informal agreements evident in manufacturing firms. To do this they will need to build union membership and strong workplace structures in those service sector companies where employers show a propensity for partnership. They will need to demonstrate their worth both to prospective members and to their employers. Note 1. When re-interviewed in late 2001, several of those firms planning to negotiate or finalise formal agreements had not yet done so. This was because they had decided to retain their

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original (draft) agreement, or because negotiations towards the agreement were still progressing. References ACAS (2001), Annual Report 2000-2001, ACAS, London. Ackers, P. and Payne, J. (1998), ‘‘British trade unions and social partnership: rhetoric, reality and strategy’’, The International Journal of Human Resource Management, Vol. 9 No. 3, pp. 529-50. Bacon, N. and Storey, J. (2000), ‘‘New employee relations strategies in Britain: towards individualism or partnership?’’, British Journal of Industrial Relations, Vol. 38 No. 3, pp. 407-27. Guest, D. and Peccei, R. (2001), ‘‘Partnership at work: mutuality and the balance of advantage’’, British Journal of Industrial Relations, Vol. 39 No. 2, pp. 207-36. Kelly, J. (1998), Rethinking Industrial Relations: Mobilization, Collectivism and Long Waves, Routledge, London. Kelly, J. (2001), ‘‘Social partnership agreements in Britain: union revitalisation or employer counter-mobilisation?’’, paper delivered to the Assessing Partnership: the Prospects for and Challenges of ‘Modernisation’ Conference, Leeds University Business School, Leeds, May 24-25. Legge, K. (1995), Human Resource Management: Rhetorics and Realities, Macmillan, Basingstoke. Marks, A., Findlay, P., Hine, J., McKinlay, A. and Thompson, P. (1998), ‘‘The politics of partnership? Innovation in employment relations in the Scottish spirits industry’’, British Journal of Industrial Relations, Vol. 36 No. 2, pp. 209-26. Martinez Lucio, M. and Stuart, M. (2000), ‘‘Swimming against the tide: social partnership, mutual gains and the revival of ‘tired’ HRM’’, Working Paper 00/03, the Centre of Industrial Relations and Human Resource Management, Leeds University, Leeds. Taylor, P. and Ramsay, H. (1998), ‘‘Unions, partnership and HRM: sleeping with the enemy?’’, International Journal of Employment Studies, Vol. 6 No. 2, pp. 115-43. TUC (2002), Partnership Works, Trades Union Congress, London.

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‘‘Working together – involving staff’’

‘‘Working together – involving staff’’

Partnership working in the NHS Anne Munro

277

School of Management, Napier University, Edinburgh, UK Keywords Employee involvement, Partnering, National Health Service, Collectivism, Case studies Abstract Contributes to debates about employee involvement and social partnership by exploring the ways in which individualist and collectivist aspects interrelate in a single initiative in the National Health Service. Identifies a particular form of employee involvement in which partnership is integral. Draws on a case study of one NHS Trust over a period of 18 months, using individual and group interviews with senior and line managers, union officials, shop stewards and staff. Argues that tension between collectivism and individualism becomes more acute lower down the organisation where line managers are responsible for implementing change. Highlights how understanding of involvement and partnership change over time and how a climate that is more amenable to union organisation can be created.

Introduction The National Health Service (NHS) has presented dual concerns for successive governments. Quality of health provision is central to the political agenda, yet the cost of funding the service, particularly staffing costs, has escalated since the formation of the NHS in 1948. In the early 1990s, Conservative governments sought efficiencies through the introduction of market relationships. A distinction was established between purchasers (health authorities and general practitioners) and providers (the newly formed NHS trusts). Trusts, run by boards of directors, were given the freedom to determine their own terms and conditions of employment outside of the national system of Whitley Councils and pay review bodies (Lloyd and Seifert, 1995). This represented a shift from the notion of the public sector as the ‘‘good employer’’ and established private sector practices as central to efficiency in the public sector (Stuart and Martinez Lucio, 2000). At local level trusts pursued a range of human resource management practices but found it harder to move away from the Whitley machinery and the tradition of working with trade unions (IRS, 1993). With its election in 1997, the Labour Government removed the purchaser/provider divide and began a new process of modernisation of the NHS with partnership as a central element. In this context a taskforce was set up to explore the concept of employee involvement in the NHS and to make recommendations to ministers on actions This research has been made possible by the access provided by the project management team. The author would like to thank them, as well as all the staff, managers and union representatives who took part in the research. They would also like to thank Iain Henderson and the referees for their detailed comments.

Employee Relations, Vol. 24 No. 3, 2002, pp. 277-289. # MCB UP Limited, 0142-5455 DOI 10.1108/01425450210428444

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needed to ensure that the NHS would be equipped to deliver these changes. The Department of Health published the Report of the NHS Taskforce on Staff Involvement in 1999, in which it is argued that ‘‘involvement can improve patient care, enable the efficient management of change and lead to a healthier, better motivated workforce with reduced staff turnover’’ (Department of Health, 1999, pp. 3-4). Staff involvement was described as being ‘‘about making sure that staff are involved in all decisions that affect them; from big change programmes, to the day-to-day decisions on how services are delivered. It is about effective partnership working, good communications and, above all, real team-working’’ (Department of Health, 1999, p. 3). The report presents a particular model of employee involvement (EI) in which partnership with trade unions is a central principle. All NHS Trusts are now required to adopt this approach and are monitored on their progress (Mahony, 2000). This research is based on a case study of one NHS trust as it attempts to implement the proposals set out in the taskforce report. Definitions of both EI and partnership are somewhat elusive. There is a range of approaches to EI which have varied significantly over time. Marchington and Wilkinson (2000, p. 344) advance the notion of waves of EI, which are driven by a variety of forces, including relations within management as well as relations between managers and workers. They describe EI as reflecting ‘‘a management agenda concerned primarily with employee motivation and commitment to organizational objectives’’ (Marchington and Wilkinson, 2000, p. 340). EI is aimed at individuals or small groups and is described as ‘‘fundamentally different from industrial democracy and indirect participation schemes such as consultative committees which are collectivist and representative in form . . . or forms of ‘social partnership’’’ (Marchington and Wilkinson, 2000, p. 340). To the extent that EI prioritises relationships between the employer and worker, it can be regarded as unitarist and individualistic, although Bacon and Storey (1996) characterise the use of EI to foster commitment to the aims of the organisation as ‘‘new collectivism’’. In contrast, although partnership too has many different meanings and interpretations, it is essentially pluralist and collectivist in its reaffirmation of the role of trade unions (Cave and Coats, 1999; Guest and Peccei, 1998a, b, 2001; TUC, 1999). Ackers and Payne (1998, p. 530) develop this argument, suggesting that while partnership ‘‘cohabits’’ with EI in many publications, partnership fosters ‘‘long-term relationships of trust between stakeholders in the enterprise’’. This appears to fit with the model being promulgated in the NHS, with trade unions having a central role, and contrasts with most EI initiatives of the 1980s (Ackers and Payne, 1998, p. 530). The central research question for this research is to what extent are there tensions in practice between the development of the collectivism of partnership and the individualism of employee involvement when part of a single initiative? This concern is not new and reflects the contributions on the relationship between human resource management and collective bargaining during the 1980s and 1990s. Guest (1989, p. 54) argues that ‘‘there is an incompatibility

between the essentially unitarist HRM and pluralist tradition of industrial relations in the UK’’. However, HRM practices have been most common in organisations with recognised trade unions (Millward, 1994, p. 90). Storey (1992, p. 242) identified four potential routes for the accommodation between the two paradigms: (1) an outright assault on trade unions; (2) simply ignoring trade unions; (3) running the established and new approaches in parallel; or (4) integrating joint arrangements into the overall new approach. He concluded that most companies followed the third approach, downplaying the status and significance of trade unions and marginalising their role (Storey 1992, p. 258). Such neglect of collectivist structures may have been possible in the hostile political and economic climate of the 1980s and 1990s, but present attempts to extend partnership working in the public sector involve an increased union role alongside a greater use of employee involvement, which more resembles Storey’s fourth route of integration or Guest and Peccei’s (2001) hybrid model of partnership. The main argument developed in this paper is that tension develops between EI and partnership when partnership policies are followed at corporate or trust level while EI strategies dominate relationships in the workplace. Taylor and Ramsay (1988, p. 138) argue that there is a ‘‘danger that temporary pluralism negotiated at the top of the organisation proves impotent to tackle a more oppressive unitarism at local level, and indeed, makes things worse for union representatives and lay representatives’’. Similarly, Marks et al. (1998, p. 220) have suggested that the ‘‘paradox of the mutual gains workplace is that it extends the scope of union influence inside corporate decision-making processes as it renders the authority of the shop-floor union delegate more precarious’’. Thus, senior union officers and officials may gain access to information and decision making (IRS, 1999; Jacks et al., 2000), while workplace organisation is weakened (Kelly, 1996), and change to working practices is facilitated (Marks et al., 1998; Taylor and Ramsay, 1998). In this context, the meanings that middle managers attach to EI and partnership become particularly significant. As Marchington and Wilkinson (2000) point out, line managers often do not believe in the principles of EI, lack the skills and training to implement it, give primacy to service delivery demands and may feel undermined by EI. They argue that ‘‘jobs at the interface between managers and managed are likely to alter most, but equally these individuals are also required to play a critical change agent role’’ (Marchington and Wilkinson, 2000, p. 356). The case study highlights the attitudes of middle managers and considers how their understanding of EI changes. Linked to this, an additional argument is made that the meanings attached to EI and partnership are not static, but evolve over time. This is demonstrated by following the development of one EI project over 18 months. In the case

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study organisation two phases were identified in the development of partnership. In the first phase, this tension between the corporate and workplace level was evident, where partnership with trade unions was emphasised at trust level and staff involvement was emphasised lower down the organisation. However, during the second phase there was some evidence of an adaptation of EI in the workplace that accommodated collectivism to some extent and enhanced the role of workplace shop stewards. This case contrasts somewhat with Bacon and Story’s (2000, p. 423) research, in which managers wanted to move toward more individualistic approaches to labour management, but for pragmatic reasons maintained collective relations with trade unions. However, the case study also highlights the fragility of interpretations of EI and partnership, being affected by both external factors and organisational restructuring (Martinez Lucio and Stuart, 2000) and by the extent to which internal trade union structures can be sustained. The research The arguments developed here draw on research carried out in a number of NHS Trusts over the last four years, although the main focus is on one case study of a community health trust in England – Midtown Care NHS Trust. A group comprising representatives from Unison, Midtown’s senior management and the NHS Executive had successfully applied for funding for a project under the Department of Trade and Industry’s Partnership Fund. The funding was to support a project to implement ‘‘Working together, involving staff’’, with four linked parts: (1) getting the right approach; (2) involving staff, learning together; (3) working together, finding solutions; and (4) spreading the word. The first phase of this research was commissioned under part (1), with a view to providing an overview of existing employee relations and an insight into views within the Trust on the development of partnership working. This phase of research was conducted during June, July and August 2000. Six one-to-one interviews, each lasting one to two hours, were conducted with senior managers and senior union officers and officials. Six group interviews, each lasting one to two hours, were carried out. There was one group interview with union representatives (total three participants), two with line managers (total 20 participants) and three with staff (total 37 participants) from a wide range of occupations within the Trust. The report from the research was used as a resource to inform developments in parts (2) and (3) of the project. An impact assessment was commissioned under part (4) of the project and carried out during November and December 2001, repeating interviews with as many of the original interviewees as possible. A total of 13 one-to-one interviews were carried with managers, union officers and staff, and a

telephone interview was conducted with the external facilitator employed during parts (2) and (3). Three group interviews were completed with union representatives (total 12), staff (total six) and first line managers (total three). There is always a need for caution in generalising from case study evidence, but this work has highlighted a number of significant features concerning involvement and partnership as well as raising issues for methodology. The research particularly demonstrates the importance of study across time to an understanding of how employee involvement initiatives evolve. Furthermore, the project on which the research is based is being publicised by the project team as a model for employee relations throughout the NHS. In this context, the research has a potentially wider importance to emerging policy and practice in the health service. The research also points to a need for caution about treating managers, employees and union officers and officials as homogeneous groups. The meaning and significance of the involvement initiative was different for senior and middle managers, various groups of staff, and for union officials and workplace shop stewards. Where studies have sought the views of unions on partnership, they have tended to be those of senior stewards or officials (IRS, 2000, p. 6). Here there was less distance between senior managers and union officials than between senior and middle managers or senior and workplace stewards. The senior management team and the senior union representatives had both invested considerable time and energy in involvement and partnership working and had similar interests in its success. Working together and partnership in Midtown Care NHS Trust: case study findings Background and context Midtown is a community trust and had approximately 1,500 staff in 2000, spread across more than 30 sites. In line with the modernisation proposals outlined in The NHS Plan (Department of Health, 2000), there were proposals for a reorganisation of health care services in Midtown to be completed by April 2002. In 2000 health provision in Midtown included one acute hospital trust, one health authority, Midtown Care NHS Trust and three primary care groups (PCGs), which included GPs and clinics. Various options were being considered for the reorganisation of community and primary health services into one or more primary care Trusts (PCTs). One option was to merge the PCGs with Midtown Care Trust to form one PCT, another was to split the town between two PCTs. For most staff their employer would change, although the nature and location of their jobs would not. During 2001, the Secretary of State for Health brought forward plans for the abolition of local health authorities, which threw reorganisation plans into further uncertainty as the health authority now had to be contained within the new structures. Formal industrial relations structures at Midtown Trust included a Trust Negotiating Committee and Directorate Consultative Committees. Staff side comprised seven recognised trade unions, the largest being Unison and the

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Royal College of Nursing (RCN). Relations between management and unions during the mid-1990s had been confrontational but by 2000 there had been a number of changes to the senior management team and an attempt by the new team to transform relationships. During 1999 a place was established on the Trust board for a trade union representative, and subsequently a union seat had been included on all senior committees and groups. A policy was adopted to make all Trust information, including financial information, available to the relevant union representative. Senior managers had a sophisticated understanding of the existence of competing agendas and the possibility of conflict between parties. They had retained a pluralist approach but had shifted the process of negotiation to a problem-solving focus. The key driver for change was the need to respond to government strategy. However, management identified their motivations for moving toward partnership and staff involvement in expectations of more efficient decision making and implementation of change, which in turn were expected to result in an improved quality of care. Motivations for senior trade union officers were based on hopes of achieving improved working conditions, better relationships with management and, most importantly, an increase in union membership. This was seen as an opportunity to expand the sphere of influence and had already been successful to a degree at trust level. Union officers were aware of potential difficulties if members thought they had become too close to management and recognised that there were increasing pressures for time off for additional union work. Both managers and union officers identified potential barriers to partnership and involvement as lying with middle mangers, clinical staff and senior professionals. These groups were expected to find the changes threatening to their traditional roles, power base and professional autonomy, in what has always been a very hierarchical service (Fenton-O’Creevy, 2001). In addition, some resistance was expected from some lower grade staff who interpreted involvement as ‘‘being expected to do management’s job for them’’. During the first phase of research there were some optimistic interpretations by the project champions, senior managers and union officers, that the initiative had already created a better working environment leading to improved staff retention and declining absenteeism. However, there had been a specific separate initiative directly addressing absenteeism, and it is unlikely that reduced rates of absenteeism were linked to the partnership and involvement project. Indeed, there was considerable cynicism among staff about involvement, which was seen as just another senior management fad which would ‘‘come and go, like so many before it’’. On the one hand, staff did welcome the idea of having a greater say at work, but for a range of reasons believed that the involvement initiative was cosmetic. There was a view that external pressures were dictating NHS practice which left little scope for real staff involvement; there was a fear that it would create more work in a context in which staff were already overstretched; there was a belief that, with no additional resources, there was little point in making suggestions; there was an

expectation that staff were only asked their opinion on superficial issues and that nothing had ever happened when they had made suggestions; and there was also concern about being seen as a troublemaker if negative issues were raised. While union involvement at trust level had developed a clear pattern, first line managers were confused about their role in the involvement process. Some thought that they had to negotiate with shop stewards but were unsure about when they should involve the stewards in a discussion. Their main concern was that the involvement of stewards at the workplace level might limit their ability to achieve changes to work organisation. However, some clearly saw the involvement initiative to mean that they should involve all staff rather than consult the union stewards, and identified it as an opportunity to move from union to staff representatives. One manager claimed to have used the involvement initiative to achieve a change to shifts despite the resistance of the shop steward. Senior union stewards had gained access to information and decisionmaking processes from which they were previously excluded, and senior management welcomed the extension of union membership within the Trust. However, the pressure of work and the increasing workload involved in attending meetings left most shop stewards feeling overwhelmed and the agenda continued to be management-led. Staff were generally positive that having some say about their working lives was better than no involvement and that senior managers were sincere in their motives; although according the accounts of staff the involvement aspect of the initiative had less impact than senior managers claimed. As a result any negative implications were minimal at this stage. However, while middle managers saw partnership working as a route to achieving their objectives more easily, there was a potential danger of the process being seen as a means to achieve change to work organisation, bypassing workplace stewards. There was little to counter this approach at the workplace level where there were so few union representatives. Thus, the tensions between the collectivist and individualist elements of the initiative became most stark at the level of the workplace, where line managers were trying to cope with involving staff and working with unions. The people with the least knowledge about the initiative were being expected to handle the most difficult aspects of it (Marchington and Wilkinson, 2000). This evidence seems to reflect the findings of Taylor and Ramsay (1998) and Marks et al. (1998). While there were opportunities for extending union influence at trust level, stewards were finding it increasingly difficult to deal with immediate workplace issues. Implementation of partnership This section charts the second phase of the partnership and involvement initiative over 18 months, between the summer of 2000 and November 2001. Heightened debate between the health authority, Midtown Trust and the PCGs over the planned PCT during the summer of 2001 affected the activities and

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progress on partnership and involvement. Both management and union time and effort had been focussed on negotiations concerning the structure of the new Trust, and staff concerns about what would happen to their jobs dominated thoughts. Nevertheless, considerable effort by all parties continued to be devoted to the development of staff involvement and partnership working throughout the organisation. Communications were regarded by management and unions as crucial to the development of staff involvement and had undergone significant change since summer 2000. An annual staff opinion survey had been introduced, there had been a number of central initiatives and managers had been encouraged to develop their own communications plans. A communications group was set up in the autumn of 2000 to develop this area, involving a cross-section of staff. No one felt that the communications process was finished or perfect. As one interviewee commented, ‘‘there are still times when you hear about a decision and you think, ‘where did that come from?’’’ Nonetheless, all interviewees considered that there had been an improvement in communications. A system of corporate notice boards had been established, with boards in areas where staff would be likely to see them. Key contacts were identified in each area to take responsibility for keeping the boards up-to-date. Briefing bulletins were set up in March 2001 – produced every two weeks with a maximum of two pages, conveying key information in a brief format. These were displayed on the notice boards, with every item including details about where further information could be gained and giving a relevant contact person. A ‘‘hot line’’ had been introduced – a confidential telephone number through which staff could raise issues or ask questions if they were unable or unwilling to discuss the matter with their line manager. A total of 35 enquiries had been made between October and December 2001. A list of dates of staff meetings held throughout the Trust was compiled. This was intended to raise awareness among managers of the importance of holding staff meetings and to provide senior managers with information about when and where they could contact groups of staff. Staff from a number of work groups commented that they now had meetings and felt more informed about issues. One senior manager had carried out a number of ‘‘back to the floor’’ sessions, which involved working alongside staff, for example cleaning beds. He described this experience as valuable for enabling him to understand how issues that seem minor to senior managers can actually be very important to front line staff. Running parallel to the developments in communications was a series of joint workshops with an external facilitator for managers, trade union representatives and staff. The aim of these workshops was to ‘‘spread the word’’ about the organisation’s approach to partnership and to consider any potential problems or issues, and included a discussion of the report from the first phase of research. While many participants found the selection process for inclusion in the workshops somewhat opaque and did not fully understand the purpose of them, opportunity to meet people with very different positions within the Trust had a considerable impact on their attitudes. Many first line

managers had their first real exposure to union officers, and workplace stewards found themselves involved in group work with the chief executive. This process challenged a number of preconceptions and stereotypes about both unions and management, and served to raise the confidence of line managers and workplace stewards. A more tangible product of the initial workshops was a model or procedure, based on a partnership approach, for dealing with issues or concerns within the trust. It is not particularly revolutionary, but in a straightforward way lays out the steps for following an approach to issues which involves staff and union stewards with a problem-solving approach – a template for all parties to follow, including middle and first line managers who previously appeared to be finding the most difficulty with partnership working. Rather than managers presenting staff with a decision, the first stage of the procedure is to establish and agree jointly the nature of the problem. The procedure indicates that both trade union and human resource department advice should be sought at the first stage – i.e. at the point of ‘‘clarification of the problem’’ or ‘‘as soon as possible’’. This avoids any potential fears from a trade union perspective of staff involvement being used as a means to exclude or marginalise unions. The importance placed on involving a union representative emphasises the need to have shop stewards in all departments. All interviewees who had contact with the procedure praised it. The benefits were described as providing a framework for common practice and a route to ‘‘better’’ outcomes – outcomes which might not suit everyone, but which appeared to be more acceptable insofar as everyone would be able to understand how and why a particular decision was made. Managers thought that decision making and problem resolution had become faster and less stressful. Not all staff knew about the new procedure, but were aware that the ‘‘way things are done had changed’’. The procedure had been used to address a range of issues, such as developing a car parking policy and finding a response to the winter fuel crisis. After the initial period of research in 2000, it was argued that the closer issues are to the workplace, the more difficult it is to use a staff involvement approach, but there was evidence of the procedure being used to address a range of workplace issues. One example involved changing shift patterns, which did not reflect the peaks in patient demand. It was jointly agreed to identify changes that would be acceptable to all. Previously any proposals to change shift patterns would have been resisted by the shop stewards. This contrasted with the example from the first phase of research, discussed above, where a manager had tried to use staff involvement to bypass the union on such an issue. There are a number of unresolved issues relating to the use of the problemsolving procedure. There was not total agreement concerning which issues should be addressed using the procedure or who should be involved at what stage. However, these issues are key to assessing how far the approach represents a more profound change to decision making in the workplace, or is merely a more sophisticated route for management to achieve change. Questions concerning who sets the agenda are closely linked to the choice of

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issues to be addressed through the problem-solving procedure. However, responses to questions about this issue cut across the management/union divide. Some interviewees made the case that there was no issue that could not be addressed through the problem-solving procedure, although the point was made that for small problems it might be a little too formal and cumbersome. As one member of staff put it, ‘‘it should be applied to more weighty matters, there isn’t time to apply it to every little thing’’. Most of the examples of using the procedure so far are what might be described as management-led concerns, rather than staff or union initiated concerns. The strongest defence of this situation came from a union official who argued that staff issues should be dealt with before getting to the stage of the procedure and therefore we would expect to see more management-initiated examples. Linked to this is the question of who sets the boundaries of a problem. For example, if management always says, ‘‘this is a problem, there is no more money, what can we do about it?’’, the approach begins to look like conventional problem-solving groups or quality circles which have tended to have a relatively short life. An issue of central concern during the first period of research was that some first line managers saw staff involvement as enabling them to negotiate change in the workplace without involving the unions. A key feature of the problemsolving procedure is that it specifies that shop stewards should be involved at the earliest stage. This offers the potential to prevent the marginalisation of workplace stewards and creates a setting in which an expansion of the number of stewards is required. During the second period of research there were still some differences of view about exactly when a union steward should be involved. However, first line managers were more likely to say they needed more union representatives in their departments, that they actively encouraged staff to talk with their shop stewards and even encouraged staff to consider becoming stewards. While the problem-solving procedure could be seen as a means to facilitate management-led change, it was also contributing to the creation of a climate in which the expansion of the union base was positively encouraged. This marks a significant change from the earlier research and other research in the sector (Martinez Lucio and Stuart, 2001, p. 23). Although fewer staff were interviewed in the second phase of research, there was agreement that workers generally were becoming more confident about expressing their views and questioning management decisions. Expectations had changed and one maintenance worker spoke of not ‘‘feeling any more that we have to do this because it came from above’’. However, some occupational groups remain suspicious about management’s intentions and interviewees could all identify staff who would ‘‘claim that nothing has changed and that they are not consulted and involved’’. This was particularly the case for non-qualified staff and some of the more isolated staff who work in the community. Where there is greater hierarchy in the immediate work group, or clear division such as between the qualified and non-qualified, the barriers and distrust are more significant.

