18 July 2022

Giving in to the unions isn’t the only way to stop strikes


Both the number and scale of industrial disputes this summer are dramatically higher than in the pre-Covid period. However they are concentrated in the public sector, or parts of the private sector that were once nationalised industries, where trade union membership remains unusually high. Across the workforce as a whole, unionisation has fallen to less than half the rate in the 1970s.

The power of unions depends on their special status in law, which provides immunity from damages if strikers follow appropriate procedures. The Thatcher and Major governments had a long-term strategy which gradually tightened the conditions under which strike action could take place. This is one of the factors that has brought us 30 years of relative industrial peace after the mayhem of the 1960s, 70s and 80s.

This is not, though, the only reason for declining union power and influence. Globalisation and structural change have weakened unionism in many countries. Within the UK increasing workforce diversity has undermined traditional union solidarity, as have higher levels of employee qualifications and individual mobility. Meanwhile a flood of regulation protecting workers against the worst excesses of rogue employers has reduced the perceived appeal of collective bargaining.

The current round of strikes and threats of strikes may be a one-off reaction to two years of intermittent lockdown which suppressed grievances and created a backlog of wage claims. It may be unlikely to lead to a continuing 70s-style wage–price spiral, but government concessions to union militancy will add to public spending and mean require even tighter monetary discipline, with negative consequences for the rest of the economy. String-free concessions could also make necessary public sector reform more difficult. And there is always the danger than some militants may be tempted to use industrial muscle to undermine the Government rather than pursue the best outcome for their members.

Some may argue that the current storm of industrial disputes will blow over, and that the Government should encourage early settlements without using up its shrinking stock of political capital by taking on the unions. But should it decide to take a markedly tougher line against militant trade unionism, there are many measures which could be taken without compromising the fundamental right to join a union. It’s worth setting them out, even if such a strategy is ultimately rejected.

Some would be largely symbolic.

The Government could tighten the rules on trade union recognition. At the moment, compulsory recognition procedures apply to bargaining units of 21 employees or more. This could be raised to, say, 50. Ballots could be made mandatory, with a higher hurdle (currently 50% of eligible employees) before recognition is granted.

Another area might be union ‘facility time’. At present union employee representatives are allowed paid time off work to carry out approved union activity (negotiating meetings, training, accompanying members to disciplinary hearings). According to the Taxpayers’ Alliance, the cost of this facility time in the public sector alone was almost £100m in 2020–21, and has been rising sharply. Under the 2016 Trade Union Act the Government has reserve powers to alter the terms on which facility time is allowed, for instance by capping the proportion of time that can be spent on union work.

The Government has already made some minor gestures of this kind. One was the decision to restore the possibility of employers substituting agency workers for striking employees. Another was the announcement by Business Secretary Kwasi Kwarteng that the Government would not endorse the proposal to allow electronic strike votes.

Such measures will annoy the unions and suggest to the public that the Government is doing something to tackle union militancy, but they are unlikely to have any significant impact on current strike activity. For example, there is no pool of skilled agency workers who can take over most key jobs on the railways.

Measures that might be expected to have more of an effect are minimum service agreements for the railways (and potentially for other services), which the Government has repeatedly said it intends to bring forward. The aim is to prevent a total walkout by rail union members. Similar laws exist in Spain, France and Italy, though there has been little published evidence on the success of these provisions.

A more serious intervention would be to ban strikes outright in certain industries. This would be very unusual in the UK context. The armed forces cannot strike, and nor can police or prison officers.

Some other European countries have wider provisions. In EU countries such as Germany, the Czech Republic, Slovakia, Denmark and Poland civil servants are prohibited from strike action. In some cases this prohibition is extended to groups such as school and university teachers, and people working in public utilities and essential services such as health and social care, fire and rescue workers, air traffic controllers and some telecommunications workers.

So far there have been relatively few suggestions that we extend strike bans here in the UK. One of the areas it has been proposed is the London Underground. Indeed, when he was Mayor of London, Boris Johnson tried to get a no-strike agreement with the unions. Thwarted in this, he called for legislation to impose a ban on strikes and recourse to compulsory arbitration. No such call has been repeated since he became Prime Minister, however.

Voluntary arbitration, usually through Acas, resolves hundreds of minor industrial disputes every year. Compulsory arbitration has been used during wartime in the UK, as well as for long periods in Australia and some Canadian provinces. Some reserve power to impose arbitration in particularly drawn-out disputes could be a useful part of the Government’s arsenal.

Another possibility might be to reduce legal protections for striking workersUnder current law, employees striking following a properly conducted ballot are protected against dismissal for up to 12 weeks. Few strikes reach this limit, but in principle this period of protection could be shortened. Or rules could be tightened to prevent one-day strikes being held at close intervals to maximise disruption, as in the case of recent railway strikes.

A nuclear option would be wider application of the controversial practice of ‘fire and rehire’. Under unfair dismissal legislation, once someone has been employed for two years, they can only lose their job for reasons such as capability, misconduct, contravention of statutory duties and redundancy. One vaguer category, however, is ‘some other substantial reason’. This provides a loophole for fire and rehire.

If the alternative to sacking employees and rehiring them on less favourable terms – which might not involve a pay cut, but some other contractual change, such as a requirement to work at weekends – is going out of business, this is a ‘substantial reason’ which permits the practice.

Allowing fire and rehire under less extreme conditions than threatened business closure could let employers do as Ronald Reagan famously did with US Federal Air Traffic Controllers in 1981 – dismiss those refusing to accept changed conditions of service. However, the adverse public reaction to the recent P&O case makes this unlikely in the current context.

Finally, given that union power is concentrated in public or quasi-public sector businesses or institutions, a radical administration could turn again to privatising government functions and breaking up concentrations of union power in the civil service, education, the railways and elsewhere.

None of these options may be necessary or indeed desirable. But if the current summer of discontent turns political, with attempts by militants to use industrial disputes to bring about a change of government, it is as well to remind ourselves that the options are there.

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Professor Len Shackleton is an Editorial and Research Fellow at the IEA and Professor of Economics at the University of Buckingham.

Columns are the author's own opinion and do not necessarily reflect the views of CapX