A result of these developments has been extra work for union representatives, who often lack the time to take part in all of the activities. In the context of the health service it may be difficult for some representatives to take time out of work because of commitments to patients and colleagues. Nonetheless, Unison had achieved an increase in the number of shop stewards across the Trust, along with an increase in membership, although there was some disagreement among officers as to whether this could be directly attributed to the partnership initiative. Union stewards spoke of feeling more confident and of gaining influence within the Trust. One specific example given of gaining influence was on the issue of suspensions – previously a manager could immediately suspend a member of staff and now a union representative, a member of the HR team and the relevant manager must be involved. From a union perspective a number of potential difficulties identified during the first phase of research had not emerged. The partnership initiative is formally linked to Unison, although one of its ‘‘champions’’ is from another union. If the project is seen to benefit particular trade unions, there could be increased tension between unions although this does not appear to have been a problem to date (Heaton et al., 2000). Earlier staff concerns about senior stewards getting too close to management had declined and there had been no problems concerning the involvement of non-union members. Discussion The case study material has described the development of a model of EI in which partnership and collectivism are integral. This contrasts with previous versions of EI that have emphasised individual relations between mangers and workers and have tended to marginalise trade unions. During the first phase of research tension between the individualistic and collectivist aspects became most evident lower down the organisation. Here, middle and line managers were expected to transform their ways of dealing with staff and unions, yet were sceptical about the value of such changes. At this level many mangers did not understand existing collective bargaining structures let alone how involvement and partnership could be implemented. Alongside this there were too few shop stewards to cover all departments and little trust between line managers and shop stewards. This situation changed considerably over the following 18 months. The problem-solving procedure provided a practical guide to dealing with issues or problems in the workplace and line managers had a clearer understanding of how they were expected to behave. In addition, the workshops provided a setting in which managers and shop stewards could meet, work together and understand each other. Involvement in the workshops led to increasing confidence amongst both groups and a greater willingness to deal with each other on workplace issues and use the problem-solving procedure. The number of shop stewards increased and a clear message was reaching staff that they have a right to receive information and express opinions. This case clearly

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demonstrates how perceptions of EI and partnership within one organisation can change over time. It is, however, difficult to establish the extent of these changes. There are enormous problems of showing a causal or quantifiable relationship between EI and partnership and general staff morale and quality of service, or measurable indices such as sickness and absenteeism rates. It is also difficult to assess such developments in the context of major organisational change. The project had continued throughout a difficult period of negotiations concerning the reconfiguration of health services in Midtown. Any new trust is likely to have a new senior management team and there are no guarantees that existing policies will be pursued. There is a delicate balance for unions where management sets the partnership agenda and the parameters of discussion. Danford et al. (2000, p. 20) point to a detached union leadership style, where ‘‘senior steward activity focused solely on the time-consuming partnership process of reactive bargaining and consultation without linking this to the needs and discontents of members’’. This, they suggest, may result in disillusion and membership decline. During the first period of research there was an indication of this. However, by the second period of research a climate had been created that was favourable to the expansion of membership, representative base and influence. Whether the new steward organisation will be sufficiently robust to satisfy the demands for independent representation remains to be seen. The growing demands on union representatives of participation in the problem-solving procedure does raise the danger of union activities being channelled away from organising to managing the organisation. Nonetheless, this example also demonstrates the potential of partnership to provide opportunities for trade unions rather than the ‘‘pseudo-partnership’’ used as a means to undermine unions (Bacon and Storey, 2000). References Ackers, S. and Payne, J. (1998), ‘‘British trade unions and social partnership: rhetoric, reality and strategy’’, The International Journal of Human Resource Management, Vol. 9 No. 3, pp. 529-50. Bacon, N. and Storey, J. (1996), ‘‘Individualism and collectivism and the changing role of trade unions’’, in Ackers, P., Smith, C. and Smith, P. (Eds), The New Workplace and Trade Unionism, Routledge, London. Bacon, N. and Storey, J. (2000), ‘‘New employee relations strategies in Britain: towards individualism or partnership?’’, British Journal of Industrial Relations, Vol. 38 No. 3, pp. 407-27. Cave, A. and Coats D. (1999), ‘‘Partnership: the challenges and opportunities’’, Tomorrow’s Unions, Unions 21, London. Danford, D., Richardson, M. and Upchurch, M. (2000), ‘‘‘New unionism’, organising and partnership: a comparative analysis of union renewal strategies in the public sector’’, paper presented to the 18th Labour Process Conference, University of Strathclyde, Glasgow, April.

Department of Health (1999), Report of the Task Force on Staff Involvement, Department of Health, London. Department of Health (2000), The NHS Plan, Department of Health, London. Fenton-O’Creevy, M. (2001), ‘‘Employee involvement and the middle manager: saboteur or scapegoat?’’, Human Resource Management Journal, Vol. 11 No. 1, pp. 24-40. Guest, D. (1989), ‘‘Human resource management: its implications for industrial relations and trade unions’’, in Storey, J. (Ed.), New Perspectives on Human Resource Management, Routledge, London. Guest, D. and Peccei, R. (1998a), The Partnership Company: Benchmarks for the Future, Involvement and Participation Association, London. Guest, D. and Peccei, R. (1998b), ‘‘The partnership company: bench marks for the future – report of the IPA survey’’, Industrial Relations Services, No. 655, May. Guest, D. and Peccei, R. (2001), ‘‘Partnership at work: mutuality and the balance of advantage’’, British Journal of Industrial Relations, Vol. 39 No. 2, pp. 207-36. Heaton, N., Mason, B. and Morgan, J. (2000), ‘‘Trade unions and partnership in the NHS’’, Employee Relations, Vol. 22 No. 4, pp. 315-33. IRS (1993), ‘‘Local bargaining in the NHS: a survey of first- and second-wave trusts’’, IRS Employment Review, 537, June, pp. 7-16. IRS (1999), ‘‘Partnership delivers the goods at Tesco’’, IRS Employment Review, 686, August. IRS (2000), ‘‘Buy in or sell out?’’, IRS Employment Review, 716, November, pp. 6-11. Jacks, D., Pullinger D. and Reilly, P. (2000), ‘‘Keeping watch’’, People Management, Vol. 6, p. 18, September. Kelly, J. (1996), ‘‘Union militancy and social partnership’’, in Ackers, P., Smith, C. and Smith, P. (Eds), The New Workplace and Trade Unionism, Routledge, London. Lloyd, C. and Seifert, R. (1995), ‘‘Restructuring in the NHS: the impact of the 1990 reforms on the management of labour’’, Work, Employment & Society, Vol. 9 No. 2, pp. 359-78. Mahony, C. (2000), ‘‘Consulting room’’, People Management, Vol. 6 No. 18, September, pp. 46-8. Marchington, M. and Wilkinson, A. (2000), ‘‘Direct participation’’, in Bach, S. and Sissons, K. (Eds), Personnel Management – A Comprehensive Guide to Theory and Practice, 3rd ed., Basil Blackwell, Oxford. Marks, A., Findlay, P., Hine, J., McKinlay, A. and Thompson, P. (1998), ‘‘The politics of partnership? Innovation in employment relations in the Scottish spirits industry’’, British Journal of Industrial Relations, Vol. 36, pp. 209-26. Martinez Lucio, M. and Stuart, M. (2000), ‘‘Swimming against the tide: social partnership, mutual gains and the revival of ‘tired’ HRM’’, paper presented to the Employment Research Unit’s 15th Annual Conference, Cardiff Business School, 6-7 September. Martinez Lucio, M. and Stuart, M. (2001), In Search of Partnership? Report of a Survey of MSF Representatives, MSF, London. Millward, N. (1994), The New Industrial Relations, Policy Studies Institute, London. Storey, J. (1992), Developments in the Management of Human Resources, Basil Blackwell, Oxford. Stuart, M. and Martinez Lucio, M. (2000), ‘‘Renewing the model employer. Changing employment relations and ‘partnership’ in the health and private sectors’’, Journal of Management in Medicine, Vol. 14 No. 5/6, pp. 310-25. Taylor, P. and Ramsay, H. (1998), ‘‘Unions, partnership and HRM: sleeping with the enemy?’’, International Journal of Employment Studies, Vol. 6 No. 2, pp. 115-43. TUC (1999), Partners for Progress: New Unionism in the Workplace, TUC, London.

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Partnership and process in the maritime construction industry Jo McBride and John Stirling

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University of Northumbria, Newcastle upon Tyne, UK Keywords Partnering, Trade unions, Case studies Abstract The authors provide a case study of a partnership agreement in the Tyneside maritime construction industry. They focus on the role of trade unions and the complex tensions that emerge between regional and local officials and workplace representatives. They argue that agreements can only be understood within the context of existing employee relations structures. Their conclusion suggests that the agreement had little impact on a ‘‘branch plant’’ of a national company and that it was often received with hostility and little commitment. As a consequence the partnership became a symbolic agreement with potential significance for external customers but no role in shaping workplace employee relations.

Introduction Partnership, as a description of the collective employment relationship, has a relatively recent genesis, although it is suggested that its roots can be traced to an ‘‘alternative’’ tradition in British industrial relations that has always embraced co-operation (Claydon, 1998; Haynes and Allen, 2001). In this paper we seek to explore the application of partnership in an ‘‘old’’ industry with industrial relations shaped by a high density of trade union membership and often characterised by adversarial collective bargaining and overt conflict rather than co-operation. Our analysis raises significant questions about the conceptualisation of partnership and its systematic application in research. We are also concerned to argue that partnership agreements must be contextualised to be understood (Stirling and Wray, 2001). This context includes external factors such as market position as well as the historical development of industrial relations and current developments within an organisation and with its trade unions. Partnership must be viewed as a dynamic relationship that can develop in stages and reflects both adversarial and co-operative behaviour (Hammer and Stern, 1986). In our case study we are seeking to address the issues noted by Taylor and Ramsay (1998, p. 119) when they suggested that: Few attempts have been made to explore the complex relationship between national trade union organisation, lay representatives and the actual experience of work and the labour process under a partnership regime.

While we are not able to explore the labour process, given the short-lived nature of the partnership, Taylor and Ramsay’s (1998) emphasis on the Employee Relations, Vol. 24 No. 3, 2002, pp. 290-304. # MCB UP Limited, 0142-5455 DOI 10.1108/01425450210428453

The authors would like to thank Dave Wray for access to his work on partnership and for his comments, and our two anonymous referees for their thoughtful and constructive reviews.

complexity and significance of relationships within trade unions is borne out by our analysis. There are clear tensions between different levels within the trade unions nationally, regionally, locally and at the workplace. Further tensions are evident between the two case study unions that are a reflection of traditional job demarcations in the industry, of different approaches to partnership and of the personalities involved. The difficulty of implementing the final agreement on the Tyne is also related to the yard’s ‘‘branch plant’’ status. The partnership agreement itself was seen as ‘‘symbolic’’ and received considerable publicity in the local business press, where it was seen to represent a break with the history of adversarial industrial relations in the industry (The Journal, 2000). Its significance was reinforced by its signing at 10 Downing Street and being witnessed by the Prime Minister. Since the conclusion of the agreement the company has gone into receivership and its future status is unknown. Methodology The focus of our analysis is a case study of a partnership agreement in the Tyneside maritime construction industry (MCI). The partnership is shaped by three significant contextual factors (Geddes Report, 1966; Commission on Industrial Relations, 1971), which are: (1) the highly competitive nature of the industry; (2) the impending employment relations legislation; and (3) an established industrial relations framework deriving from the traditional shipbuilding industry. The company identified for this case study was the only establishment within the Tyneside MCI to have signed a formal social partnership agreement, thus allowing for some comparisons with other companies on the River Tyne. We are particularly concerned with the relationship between the agreement and its implementation, and its consequences for trade union organisation. Our case study data, therefore, are derived from interviews with all full time officials (FTOs) directly involved in the Tyneside MCI and a sample of shop stewards. Interviews were conducted with senior regional officials (including one with national responsibility for the case study company), district officials with day-to-day responsibility for the industry and shop stewards, including convenors and senior stewards. The unions involved in the research were the key industry unions, the GMB and the AEEU, which combine together in the Confederation of Shipbuilding and Engineering Unions (CSEU). They reflect a wide range of experience in the industry and have representation in companies other than the case study organisation. The interviews were semi-structured and exploratory and allowed the respondents to speak freely and identify key issues themselves. This qualitative approach to data collection was supported with documentary

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material from regional minutes of the GMB trade union, the company and local press. The companies covered by our research are listed anonymously in Table I. Solutions or problems: trade unions and partnership? The focus of our analysis is on trade unions and partnership, and from this perspective we regard partnership as a collective relationship between employers and trade unions. We recognise that others have suggested that partnership can be delivered in a non-union environment and may view it as reflecting a relationship between an organisation and its employees (Guest and Peccei, 1998). It is our view that, as Kelly (1996) and Taylor and Ramsay (1998) have argued, partnership models present a serious challenge to independent union organisation and workplace mobilisation. Models of partnership are being developed in three separate but interlinked ways. First, as ideology, second as process and third in relation to outcome. Guest and Peccei (2001, p. 212) develop a parallel argument in relation to principles, practices and outcomes. The TUC (1999, p. 8) model of partnership at the level of ideology is clear – it wishes to distance trade unions from the past and engage in the future: Embracing partnership is therefore the right strategic choice for the trade union movement . . . it identifies trade unions with high performance and best practice – and it responds to employer’s needs too.

At this level partnership develops a symbolic status and becomes a leitmotif for the whole organisation, and the exact nature of the agreement is not critical.

Table I. Tyneside maritime construction industry

Number of Unions employees recognised

Company

Product

Industry

Offshore developments

Oil and gas platforms

Offshore construction

Bird Shipbuilders

Shipbuilding and conversion

Shipbuilding

Shields Shiprepairers

Ship repair and conversion

Ship repair

700

GMB, AEEU

Marsden Offshore

Offshore supply

Offshore fabrication

100

None

Tyne Ship Repair

Ship repair and conversion

Ship repair

260

Confederation

Rake Fabrications

Oil and gas fabrication

Offshore fabrication

1,000

GMB

Leslie Marine Supply

Offshore and marine supply

Offshore fabrication

100

None

300 1,000

GMB, AEEU GMB

However, partnership has to be operationalised and this shifts the focus of a model to process. In this second respect, the relationship between partnership and existing models of collective bargaining is critical. Their analysis of process has led some authors to suggest that, following developments in the USA (Kochan et al., 1986), UK models of partnership reflect a shift from ‘‘distributive’’ to ‘‘integrative bargaining’’ (Roper, 2000). This represents a move from adversarial negotiations rooted in opposing power relationships to mutual gains generated through problem solving, although the same outcomes may result from both. Thus, while in terms of ideology partnership may be regarded as all-embracing, in terms of process it is likely to be more complex and dynamic, with some issues, such as training, covered by partnership arrangements but others, such as pay, not covered. In effect, we are left with complex questions in relation to the process of partnership and its relationship to traditional collective bargaining with its perceived legacy of conflictual industrial relations. Finally, it is clear from the ideology of partnership that employees are to share in the success of the business and they do that most visibly in terms of outcomes rather than process. There is a wide-ranging literature suggesting employee benefits from partnership which concentrates on areas such as employee involvement and development, increased communication and training (Knell, 1999; Guest and Peccei, 2001). Our focus is on trade union organisation, and in this respect Kelly’s (1999) review of nine partnership companies suggests job security, improving terms and conditions of employment and strengthened workplace organisation are the key potential benefits. In briefly reviewing each of these ways of conceptualising partnership it is clear that unions are seeking to develop ‘‘strategic choices’’ that extend their influence into new areas of decision making. At the level of ideology, trade unions are seeking to establish themselves as ‘‘solutions not problems’’ that add value to organisations. In terms of process there is some ambiguity over the relationship between partnership and collective bargaining, but it is clear that unions are seeking to participate in strategic management decisions as well as workplace issues like training that have traditionally been part of the ‘‘managerial prerogative’’. In relation to outcome, trade unions are seeking to improve terms and conditions of employment, enhance job security, maintain their role in a period of weakness (Brown, 2000) and maintain or increase membership at a time of decline. Each of these strategies brings related problems: an identification with the ideology of partnership brings an identification with management. At the national level this is unproblematic for the TUC, which wants unions associated with successful business. However, at the workplace, trade unions retain representational and bargaining roles that generate ‘‘ambiguities’’ in their relationship with management. In effect, partnership in process leads the trade unions to share responsibility for management decisions, though it is

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questionable whether it offers them the power to shape those decisions (Horvath and Svyantek, 1998). The relationship between union full time officers, shop stewards and members becomes critical if trade unions are not to be identified as an arm of management. The tensions that partnership brings to these relationships is discussed in our case study, but others have also noted the significance of this point both within unions (Tailby and Winchester, 2000) and between them (Heaton et al., 2000). In terms of process, the conclusion of Kochan et al.’s (1986, p. 180) study in the USA has resonances with Kelly’s (1996) conclusions and the situation in the UK: Given management’s instinctive opposition to sharing power, especially over issues considered to be its prerogatives, there is little chance of any involvement unless a union has sufficient power to force management to deal with it at the strategic level.

In a situation of declining trade unionism is must be doubtful that such power is commonplace in UK workplaces. Finally, we have seen that discussion of the outcome of partnership is contentious with positive studies (Knell, 1999) challenged by those suggesting that it is failing to deliver significant benefits (Kelly, 1999). Each of these issues is illustrated in our case but, as we argued at the outset, partnership must be understood in relation to the context in which it develops. The Tyneside MCI has a particularly strong and complex trade union tradition that has co-existed with divergent management practice in different companies. Industrial relations in ‘‘the yards’’ There is some difficulty in defining an industry still commonly known on Tyneside as ‘‘the yards’’. We are using the term ‘‘maritime construction industry’’ to encompass the building of ships, ship repair, ship conversion, offshore fabrication and the decommissioning of oil rigs that are all part of the work of the Tyneside ‘‘yards’’. Within the industry there are strong traditions of trade unionism which has been Byzantine in its complexity, sectional in its nature and rooted in workplace organisation. There existed within this complexity a critical network of relationships. Shop steward organisation was close to the membership, with yard meetings providing the basis of decision making and the foundation of the stewards’ power. Senior stewards and convenors were linked together through the ‘‘confed.’’ (the Confederation of Shipbuilding and Engineering Unions) and had close working relationships with union full time officers, who had often come from the yards themselves and whose sole responsibilities might well be to continue to deal with them. This trade union organisation was inevitably undermined through the decline of the shipbuilding industry (Stirling and Bridgford, 1985), the period of trade union mergers which challenged the old sectional strengths and a managerial offensive leading to a temporary and itinerant workforce and trade union non-recognition. Nevertheless, for those remaining in the industry, trade

unionism had been a part of the workplace culture (Roberts, 1993) and re-emerged in unofficial disputes that reflected the long-standing adversarial nature of industrial relations and the continued significance of a solidaristic trade unionism. A comparative analysis of industrial disputes in the North East Region, drawn from GMB regional Minutes between the years 1993-1998, indicated that the MCI continued to show the most significant level of disputes. However, these figures are only recorded official disputes and there are no records held of unofficial actions taken for, as one FTO claimed, ‘‘there are far too many’’. Key features of the disputes have significance for the development of partnership in the industry. From the employer’s point of view, disputes are particularly damaging in relation to the tight competition for orders in the industry that also leads them to seek low labour costs. For the union, the disputes are certainly about wages and conditions but they also reflect the recasualisation of the industry following privatisation. For the employees, the expansion of short-term contracts has unsurprisingly led to an absence of loyalty to a company, as workers move from yard to yard finding jobs through employment agencies below negotiated rates. In addition to this, there does not appear to be any adequate procedure to handle members’ disputes before their contract expires. Thus, the most direct way for workers to deal with a dispute before their contract ends is to take unofficial industrial action. The continuing pattern of such disputes in the Tyneside MCI reflects both the continuing influence of collectivism and the organisational role of workplace shop steward organisation as a focus for channelling discontent through the trade unions. In this context, partnership can be viewed as another step in seeking to solve the industrial relations ‘‘problems’’ of the industry through challenging the remaining strength of this workplace trade union organisation. The issues of ‘‘image and orders’’ as well as trade union organisation were central to the negotiation of the partnership agreement at Shields Shiprepairers. Union recognition at Shields Shiprepairers Nationally, Shields Shiprepairers’ head office was based in Birkenhead, where it had its biggest yard. Regionally, the company owned yards on the Tyne, Tees and Wear, although this case study focuses primarily on the Tyne yard in Hebburn, which was taken over by Shields Shiprepairers in the early 1990s. At the time of the partnership agreement, the Tyne yard employed approximately 700 workers, although this figure had declined significantly from its high point. Previous to the purchase of the Hebburn yard, a River Wear employer owned the Hebburn yard from the time of the departure of British Shipbuilders. This company had no formal recognition with trade unions and our respondents indicated that the employer consistently attempted to ‘‘keep the unions out’’ through tactics such as changing workers on shift systems, making it difficult for the unions to organise. However, it was also suggested that despite non-recognition, the main unions in the industry did have significant membership in the yard.

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When Shields Shiprepairers initially acquired the Hebburn yard in the early 1990s it decided to continue with the practice of non-recognition of trade unions. However, as the workforce began to circulate between yards, due to the closure of Bird Shipbuilders and the end of contracts in other yards, workers began to demand the same employment rights that existed in other yards on the Tyne. This began to cause industrial relations problems in Shields Shiprepairers and these difficulties, together with the impending recognition procedures in the Employment Relations Act (1999), resulted in the company acknowledging that unionisation for manual workers was inevitable. As one regional official explained: They approached us knowing that they had no choice, bearing in mind legislation was coming in.

In 1999, a ballot was conducted nationally for recognition of trade unions. However, the result of this ballot was viewed by the trade unions as unfair. One union officer implied that the company would have ‘‘preferred’’ not to have trade union recognition and alleged that when the ballot was being conducted, the company attempted to ensure that the vote was in its favour: They tried all ways, they fiddled the ballot and everything . . . we balloted the blue collar workers, they included the staff, the apprentices, the tea woman, just to try to get their non-recognition vote up and it worked the first time but it didn’t work the second time.

Due to the overwhelming result of a second ballot an agreement on recognition was reached for hourly paid workers (excluding foremen and chargehands) in the group’s UK engineering production facilities to be represented by either the AEEU or the GMB. In this respect, the company’s approach to recognition through partnership might be seen as the ‘‘least worst’’ option (Stirling and Wray, 2001). Ultimately, a partnership agreement between the company, the GMB and the AEEU was concluded in 2000, with union leaders and employers supporting the initiative. The agreement The agreement was signed for the AEEU and the GMB by the respective general secretaries and regional secretaries, of whom only one, the GMB regional secretary, was based in Tyneside, and none were directly involved in industrial relations in the MCI on a day-to-day basis. While it might be anticipated that an agreement signed in Downing Street with its symbolic value would attract senior union officials, the absence of local level officials is significant when we review the responses. The agreement also reflects the competing tensions surrounding its development. Thus, the partnership represents a very public statement of commitment to the avoidance of conflict that challenges external perceptions of the industry and with the intention of encouraging customers to place orders with the company. The agreement also reflects the ‘‘new realism’’ of 1990s trade unionism, with its references to binding pendulum arbitration. Finally, in spite of its symbolic groundbreaking nature, its parameters reflect traditional

industrial relations concerns both generally and in the industry. For example, the agreement deals with trade union recognition and representation, job flexibility, disciplinary and grievance procedures, working time, redundancy consultation, health and safety, and equal opportunities. Key issues in relation to partnership can be reviewed in respect of the categories of ideology, process and outcomes that we developed earlier in the paper. In terms of ideology there are clear and repeated references to the business needs of the company and the trade unions’ role in supporting them. Thus: Shareholder value and the employees standard of living are dependent on the success of the group in the market place and they [employers and trade unions] commit themselves to do everything necessary in pursuit of the success of the group (Agreement: clause 2).

Significantly, the union role in relation to the labour government is specifically indicated: [Employers and trade unions will] act jointly where appropriate for the purposes of political lobbying, promoting the Group and reinforcing customer confidence (Agreement: clause 4).

Questions of process are dealt with through the establishment of ‘‘forums for joint consultation’’ that reflect the ambiguity we discussed earlier in relation to wage (distributive) bargaining and ‘‘matters concerning the group’s performance on business activities’’. Employee membership of these forums was managed through the trade unions but the agenda remained firmly in the hands of management who will, through ‘‘the president’’ of the ‘‘group council’’ ‘‘. . . approve the content of agenda items’’. However, the key procedural matter is in relation to the resolution of disputes and the adoption of a so-called ‘‘no-strike’’ clause: If a settlement is not reached after a reasonable period of discussion either party can resolve to refer the matter to ACAS for conciliation and if that is unsuccessful for binding pendulum arbitration (Agreement: clause 8).

Partnership agreements elsewhere have not necessarily sought to include references to binding pendulum arbitration which was a characteristic of some collective agreements signed in the 1990s. Its presence here reflects the significance of the desire for a public acknowledgement of the commitment to settling disputes without industrial action. However, the successful implementation of such a clause is strongly dependent on local commitments in an industry where strike action is often unofficial. In terms of outcomes, we noted earlier Kelly’s (1999) references to job security, terms and conditions of employment and union organisation. In the circumstances of the company’s move into receivership these issues are clear, and the commitment to job security which it gave is vividly illustrated in retrospect: It is acknowledged by the partners, that economic and business conditions can change leading to a situation where the Group may have little or no control over the matter. In such circumstances the Group will endeavour to minimise job loss (Agreement: clause 12).

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The third potential gain for the union was of some significance as it related to the question of recognition. We discussed the circumstances of this above, but the agreement clearly offered a formal status for the GMB and the AEEU, and a role in the group forums. However, questions remain as to how far this would have encouraged trade union recruitment or supported effective organisation. In spite of the non-recognition, local officials suggest that union membership is maintained as workers move from yard to yard, so there might be little to gain in terms of numbers. It is also debatable whether the form of organisation and the restricted content of the forums would have encouraged an active workplace trade unionism. However, judgement is reserved not simply because of the potential yard closures but because of the lack of awareness of its content in Tyneside. This was an agreement signed by senior union officials in a group dominated by the major yard in Liverpool rather than the Tyneside outpost. The lack of awareness is graphically illustrated by one local official commenting on ‘‘no strike’’ agreements such as the one in the partnership: Well we couldn’t agree to that in any shape or form . . . and pendulum arbitration [that’s] one thing I don’t believe in.

Implementing the agreement Agreements on the principles of social partnership require evaluation in the light of practice. Issues highlighted in previous research concerning the formulation and implementation of social partnership include Marks et al.’s (1998) reference to ‘‘ownership’’ of the agreement. They report that in one of their cases it was the company which set the entire initial bargaining process and excluded union agendas. The social partnership deal was therefore perceived to be ‘‘owned’’ by the employer from the outset. Their conclusion suggests that trade union involvement is crucial to the development of a social partnership programme. Although trade unions were heavily involved in establishing the agenda in our case study, it was at union senior level and company national level where ‘‘ownership’’ of the agreement resided. It is not simply a case of recording ‘‘union involvement’’ but analysing the levels at which that takes place and degrees of involvement and commitment. A clear problem highlighted from our interviews was that the agreement was weakly filtered down to regional level and divorced from local industrial relations. As support for the agreement was driven by union leaders nationally there remained considerable doubt over the practice and outcomes of the agreement regionally. Despite there being an initial indication of some support by one regional union official: It’s a fairly new regime at Shields Shiprepairers and I think that they recognised that this was the best way to manage their industrial relations and manage their workplace . . . at local level I think it’s working . . . there hasn’t been a sniff of trouble.

However, the FTOs directly involved in the industry produced a contrasting set of circumstances and attitudes to the agreement in practice. As one FTO explained:

The management haven’t improved their relations with the unions since, so we’ve got an agreement but . . . well I’m over there next week, over another major problem . . . and I was in there last week playing hell about the industrial relations.

Another FTO from a different union perceived the social partnership agreement as being ‘‘lop-sided’’ in favour of the employer: They [Shields Shiprepairers] want to take full advantage of the situation (partnership agreement) . . . I am constantly fighting a rearguard action . . . the same old bloody thing’s there . . . the management at the end of the day just lie dead at times I feel.

The interviews with the FTOs directly involved in Tyneside MCI overwhelmingly revealed evidence of continuing conflictual industrial relations. They also indicated their lack of involvement in the deal: Well, I think with the gift of hindsight it might have been better to involve us a bit more because it’s alright to do things at national level, but when it comes down to the nitty gritty everyday stuff, sometimes, you can’t put everything into the agreement you want and it’s a spirit and intent behind it. You can have all the partnerships in the world, but if there’s no spirit and intent then you might as well forget it, so I think that maybe, with the gift of hindsight, they should have spoken to us a bit more prior to signing it . . . because I’ve found that the spirit and intent hasn’t been applied . . . the agreement’s there, but it’s there just written.

Respondents were asked whether there had been local meetings with unions and the employer regarding the partnership agreement. We were informed that when the deal had initially been signed, a negotiating committee was established and the regional management, FTOs and shop stewards ‘‘went away on the same course’’. However, FTOs from all unions claimed that the training sessions ‘‘did not go well’’ and were ‘‘unsuccessful’’. Their opinion on these outcomes was: You’re back to people . . . you’re back to human beings, it’s like I said before, if the spirit and intent’s not there, it won’t work.

In addition to this, it was evident that the regional workforce was completely divorced from the agreement and, when asked as to their knowledge of the deal, one FTO claimed: As far as them are concerned, we’ve got an agreement with a company that they deliver the product at the end of the day . . . he doesn’t want to know if I’m going to go rolling round the floor kissing and hugging the bloody employer, he wants to know what I’m going to do on behalf of him to defend his position in the workplace.

Another officer assumed that the shop stewards would consult with the workforce concerning the social partnership agreement, although he added: I don’t think they’re [the workforce] all that bothered, as long as they’ve got a job and a bit security and a bit in their pocket, that’s as far as it goes with them.

However, the relationship between the union officials, shop stewards and members is critical to partnership, and the officers’ assumptions about consultation do not necessarily reflect agreement. Indeed, our initial findings suggest clear hostility to partnership in the Tyneside MCI and a distancing

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between some stewards and the local officers. One shop steward respondent argued that the full time official should have the responsibility of informing the workforce about social partnership: We’ll just throw it back in their face and tell them [the union officers] they’ll have to come down and tell the lads because obviously this will just flare up. If he wants to tell the men he’d better come down and tell them himself ‘cos’ there’s no way I will.

300

Partnership was perceived by shop stewards as a way of undermining the union: I think the only way it would work is to get rid of the existing stewards and get somebody else who hasn’t got a clue.

There was also a strong feeling that the workforce would not accept a partnership agreement, as one shop steward clearly demonstrated: I think if we took that to the lads they’ll rip their union cards up.

Another shop steward, turning his response to future employment on the river, claimed: How could we possibly go anywhere on the river, Bird Shipbuilders or anywhere and say the union’s signed an agreement with the employers . . . they’ll [the workforce] kill us . . . they’ll kill us. People have fought for probably the last 70-80 years to get, well we haven’t got great conditions, but we’ve got a lot better than we used to, and some people have put their life on the line to get these conditions and some have lost their livelihood by being shop stewards and outspoken, and the union officials are protected, and us sitting here, we could go tomorrow and nobody would give a toss about us, the union wouldn’t give a monkeys.

Asked whether a partnership agreement would work, the reply from another shop steward was: Definitely not. Not in a million years.

Interviews with FTOs produced a pattern of responses that tended to reflect cynicism towards social partnership. In a number of cases this resulted in negative attitudes and mistrust towards partnership in both principles and practice. Another FTO claimed that the concept of partnership was: . . . just a term, like windows of opportunity and mission statements, it’s all bloody jargon.

Overwhelmingly, all officers working directly with the company perceived that the agreement on Tyneside had proved to be unsuccessful: I cannot put my hand on my heart and say that we’ve delivered anything under the realms of social partnership.

Such findings support previous research by the authors in which it was argued that the partnership agreements become the property of the senior managers and union officials who negotiated them, and local officials and the workforce as a whole may be unsupportive or even unaware of their existence (Fitzgerald et al., 1999). Themes central to partnership principles, such as employee consultation, employee involvement and training, were entirely disregarded throughout the

agenda of the Shields Shiprepairers’ agreement. which is another reason perhaps for its shortcomings in practice. In addition to this, these findings support comments made in other research, such as Tailby and Winchester’s (2000, p. 381) illustration of how union representatives: . . . confessed to the flak that they have received from members and activists for their enthusiastic embrace of a closer relationship with management.

Such an ‘‘enthusiastic embrace of a closer relationship’’ between trade unions and management was perceived as being ‘‘unnatural’’ in the dialogue used by some of our respondents. This may be due to the resilient ‘‘us and them’’ attitudes still evident in the industry and may also derive from the pervasive culture of masculinity. Some of the language used by respondents reflects this, with one FTO referring graphically to the social partnership agreement as a ‘‘shafter’s charter’’: And we get shafted every time by it . . . the same old thing just carries on and nobody wants to change it, you’ve still got the same old cycle . . . they just see social partnership as the trade unions baring their buttocks.

It is perhaps unsurprising that such masculine discourse dominates an industry traditionally seen as a male preserve, but it is also a reflection of an industrial relations culture deriving from power-based adversarialism where co-operative or partnership strategies are profoundly challenging. This can also be located within a broader, and strongly gendered, regional culture which is necessarily changing but retains its roots in a strongly traditional industry such as shipbuilding, which is also located in relatively closed communities. The solidarity of those communities and the network of communications within them remain an important underpinning of trade union organisation and access to jobs for a mobile workforce. Partnership without partnership Partnership was viewed differently in other yards where formal agreements did not exist but where our respondents would characterise them in terms of their ‘‘good’’ or ‘‘bad’’ industrial relations. As one union official explained: I reckon we work more in social partnership with some of the other companies than we do with Shields Shiprepairers, even though we haven’t got technically speaking a social partnership deal.

The majority of respondents tended to associate ‘‘partnership’’ with recognition agreements rather than a set of principles that reside in formal agreements. One union official illustrated his perception of such ‘‘partnerships’’: The bones of the agreement is that we both work together, to strive to deliver what we’re both saying, we work in partnership with each other to improve the company’s performance and deliver to the membership better terms and conditions of employment.

Despite an indication of working within some principles of ‘‘social partnership’’, as outlined by the TUC (1999), further analysis revealed a different interpretation of ‘‘working in partnership’’. The meaning attached to the

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respondents’ perceptions was more one of generating orders for the companies in Tyneside MCI in order to secure employment on the Tyne. This has been a continuous theme throughout the history of shipbuilding on the River Tyne, and the recent situation was reflected in some comments by FTOs: We’ve tended to try to work with the companies to help them survive and it’s worked if you look at [Birds] and [Offshore Developments] who’ve both been through a closure situation and they’ve come back to life, it’s worked because it’s been the combined efforts the companies and the unions, the unions using the political arena to persuade the government to assist . . . so even though technically speaking we may not have partnership deals in some of the companies, the actions that take place are along the lines of partnership.

Over recent years, such co-operation has been prominent in the industry. On the initiative of the senior officials of trade unions in Tyneside MCI, and with the involvement of employers, several rallies and lobbies of parliament have taken place to win contracts for the Tyne industries including the highly publicised ‘‘Save Our Shipyards: The Maritime Industry Campaign’’. According to one senior union official: The whole thing has been tremendous, and that to me is partnership.

Conclusion We have argued in this paper for a reconceptualisation of partnership in terms of ideology, process and outcomes as a mechanism for operationalising it and applying it in research. We have also suggested that partnership must be analysed in terms of both its context and in the series of relationships that surround an agreement. In this respect, a partnership agreement may be seen as a reflection of pre-existing change or an attempt to create the basis for future developments. In both respects it can take on the ‘‘symbolic’’ status that it did at Shields Shiprepairers, but for strongly contrasting reasons. In our case study it represented a break from the past but it can also be seen as a ‘‘rebranding’’ of employee relations to the external world as a means of selling a product in a fiercely competitive market. Both the company and the trade union would, therefore, be committed to an agreement with the potential to enhance job security. On the other hand, the partnership grew from conflict over trade union recognition rather than a real change in workplace employee relations, where workers and local officials saw job security undermined by the temporary nature of employment contracts. Moreover, whilst the agreement represented the symbolic ending of partnership negotiations for national officials, it was the beginning of a new relationship for local trade unionists and the Tyneside management – a relationship in which they had been able to make little investment and that had little meaning for them. We would argue that the partnership agreement at Shields Shiprepairers was a response to a context in which formal trade unionism was seeking to re-assert itself through a legally based recognition agreement. The agreement that was concluded served the company’s interests in establishing a relationship with two unions at corporate level and including clauses that restricted industrial action and offered little in terms of participation at lower

levels of the group. The outcome was an agreement that was little known on Tyneside, had little impact and was negatively received by some of the full time officials, and also by the stewards we have interviewed. By contrast, the local full time officers and shop stewards were able to identify other companies in the industry where trade unions had never been de-recognised and a strongly co-operative industrial relations culture has emerged organically. In such circumstances there was little need for partnership agreements when there were established, solidaristic networks between union officers, shop stewards and members alongside strong working relationships with local management. The partnership agreement at Shields Shiprepairers, by contrast, has done little to add to membership levels that had remained strong in spite of non-recognition or to enhance workplace organisation. While it must be stressed that the agreement was short-lived and outcomes need to be related to other factors than the operation of the partnership itself, there appears to have been little gain and potentially significant loss for the company’s workers on Tyneside. The company’s shift into receivership clearly brings into doubt any semblance of job security. What remains is the context that created the partnership, and that is the search for new orders and the use of partnership as ‘‘symbolic’’ of good industrial relations and a committed workforce. References Brown, W. (2000), ‘‘Putting partnership into practice in Britain’’, annual review article, British Journal of Industrial Relations, Vol. 38 No. 2, pp. 299-316. Claydon, T. (1998), ‘‘Problematising partnership: the prospects for a co-operative bargaining agenda’’, in Sparrow, P. and Marchington, M., Human Resource Management: The New Agenda, FT/Pitman, London. Commission on Industrial Relations (1971), Shipbuilding and Ship Repairing, HMSO, London. Fitzgerald, I., McBride, J., Stirling, J. and Wray, D. (1999), ‘‘Striking back: shop stewards in manufacturing industry’’, paper presented to the International Labour Process Conference, Royal Holloway College, Egham. Geddes Report (1966), Shipbuilding Inquiry Committee 1965-1966, Report, Cmnd 2,937, HMSO, London. Guest, D. and Peccei, R. (1998), The Partnership Company: Benchmarks for the Future: The Report of the IPA Survey, IPA, London. Guest, D. and Peccei, R. (2001), ‘‘Partnership at work: mutuality and the balance of advantage’’, British Journal of Industrial Relations, Vol. 39 No. 2, pp. 207-36. Hammer, T.H. and Stern, R.N. (1986), ‘‘A yo-yo model of cooperation: union participation in management at the Rath Packing Company’’, Industrial and Labor Relations Review, Vol. 39 No. 3, pp. 337-49. Haynes, P. and Allen, M. (2001), ‘‘Partnership as a union strategy: a preliminary investigation’’, Employee Relations, Vol. 23 No. 2, pp. 164-87. Heaton, N., Mason, B. and Morgan, J. (2000), ‘‘Trade unions and partnership in the Health Service’’, Employee Relations, Vol. 22 No. 4, pp. 315-33.

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Horvath, W.L. and Svyantek, D.J. (1998), ‘‘Participative management in union settings: lessons from Saturn’’, in Lewin, D. and Kaufman, B.E., Advances in Industrial and Labor Relations, Vol. 8, JAI Press, Greenwich, CT. (The) Journal (2000), 16 August. Kelly, J. (1996), ‘‘Union militancy and social partnership’’, in Ackers, P., Smith, C. and Smith, P., The New Workplace and Trade Unionism, Routledge, London. Kelly, J. (1999), British Social Partnership Agreements: Who Wins, Who Loses?, LSE, London. Knell, J. (1999), Partnership at Work, Employment Relations Research Series 7, Department of Trade and Industry, London. Kochan, T.A., Katz, H.C. and McKersie, R.B. (1986), The Transformation of American Industrial Relations, Basic Books, New York, NY. Marks, A., Findlay, P., Hine, J. and Thompson, P. (1998), ‘‘The politics of partnership? Innovation in employment relations in the Scottish spirits industry’’, British Journal of Industrial Relations, Vol. 36 No. 2. Roberts, I. (1993), Craft, Class and Control: The Sociology of a Shipbuilding Community, Edinburgh University Press, Edinburgh. Roper, I. (2000), ‘‘Quality management and trade unions in local government: demonstrating social partnership?’’, Employee Relations, Vol. 22 No. 5, pp. 442-66. Stirling, J. and Bridgford, J. (1985), ‘‘British and French shipbuilding: the industrial relations of decline’’, Industrial Relations Journal, Vol. 16 No. 4, pp. 7-16. Stirling, J. and Wray, D. (2001), ‘‘What price partnership?’’, paper presented to the Work, Employment and Society Conference, University of Nottingham, Nottingham. Tailby, S. and Winchester, D. (2000), ‘‘Management and trade unions: towards social partnership?’’, in Bach, S. and Sisson, K., Personnel Management, 3rd ed., Basil Blackwell, Oxford. Taylor, P. and Ramsay, H. (1998), ‘‘Unions, partnership and HRM: sleeping with the enemy?’’, International Journal of Employment Studies, Vol. 6 No. 2, pp. 115-43. TUC (19990, Partners for Progress: New Unionism in the Workplace, TUC, London.

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Assessing the principles of partnership Workplace trade union representatives’ attitudes and experiences

Assessing the principles of partnership 305

Miguel Martinez Lucio and Mark Stuart Leeds University Business School, University of Leeds, Leeds, UK Keywords Trade unions, Partnering Abstract The article examines the attitudes and experiences of senior workplace trade union representatives, from the Manufacturing, Science and Finance Union, against the TUC’s six principles of partnership. The findings suggest some acceptance of the ideological aspects of partnership, such as the need to move away from adversarial cultures and understand the impact of market imperatives and pressures on the firm. The results reveal little support, however, for improvements in job security, transparency and involvement and the quality of working life (the TUC’s so-called ‘‘acid test’’ of partnership). Against a backdrop of job insecurity and widespread work intensification, the article argues that the material and organisational basis to partnership appears to be undermining various attitudinal changes within the thinking of trade union representatives regarding their roles and relations at work.

Introduction Partnership has emerged as a central feature of industrial relations discourse in the UK. It is often presented as an attempt to broaden the role of trade unions within corporate and workplace politics, typically developed around a ‘‘new’’ capital-labour relationship that recognises the common ‘‘threat’’ of the ‘‘market’’. A number of organisations have sought to promote the partnership approach through the development of a series of underpinning principles and preconditions (such as the Involvement and Participation Association and the Trades Union Congress). Such principles are considered to be central to the effective development of partnership-based approaches, acting as a political counterpoint to the less socially oriented interventions of private consultants and managerialist information circuits. This paper studies the meaning and relevance of such principles and then examines their significance for the evolution of partnership at the workplace. The paper aims, in particular, to assess whether such principles are engaged with and witnessed on the ground by trade unionists. The paper draws, empirically, from a unique survey of workplace representatives of the Manufacturing, Science and Finance trade union (MSF). We note that a cautiously positive attitude to ‘‘partnership as involvement’’ exists among this constituency in terms of some of the vectors of partnership. However, with regards to broader issues, such as the commitment of management to a systematic investment in partnership in terms of training and involvement, there appears to be a significant level of concern.

Employee Relations, Vol. 24 No. 3, 2002, pp. 305-320. # MCB UP Limited, 0142-5455 DOI 10.1108/01425450210428462

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The emergence of partnership The politics of partnership Partnership has emerged due to a range of factors since the mid-1990s. On the one hand, we have witnessed in the UK an increasing interest in extending employee rights and a changing regulatory environment on a range of employment issues. Employers have, therefore, been faced with the prospect of having to involve unions and worker representatives within their decisionmaking processes. In addition, a new politics of workplace relations has emerged based on social issues such as work-life balance, employee-led flexibility at work, and a broad concern with managerial and employee conduct and behaviour. The combination of these changing regulatory and labour market circumstances has led certain ‘‘enlightened’’ and ‘‘strategic’’ employers to rethink their relationships with trade unions (Ackers and Payne, 1998). Paralleling these external contributory factors is the emergent belief that internal organisational change and the adoption of new management practices requires ongoing ‘‘renewal’’. Any attempt to extend the adoption of new forms of employee relations requires, therefore, new allies and supports, in particular trade unions, which can provide organisational change with a degree of legitimacy (Martinez Lucio and Stuart, 2000). It is our view that the combination of these factors has led to an increasing interest amongst management and employer circles in the role of trade unions within the management of labour. Finally, such a shift in emphasis, when compared to the dark days of the 1980s and early 1990s, has been embraced by various union e´lites, who have seen the possibility for a new role for organised labour in the regulation and managing of work. For Ackers and Payne (1998) the partnership agenda forms the basis for union engagement and can be used to deepen their institutional role at various levels of the employment relation and the state. In effect, unions should ‘‘play back the rhetoric of employee involvement and become active agents in the workplace and wider society’’ (Ackers and Payne, 1998, p. 527). Partnership represents, then, an opportunity for linking organisational effectiveness with social considerations through the establishment of a new voice for labour within the corridors of corporate and workplace life: it represents in effect a model for creating new working relations across a variety of organisational issues. It is difficult to trace, however, a clear line in terms of the development of, and interest in, partnership. In many ways it is a complex and over-determined phenomenon, with unions and management engaging with the concept for quite different reasons and in relation to distinct elements of employment relations. These competing logics within partnership mean that it is subject to various interventions and uses (Brown, 2000). Hence, the increasing interest in establishing principles, meanings and approaches to partnership in a formal and interventionist manner is part of a political processes to ‘‘regulate’’ and manage such developments.

Concerns, risks and preconditions There are, however, critics of partnership who raise questions regarding the impact on worker representation of such a new-found proximity to management interest and processes, and the extent to which partnership depoliticises and incorporates trade unions (Danford et al., 2002; Kelly, 1996, 1998; Marks et al., 1998; Taylor and Ramsay, 1998). Part of this concern is an extension of the now familiar debate regarding the relations between industrial relations and human resource management (Legge, 1994). Even the most systematic proponents of partnership have argued that partnership is contingent on a set of preconditions that are required for effective implementation. Kochan and Osterman (1994, p. 46), for example, argue that for partnership relations to be effective, voice mechanisms should be incorporated at the strategic, functional and workplace levels. Mere shifts in management rhetoric, and a minimal involvement of trade unionists within the political processes of the firm, will not lead to effective outcomes in terms of mutual gains. Much of the above relates to the issue of risk and the reality that trade unions have more to lose than employers if the ‘‘game’’ of partnership is not handled evenly (Higgins, 1996, p. 479). Thus commentators such as Kochan have consistently argued that partnership strategies necessitate that the voice of labour be extended and institutionalised: At the macro level the new system would involve a greater acceptance of unions in society and meaningful labor law reform and a growth oriented macro-economic and industrial policy, all derived from a rebirth of the political influence of the labour movement (Kochan, 1985, p. 345).

These dimensions are seen as vital preconditions for partnership to develop as a socially and economically ‘‘beneficial’’ strategy, a position that is often underplayed in the more optimistic and prescriptive pronouncements on partnership. It is these preconditions that are the vital starting point to any discussion on partnership, and, as the next section outlines, they underpin the recent attempts by leading organisations involved in industrial relations to condition and influence its development in the face of the diverse realities and experiences that inevitably emerge. In search of the ‘‘key ingredients’’ Regardless of the debate on the merits and problems of partnership, there are, therefore, a range of concerns regarding its viability, sustainability and costs (especially for labour). To this end, various national bodies and peak organisations have attempted to provide industrial relations actors with a set of criteria for establishing ‘‘good’’ partnership practices. In order to avoid partnership becoming synonymous with minimalist organisational agendas and fanciful rhetoric, bodies such as the IPA (1997) have established relevant benchmarks for partnership. The IPA emphasises: . commitment to business success; . employment security;

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. . . .

308

employee voice; sharing the success of the organisation with all employees; training and development; and flexible job design and direct participation.

In true ‘‘third way’’ fashion, the principles stress the mutual responsibilities of all parties (Giddens, 2000). Thus, as a recent IPA report (Guest and Peccei, 1998, p. 6) notes: . . . successful partnership operates with a set of reciprocal commitments and obligations between the organisation and the people working in it which underpins the way the company is run. The stronger this approach the more positive the outcomes.

This notion of reciprocity is central to the development of partnership as it emphasises the need for a complex contract between actors in dealing with the form and content of industrial relations just as its boundaries widen both socially and economically. This article draws, however, on the TUC’s six principles of partnership. These are broadly similar to the IPA’s principles and, again, can be understood as the necessary building blocks and preconditions for the successful development of partnership at the workplace (see Brown, 2000). The principles are presented in the TUC’s (1999) Partners for Progress document as follows: (1) Commitment to the success of the organisation. (2) Recognising legitimate interests. (3) Commitment to employment security. (4) A focus on the quality of working life. (5) Transparency. (6) Adding value. The debate on partnership is therefore premised on detecting and establishing firm foundations for the renewal and extension of labour participation within employment relations on matters such as communications, involvement, the quality of working life and business objectives. This reflects a concern with the legacies of UK industrial relations, and the weakness of its institutional processes and managerial traditions. Essentially, the interest in partnership appears to be underpinned by the belief that a series of ‘‘good practice’’ benchmarks may facilitate a renewal in ‘‘good industrial relations’’ – as Purcell (1981) once labelled it – and the avoidance of a further decline in institutional industrial relations. In this regard, union strategy now appears to necessitate the explicit annunciation of objectives and processes. It is much more concerned with providing a behavioural and cultural basis for the development of ‘‘positive’’ views of employment relations. This is a new departure in the politics of industrial relations as unions begin to provide a set of information services to employers and managers through an increasing array of

networking, marketing and consultancy roles[1]. The objective is to supplement industrial relations legislation with codes of conduct and models of best practice through informational relations. Consequently, the issue becomes one of what these ‘‘rules’’ mean in the context of the lived experiences and attitudes of trade unionists in the workplace.

Assessing the principles of partnership

Methods, measures and indicators of partnership Sample and data collection The TUC’s principles of partnership are likely to form the backdrop and basic ground rules for UK trade unions’ engagement with partnership. Little is known, however, about the utility and relevance of these principles for trade union activity at the workplace – the level where the majority of partnership approaches and agreements will be developed and concluded. The paper examines these concerns through the findings of a postal questionnaire of MSF workplace representatives. In broad terms, the questionnaire sought to assess trade unionists’ experiences of contemporary employment relations and the management of change, including their attitudes towards the principles and practices of partnership. A key concern was to map the changing nature and forms of industrial relations across MSF’s key sectors, and to assess the extent to which partnership-type arrangements were taking root. The distribution of questionnaires was not, therefore, restricted to those organisations with partnership agreements. The MSF trade union was chosen because it is one of the UK’s largest trade unions, with 425,000 members[2]. While it mainly represents skilled and professional workers (typically technical and scientific), it covers a wide range of industries and services in the public and private sectors and has a reputation for developing innovative trade union strategies (for example, around training and development and organising). Its workplace representatives provide, therefore, an excellent data source for exploring the development of partnership-type approaches[3]. The survey sample was drawn from the MSF membership database and included the most senior MSF representative at each workplace across eight key industrial sectors: airlines, aerospace, chemicals, education, finance, health, manufacturing and the voluntary sector[4]. After piloting the survey instrument at a number of MSF training schools, all questionnaires were distributed and returned through the MSF head office during April and May 2000, with a follow-up survey of non-respondents during July. A total of 2,084 questionnaires were distributed, of which 353 were returned. Some returns had to be rejected, however, as they were incomplete or from extraneous sectors, leaving 317 useable responses. The distribution of returns presented in the Appendix shows that the response rate varied by sector, from a low of 10 percent in manufacturing to a high of 26 percent in health, a distribution that is in line with recent multi-sector surveys (see, for example, Arrowsmith and Sisson, 1999). The overall response rate was just over 15 percent. The relevance and validity of the data can be justified by the fact that while the response rate

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is low the number of returns (at 317 workplaces) is high, allowing us to undertake a meaningful statistical analysis. Second, the spread of respondents by sector, firm size and MSF union representation was reasonably representative of the original sample population[5]. The principles of partnership The TUC’s six principles presuppose certain attitudinal perspectives from both trade unionists and employers, presented in terms of reciprocal responsibilities. The survey sought to explore MSF representatives’ attitudes towards mutual reciprocity by unpacking the six broad principles into 16 specific items. Items were identified through a review of the TUC’s publications on partnership, specifically in terms of the philosophies, characteristics and enabling conditions supposed to underpin the six principles (TUC, 1996, 1999). MSF representatives were asked to respond on a five-point Likert scale from strongly agree (1) to strongly disagree (5). The relevance of the items to assessing the TUC six principles is supported by a reliability check, which revealed an alpha score of 0.78. The responses, presented in Table I, find that the balance between general levels of agreement and disagreement was evenly distributed across the 16 variables. That is, eight items elicited responses that were in agreement, and eight elicited responses that led to disagreement. Involvement and communication. For commentators such as Ackers and Payne (1998) partnership is seen to afford trade unions an increased role in the decision-making processes of organisations. The centrality and importance of voice mechanisms to the partnership-building process has been endorsed by organisations as varied as the Chartered Institute for Personnel and Development (CIPD), the IPA and the TUC, albeit with different degrees of emphasis. The CIPD, for example, still retains a commitment to the principle of individual forms of communication, whilst the IPA and, by definition, the TUC give more credence to representation. The philosophy of partnership draws from this interest in employee involvement (Stuart and Martinez Lucio, 2002). However, this renewed interest necessitates fundamental developments in the culture and practice of involvement and communication within organisations. As the IPA (1997, p. 16) notes: Debates about company performance, awareness of investment and divestment, the state of the marketplace, training and personal development policies, redundancies and cutbacks are all central to the agenda of any effective forum. Building employee awareness of these issues and getting employees’ views ensures that better decisions are made.

The questionnaire investigated the extent of MSF involvement across a range of key workplace issues. Involvement was defined in terms of negotiation, consultation and information, and respondents were asked to give preference to the highest level of involvement in relation to the issues outlined in Table II. MSF involvement was found to be most prevalent in terms of pay and working conditions, and least prevalent with regard to business investment decisions.

Effective industrial relations are based on a shared understanding of the business goals of the organisation The business goals of this organisation are clearly explained to the union and its members Management has become more willing to share, and develop jointly, the future business goals of this organisation Management recognises that at certain times ther might be legitimate differences in the interests of the employer and employee There is a high degree of mutual trust between management and unions at this organisation Employment security should be dependent upon the development of greater flexibility Management has become more committed to employment security Measures to improve the employability of staff have become an increasing priority There has been an increased investment by the organisation in the quality of members’ working lives Training and development are regarded as non-conflictual issues between unions and management at this organisation Opportunities for non-vocational training exist at this workplace Management shares information, and discusses openly the future plans of the business Unions have the opportunity to express their members’ views on key business issues Unions may have to accept conditions of confidentiality on certain issues and manage their membership communications in new ways Employee commitment is dependent upon non-adversarial industrial relations The future role of the union at this organisation should be dependent on its success in contributing to performance improvements. 45 34 29 48 14 34 18 23 10 40 24 29 45 48 41 23

12 5 9 5 6 5 2 1 6 4 4 10 18 16 6

Agree

39

Strongly agree

27

21 24

28 20 21 16

29

37 35 34

25

20

25

26

9

Neutral

29

8 15

20 30 24 16

39

15 26 26

30

17

23

18

4

Disagree

Mean score

1.86 2.82 3.21 2.64 3.57 2.88 3.30 3.30 3.69 2.82 3.43 3.33 2.80 2.33 2.50 3.26

Strongly disagree

3 11 18 7 26 9 16 15 22 7 23 23 14 5 4 16

Assessing the principles of partnership 311

Table I. MSF representatives’ attitudes to the principles of partnership (valid percentage)

Employee Relations 24,3 312 Table II. Levels of union involvement (valid percentage)

Pay and working conditions Health and safety Equal opportunities Levels of training investment Training opportunities Performance appraisal Staff and manpower planning Business investment decisions Family friendly policies

Negotiate

Consult

Inform

Not involved

Meana

65 32 23 5 7 17 7 1 26

13 45 36 22 29 33 21 11 25

11 13 21 38 34 21 34 32 18

12 10 21 36 29 29 39 56 31

1.69 2.01 2.40 3.04 2.86 2.62 3.04 3.43 2.54

Note: The higher the mean, the lower the level of involvement (where 1= negotiate and 4 = not involved)

The issue of involvement was also considered in terms of the communication mechanisms used by management to communicate with MSF members. To this end, questions were asked about the types of organisational practices and forms of employee involvement in operation. The findings presented in Table III organise the communication mechanisms into upward, downward and collective forms of involvement. The general preponderance of downward forms of communication over upward and collective mechanisms is clearly in line with other recent commentaries (Marchington and Wilkinson, 2000; Sisson and Storey, 2000). Changing working practices and working conditions. The reciprocal nature of partnership is often characterised in terms of a quid pro quo between flexibility and security. Employees are expected to be open to flexible working practices, whilst employers are expected to respond to this Communication mechanism Team meetings (D) Notice board (D) Newsletters (D) Video communications (D) Suggestions schemes (U) Staff attitude surveys (U) Quality circles (U) Performance appraisal (U and D) Works consultation committee (C) Regular factory meetings (C) European works council (C)

Percentage 84 85 77 25 44 49 22 79 53 33 19

Table III. Communication mechanisms used by management to communicate with MSF Note: U = upward communication, D = downward communication, C = collective members (valid communication percentage)

through measures that enhance the security of their employees. This could take the form of a non-compulsory redundancies policy, but more often that not is articulated in terms of training and development packages designed to enhance the employability of staff. The study sought to explore these potential ‘‘tradeoffs’’ by asking respondents how their conditions of work and their degree of flexibility had changed over the previous three years. The findings presented in Table IV are measured across a three-point scale from increased, through no change to decreased. The next section of the article draws from these data to examine the TUC’s six principles of partnership. Each of the principles is investigated in turn to assess the extent to which the principles and practices of partnership are taking root.

Assessing the principles of partnership 313

Assessing the principles of partnership Principle 1. Commitment to the success of the organisation According to principle 1, successful partnerships are based on a ‘‘shared understanding of, and commitment to, the business goals of the organisation and to its lasting success’’ (TUC, 1999, p. 13). This includes support for flexibility at work and openness to ‘‘best practice’’ ideas. The MSF representatives surveyed broadly supported this principle. Approximately eight out of every ten agreed or strongly agreed that effective industrial relations are based on a shared understanding of the business goals of the organisation. Principle 2. Recognising legitimate interests Principle two represents a bedrock for ensuring that partnerships are ‘‘true’’ rather than ‘‘sham’’. It recognises that differences of interests will occur in partnership firms, and suggests that it is through the recognition of such differences, and their resolution, that long-term trust can be built. Again, there was broad agreement with principle 2. Six out of every ten respondents agreed or strongly agreed that the management at their place of work recognised that at certain times there might be legitimate differences in the interests of the Increased

No change

Decreased

Flexible practices The extent of multi-skilling The extent of multi-tasking The proportion of temporary contracts The proportion of part-time contracts

57 76 47 43

40 21 38 48

3 2 16 9

Working conditions Intensity of work Access to training and development Information about change at work Security of employment

89 36 30 3

9 47 58 38

3 18 12 59

Table IV. Changes in flexible working practices and working conditions

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employer and employee. Just a quarter disagreed. Further investigation suggests that this may be indicative of an environment of ‘‘good’’ industrial relations at the workplaces surveyed. Approximately four out of every ten respondents reported that relations between trade unions and management at their workplace were good or very good. Only two out of every ten reported that relations were poor. The findings across principles 1 and 2 reveal a significant degree of support for the pluralistic ethos of partnership. For the TUC (1999, p. 13), successful partnership-based arrangements will ‘‘embrace’’ the fact that occasional differences of interest are legitimate, and this recognition of divergent interests will over time ‘‘embody a degree of trust and respect that should aid the resolution of such differences’’. The survey found little evidence, however, that mutual trust is currently widespread. Over half of respondents disagreed when asked if there is high degree of mutual trust between management and unions at their workplace (just under a fifth agreed). The reasons for this will become clear as we examine the remaining principles. Principle 3. Commitment to employment security For the TUC (1999, p. 13), while effective partnership-based approaches ‘‘address flexibility of employment’’, this flexibility must not be at the expense of security of employment. Accordingly, partnership arrangements should include measures that enhance employment security and employability. Unsurprisingly, the survey found extensive evidence of flexible working practices. Increases in the extent of multi-skilling (57 percent), multi-tasking (76 percent), atypical employment (temporary 47 percent, part-time 43 percent) were reported to have been extensive over the last three years. Four out of every ten MSF representatives agreed or strongly agreed that employment security should be dependent on the development of such increases in flexibility. Just a quarter disagreed. There was, however, little evidence of concrete improvements in employment security. Respondents were more likely to report that employment had decreased (43 percent) rather than increased (33 percent) at their workplace during the last three years. While all sectors had experienced employment reduction, decreases were most pronounced in manufacturing, chemicals and aerospace. Increases were most pronounced in the voluntary and health sectors. Six out of every ten respondents reported that, in their view, employment security had decreased at their place of work over the last three years. Just 3 percent reported that employment security had increased[6]. Not surprisingly, just under a quarter of respondents agreed or strongly agreed that management has become more committed to employment security. Approximately four out of every ten disagreed. It is important to recognise here that what is actually meant by employment security can often appear to be a conceptual sleight of hand. Rather than security in a job, employment security under the ‘‘new psychological contract’’ is often presented in terms of employability, whereby employees are expected to manage their own careers

and employers are expected to provide the means (i.e. learning and training opportunities) to assist this (Herriot et al., 1998). The survey findings, again, found little support for this scenario. Just a quarter agreed or strongly agreed that measures to improve the employability of staff at their place of work had become an increasing priority. Four out of every ten respondents disagreed.

Assessing the principles of partnership

Principle 4. Focus on the quality of working life According to the TUC (1999, p. 13), the ‘‘acid test for effective partnerships is that they deliver something concrete’’. In keeping with the ‘‘new’’ industrial relations agenda, it emphases measures that improve personal development and growth. The survey found that there had been an increased emphasis on training and development related issues. Just over two-thirds of respondents reported that there had been an increased emphasis on training and development at their workplace during the previous three years. This was supported by the fact that annual personal training and development plans had been introduced in just over half of all cases. Three out of every ten respondents also reported that their place of work had obtained IiP accreditation, with a further 18 percent currently going through the process. In keeping with the ‘‘new’’ agenda, just under a half of all MSF representatives regarded training and development as non-conflictual issues (just over a quarter disagreed). There is some doubt, however, over the extent to which this interest in training and development is actually delivering anything concrete. Access to training and development had increased in just over a third of cases, and had actually decreased in a fifth. Opportunities for non-vocational training also appeared to be limited, with just three out of every ten representatives stating that such opportunities were available at their place of work. Of particular concern, union involvement over training and development related issues was found to be of a very low level and was rarely subject to negotiation. Respondents were most likely to be simply informed over the levels of training investment and training opportunities, and were most likely to report no involvement at all with regard to staff and manpower planning. It is also doubtful that employees will restrict their views on the quality of working life to personal development and growth. In this regard, some of the broader findings on working conditions are particularly noteworthy. As Table IV clearly demonstrates, nine out of ten respondents reported that the intensity of work had increased over the previous three years. There was little evidence to suggest that MSF members have received any wider organisational support for their increased efforts. Approximately six out of every ten respondents disagreed or strongly disagreed that there had been an increased investment by the organisation in the quality of their members’ working lives.

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Principle 5. Transparency This principle is concerned primarily with involvement and communication at work. Meaningful partnership, the TUC (1999, p. 13) argues, should be based on

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a real sharing of information about future business plans and genuine consultation over workplace change. Staff should have access to regular forums for communication and should have the opportunity to genuinely express their opinions. For trade unions, however, increased consultation may be conditional upon accepting certain conditions of confidentiality, which will affect their own membership communication channels. Respondents were generally positive about the flows of information with regard to the business goals of the organisation. Just under a half of all respondents agreed or strongly agreed that the business goals of the organisation are clearly explained to the union and its members, with less than a third disagreeing. Similarly, approximately six out of every ten respondents agreed or strongly agreed that the union has the opportunity to express its members’ views on key business issues, again just three out of ten respondents disagreeing. The representatives surveyed were also in agreement (66 percent) that if they are to have access to information on the future of the business they may have to accept conditions of confidentiality on certain issues and manage their membership communications in new ways. These findings were not, however, indicative of a broader management enthusiasm for information disclosure at the workplace, or a deeper sense of involvement and communication. MSF representatives were more likely to disagree (47 percent) than agree (33 percent) that management at their workplace shares information, and discusses openly the future plans of the business. The issue, then, is not whether management simply informs trade unionists, but the means by which information is shared. Likewise, 41 percent disagreed that management has become more willing to share, and develop jointly, the future business goals of the organisation, compared to 34 percent who agreed. At a more concrete level, formal involvement over business investment decisions was virtually non-existent. Just 1 percent of respondents reported that business investment decisions were subject to negotiation, and it was the subject of consultation in just 11 percent of cases. Respondents were informed more frequently (a third of cases), but over half of respondents were not involved at all with regard to such decisions. As Table III indicates, management mechanisms for communication were found to be widespread, although downward forms of communication were far more common than upward or collective forms of communication. Thus, team meetings, notice boards and newletters were found to be in use in 84 percent, 85 percent and 77 percent respectively, while staff suggestion schemes were used in 44 percent of cases and quality circles were deployed in just 22 percent of cases. At a more collective level, there were works consultation committees in 53 percent of cases, and a third of respondents reported that regular factory meetings were held at their place of work. Principle 6. Adding value The key point here is that partnership-based arrangements should ‘‘tap into sources of motivation and commitment and/or resources that were not accessed

by previous arrangements’’ (TUC, 1999, p. 13). The emphasis is again placed here on the value added benefits of training and development, both in terms of skill acquisition and skill deployment. The findings on training and development have already been reported, but it is worth considering the attitudes of MSF representatives towards the furtherance of employee commitment and the role trade unions can play in contributing added value. Nearly six out of every ten representatives agreed or strongly agreed that employee commitment is dependent upon non-adversarial industrial relations. Just a fifth of respondents disagreed. Yet, respondents were more likely to disagree or strongly disagree (45 percent) than agree (29 percent) that the future role of trade unions should be dependent upon their success in contributing to performance improvements. Discussion The findings on the principles of partnership are mixed. On the one hand you could argue that there is a cautiously positive attitude among trade unionists to the challenge of finding a ‘‘new way of working’’ with management. In terms of principles 1, 2 and 6 (commitment to the success of the organisation, recognising legitimate interests and adding value) trade union representatives reported that they agreed with the TUC’s position and that this was generally reflected within their own approaches. More precisely, they agreed that agents should work towards the success of the organisation and that management in their workplaces accepted their right to differ at key moments. Good or very good industrial relations appeared to be present in 40 percent of the workplaces. In most cases it was felt that a committed workforce was based on a non-adversarial industrial relations culture. This is clear evidence that certain elements of the TUC agenda are being reflected within trade union positions within the workplace. Yet this narrative appears to weaken when we take into account the overall perspective trade unionists have of their effective involvement, the degree of organisational transparency and the quality of working life. On matters related to principles 3, 4, and 5 (employment security, focus on the quality of working life and transparency) there was a belief that the actual support mechanisms and preconditions for the development of partnership have yet to emerge. Employment security and the quality of working life were seen to be poor and problematic. Issues such as the intensifying nature of work were highly apparent. Of particular significance, effective forms of transparency and involvement were not seen by the respondents as being present in their workplace. The above analysis shows us that the terrain of partnership politics presents us with a complex set of challenges. It appears that the very form of industrial relations and its content has not shifted towards a parternship-based approach. First, any adoption of partnership would appear to be taking place in a context where institutional resources for trade unionists may not be enhanced – especially given the uneven tradition of voice mechanisms (Stuart and Martinez

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Lucio, 2002). Second, the ‘‘minimal’’ management commitment that is perceived means that any venture into partnership may be considered to be a ‘‘risky proposition’’ from a trade union point of view, as gains are not easily visualised by their members. Third, the poor substance of working life (in terms of training, working environment, etc.) means that any trade-offs and gains may not actually be consistent over time. Hence we would argue that there is a gap between the rhetoric of the ‘‘modern’’ labour movement and the current experiences of workplace trade unionists – although in terms of sentiments this gap may not be so clear. The current interest in establishing benchmarks, principles, points of reference and ‘‘milestones’’ – an intriguing and under-researched phenomenon in contemporary industrial relations – is in great part a realisation that partnership requires a complex effort in terms of its construction exactly because of the paucity of guarantees and supports. Hence, organisations such as the TUC have developed the new politics of benchmarking which we outlined earlier. The very development of the TUC’s Partnership Institute is premised on this[7]. Partnership may therefore appear attractive, but even its keenest supporters are forced to acknowledge that, given the degree of instability in employee voice, collective rights, and unpromising developments in the quality of working life, the process needs very detailed ‘‘maps’’. The question is whether employers and managers are reading them. Notes 1. This is exemplified by the launch of the TUC’s Partnership Institute in 2001 (see TUC Partnership Institute, 2001). 2. At the time of writing the MSF has just merged with the Amalgamated Electrical and Engineering Union to form the new union, Amicus, which has a membership of over 1 million. 3. This is not to suggest that MSF is intrinsically pro-partnership. As Upchurch and Danford (2001, p. 102) note, ‘‘[W]hilst MSF has [also] signed a number of partnership deals with employers . . . its leadership has displayed a generally cautious and pragmatic approach to the question of partnership’’. Indeed, recent annual conferences of the MSF have passed motions which have been highly critical of partnership as a political and industrial relations agenda (Martinez Lucio and Stuart, 2001). 4. The survey sought to uncover the attitudes and experiences of trade union representatives towards workplace change and the perceived impact of such change on their members. We are sensitive, however, to the fact that the views and interests of trade union representatives are not necessarily synonymous with those of trade union members. 5. The smallest workplaces surveyed employed fewer than 20 and the largest more than 5,000, with the modal value between 1,000-4,999 (representing just under 30 percent). These findings are in step with the sectoral distribution of MSF representation, public sector workplaces, such as hospitals and universities, in particular, tend to be large. The density of MSF membership varied from less than 5 percent to 100 percent, with a mean of just under 60 percent. 6. However, it should be acknowledged that this concern with job insecurity may be a ‘‘manufactured uncertainty’’ due to the increasing level of organisational change, changing ownership structures, and marketisation within the economy and not necessarily the outcome of actual changes in long-term employment (Doogan, 2001).

7. This can be seen as a new form of ‘‘marketing’’ and ‘‘learning’’ function which parallels, and even complements, those of the IPA and the DTI Partnership Fund. References Ackers, P. and Payne, J. (1998), ‘‘British trade unions and social partnership: rhetoric, reality and strategy’’, International Journal of Human Resource Management, Vol. 9 No. 3, pp. 529-49. Arrowsmith, J. and Sisson, K. (1999), ‘‘Pay and working time: towards organization-based systems?’’, British Journal of Industrial Relations, Vol. 37 No. 1, pp. 51-75. Brown, W. (2000), ‘‘Putting partnership into practice in Britain’’, British Journal of Industrial Relations, Vol. 38 No. 2, pp. 299-316. Danford, A., Richardson, M. and Upchurch, M. (2002), ‘‘‘New unionism’, organising and partnership: a comparative analysis of union renewal strategies in the public sector’’, Capital and Class, No. 76, pp. 1-27. Doogan, K. (2001), ‘‘Insecurity and long-term employment’’, Work, Employment and Society, Vol. 13 No. 3, pp. 419-41. Giddens, A. (2000), The Third Way and its Critics, Polity Press, Oxford. Guest, D. and Peccei, R. (1998), The Partnership Company: Benchmarks for the Future, Involvement and Participation Association, London. Herriot, P., Hirsch, W. and Reilly, P. (1998), Trust and Transition: Managing Today’s Employment Relationship, John Wiley & Sons, Chichester. Higgins, S.H. (1996), ‘‘Towards taming the labor-management frontier: a strategic marketing framework’’, Journal of Business Ethics, Vol. 15, pp. 475-85. Involvement and Participation Association (1997), Towards Industrial Partnership, IPA, London. Kelly, J. (1996), ‘‘Union militancy and social partnership’’, in Ackers, P., Smith, C. and Smith., P. (Eds), The New Workplace and Trade Unionism, Routledge, London, pp. 77-109. Kelly, J. (1998), Rethinking Industrial Relations: Mobilisation, Collectivism and Long Waves, Routledge, London. Kochan, T.A. and Osterman, P. (1994), The Mutual Gains Enterprise: Forging a Winning Partnership among Labour, Management and Government, Harvard University Press, Boston, MA. Kochan, T.A. (1985), ‘‘Is a new industrial relations system emerging?’’, in Kochan, T.A. (Ed.), Challenges and Choices Facing American Labour, MIT Press, Cambridge, MA, pp. 339-45. Legge, K. (1994), Human Resource Management: Rhetoric and Reality, Macmillan, London. Marchington, M. and Wilkinson, A. (2000), ‘‘Direct participation’’, in Bach, S. and Sisson, K. (Eds), Personnel Management, Basil Blackwell, Oxford, pp. 340-64. Marks, A., Findlay, P., Hine, J., McKinlay, A. and Thompson, P. (1998), ‘‘The politics of partnership? Innovation in employment relations in the Scottish spirits industry’’, British Journal of Industrial Relations,Vol. 36 No. 2, pp. 209-26. Martinez Lucio, M. and Stuart, M. (2000), ‘‘Swimming against the tide: social partnership, mutual gains and the renewal of ‘tired’ HRM’’, Centre for IR and HRM discussion paper series, University of Leeds, Leeds. Martinez Lucio, M. and Stuart, M. (2001), ‘‘Constructing partnership: the ideology and politics of union strategy’’, presented at 16th Employment Research Unit Conference: Politics, Public Policy and the Employment Relationship, University of Cardiff, Cardiff, 10-11 September. Purcell, J. (1981), Good Industrial Relations: Theory and Practice, Macmillan, London. Sisson, K. and Storey, J. (2000), The Realities of Human Resource Management: Managing the Employment Relationship, Open University Press, Buckingham.

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Stuart, M. and Martinez Lucio, M. (2002), ‘‘Social partnership and the mutual gains organisation: remaking involvement and trust at the British workplace’’, Economic and Industrial Democracy, Vol. 23. No. 2, pp. 177-200. Taylor, P. and Ramsay, H. (1998), ‘‘Unions, partnership and HRM: sleeping with the enemy?’’, International Journal of Employment Studies, Vol. 6 No. 2, pp. 115-43. Trade Union Congress (1996), Your Stake at Work: TUC Proposals for a Stakeholding Economy, TUC, London. Trade Union Congress (1999), Partners for Progress, TUC, London. Trade Union Congress Partnership Institute (2001), Partners for Progress: Winning at Work, TUC, London. Upchurch, M. and Danford, A. (2001), ‘‘Industrial restructuring, ‘globalisation’, and the trade union response: a study of MSF in the south-west of England’’, New Technology, Work and Employment, Vol. 16 No. 2, pp. 100-17. Appendix

Sector

Table AI. Sectoral breakdown of response

Aerospace Airlines Chemicals Education Health Finance Manufacturing Voluntary Missing Total

Number distributed 168 70 190 156 266 228 706 300 2,084

Number returned

Response (%)

Valid percentage

33 10 22 29 68 34 71 42 8 317

20 14 12 19 26 15 10 14

11 3 7 9 22 11 23 14

15

100

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The contingencies of partnership Experiences from the training reform agenda in Australian manufacturing

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Richard Cooney Department of Management, Monash University, Victoria, Australia Keywords Partnering, Education, Training, Skills Abstract This paper examines the development of an antecedent model of social partnership, the social ‘‘accord’’ employed by the Labor Government in Australia during the period 1983-1996. The specific focus of the paper is upon the implementation of the Training Reform Agenda (TRA) in Australian manufacturing. The TRA was designed to provide for the upskilling of existing employees and the enhanced vocational preparation of new employees. This was a joint objective of government, business and union policy and one designed to encourage the growth of high-wage, high-skill industries. The achievement of this objective was, however, limited. Social partnership, in the case of the TRA, proved to be a way of legitimating a work change process which delivered greater gains to employers than it did to unions and employees. The partnerships formed under the aegis of the TRA had a limited lifespan and represented a contingent form of relationship between the partners, rather than a seachange in relations.

Introduction The Training Reform Agenda (TRA) was one element of a larger process of ‘‘social accord’’ implemented by successive Labor governments in Australia during the period 1983-1996 (Beilharz, 1994; Carney, 1988). The process of social accord was a nascent form of social partnership, bringing together government, community and business to achieve consensus on a broad range of social objectives. These objectives were identified at a number of federal and state ‘‘summit’’ meetings and policy prescriptions were then developed in conjunction with representative interest groups. The architects of the accord process saw the emergence of a national consensus to solve Australia’s economic and social problems as the beginning of a seachange in social relations, with consensus politics becoming an institutionalised part of the landscape (Hawke, 1979). The development of a social accord was not seen to be a short-term partnership between the state and interest groups but rather represented a long-term change in the relations between government and social interests. As with many of the hopes raised by the accord process, however, this proved to be illusory and the progress of the accord can best be seen as a series of shifting partnerships between government, unions and business. Each of these parties to the social accord had their own view of what accord meant. While preferring the language of consensus to that of partnership, the accord process prefigured some of the policy, many of the mechanisms, and much of

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the rhetoric of contemporary partnership approaches to the employment relationship. The high ideals of social consensus were realised in more limited ways that may serve to illustrate the contemporary reality of social partnership. The TRA and the reform of Australian manufacturing The TRA refers to a broad set of reforms of Australia’s Vocational Education and Training (VET) system that were introduced during the period 1989-1996. The reform process was set in train at meetings of federal, state and territory ministers for VET. The major objectives of the reforms (Hall, 1995; Lundberg, 1994; Smith, 1992) were: . to enhance industry competitiveness by raising skill levels; . to establish national standards in vocational education and training, and; . to improve access, quality and outcomes for individuals undertaking vocational education and training. When we look specifically at manufacturing, the agreed goals of training reform were the: . development of accredited entry level training for all employees, not just trade employees; . development of portable, formal vocational qualifications for all employees, and; . development of vocational pathways from low skilled jobs with base level qualifications to higher skilled jobs with advanced qualifications. In order to achieve those goals, a unified, national system of entry-level training had to be developed to replace the various state systems. This necessitated the development of national competency standards, national training curricula and a national framework for the recognition of existing skills and prior learning. The consensual reform of Australia’s VET system was undertaken in conjunction with the reform of the industrial relations system and the two reform processes worked hand in hand. Enhanced vocational training was a key support for the reform of industrial awards, or award restructuring, where extensive, job-based, employee classification structures were abandoned in favour of broad, skill-based classification structures. The restructuring of the Rubber Award, for example, saw 300 job-based classifications reduced to six broad skill levels. Training was designed to raise the general level of shopfloor skills to facilitate the introduction of the new classification structures and the more flexible deployment of labour within those structures. Employees were to be trained in a broader range of functions and across a wider range of jobs (Cooney, 1997). The reforms to the industrial relations system also allowed formal enterprise level bargaining to take place for the first time. Industry level bargaining over

the awards was to be supplemented by enterprise level agreements about the process of award restructuring. Training and work practices were both to be customised to the needs of individual enterprises and this was to be negotiated at the enterprise level (Guthrie and Barnett, 1996). Despite the agreement surrounding reform in the short term, the parties involved in the process of consensually negotiated change had different views of what partnership meant and different longer term objectives for the reform of work practices and vocational education and training. The federal government and the accord The federal government’s approach to reform borrowed heavily from European social democracy and was corporatist in its orientation (Dabscheck, 2000; Higgins, 1987; Markey, 1987). Bipartite and tripartite bodies were widely used to develop policies and programs to achieve agreed national goals. The mechanisms that were established to implement the reform agenda in manufacturing were typical of those used during the years of the accord. Tripartite industry councils were formed to identify issues and develop policies, and industry plans were developed for those industries most in need of restructuring (Markey, 1987). The same corporatist approach that informed the development and implementation of industry restructuring was taken in regard to vocational education and training (Smith, 1992). In 1994, for example, the Australian National Training Authority (ANTA) was established on a tripartite basis, and reporting to it were the tripartite ITABs that developed industry training plans and gave advice on such matters as the establishment of industry competency standards. At each stage of the reform process and at each level of policy development, the establishment of representative tripartite bodies was a key feature of federal government activity and the formation of partnerships between representative social actors was a key objective. Unions and the accord process The trade unions in Australia, and the manufacturing unions in particular led by the Amalgamated Metal Workers Union (AMWU), were integral to the development of the accord. Unlike the parliamentary Labor party, however, the unions held a view of the accord process which emphasised its potential to reform industrial relations and develop industrial democracy (Carmichael, 1988; Mansfield, 1988; Mathews, 1989). Leading figures in the metals union argued in favour of the accord as a socialist opening, moving Australian labour towards German and Scandinavian models of social democracy (Carmichael and Ogden, 1981). The traditions of Australian ‘‘Labourism’’, where wage rises were pursued through the centralised award system without much concern for the broader goals of the labour movement, were to be overthrown. In place of the old labourism a new strategic unionism would develop, one where unions would argue in favour of social wage goods such as education, health, welfare and

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superannuation, and in favour of public policy goods such as training and labour market programs, industry and trade development programs (ACTUTDC, 1987; Ogden, 1993a; Phillimore, 1997). As the ACTU’s skill formation officer observed: Australian unions have broadened their advocacy efforts from a narrow preoccupation with issues specific to the worker, such as wages and working hours, to a wider concern with the health and global competitiveness of Australian industry . . . The Australian union movement now is actively engaged in such issues as the efficiency of Australian industry, the need for new skills, training, and better management techniques, the use of technology, and the organization of work (Ogden, 1993b, p. 232).

The new approach was designed to extend union influence at the workplace by establishing consultative mechanisms, such as enterprise consultative committees, that would tackle issues like training and skill formation, occupational health and safety, employee participation, work redesign and the negotiation of enterprise agreements. The unions sought to use consultative mechanisms to establish partnerships with enterprise managements that would entrench strategic unionism. Partnerships could be established with firms to modernise Australian manufacturing and to create a climate that would support investments in high technology, high skill forms of industrial renewal (Mansfield, 1988; Mathews, 1994; Ogden, 1993a). As well as exhibiting a concern for the state of Australian manufacturing, the unions were also concerned with the state of the union movement itself. Union membership was declining and union density was falling (Peetz, 1990). Strategic unionism was seen as a way out of this morass, providing unions with a way to reconceptualise their role at the workplace and so attract new members and rebuild the trade union movement (Ogden, 1993a). The achievement of industrial democracy was sought through partnership with the state, which would establish a favourable policy environment and partnership with enterprise managements, which would regulate the individual enterprise. This dual approach led to some successes where the unions’ view of consultation was accepted by management but, on the whole, employers emphasised individual employee participation rather than consultation and negotiation with employee representatives. The employers held a view of partnership in the reform process that was at odds with that espoused by the unions. Business and the accord The approach of business to the accord was to emphasise reforms which broke down centralized forms of regulation in the workplace – such as industrial awards – in favour of the local management regulation of the employment relationship. Business interests sought to establish unitary enterprise cultures where management provided goods such as training that benefited both individual employees and the firm. Individuals would gain from the acquisition of skills that provided for career development within the firm, while the firm would gain from the more efficient use of human resources. Management

sought the development of enterprise cultures where there was a shared commitment to achieving the business goals of the enterprise and individual employees actively participated in improving the profitability and competitive position of the firm (Business Council of Australia, 1989, 1991; Noakes, 1988). The desire of employers to use training as a support for the establishment of such unitary cultures of work and organization is reflected in the desire of groups such as the Business Council of Australia to establish an enterprise stream of vocational education and training alongside the industry streams. Employers sought to have their own enterprise training formally recognised and accredited without the need to refer to industry standards (Smith, 1992). Where the unions sought a policy environment that supported the development of industrial democracy by extending the scope of consultative mechanisms, business sought a regime favourable to the development of partnerships that voluntarily encouraged employee participation. Consultation with employee representatives was to be replaced by direct employee involvement in work-related tasks that could make a difference to enterprise performance. The focus on enterprise needs and the emphasis on voluntary enterprise implementation of reforms was a feature of the employers’ approach. The sole measure implemented as part of the training reform process that compelled employers to spend money on training – the 1991 Training Guarantee levy which required employers to spend 1.5 percent of payroll or forfeit that amount to the government – was strenuously opposed by employers and eventually abandoned by the Labor government (Curtain, 1994; Waters-Marsh and Thompson, 1993). The experience of the TRA Government, unions and business had some very different views about the nature of the partnerships that they were entering into. Government stressed the development of mechanisms to facilitate joint policy development, whilst unions advocated the development of consultative mechanisms to advance industrial democracy and business advocated the development of direct participation to promote employee involvement in the firm. In spite of these differences, the partners were agreed upon a broad set of reform goals that were the genesis of the TRA. The partners to the TRA sought the overhaul of a vocational education and training system that had been limited to the provision of entry-level training for recognised trades. The partners sought to change the training culture of Australian manufacturers towards one where accredited vocational education and training was provided to all employees, where there were recognised vocational pathways based upon the acquisition of skill and knowledge and where the skills attained through training would support employee participation and facilitate the redesign of work practices. When we examine the experience of the TRA, we see that, while some progress has been made towards the achievement of these objectives, progress

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has been limited and policy prescriptions have worked in favour of enterprise voluntarism rather than the institutionalisation of industrial democracy. The implementation of the TRA led to the development of accredited vocational training for many employees who had previously had little or no access to such training. Over 5,000 production operators in the vehicle manufacturing industry in Victoria, for example, have now completed the VIC, enabling them to access wage rises and advanced training for trade equivalent certificates (Smith, 2001). Employees in the highly seasonal fruit canning industry undertaking the Food Industry Certificate have likewise been able to access wage rises and maintain their classification, as they move from employer to employer. The implementation of such qualifications, for what were previously seen to be ‘‘unskilled’’ occupations, has been a major achievement. Despite these gains, some significant problems remain. Manufacturing employers have a poor knowledge of training issues and are loath to spend money on training (Curtain, 1994; Pickersgill, 1999; Waters-Marsh and Thompson, 1993). The provision of training leads to pay rises for many employees and hence employers may seek to avoid the pay rises by avoiding the training. The restructuring of the Graphic Arts Award in the printing industry, for example, is still incomplete after a decade. The industry still operates with an ‘‘interim’’ classification structure because employers want employee pay classifications linked to the tasks that they undertake rather than the training that they have completed. Many employers seek to pay only for skills ‘‘used’’ rather than for skills ‘‘acquired’’ through education and training programs. Payment for skill remains an important industrial issue in many industries and an ongoing issue for unions. The perceived ‘‘cost’’ of training has also led to a stop-start approach to delivery, as employers embark on cost cutting and deliver only those parts of certified training programs that are seen to be of direct benefit to them. This effect is augmented by changes in firm ownership and the churning of managers. Many firms do not sustain their commitment to training programs and many employees end up with only partially completed qualifications. There have also been problems with the poor quality of training programs that are delivered in the workplace. There is heavy emphasis on the development of technical skills to promote labour flexibility but little emphasis on the acquisition of in-depth, theoretical knowledge (Hall, 1995). Employers have a preference for on-the-job training that develops low level, firm-specific skills rather than for training that combines a mix of work-based and institutional training, in other words, employers are reluctant to pay for training that develops a mix of firm-specific and generic skills (Burke, 1996; Curtain, 1994; Pickersgill, 1999). Task-focused learning, often delivered by low-cost means such as self-paced (i.e. self-instructional) learning or computermediated training, has been commonplace in Australian workplaces (Lundberg, 1994).

Moreover, not all the training that is delivered is recognised towards a vocational qualification. Much firm-specific training does not lead to the development of transferable skills and gaps continue to exist between formal, recognised training leading to a recognised qualification and in-house enterprise training (Cooney, 1999). In-house training should be recognised through the National Framework for the Recognition of Skills (NFROT) but this does not always happen. Standardised national curriculum modules are often inflexible and firm-specific training does not always fit neatly within them (Hall, 1995). Even where recognised vocational training has been provided, employee skill development has often been limited by the lack of high-skill work designs and even by the simple lack of opportunities for basic job rotation. The highskill work designs sought by the unions have not materialised as firms have followed a cost-cutting agenda. Management has been preoccupied with downsizing and outsourcing, and little attention has been paid to the redesign of work. Practices such as outsourcing, indeed, have been inimical to the development of high skills. The outsourcing of functions such as maintenance has limited the scope for work redesign. Rather than redesigning work to provide for job enrichment by enhancing skill variety, work has become more intensively task focused as a wide range of direct production-related functions such as housekeeping, record keeping and quality control have been incorporated within jobs (Cooney, 1999). Training has been largely firm specific and task specific, and this has gone hand in hand with job enlargement to achieve functional flexibility rather than job enrichment to develop high skills. The competency-based training system in Australia has also contributed to the narrow focus of skill development. Competency-based training has been seen to be too fragmented and compartmentalized to develop integrated competencies and high skills, being suitable instead for low-cost, self-paced and task-focused learning (Ewer and Ablett, 1996; Lundberg, 1994). The development of skill-based career ladders has also met with its difficulties. Many firms lack adequate procedures for the assessment and recognition of skills and, even where these are in place, the skill-based career ladders have been frustratingly short (Cooney, 1999; Curtain, 1994). There are still few links between operator and trade qualifications to facilitate career progression. The entry level qualification in the metals manufacturing industry, the Engineering Production Certificate for example, has only 200 of its 960 hours of training accredited towards a metals trade certificate. The seamless vocational pathways from semi-skilled work to advanced skilled work have been slow to materialise in Australian manufacturing and, for those attempting to access them, there are many obstacles along the way. There have also been problems establishing the portability of qualifications and the transferability of skills. Many firms prefer to recognise their own training in their own production systems and techniques, rather than recognise industry-wide qualifications. The decentralised nature of the vocational

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training system in Australian manufacturing contributes to this situation. Enterprises can customise industry standards to their own needs and in the process implicitly make an industry-wide qualification a firm-specific qualification. In the vehicle manufacturing industry, for example, the Ford Motor Company is the only one of the four vehicle manufacturers in Australia to give recognition to a Vehicle Industry Certificate (VIC) obtained in another manufacturer’s training program. The other manufacturers maintain that only their own training programs, for what is supposedly an industry certificate, deliver the competencies that are needed on the job. Twelve years after the implementation of the TRA in Australian manufacturing, vocational qualifications have been introduced for most employees but the portability of those qualifications and the articulation of those qualifications remains problematic. The training effort of manufacturers is variable, and firm-specific and task-specific training have become the norm. The employer vision of voluntary reform to meet enterprise-specific needs has largely been the reality of training reform, and employee training has largely become a firm-specific good. Unions and the TRA The continued presence of unions on state and national ITABs has been one achievement of the TRA in manufacturing. The effectiveness of Australian ITABs in developing industry training standards has been mixed but the manufacturing boards have been more effective than most, in part due to the presence of well organized unions. The manufacturing unions established an early presence on the ITABs and the manufacturing ITABs were among the first to develop industry training standards (in industries such as aerospace, automotive, food processing, metals and engineering, printing, textiles, clothing and footwear) and basic vocational certificates (such as the VIC, Food Production Certificate and Engineering Production Certificate) for below trades level training (Lundberg, 1994). Despite these achievements, many manufacturing unions question the value of their continued participation on these boards. There has been little acceptance of the union position on skill formation and work design, and much union activity has been of a defensive nature. Unions have been engaged in campaigns to have industry training standards recognised, to resist employer demands for the creation of vocational qualifications that can be delivered entirely on the job and to resist employer demands for the expansion of attitudinal and behavioural ‘‘competencies’’ in industry standards (Ewer and Ablett, 1996; Phillimore, 1997). Union participation in the plethora of state and federal training boards and their associated committees has required a significant commitment of union resources. Union activity on the industry training boards has indeed often diverted union resources away from the industrial organizing and activity that has brought most benefit to union members. The metals unions, for example, were forced to mount an industrial campaign to gain industry-wide recognition

of the metals industry standards that would determine the training, classification and pay of their members (Curtain, 1994). The employer group, the Metal Trades Industry Association, had wanted the voluntary adoption of industry standards, but it was only after a successful industrial campaign that employers were forced to adopt the industry standards as the basis for negotiating training and classification issues in enterprise agreements. Following the abandonment of the Training Guarantee in 1994 there has been no requirement on employers to provide training and, consequently, the training effort of manufacturers has declined. In the early 1990s, at the high water mark of the TRA, manufacturing employers were providing 26 hours of training, per employee, per annum, on average but this training effort declined to just 21 hours by the mid-1990s. The percentage of employers providing training also fell over this period from 46.7 percent of employers in 1993 to just 21.5 percent of employers in 1996 (Australian Bureau of Statistics, 1996). In many cases it has only been industrial activity by unions that has put pressure on employers to maintain a training effort. The more heavily unionised industries and sectors of the Australian economy are those where most training has occurred and this has largely been due to industrial pressure. Where there are more active unions, more general and more firm-specific training has been provided by employers (Kennedy et al., 1994). The union vision of using a decentralised industrial relations system to advance industrial democracy through local consultative mechanisms has also met with its problems. There is no legislative requirement for employers to establish such mechanisms, and even where they are established by enterprise bargaining agreements, the scope of responsibility for such bodies remains a matter for management discretion. Such bodies have been most often used to negotiate occupational health and safety issues and training implementation issues (i.e. such matters as the time and location of training) rather than the substantive issues of work design and skill formation (Teicher and Grauze, 1996). The manufacturing unions experienced some early successes with the use of consultative mechanisms, but these were driven by short-term need rather than an agreement to institutionalise industrial democracy. Partnerships were formed with management in the early 1990s to drive industry restructuring programs and the award restructuring process, but having worked through ‘‘restructuring’’, management became increasingly disinterested in partnership and the use of consultative mechanisms declined. Partnerships were formed with employers in those industries (steel, heavy engineering and textiles, clothing and footwear) where a government funded restructuring package was offered. Low interest loans were made available and a range of subsidies, for activities such as employee training, were payable to participating firms. The Heavy Engineering Adjustment Package, for example, gave firms training subsidies of $125 per day for 36 days of off-the-job training and $100 per day for 36 days of on-the-job training. Obtaining the package, however, was dependent on management reaching agreement with unions on

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the progress of restructuring. Matters such as changes to work practices, forms of skill development and the use of consultative mechanisms, had to be agreed to by the unions before assistance would flow (Ogden, 1993b, p. 240). Employers wishing to take advantage of the award restructuring process were likewise obliged to reach agreement with unions on the progress of restructuring. The implementation of the Restructuring and Efficiency Principle required the establishment of enterprise consultative committees to negotiate an enterprise restructuring and efficiency agreement that would cover such matters as training, the broadbanding of jobs and the conduct of skill audits. This process was extended with the introduction of the Structural Efficiency Principle which tied wage increases to the progress of award restructuring (Lansbury and Niland, 1994). Employers benefited greatly from this process, with the new classification structures facilitating the more flexible use of labour – in the metals manufacturing industry, for example, the 348 different job classifications found in the old award, were compressed into 14 skill levels under the award restructuring process – but once restructuring was complete, employer interest in the use of consultative mechanisms declined. Union influence in the workplace was, thus, not institutionalised through the reform process but rather was contingent on management policy and the direction of public spending (Phillimore, 1997, 2000). The partnerships that were formed during the years of the TRA were of limited duration, and once enterprise managements had achieved the reforms that they sought they largely lost interest in work redesign, training reform and consultation with employee representatives. The participation of the unions in the reform process has failed to increase their influence at the workplace and it has also failed to abate the decline in their membership. Union membership has continued to decline in Australian manufacturing, with coverage falling from 46.1 percent of the manufacturing workforce at the beginning of the 1990s to 32.8 percent by the end of the decade (Australian Bureau of Statistics, 1999). The agreements struck with management during the reform process failed to halt the decline in union membership due to the outsourcing of work to non-union contractors and the anti-union stance taken by some employers (Peetz, 2000). Partnerships with management have not been able to halt the job losses in manufacturing nor the decline in union density. The reality of partnership in the reform process is that it has driven manufacturing unions further towards the US model of enterprise partnership rather than the European model that was envisaged at the outset of the reform process (Bluestone and Bluestone, 1992; Kochan and Osterman, 1994). Productive relationships with management have increasingly become a matter of employer choice, as some employers seek to deunionise, some to minimise union influence and some to maintain consultation and collaboration. In a decentralised industrial relations system, the kind of relationship that is

established with employees and their representatives is increasingly the choice of management alone. Business and the TRA Business management was, by and large, the winner from the process of reform and restructuring. Training reform at the enterprise level proved to be voluntary and training remained largely a firm specific good supplied at the discretion of management. Task-focussed training was developed to enable employers to increase the scope of employee job responsibilities and the skillbased classification systems enabled management to more flexibly deploy their human resources. Management achieved significant reform of work practices for minimal expenditure on training and skill development. This approach of enterprise voluntarism has, however, created its own problems. Supply side measures to enhance the training effort of manufacturers have been rejected as being too expensive and a fetter upon management prerogative, and yet employers cannot rely on the demand side alone to address labour market needs. Demonstrated skill shortages remain in many manufacturing industries and employers have been forced to rely on immigration or the creation of industry group training schemes to try and address these shortages (DETYA-AIG, 2001). The latter schemes are voluntary and have not entirely met industry needs, forcing manufacturers to rely on skilled migration instead, with groups such as the Business Council of Australia arguing for a tripling of numbers in Australia’s migration program. Skilled migrants (i.e. those brought to Australia by a prospective employer) now make up the largest category of migrants to Australia, having overtaken migrants in the Family Reunion category which has traditionally dominated inbound migration. While business has achieved its goal of restructuring work practices to facilitate the flexible deployment of labour, and while it has minimised union influence at the workplace in its drive to build unitary enterprise cultures of employee involvement and commitment, its own chronic under-investment in training has created problems. The training effort of manufacturers is variable, training programs promote minimal skill development and employers have been forced to look to external labour markets for the skills that they require. Conclusion The reality of partnership in the contemporary reform of vocational training in Australian manufacturing is that the partners have steadfastly pursued their own agendas for change and their own visions of partnership. Partnership has been a contingent process to promote the achievement of short-term goals, rather than a long-term process to promote agreed national goals. The establishment of partnerships has not promoted a change in relations between the partners, with a reversion to the status quo ante often following the dissolution of partnerships. Partnership has not led to mutual gains but has reflected the continuing unequal relationship between the partners.

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The establishment of partnerships has also not led to any greater agreement between the partners. Employers continue to see training as a firm-specific good and they seek to capture the benefits of that training through enhanced management control in the workplace. Issues surrounding the provision of training, the quality of training, the portability of qualifications and payment for skills acquired continue to be industrial issues of concern for unions. The result of partnership in a neo-liberal system with a decentralised training system and a decentralised industrial relations system is that management has had more success implementing its vision of partnership than have the unions. Training has become increasingly task focussed and firm specific, and the commitment of Australian manufacturers to skill development remains contingent on enterprise need and management policy. Unions have made limited gains from the process of reform. High skill work designs have not been widely implemented and industrial democracy has not been brought to Australian workplaces. The role of government in the reform process has been to build temporary institutions to facilitate the development of partnerships, but to otherwise withdraw from the regulation of labour markets and the employment relationship. Partnership has provided a veneer of government activity to deliver social goods, whilst the underlying reality of the power relations between the partners has in fact determined the outcomes of the partnership. References Australian Bureau of Statistics (1996), Employer Training Expenditure, Australian Government Publishing Service, Canberra. Australian Bureau of Statistics (1999), Trade Union Membership Australia, Australian Government Publishing Service, Canberra. Australian Council of Trade Unions – Trade Development Council (1987), Australia Reconstructed. Report of the ACTU and TDC Mission to Western Europe, Australian Government Publishing Service, Canberra. Beilharz, P. (1994), Transforming Labour. Labour Tradition and the Labor Decade in Australia, Cambridge University Press, Cambridge. Bluestone, B. and Bluestone, I. (1992), Negotiating the Future. A Labor Perspective on American Business, Basic Books, New York, NY. Burke, G. (1996), ‘‘Dimensions of VET in Australia’’, in Selby Smith, C. and Ferrier, F. (Eds), The Economic Impact of Vocational Education and Training, pp. 96-111, Australian Government Publishing Service, Canberra. Business Council of Australia (1989), Enterprise-based Bargaining Units: A Better Way of Working, Vol. 1, Business Council of Australia, Melbourne. Business Council of Australia (1991), Developing Australia’s National Competitiveness, Business Council of Australia, Melbourne. Carmichael, L. (1988), ‘‘Reconstructing Australia’s manufacturing sector’’, Work and People, Vol. 13 Nos 1, 2, pp. 32-3. Carmichael, L. and Ogden, M. (1981), ‘‘Reconstructing Australia’s manufacturing sector’’, in Evans, G., Reeves, J. and Malbon, J. (Eds), Labor Essays, pp. 38-46, Australian Labor Party, Richmond.

Carney, S. (1988), Australia in Accord. Politics and Industrial Relations under the Hawke Government, Sun Books, Melbourne. Cooney, R. (1997), ‘‘Training reform in the Australian automotive industry’’, International Journal of Training and Development, Vol. 1 No. 4, pp. 259-70. Cooney, R (1999), ‘‘Employee training and human resource management practices in the Australian automotive industry’’, paper presented at the 8th National Vocational Education and Training Research Conference, 6-9 July, Southern Queensland Institute of TAFE, Toowoomba. Curtain, R. (1994), ‘‘The Australian Government’s training reform agenda: is it working?’’, Asia Pacific Journal of Human Resources, Vol. 32 No. 2, pp. 43-56. Dabscheck, B. (2000), ‘‘The accord: corporatism visits Australia’’, in Wilson, K., Bradford, J. and Fitzpatrick, M. (Eds), Australia in Accord. An Evaluation of the Prices and Incomes Accord in the Hawke-Keating Years, South Pacific Publishing, Footscray, pp. 93-103. DETYA-AIG (2001), Group Training Research Project, Department of Education, Training and Youth Affairs – Australian Industry Group. Ewer, P. and Ablett, D. (1996), ‘‘Competency-based training: has it all gone wrong?’’, in Selby Smith, C. and Ferrier, F. (Eds), The Economic Impact of Vocational Education and Training, Australian Government Publishing Service, Canberra, pp. 202-8. Guthrie, H. and Barnett, K. (1996), Training and Enterprise Bargaining, National Centre for Vocational Education Research, Leabrook. Hall, W. (1995), ‘‘The National Training Reform Agenda’’, The Australian Economic Review, 2nd quarter, pp. 87-92. Hawke, R.J. (1979), The Resolution of Conflict, Australian Broadcasting Commission, Sydney. Higgins, W. (1987), ‘‘Unions as bearers of industrial regeneration: reflections on the Australian case’’, Economic and Industrial Democracy, Vol. 8, pp. 213-36. Kennedy, S., Drago, R., Sloan, J. and Wooden, M. (1994), ‘‘The effect of trade unions on the provision of training: Australian evidence’’, British Journal of Industrial Relations, Vol. 32 No. 4, pp. 565-80. Kochan, T.A. and Osterman, P. (1994), The Mutual Gains Enterprise. Forging a Winning Partnership Among Labour, Management and Government, Harvard Business School Press, Boston, MA. Lansbury, R.D. and Niland, J.R. (1994), ‘‘Trends in industrial relations and human resource policies and practices: Australian experiences’’, The International Journal of Human Resource Management, Vol. 5 No. 3, pp. 581-608. Lundberg, D. (1994), Where Are We? Reviewing the Training Reform Agenda, National Centre for Vocational Education Research, Leabrook. Mansfield, B. (1988), ‘‘Industrial democracy’s role in industry restructuring’’, Work and People, Vol. 13 Nos 1 and 2, pp. 22-6. Markey, R. (1987), ‘‘Neo-corporatism and technological change in Australia: an international perspective’’, New Technology, Work and Employment, Vol. 2 No. 2, pp. 142-53. Mathews, J. (1989), Tools of Change. New Technology and the Democratisation of Work, Pluto Press, Leichhardt. Mathews, J. (1994), Catching the Wave, Workplace Reform in Australia, ILR Press, Ithaca, NY. Ogden, M. (1993a), Towards Best Practice Unionism. The Future of Unions in Australia, Pluto Press, Leichhardt. Ogden, M. (1993b), ‘‘Union initiatives to restructure industry in Australia’’, in Adler, P.S. (Ed.), Technology and the Future of Work, Oxford University Press, New York, NY, pp. 232-68.

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Noakes, B. (1988), ‘‘Realising employee potential and commitment. The CAI on employee participation’’, Work and People, Vol. 13 Nos. 1 and 2, pp. 19-21. Peetz, D. (1990), ‘‘Declining union density’’, Journal of Industrial Relations, Vol. 32 No. 2, pp. 197-223. Peetz, D. (2000), ‘‘The accord and the paradigm shift in union membership’’, in Wilson, K., Bradford, J. and Fitzpatrick, M. (Eds), Australia in Accord. An Evaluation of the Prices and Incomes Accord in the Hawke-Keating Years, South Pacific Publishing, Footscray, pp. 141-58. Phillimore, J. (1997), ‘‘Trade unions and the National Training Reform Agenda in Australia, 1983-1996’’, International Journal of Training and Development, Vol. 1 No. 1, pp. 34-48. Phillimore, J. (2000), ‘‘The limits of supply-side social democracy: Australian labor, 1983-1996’’, Politics & Society, Vol. 28 No. 4, pp. 557-87. Pickersgill, R. (1999), ‘‘Training matters? The invention of the ‘training market’ and employer failure’’, in Leggett, C., Provis, C., Shanahan, R., Stern, E., Treuren, G. and Wright, P. (Eds), Current Research in Industrial Relations, pp. 107-18, AIRAANZ 99, Vol. 2, The Association of Industrial Relations Academics of Australia and New Zealand. Smith, A. (1992), ‘‘Australian training and development in 1992’’, Asia Pacific Journal of Human Resources, Vol. 31 No. 2, pp. 65-74. Smith, D. (2001), text of speech by Mr David Smith, Assistant Federal Secretary, AMWU – Vehicle Division, to the Workshop Employee Training and Employment Relations in Australia, National Key Centre in Industrial Relations, Monash University, Victoria, April 20 . Teicher, J. and Grauze, A. (1996), ‘‘Enterprise bargaining, industrial relations and training reforms in Australia’’, Australian Bulletin of Labour, Vol. 22 No. 1, pp. 59-80. Waters-Marsh, T. and Thompson, B. (1993), ‘‘The Training Guarantee Scheme: a longitudinal study in the Australian metals manufactures industry’’, Asia Pacific Journal of Human Resources, Vol. 31 No. 3, pp. 30-43.

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Partnership, ownership and control The impact of corporate governance on employment relations

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Simon Deakin Centre for Business Research and Judge Institute of Management, University of Cambridge, Cambridge, UK

Richard Hobbs Faculty of Law, University of Cambridge, Cambridge, UK

Suzanne Konzelmann and Frank Wilkinson Centre for Business Research, University of Cambridge, Cambridge, UK Keywords Partnering, Governance, Mergers and acquisitions, Human resource management, Employee relations Abstract Prevailing patterns of dispersed share ownership and rules of corporate governance for UK listed companies appear to constrain the ability of managers to make credible, long-term commitments to employees of the kind needed to foster effective labour-management partnerships. We present case study evidence which suggests that such partnerships can nevertheless emerge where product market conditions and the regulatory environment favour a stakeholder orientation. Proactive and mature partnerships may also be sustained where the board takes a strategic approach to mediating between the claims of different stakeholder groups, institutional investors are prepared to take a long-term view of their holdings, and strong and independent trade unions are in a position to facilitate organisational change.

Introduction Most large UK private-sector organisations are listed companies that are subject to intense pressures to prioritise shareholder value. The question arises of whether this constrains the ability of managers to pursue genuine partnership arrangements with long-term stakeholders, including employees. We present empirical evidence addressing this question in the form of qualitative case studies of labour-management partnerships in companies operating within different corporate governance structures. Building the trust required for partnership is indeed problematic in some companies with the ‘‘dispersed shareholder ownership’’ which is typical of the UK. Companies with continental-European forms of ‘‘concentrated ownership’’ are often better able to make credible commitments to their employees. However, ownership is not decisive on its own. Regulatory factors, in particular relating to product The authors are grateful to the ESRC for funding the research reported here, through its core grant to the Centre for Business Research. They would also like to thank participants at the Conference on Assessing Partnership: The Prospects for and Challenges of Modernisation, held under the auspices of Leeds University Business School and Pinsent, Curtis Biddle, 24-25 May 2001, and two anonymous referees, for their comments on earlier drafts.

Employee Relations, Vol. 24 No. 3, 2002, pp. 335-352. # MCB UP Limited, 0142-5455 DOI 10.1108/01425450210428480

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markets, are also important, as is the strategic role of the boards of particular companies in shaping their approach to corporate governance. We review cases of companies which have developed enduring labour-management partnerships while continuing to be active in the market for corporate control and maintaining a wide share ownership base. We suggest that where the corporate governance system can be seen to support partnership in this way, it operates in conjunction with regulation underpinning quality standards, relative stability in product markets, and, above all, a willingness on the part of senior management to mediate between the claims of different stakeholder groups, rather than seeing themselves simply as agents of the shareholders. The significance of corporate governance for labour-management partnerships The benefits of labour-management partnerships are, in principle, well understood. Partnership allows for the full exploitation of technical complementarities in production, it facilitates the sharing of knowledge, and, above all, it fuels the organizational learning processes by which new information and knowledge are created and diffused, and by which new products, processes and organizational forms are developed (Wilkinson, 2000). The hallmark of partnership is that the parties give open-ended commitments to cooperate, in the expectation that these benefits will follow. This necessarily entails an extended time horizon. It also involves an acknowledgement on both sides of their mutual exposure to risk. In this sense, to qualify as an ‘‘influential stakeholder group’’ within an enterprise, employees ‘‘must bear significant residual risks, contribute valued resources, and have sufficient power to affect organizational outcomes’’ (Kochan and Rubinstein, 2000, p. 370). In other words, employees must not only put valued resources at risk, in the sense of incurring costs if the enterprise fails or their relationship with it terminates; management must in return accept that employees should be able to exercise a degree of power in the context of corporate decision making. At the very least, this implies that they should be meaningfully informed and consulted when decisions over the shape and structure of the enterprise are made. The corporate governance literature increasingly recognizes that fairness of treatment, job satisfaction, high quality of work environment and, particularly, income and job security are important factors in generating investments in firm-specific capital by employees (Blair, 1995; Kelly and Parkinson, 1998; Slinger and Deakin, 2000). Equally, a growing body of work in the theory and practice of human resource management (HRM) points to a link between effective HRM and improved corporate performance (see Guest (2001) for an overview). However, it is also clear that the possibility of these gains will not necessarily induce management to adopt a pro-stakeholder stance. A lowcommitment, low-cost alternative may be to pursue increased market share through a strategy of cost reduction, involving minimal commitments of job security and a marginal role for employee voice. The product market has been identified as a factor shaping this aspect of corporate strategy; cost-reduction

approaches are thought to be more likely in sectors where product or services are relatively undifferentiated and managers perceive little scope for competing on quality (Schuler and Jackson, 1987). While this focus on the product market has been useful, the impact of corporate governance mechanisms on corporate strategy in general and on human resource management in particular has until recently been neglected. One of the very few studies to make the link explicit is Kochan and Rubinstein’s study of Saturn, the US vehicle manufacturer, which was set up as an experiment in partnership between General Motors and the United Auto Workers Union (Kochan and Rubinstein, 2000; Rubinstein and Kochan, 2001). One of the messages of the Saturn experiment is that there is a still unresolved tension between the priority granted to shareholder interests by the US corporate governance system, and efforts to build labour-management partnerships which will endure over time. One reason for this is that the particular form taken by shareholder ownership in large US and UK corporations may shorten the time horizon over which managerial strategies are conceived and implemented. Publicly-listed companies in both systems are characterized by dispersed-shareholder ownership. The principal shareholders are institutions – insurance companies and pension funds – which invest on behalf of their policy-holders and beneficiaries. They place the day-to-day control and management of their shareholdings in fund managers and other specialist investors who act as their agents. Typically, the share structure of a listed company will consist of several blocks, each consisting of up to 5-10 per cent of the total share capital, that are controlled by fund managers on behalf of a number of clients. By contrast, the dominant block-holding or concentrated ownership model, in which one shareholder (normally another company, a family holding, or a bank) holds a majority or near-majority stake, while common in continental Europe, is rare for UK listed companies. Differences in ownership structure have direct implications for corporate governance. Concentration allows dominant shareholders to intervene directly if management underperforms or neglects shareholder value. Dispersion makes internal control of this kind problematic, thanks to the substantial collective action costs of mobilizing large numbers of individual shareholders. As a result of this separation of ownership and control, management may enjoy a considerable degree of autonomy. The problem is reduced but not eliminated by the growing assertiveness of institutional investors in the UK and USA (Hawley and Williams, 2000). One response, which has been increasingly characteristic of UK corporate governance since the 1960s, is to permit and encourage an active market for corporate control in the form of hostile takeover bids (see Deakin and Slinger, 1997). The threat of a hostile bid is said to discipline management to align its interests with those of the shareholders. However, hostile bids also tend to induce asset disposals and job losses in the companies targeted, leading some to suggest that any surplus they generate for shareholders is achieved at the expense of breach of long-term ‘‘implicit

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contracts’’ with the other stakeholders, in particular employees (Shleifer and Summers, 1988). Ownership also affects stakeholder relations more generally. With dispersed share ownership, shareholders benefit from the possibility of low-cost exit. The resulting liquidity in capital markets enables them to take advantage of alternative investment opportunities, and in principle permits more efficient resource allocation. The disadvantage is that other stakeholders, such as employees, suppliers and customers contributing firm-specific inputs, knowing that the shareholders may switch their investments at short notice, may be dissuaded from making long-term investments of their own in the firm (Franks and Mayer, 1998, p. 728). In this context, the specific issue we wish to address is whether dispersedshareholder ownership constrains the development of a partnership approach in employment relations. Given that the time-dimension of partnership is crucial, the threat of exit by shareholders might be expected to undermine the credibility of attempts by management to build enduring partnership relations. By contrast, we might expect concentrated ownership to enable managers and shareholders more easily to make a credible commitment not to renege on ‘‘implicit contracts’’ made with the other stakeholders. The case studies We aim to throw light on these questions by reference to qualitative case study evidence drawn from a sample of enterprises operating in the UK under different forms of corporate ownership. The case study firms are: . a large specialised cleaning and facilities management company (‘‘Cleanwell UK’’); . a large manufacturing company (‘‘Tenswell UK’’); . a large telecommunications company (‘‘Hearwell’’); . two major multi-utilities providing electricity and gas services (‘‘Seewell UK’’ and ‘‘Warmwell’’); . a smaller water and gas company (‘‘Flowell UK’’); and . an electrical contracting company (‘‘Fixwell’’). Tables I and II contain more detailed information on the product-market environment, enterprise-specific factors and financial profiles for each of these companies. The research concentrated on a small number of case study firms which could be studied in depth over a period of years. The aim of this approach was to gain an understanding of both management and union perceptions of partnership arrangements, and how those perceptions changed over time, from speaking directly to those involved in such arrangements. Rather than look at just one or two organisations, it was felt necessary to construct a sample which could provide a varied cross-section of ownership forms. Thus, some firms

Multi-utility services, generally very limited competition, although energy retail market open to competition

Electrical contracting services, operates across different markets, mainly high quality, mainly mediumsize contracts

General cleaning: price competitive Specialized services: competition on the basis of quality and given price, fewer large competitors Reputation important Long-term contracts in PFI

Concentrated, European parent Stock exchange: Madrid

Customer interests dominate Regulations: price, quality service, financing, competition, environment

Concentrated, UK, management buyout, not listed

Concentrated, European parent Stock exchange: Copenhagen

Flowellc

Employee Regulations: interests predominantly influence PFI, health and safety Regulations: quality in NHS, health and safety

Fixwellb

Cleanwella

Services and products: specialised and technologically sophisticated, competitive market, price and quality, long-term relations

Customer interests dominate Regulations: price, quality, service, financing, competition, environment

Dispersed: UK parent Stock exchanges: London and New York

Hearwelld

Multi-utility services, generally very limited competition, although energy retail market open to competition

Customer interests dominate Regulations: price, quality, service, financing, competition, environment

Dispersed, UK parent Stock exchanges: London and New York

Warmwelle

Multi-utility services, generally very limited competition, although energy retail market open to competition

Customer interests dominate Regulations: price, quality, service, financing, competition, environment

Dispersed, US parent Stock exchange: New York

Seewellf

Mass produced, manufactured goods, intense competition on basis of price and satisfactory quality, volatile and difficult market conditions, short-term relations

Regulations minimal: environment, health and safety

Dispersed, merger between UK and European parent Stock exchanges: London, New York and Amsterdam

Tenswellg

Notes: a specialised contract cleaning and facilities maintenance; b electrical contracting; c multi-utility (water and gas); d telecommunications; e multi-utility (electricity, gas, water); f multi-utility (electricity and gas); g manufacturer (heavy industry)

Product markets (product type, degree and nature of competition, supply relations)

Regulation (stakeholder representation, industry regulations)

Ownership (degree of dispersion, stock exchange listings)

Sector

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Table I. Case study characteristics: the structure of ownership, product markets and regulatory environment

Multi-site, multi-country

Density: 35% overall, 60% in NHS sector Effective representation of membership

Proactive and mature, voluntary, particularly mature and deep in NHS sector, joint consultation and dialogue, HR policy supports business objectives and partnership, union involvement in working through challenges, recognition of mutual interests

Union strength (density, effective representation)

Nature of partnership

Table II. Case study characteristics: enterprise-specific factors and nature of partnership

Enterprise structure

Cleanwell

Proactive and mature, unions seen by management as an effective check and balance against commercial pressures, HR policy supports business objectives and partnership

Very little: disintegrating, union only recognised as a result of legislation, works council with union and independent representatives, culture of insecurity

Density: 50% (up from 40% two years ago), weak representation at local level

Multi-plant, multi-country

Flowell

Proactive (with some reactive elements) and mature, voluntary, mature, especially in traditional lines, joint consultation and dialogue, HR policy supports business objectives and partnership, union involvement in working through challenges, recognition of mutual interests

Density: 60% overall, 99% in networks, effective representation of membership

Multi-plant, multi-country

Hearwell

Proactive (with some reactive elements) and mature, divisional and local joint bodies to develop awareness of business plan and objectives, HR policy supports business objectives and partnership, union involvement in working through challenges, recognition of mutual interests

Density: 45% overall, 66% of staff covered by collective agreements, effective representation of membership

Multi-plant, UK and USA

Warmwell

Reactive and weak, much information and consultation in some parts of business but individualisation in other parts, union not involved at all in strategy, union used to manage downsizing, issues owned by management

Density: over 80% in generating and networks, less than 10% in trading, internal divisions among Seewell unions

Multi-plant, multi-country

Seewell

340

Density: 50%, new leadership at local level said to be less partnership orientated

Multi-site, UK

Fixwell

Very little, disintegrating, insufficient sharing of information and consultation, especially regarding redundancies and plant closures, union has no confidence in business strategy

Density: 80% overall, 100% in blue collar, internal divisions, redundancies eroding UK membership base

Multi-plant, multi-country

Tenswell

Employee Relations 24,3

have more concentrated patterns of shareholder ownership (Cleanwell, Flowell and Fixwell), while, for others it is more dispersed (Hearwell, Warmwell, Seewell and Tenswell). While the majority of the sample have a combination of US and UK shareholder ownership, Cleanwell and Flowell have continental European ownership. In other respects, the companies are similar. All seven are unionised companies; all have been actively engaged in merger and acquisition activity or in listing on or de-listing from the stock market in the period of the study; all have sought to promote partnership with employees and unions. Six have global operations or are subsidiaries of global parent corporations. Companies in the sample were initially contacted in the late 1990s. Interviews on the issue of partnership were carried out with senior managers in the spring and summer of 1998, and the companies were then re-interviewed during 2000 and 2001 to see how partnership relations had developed in the interim. Interviews were also conducted with national-level trade union officials in relation to the specific companies and to conditions operating more generally in the sectors concerned. Detailed case histories of the companies were then undertaken, focusing on the one hand on capital structure, dividend policy and financial earnings and, on the other, on human resource strategy. Finally, the regulatory framework for their respective product market sectors was studied in detail. The case histories and regulatory studies served to place the interview material in context, making it possible to locate the interviewees’ perceptions of partnership with reference to relevant enterprise-specific factors and the wider market environment, as we shall now describe. Concentrated versus dispersed ownership Cases of concentrated ownership We find evidence, first, that concentrated ownership may be perceived by management and unions alike to provide a strong foundation for partnership. In Fixwell’s case, the company’s five managing directors organised a management buyout in 1997 in order to allow the firm to more easily pursue its chosen business objectives in a difficult economic environment. According to the personnel director, the absence of external shareholders permitted the company to ‘‘not get blown off course during difficult trading conditions’’ and to maintain its commitment to high ethical standards and a high quality service. ‘‘We can grow at our own pace, we can make decisions that are sensible to us as a commercial organisation. There is no one else to please other than the five directors.’’ In another case where partnership was described by the union as ‘‘mature and deep’’, the company (Cleanwell UK) was a wholly owned subsidiary of a continental European company (Cleanwell International). In this case, prior to 2000, approximately half of the voting shares were controlled by five main holdings, two of these being continental European public-sector pension funds and one a continental European bank. Cleanwell International shares are primarily listed on a continental European stock exchange, with a secondary listing on the London Stock Exchange. The trade union at Cleanwell UK felt

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that the continental European model of ownership was an ‘‘important influence’’ on the company’s approach to human resource strategy and union relations. Still, it is important to stress that, even under this model, the corporate group’s focus was on the creation of shareholder value; its stated business objective was to double turnover, operating profit and earnings per share by 2005. The significance for partnership is that the group was able to commit to growing the business over the longer term. According to its 2000 annual report, Cleanwell International ‘‘believes that management, employees and shareholders share common long-term interests’’. In 2000, Cleanwell International’s chief executive said: ‘‘We do not believe in ‘management by quarter’[1], with big dividends, fragmentation of the business with a view to short-term profit’’. The company does not pay a dividend, preferring to fund further investment from retained profits. According to Cleanwell UK’s finance director in 2001, the pressure felt from shareholders and bankers is to demonstrate ‘‘credibility of management’’, by delivering what is promised. Moreover, there are signs in the case of Cleanwell that partnership relations can endure despite a move to a more dispersed shareholder base. In 2000, Cleanwell International’s corporate governance environment changed significantly as Cleanwell increased its issued share capital by 5.1 per cent to fund acquisitions, and merged the voting and capital shares into a single class. As a result, its shareholder base became much more dispersed, with only one pension scheme holding more than 5 per cent of the share capital. The geographical distribution of shares also shifted: 30 per cent of investors were now continental European, while 56 per cent were from the UK and USA. Despite this change in share ownership, there was still strong evidence of Cleanwell’s commitment to partnership with its employees. In 2000, the group launched a new human resource strategy as ‘‘a core element’’ of the group’s overall business strategy, and set up a corporate human resource function ‘‘to strengthen its employee development efforts’’. Although it may be too early to tell, according to the UK finance director, changing share ownership is not a negative factor for partnership because new investors know what they are buying into. Nor, conversely, does concentrated ownership appear to guarantee partnership. In one company (Flowell UK), we found evidence that a single block shareholding by a continental European parent can even be destructive of partnership-style working practices. In May 2000, Flowell UK became a wholly-owned subsidiary of a continental European multi-utility company, Flowell International, which had previously held a substantial part of Flowell UK’s equity. According to Flowell UK’s managing director, the continental European parent could be rated at seven or eight (out of ten) in terms of taking a long-term approach (compared with a rating of one for an American and two for a UK parent). Nevertheless, he told us that pressure from a single shareholder (to return a satisfactory dividend) was felt all the more intensely than pressure from dispersed shareholders. By the time of the second wave of

interviews, there was substantial evidence of the breakdown of partnership in employment relations at Flowell UK. Following the takeover, work was increasingly contracted out and we were told by a senior manager that there was a ‘‘culture of insecurity [that] runs right the way through the company, from the top to the bottom’’.

Partnership, ownership and control

Cases of dispersed ownership Tenswell UK provides the strongest evidence of the claim that the pressure to deliver continuously high returns to a dispersed shareholder base can have a destructive impact on partnership with employees. This company had a long history of labour-management partnership both before and after privatization in the 1980s. In 1998, however, Tenswell’s chairman said: ‘‘[o]ur business is about profits and shareholder value. If it’s jobs before shareholder interests, the answer is no . . . it simply prolongs the agony’’. In 1999, the company merged with a large continental European manufacturer to become Tenswell International. Its ordinary shares were then traded on the London Stock Exchange and a continental European stock exchange; its American depository shares, each representing ten ordinary shares, were listed on the New York Stock Exchange. In February 2001, the company announced a major restructuring programme and the loss of 6,000 jobs. There was no prior consultation with employee representatives, union proposals were rejected outright, and government ministers criticised Tenswell for its failure to consult with them. On the day of the restructuring announcement, Tenswell’s share price increased by 11 per cent. The trade union was particularly critical of US institutional investors. They were perceived to have a short-term, financecentred view and to be distant from the political and social implications associated with plant closures in the UK. However, it is important to note here that, although US investors represented approximately 32 per cent of Tenswell shareholders and three US institutions owned 16 per cent of the shares, a similar proportion of Cleanwell International shareholders are also US citizens[2]. It is also significant that the union at Tenswell stressed the negative influence brought to bear by a German bank that owned 5 per cent of Tenswell International’s shares. According to the union, pressure on the company from the German bank to reduce borrowings was a significant factor in the company’s restructuring plans and its decision to eliminate 6,000 jobs. Although the example of Tenswell suggests that the UK system of corporate governance can indeed serve as a constraint on partnership, the cases of Warmwell and Hearwell demonstrate that mature and enduring partnership can also be developed and maintained within the UK’s distinctive corporate governance environment. Both companies have been commended by the government for their partnership approach to employment relations. According to the personnel director of Warmwell: ‘‘We have excellent relations with our trade unions. We sit at the table with them at the national and the local level. We . . . recognise the value of a legitimate role for the trade unions. Why

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fight? Why go back to the seventies? If there is a problem, we share the problem and the solution’’. At Hearwell, too, the union described a ‘‘mature’’ partnership, explaining that evidence could be found in the fact that over a two-year period, the company and union had negotiated a complete overhaul of the system of grading structures, pay and conditions. In the opinion of the union official we interviewed, the result was a win-win situation: the company achieved greater flexibility and employees achieved better pay and a reduced working week. Hearwell’s personnel director commented in 1999: ‘‘I hesitate to call it a partnership, although to some extent that’s what it has become’’. Yet both companies have highly dispersed share ownership[3] and in their annual reports stress the importance of delivering value to shareholders. During the period of the study, both companies also pursued strategies designed to pay high dividends relative to earnings[4]. In 2000, Warmwell announced an intention to grow its dividend by 5 per cent in nominal terms over the next three financial years. Hearwell told us that executive bonuses depend on maintaining the company’s position in the top 30 UK companies, based on delivering total shareholder returns (that is, stock value growth plus dividend flow) over a five-year period. According to Hearwell’s director of strategy, shareholders are the company’s ‘‘most important’’ stakeholder group. The key to both companies’ experience is the emphasis on delivering longterm shareholder value and on managing shareholder expectations. According to Warmwell’s 1999 annual report, there is a ‘‘long-term strategy of concentrating on . . . shareholder value’’ (emphasis added). Warmwell’s personnel director told us that ‘‘we spend a lot of time trying to educate the stock market on what we’re about . . . the institutions are seeing us in a better light . . . All of our strategies are about building businesses. We believe that you can’t do that in the short term . . . In every pound that we use to acquire or to grow organically, we’re looking for a long term return.’’ It was his belief that such a strategy would support the provision of regular, above average returns to shareholders. The union at Seewell, a company with a less articulated form of partnership, stressed the importance of managing shareholder expectations: ‘‘it’s what management promises to shareholders, not what shareholders demand of management.’’ According to Hearwell’s 2000 annual report, the chief executive and group finance director hold meetings with the company’s principal institutional shareholders to discuss the company’s strategy, financial performance and specific major investment activities. In 1999, Hearwell told us that: . . . we have a different shareholder base to our competitors. We have a lot of pension funds and so on who are interested in long-running, continuing cash flows rather than sparky value appreciation and decline . . . I think the other thing is that we are quite explicit that we are a medium term stock’’ (emphasis added)[5].

During 2001, however, Hearwell came under pressure from the financial markets, as debts mounted following a series of acquisitions and certain investments failed to produce expected returns. The response of Hearwell’s union was significant, in that it carefully avoided making the argument that the

UK model of corporate governance had a negative effect on partnership. It did, however, say that the need to satisfy the financial markets could distract management from developing more long-term strategies because as share prices fell, management was prone to making ‘‘knee-jerk reactions’’, attacking costs in order to demonstrate to financial analysts that some action was being taken[6]. The union also said that it would refuse to join in public criticism of the company. Rather, it was urging management to be less defensive in managing financial analysts and more aggressive in publicising the company’s underlying achievements. The cases also demonstrate the potential for a mutually reinforcing relationship between partnership in employment relations and those rules of the UK system of corporate governance that encourage a high level of takeover and merger activity. Warmwell and Cleanwell are instructive cases, since both are companies in which partnership has endured over time, at the same time as the companies have sought to grow shareholder value through a strategy of acquisition. In the case of Warmwell, partnership has been employed as a mechanism to assist in the takeover process. According to Warmwell’s human resource director, the company’s acquisition of another UK utility was made possible by Warmwell’s human resource strategy: [We] use our trade unions . . . to talk with the local unions and say ‘‘we know you don’t like the idea of being taken over. We don’t like the idea of you being taken over. But if you’re going to be taken over, it’s better that it’s these guys because they know what they’re going to do and they’ll treat you firmly but very fairly’’.

Takeovers of this kind can be used to import the partnership philosophy into companies that were previously hostile to the concept. After Warmwell completed its acquisition, it reintroduced union recognition arrangements that the previous management had removed following privatisation. The experience of Cleanwell UK offers a further example. In 2000, Cleanwell UK acquired a UK listed company, which was de-listed following the acquisition. According to the union, . . . in the case of [X], the effect is overwhelmingly positive. We did not have any national relationship with [X] and our local relationships varied from the neutral to the very bad. So it has been a massive step forward just in terms of dialogue, ability to raise issues . . . In general terms, we see acquisitions by [Cleanwell UK ] positively. They seem to extend their company philosophy into the companies they take over rather than importing other philosophies from the companies they take over.

In short, there is a complex relationship between corporate governance models and the ability to sustain partnership. There are suggestions that the corporate governance system may favour partnership, at least in the sense of enabling successful experiments in partnership to provide the springboard for companies to undertake acquisitions of less successful competitors. This suggests that the market for corporate control, on its own, is not a decisive factor for or against partnership. However, we need to investigate more closely how corporate governance interacts with other factors that influence the sustainability of partnership, in particular market regulation, product market

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conditions and the dynamics of relations between management and unions at enterprise level. Regulation The nature of regulation has an important influence on the sustainability of partnership in employment relations through its impact on the hierarchy of stakeholder interests as well as its effect on conditions and requirements firms confront in their product markets. According to the Seewell union, ‘‘regulation is the pervading influence . . . ownership is not a distinct driver’’. Similarly, the personnel director at Warmwell told us that the ability of the company to pursue a long-term strategy, while at the same time delivering year-on-year above average returns ‘‘very much depends . . . where regulation goes’’. Regulations can serve as a complement to corporate governance through their influence on the relative position of stakeholder groups within the hierarchy of interests they support. From this perspective, the most supportive environment for partnership is one in which regulations buttress the relative position of employees. The regulation of the Private Finance Initiative (PFI) in the NHS provides a good example. With the objective of ensuring a high quality standard of service in this sector, PFI regulations in the NHS require evaluation of the employment-relations records of firms which bid for contracts (NHS Executive, 1999, section 2, para. 5.79; see also Private Finance Treasury Taskforce, 1999, para. 4.3); they also entitle trade unions to interview and submit a report on short-listed bidders[7]. According to the guidelines, the underlying logic is that companies with poor labour relations and inadequate investment in staff often deliver a poor standard of service. We found strong evidence of the supportive role of PFI regulation in the NHS in the case of Cleanwell UK, which has been particularly successful in this area. In 2000 Cleanwell UK held ten contracts with an annual turnover of over £30 million. Equally, the imposition of guaranteed customer service standards by regulators in the utilities serves as a significant support mechanism for partnership because it means that pressures to cut costs cannot be permitted to undermine standards of customer service (see, for example, OFGEM, 2001). According to the managing director of Flowell: ‘‘the whole thing is driven by customer service’’. This is important because regulators themselves intensify the pressure to cut costs and increase efficiency by imposing price controls. In the UK, regulation has tended to restrict price increases to customers to levels below the increase in the retail price index, through a formula expressed as RPI – X (with ‘‘RPI’’ indicating retail price inflation and ‘‘X’’ an efficiency improvement brought about by enhanced performance). In themselves, price controls potentially serve as a constraint on partnership because of the likelihood that they will lead to restructuring and downsizing. However, when taken together, price controls and customer service requirements may provide strong incentives for active partnership to be sought as a way of enhancing the level of performance. At both Seewell and Hearwell, the unions told us that

high guaranteed standards of customer service provide an effective bargaining tool in negotiations over cost cutting: The vulnerable area is customer relationships and if those are disrupted, then there are various means through the regulator and other bodies by which [the company] will be brought to account. So that’s advantageous to us.

Telecommunications and utilities regulations can also extend time horizons by tempering the expectations of capital providers and extending operating parameters. By allowing for capital providers what one interviewee called ‘‘a return that is sufficient, but no more than sufficient’’, these regulations temper the expectations of institutional investors, facilitating a longer term view that is conducive to partnership. Regulators make assessments for costs of debt, costs of equity and dividend yields in their price determinations[8]. They also set operating parameters for periods of up to five years. According to the water regulator, financing costs have fallen as ‘‘financial markets have adapted to the position of privatised utilities’’ (OFWAT Periodic Review, 1999). At the same time, regulators’ assessments of returns on capital are indicative and not prescriptive[9]; regulators determine the level of prices but leave it to companies to manage their level of profits. As a result, this form of regulation still provides only a very weak support mechanism for partnership in itself; it is open to companies operating under this regime to decide whether or not to opt for a proactive approach to partnership. Nevertheless, the stress on quality of customer service in utility regulation can serve to encourage active partnership in conjunction with the operation of the takeover mechanism. Warmwell, which combined what both management and unions regarded as a particularly strong labour-management partnership with a highly proactive role in the market for corporate control, illustrates this point. Warmwell’s bid for another UK utility company was assisted by the publication by the regulator of information relating to levels of customer service and organisational costs in companies which had recently been privatised. On this basis, Warmwell’s management was able to benchmark the company’s performance against industry standards and identify a suitable target for acquisition. As one of its senior managers put it: The skills that we built through benchmarking were just the same ones that we needed to evaluate potential acquisitions . . . We looked at [the target] and said we know what it can do: its costs per customer, per kilometre of line, its fault rates and so on were all in the public domain from the regulatory process. We knew the international benchmarking levels possible from looking at . . . other leading companies. We could say – if that company was under our control, this is what it would be worth to us. We then looked at what we would have to pay for it.

The information generated by regulation was used by the company to exploit what it considered to be its comparative advantage in being better able than the target to meet high standards of service. In that sense, as in the case of PFI, the regulatory process can be said to have had a bias in favour of companies which rely on a partnership ethic to enhance their performance.

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Regulation also affects the nature of product market competition which in turn impacts on the firm’s ability to maintain partnership in employment relations. In general, the more volatile a market, the greater the pressures operating on the firm and the more difficult it is to maintain the partnership, whereas sectors characterised by high technical barriers to entry and managed competition are conducive to partnership. Cleanwell UK’s differential experience in the PFI market in the NHS and the railway sector provides a good example. According to the union at Cleanwell UK, in the NHS PFI market, ‘‘the big five, between them, control 85 per cent of the market. The small companies are all being edged out’’. The union pointed out that there are high barriers to entry associated with running a NHS building contract. ‘‘There are a lot of risks . . . so [NHS bodies] tend to go with people they know, which has helped [Cleanwell].’’ Furthermore, ‘‘because of the nature of the contracts, you have to be pretty big’’. PFI contracts are typically awarded for 25-30 years and ‘‘it is very unlikely that the contract will be taken away from the PFI company that gets it in the first place’’. The union suggested that this meant that Cleanwell could look at the long- term profitability of PFI contracts and so ‘‘the degree of conflict in the first few years is lessened’’. By contrast, in the railway marketplace there were many medium and small-sized companies competing for short-term contracts, primarily on the basis of price. The management of Cleanwell UK regarded this as a constraint on the Cleanwell approach. At Tenswell, by contrast, not only was share ownership highly dispersed (and held mainly by UK or US investors) but there was also an absence of market and regulatory factors favouring partnership at the time of the major plant closure which occurred in 2000. Over 80 per cent of the workforce was engaged in the production of a product whose markets were extremely volatile and price sensitive and for which there was substantial global over-supply. Regulation had, if anything, been aimed at increasing the intensity of national competition through the removal of barriers to trade, and this globalised market was little affected by price and quality standards. The management of partnership In addition to the factors we have so far been considering, the quality and vision of company management at all levels of the organisation, from the strategic level down, contributed significantly to the effectiveness of partnership in the companies we studied. In the case of Warmwell, its human resource director told us: ‘‘human resource strategy is equally as important, not any more so, not any less so, than the financial, commercial and engineering strategy. It is by playing all the strands at the same time that we get the key strength’’. The union at Hearwell also stressed the importance of the role of management as ‘‘an interface’’ between the investment community, the regulator, customers and workers. This was particularly evident during the massive restructuring following privatization, during which Hearwell’s chief executive was perceived to act as a buffer between the union and the board to ensure that there were no

compulsory redundancies. The role of a ‘‘hard hitting’’ human resource director who could persuade the board of the case for investment in human capital and deliver on commitments was also seen as integral to effective partnership relations at Hearwell. According to the union, partnership is ‘‘not just a piece of paper that sets out procedures. It is about identifying issues, trustworthy behaviour, and delivering high quality outputs’’. The strength and sophistication of the union is also vitally important for the success of partnership. A weak and/or adversarial union (at the national and/or local level) can be an impediment to partnership. At Flowell, despite an improvement in union density from 40 per cent in 1998 to 50 per cent in 2001 (resulting from the successful recruitment campaign of a large union), the local union was regarded by management as weak and ineffective. Collective bargaining rights were granted in 1999 only under the pressure of legislation putting in place a statutory procedure aimed at encouraging recognition[10]. By contrast, at Hearwell, where the position of the union had been strengthened following the company’s unilateral decision, in 1996, to restore trade union recognition at a subsidiary it had acquired by takeover, the personnel director could comment: The unions themselves have become more and more realistic in terms of what it means to be a private [sector] company in terms of what their role is, how they can participate in a strategic debate . . . they have been well served over that period by the national leadership.

A strategic approach to partnership has also been adopted by the union at Cleanwell UK, which, while fundamentally opposed to PFI and contracting out in the public sector, has used regulation of the PFI process to strengthen its bargaining position: We don’t actually agree with the fact that [Cleanwell] should have the contract in the first place . . . [However] we have to deal with the world as it is rather than as we would like it to be. So, if private sector employers are going to be awarded contracts . . . we have taken the view that it is better that we have a partnership arrangement with those employers, rather than a wholly conflictual one.

It is at the operational level that the true effectiveness of partnership is particularly manifest. According to the union at Seewell, the attitude of management was that ‘‘this is our agenda, these are our decisions, we make them, we implement them. It’s not actually we don’t want to deal with unions, it’s just that we own the problem and we’re going to drive it’’. By contrast, the personnel director at Warmwell (Seewell’s competitor) told us that ‘‘trade unions in many ways assist me in solving my problems. They solve problems for me before they even come to my attention’’. Fixwell’s personnel director echoed this view: They help us to manage change, you know a lot of the change that we have needed to introduce within the business would not have been managed without the involvement of the trade unions. They do a lot of work in communicating to staff and they provide a good check and balance as well . . . Commercial pressures on the business will always pressure us into

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doing things . . . a bit of check and balance which the trade union provides helps us to see that perhaps we’re not being as reasonable as we could be. So, they do a good job for us.

The personnel director at Hearwell also highlighted the important role of the union as ‘‘a very effective communication channel and a persuasion channel’’. There are, then, important differences in the conception of partnership that emerges from the dynamics of enterprise-level relations between unions and management (see Table II). In most of the cases we studied, ‘‘partnership’’ was defined as ‘‘working together to achieve a common objective’’. However, variation in that objective had an important influence on the type of partnership that developed. In cases where the objective was to deliver a high quality or higher value product or service to consumers, or jointly to find a way forward in the face of market or regulatory opportunities and challenges, the partnership could be characterized as proactive and mature. By this we mean that, having endured moments of difficulty for the company in the past, it was regarded as more likely to continue in the future. In contrast, where the objective was simply to involve the union to manage the execution of redundancies or plant closure, we may characterize the partnership as reactive and unstable. From the case-study evidence presented here, such partnerships are unlikely to survive downsizing aimed at maintaining shareholder value over the immediate term. Conclusion Three principal findings emerge from our case studies into the impact of corporate governance on labour-management partnerships. First, ownership structures are important but not necessarily decisive in determining the emergence of partnership. Some companies with dispersed ownership demonstrate long-lasting partnership arrangements, while others, with concentrated ownership, are characterized by its absence. Second, regulation of product and service quality, of the kind observed in most utility sectors and in certain others, favours the emergence of what we have called here ‘‘mature’’, that is to say, stable and enduring partnerships. This is because, in these markets, profitability is linked to the ability of companies to maintain a high and consistent quality of service for end users over an extended period of time. As a result, managers are better able to convince shareholders to take the view that they will reap significant returns over the long term from a stakeholder approach. In the absence of these stabilizing factors, however, goodwill between labour and management is not enough to sustain a partnership approach when it conflicts with short-term shareholder interests. Then, the pressure to meet shareholder value over the immediate term tends to prevail. Third, the role of the board in mapping out a strategic approach to corporate governance issues is essential. In particular, executive directors can play an important role in arguing for a stakeholder-orientated strategy on the grounds that it will bring benefits over the longer term, and, above all, in defending it

when times are difficult. Since this long-term strategic positioning is quintessentially a function for the board, the incorporation of the human resource function into board-level corporate planning would appear to be a vital factor in underpinning partnership. It would therefore seem that corporate managers can feasibly aim to reconcile the interests of stakeholder groups with the goal of ‘‘enlightened shareholder value’’. This is particularly the case where regulatory influences and the product market environment favour such an approach. At the same time, our study suggests that regulatory and product market factors should not be viewed in isolation from corporate governance, broadly understood to include the structure of ownership and control and the conditions for the exercise of stakeholder voice. There is a complex relationship between managerial strategy and investor expectations which requires further investigation. There are signs that institutional investors may be increasingly prepared to take a long-term view of their holdings, just as managers may be prepared to make a case for corporate strategy to be judged against a long-term time horizon. Our case studies also suggest that a proactive management benefits from strong and independent employee representation in building partnership. However, employee representation of this kind is not consistently available. Under these circumstances, it remains to be seen how durable labour-management partnerships will prove to be in response to exogenous shocks in the form of economic downturns and changes in systems of regulation. Notes 1. This is a reference to the common practice of quarterly assessments of the performance of fund managers (see Slinger and Deakin, 2000). 2. 1997: 35 per cent; 1998: 23 per cent; 1999: 23 per cent 2000; 30 per cent. Two US institutions held 15 per cent of the capital shares (8 per cent of voting shares) in December 1998. 3. At March 2000, there were 531,000 holdings of Warmwell shares, 79 per cent of them UK based and 21 per cent US based. At March 2000, 82 per cent of Hearwell’s shares were held in 60,402 institutional holdings and 18 per cent in 1,751,341 individual holdings. 4. In the 2000 financial year Warmwell’s underlying earnings per share fell by 2.6 per cent (for all UK businesses earnings per share increased by 1.4 per cent), but dividend per share increased by 10.2 per cent. Dividend per share increased by an average 12.7 per cent per annum over the five years to 2000. At Hearwell dividend per share increased by 7.4 per cent in the 2000 financial year, whereas underlying earnings per share fell by 2.2 per cent. 5. This is supported by the comment of one of Hearwell’s leading shareholders, with a stake of more than 2 per cent, that ‘‘we’re certainly not bearish on telecoms when you take a medium-term view’’ (Financial Times, 2001). 6. The union at Hearwell also argued that to have true partnership in terms of long-term investment in human capital, it was crucially important to show training costs as an

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investment in the balance sheet, to avoid this being the first thing that was cut when budgets were tightened. 7. Letter from the Secretary of State for Health to the Head of Health, UNISON, 20 October 1998. Generic guidelines of PFI state that, having regard to the views of tenderers, public sector clients should consider inviting recognised trade unions or staff representatives to discuss relevant employment issues with short-listed bidders (Private Finance Treasury Taskforce, 1999, para. 4.3). 8. For example, in relation to the electricity distribution sector during the period of the study, the electricity regulatory body OFGEM estimated the cost of capital as a weighted average of the cost of debt and equity finance at 6.5 per cent, implying a dividend yield of 4.75 per cent (OFGEM, 1999, pp. 38-47). 9. OFGEM (1999, p. 41) recognises that the figures it uses ‘‘may differ substantially’’ from the actual levels paid out by the electricity companies. 10. The relevant legislation was contained in the Employment Relations Act 1999; see generally Brown et al. (2001) on the meaning and impact of this legislation. References Blair, M. (1995), Ownership and Control, Brookings Institution, Washington, DC. Brown, W., Deakin, S., Hudson, M. and Pratten, C. (2001), ‘‘The limits of statutory trade union recognition’’, Industrial Relations Journal, Vol. 32, pp. 180-94. Deakin, S. and Slinger, G. (1997), ‘‘Hostile takeovers, corporate law, and the theory of the firm’’, Journal of Law and Society, Vol. 24, pp. 124-51. Franks, J. and Mayer, C. (1998), ‘‘Ownership and control in Europe’’, in Newman, P. (Ed.), The New Palgrave Dictionary of Economics and the Law, Vol. II, Macmillan, London. Guest, D. (2001), ‘‘Human resource management: when research confronts theory’’, International Journal of Human Resource Management, Vol. 12, pp. 1092-1106. Hawley, J. and Williams, A. (2000), The Rise of Fiduciary Capitalism: How Institutional Investors Can Make Corporate America More Democratic, University of Pennsylvania Press, Philadelphia, PA. Kelly, G. and Parkinson, J. (1998), ‘‘The conceptual foundations of the company: a pluralist approach’’, Company, Financial and Insolvency Law Review, Vol. 2, pp. 174-97. Kochan, T. and Rubinstein, S. (2000), ‘‘Towards a stakeholder theory of the firm: the Saturn partnership’’, Organisation Science, Vol. 11, pp. 367-86. Rubinstein, S. and Kochan, T. (2001), Learning from Saturn, Cornell University Press, Ithaca, NY. Schuler, R. and Jackson, S. (1987), ‘‘Linking competitive strategies with human resource management practices’’, Academy of Management Executive, Vol. 1, pp. 207-19. Shleifer, A. and Summers, L. (1988), ‘‘Breach of trust in hostile takeovers’’, in Auerbach, A. (Ed.), Hostile Takeovers: Causes and Consequences, University of Chicago Press, Chicago, IL. Slinger, G. and Deakin, S. (2000), ‘‘Company law: an instrument for inclusion – regulating stakeholder relations in takeover situations’’, in Stewart, A. and Askonas, P. (Eds), Social Inclusion: Possibilities and Tensions, Macmillan, London. Wilkinson, F. (2000), ‘‘Cooperation, the organization of work, and competitiveness’’, in Clarke, L., de Gijsel, P. and Janssen, J. (Eds), The Dynamics of Wage Relations in the New Europe, Kluwer, Deventer.

Book reviews Understanding European Trade Unionism Richard Hyman Sage London 2001 196 pp. ISBN 0 7619 5220 9 and 0 7619 5221 7 (paperback) Price £18.99 paperback, £55.00 hardback Keywords Trade unions, Industrial relations, Europe Richard Hyman is rarely less than interesting, and often provocative and challenging in his analysis, and readers will find each of these dimensions in his discussion of European trade unionism. What they will not find is the comprehensive study that the title implies. The major areas of argument are developed from case studies of three countries (Germany, Italy and the UK), and each provides significant grist to Hyman’s mill. However, the lack of a case study from the Nordic trade unions, although not their complete omission, is disappointing given their particular traditions and continuing strength compared to the countries included. While the study of trade unionism in the countries of the old Soviet bloc is in its infancy they are also a part of ‘‘European trade unionism’’, although their past would offer a significantly different dimension to the analysis that Hyman seeks to develop. This is focussed on broader argument about trade union movements as a whole, and so the focus of the book concentrates largely on the actions and policies of national confederations. The consequence is that workplace trade unionism is neglected and there is little in the way of detailed analysis of, for example, comparative membership trends. Equally, the often strong divisions between ‘‘white’’ and ‘‘blue’’ collar confederations is not discussed in any significant detail, although the distinction is characteristic of trade union structures, particularly in Northern Europe. Nor is there detailed analysis of the changing parameters of collective bargaining that Clegg (1976) had earlier placed at the centre of the comparative study of trade unions. This lack of detail is acknowledged by the author, who suggests that he is drawing on ‘‘the economists’ notion of ‘stylised facts’ [that] denotes propositions which, if they were true, would make an analysis and argument more plausible, but which it would be impolite to confront with awkward counter-evidence of an empirical nature’’. It is this approach that takes us into the broad sweep of the book’s argument in which the subtitle provides the key to the analysis. Hyman seeks to construct an analysis of European trade unions, which he describes as ‘‘adrift within a sea of variable geometry’’. He draws a triangle, the three points of which are society, market and class, and he seeks to analyse Europe’s trade unions in relation to each of them. He selects three case study countries and characterises the UK trade union movement as between market

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and class; the German as between society and market, and the Italian as between class and society. His analysis of these different dimensions of trade unionism are at the heart of the book’s argument, and Hyman develops a detailed exploration the rich complexity of notions such as class and civil society. It is clear that he sees the inter-relationship between each of the three features he identifies as critical to understanding national trade union identities and, indeed, these dimensions have undoubtedly shaped trade unions in the post-war period that is Hyman’s focus. However, the analysis also underpins an argument about the future of trade unions in the contrasting case study countries that leads us into areas that have been the subject of much wider debate. In this respect ‘‘concerned scholars’’, including Hyman, have a duty to assist trade unions in their struggle to ‘‘reassert their relevance’’, particularly as ‘‘opponents of the dehumanising advance of market forces’’. Hyman argues that ‘‘political economism, as an overarching trade union project, has reached the end of the road’’ and that there are no easy alternative solutions. It is no doubt in this area that Hyman is at his most provocative although it is not always easy to identify and weave through what he sees as the options available to trade unions. Given the level at which the book’s argument is developed, it is unsurprising that the focus of attention is beyond the workplace and ‘‘beyond national identities’’. It is certainly the case that trade unions have to confront and respond to the changes in global capitalism that most trade union members have to deal within their own localities, and the arguments about capital’s global space and labour’s local place are now well developed elsewhere. Hyman suggests that there are further contradictions for trade unions to confront. The search for what he describes as ‘‘utopias’’ to provide a vision for a better future is in marked contrast to what he describes as the task of European trade unionism, encapsulated as the slogan ‘‘develop the internal social dialogue!’’ The author’s own exclamation mark may hint at a little irony here, but it is clear that the review of organisational structures is an important and critical element in successful trade union renewal. There are further problems for Hyman in the contradictory nature of a supranational European State which appears irrelevant to ordinary people, but which provides ‘‘innovative’’ decisions in its Court of Justice and significant interventions in equal opportunities. There is indeed an issue there, but it is the case that Commission Directives and their consequent national regulations have had significant impacts on workers’ lives in areas such as health and safety or working time. The European Works Council Directive is arguably beginning to provide the foundation for the development of some trade union organisational links based on cross-European workplaces. Understanding European Trade Unionism does not provide us with the comprehensive analysis its title might suggest. Rather we are offered an argument at a general level that takes us into a set of insights and arguments that will deepen any reader’s understanding of European trade unionism and the reasons for difference in national developments. The individual national

case studies are valuable in themselves, and provide the cogent and thoughtful analysis that you would expect from Richard Hyman. It is equally clear that he is committed to a ‘‘trade union project’’ that is essential to the support and protection of working people. It is his analysis of the way forward that will be the most provocative and this is not simply confined to the pages of the concluding chapter but permeates the argument throughout. It is of course, whether you might agree or disagree, essential reading. John Stirling University of Northumbria, Newcastle upon Tyne, UK Reference Clegg, H.A. (1976), Trade Unionism under Collective Bargaining: A Theory Based on Comparisons of Six Countries, Basil Blackwell, Oxford.

Human Resource Management in Context: A Case Study Approach Edited by Helen Newell and Harry Scarborough Palgrave Basingstoke 2002 259 pp. ISBN 0-333-92136-4 (paperback), ISBN 0-333-92135-6 (hardback) Price £22.99 paperback, £50.00 hardback Keywords Human resource management, Flexibility, Change In an increasingly competitive world, the link between effective people management and organisational performance is gaining increased interest. However, there is a growing recognition that people management, or more specifically human resource management, is not the preserve of functional HR specialists. More and more, line managers are expected to be in the vanguard of the implementation of HR initiatives such as teamworking, organisational change or managing diversity, if not involved from the initial policy formulation. It is therefore of paramount importance that managers have a holistic understanding of the intricacies of HR issues. Without this, organisations risk their HR initiatives falling foul of unforeseen contextual pitfalls or resistance from employees. With this in mind, it is refreshing to see a book that adopts a pluralist perspective on HRM, rather than the usual unitary view of best practice models. The book sets out to highlight the impact of context, both internal and external, on HRM policy by providing case studies to illustrate the interaction of issues. Case studies are a particularly effective way of highlighting the contrast between the formulation of HR policy and the messy reality of implementation.

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Each case is prefaced by a briefing section which outlines both the environmental influences of the particular sector in which the organisation operates and a summary of the HR issues under examination. This takes the form of either a summary of the academic and practitioner literature associated with the topic area or an examination of the contextual issues that influenced the implementation of the initiative. All cases are based on recent research by members of the Industrial Relations and Organisational Behaviour Teaching Group, the University of Warwick, and members of the Industrial Relations Research Unit. They are, therefore, based on real organisations and the HR issues that they face. The ordering of the case studies, according to the editors, mirrors a progression from issues of micro focus, such as work organisation and reward systems, through more macro topics which encompass the more strategic level of HR policy on such issues as the learning organisation or managing diversity to, finally, a global focus looking at international HRM. There are also three main themes, which unite the nine case studies: new forms of technology and organisation; changes in the employment relationship; and the drive towards flexibility. The chapter written by the editors of the text explains the rationale for their approach, stressing that no model of best practice in HRM is value-free or context-free. Therefore, rather than trying to present universal truths, they celebrate the importance of contextual factors and use these as the vehicle for encouraging analysis and debate. As well as recognising the importance of external contextual factors such as sector-specific pressures, they also highlight the importance of several key internal factors such as management style, the role and perception of the HR function, the organisational culture, and the links between HR strategy and business strategy. Indeed, these factors form the basis of most of the case analysis questions at the end of each case. Students are normally asked to identify and analyse the influence of contextual factors as well as consider the wider ramifications of the case for HRM in general. The first case study is ‘‘Alcan: managing change’’, by Paul Edwards and Martyn Wright, which covers the introduction of advanced team systems at an aluminium smelter in Northumberland. The case is particularly good at highlighting the perceptions of different stakeholders during the change process and how the existing culture and organisational environment influenced their views. The case also recognises that often HR initiatives can bring about conflicting results; in this case the support of one group of employees was at the expense of another. In the case of ‘‘Buildsoc: Does teamworking mean team pay?’’, Keith Sisson provides a good critique of reward systems and the changing patterns and expectations associated with them, especially in relation to team pay, as well as considering the practical limitations of performance-related pay. Helen Newell’s case, ‘‘Accountco: small is beautiful? HR planning in a small firm’’, provides an example of HR planning in interesting context – how do

models of best practice in recruitment and selection work in relation to a small firm? She raises the important point that for HR to be strategic there has to be a clear centrality of HR input to business strategy, which depends very heavily on the status and power of HR in an organisation. This is especially hard to achieve in a small organisation where functional specialists are too heavy an overhead to support. In ‘‘Multico: new technology and the sales force; introducing technical change in a non-union environment’’, by Helen Newell and Caroline Lloyd, points out the importance of considering the centrality of HR to a change process. Again, as in the Alcan case in chapter 3, the differing perspectives on change by different stakeholder groups are drawn out well. The case on ‘‘London Borough: a partnership agreement?’’, by Keith Sisson, is the only public sector case in book, which, given that the authors support the importance of context, is somewhat disappointing. It is important to realise that despite the coercive isomorphism of new public management, the context of the public and voluntary sectors is still quite different from the issues faces by private sector organisations and therefore it would have been nice to see a wider spread of cases presented. The issue of partnership is an important one, especially given the growing importance of the new European social model and its influence on policy making. As a result, unlike other chapters in the book, there is an extensive discussion of the theory and models of partnership with only a very short case study. This means that student reflection for this case is focussed more on generic issues than specific contextual factors. The ‘‘Bankco: managerial and organisational learning’’ case, by Elena Antonacopoulou, asks for a more traditional case study analysis covering the objectives of introducing organisational learning, the barriers to implementation, an action plan for overcoming these and, finally, a consideration of the role of HR. The most interesting feature in this case is the barrier caused by the perceptions of middle managers, a perennial problem for any HR initiative that seeks to achieve culture change. ‘‘Pharmaco: organisational restructuring and job insecurity’’, by Helen Newell and Caroline Lloyd, highlights the often competing priorities of HR policies – a concern for business performance weighed against concern for employee dissatisfaction and perceived erosion of the psychological contract ‘‘Telco: managing a diverse workforce’’, by Sonia Liff, describes the legal context of anti-discrimination legislation, the business case for equality and the difficulty of changing organisational cultures to support diversity initiatives. It raises issues about indirect barriers to diversity and the need for consistency in HR policy. Finally ‘‘Engineering products: iInternationalising production’’, by Tony Edwards, tackles international integration including the orientation of national cultures, the effect on resourcing policies and implications for HR managers. It also covers the negative impact on employees of increased job insecurity and reduction in union power as a result of internal competition.

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The editors make the case very strongly that this text is not about equipping students with the tools and techniques of operational HRM, such as training and development, employee resourcing, reward or relations. Instead it is intended to raise questions rather than answer them, and as such is ideal for advanced undergraduate or MBA students. The case study approach encourages a critically evaluative response from students and provides them with opportunity to untangle the complex web of factors that are interwoven in most people management scenarios. It also encourages them to reflect on their own organisational contexts when considering the implementation of HR initiatives. However, one of the weaknesses of the text is that it does not explicitly recognise the centrality of ethics to HRM initiatives; a point that cannot be made often enough. Although ethical concerns were evident in several of the cases, there were no references to ethics in any of the briefing notes prefacing the cases. Despite this small criticism, this is a valuable addition to the teaching resources for HRM and could be used to extend the understanding of complex HR issues by students. Although it does not offer comprehensive coverage of the range of HR activities, it does offer a subtlety of analysis often missing from other texts. Gillian Kellock Hay Glasgow Caledonian University, Glasgow, UK

Internet news

Internet news

http://www.emeraldinsight.com/er.htm Internet News This year marks a change to the Internet news from reviewing Web sites and links by theme and topical issues towards generating a set of links on the Employee Relations Web site. In each edition of Employee Relations we will review a number of Web sites and these will be added to the Employee Relations site. We would welcome suggestions as to both links and sites to be included (please forward these to me, [email protected]). There have been considerable developments in the scope and range of trade union Web sites and links in recent years. The European Industrial Relations Observatory (www.eiro.eurofound.ie) provides a comprehensive list of European and international trade union sites, as well as extensive lists of trade union organisations by country, while the International Labour Organisation (www.ilo.org) offers a more general set of links by both alphabetical order and subject. The International Confederation of Free Trade Unions (www.icftu.org) likewise offers a range of links to related topics; a linked page (www.global-unions.org) covers a number of largely third world and international issues. The international labour solidarity Web site (www.labournet.org) likewise covers international trade union news and offers links to a series of labournets across Europe and to the US Labor Net (www.labornet.org). The latter’s links page is a rich source of information and further links to US and international unions, current events, legislation, culture and humour. The revised TUC Web page (www.tuc.org.uk) provides a link to all affiliated trades unions. The Labour Research Department (www.lrd.org.uk) provides some 400 related links by theme and section. Labournet (www.labournet.net) remains one of the better sites for current news and issues, and offers an alternative to news sources as to current issues and disputes. Labourstart (www.labourstart.org) similarly provides current and recent labour news from various media sources. An alternative site is the cyber picket line (www.cf.ac.uk/socsi/union/) which is now located in the School of Social Sciences at Cardiff University.

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Internet conferencing If you are interested in setting up an Internet conference, or wish to set up a discussion group, please let me know at the e-mail address below. Your main task, as has been indicated earlier, would be organising the speakers (see ‘http://mcb.co.uk/confhome.htm for further information). List of sites The European Industrial Relations Observatory (www.eiro.eurofound.ie) International Labour Organisation (www.ilo.org).

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The International Confederation of Free Trade Unions (www.icftu.org) (www.global-unions.org). The international labour solidarity Web site (www.labournet.org). The United States Labor Net (www.labornet.org). TUC (www.tuc.org.uk). The Labour Research Department (www.lrd.org.uk). Labournet (www.labournet.net). Labourstart (www.labourstart.org). The cyber picket line (www.cf.ac.uk/socsi/union) Cliff Lockyer Internet editor