Lessons from History – Working with an incoming Labour Government

After seventeen years of Tory rule, in 1997 the prospect of a Labour Government felt like emerging into sunlight after years spent in a dark, damp tunnel.

Manifesto promises that unions had campaigned for soon appeared on the legislative timetable – the National Minimum Wage, reinstatement of trade union recognition at GCHQ, adoption of the EU Social Chapter, which brought in new rights for part time workers and working time protection. All of these made a big difference to workers. By and large they were swallowed by the employers’ organisations. The size of Labour’s majority forced them to concede that there was clear public support for them.

But what of collective rights, rights for union members to recognition and collective bargaining, rights to individual representation by a union and the repeal of the Tory anti strike laws?

Commitments in the manifesto were there but hedged about and vague. Unions would be recognised, with statutory underpinning but only where there was majority support in the workplace. Collective bargaining following recognition would be on pay, hours and holidays but not training or equality. Workers could take a union “companion” into a formal disciplinary or grievance procedure. But nothing much on repealing the anti-strike laws. It was made clear to the TUC before the election that on these collective matters there would have to be discussions and agreement with the CBI.

Whereas of course it was usual to have discussions between Labour Governments, unions and employers, this time it appeared that agreement would have to be reached – in other words, in a situation where the TUC wanted reform and the CBI clearly didn’t, the CBI was getting a potential veto.

There followed hours and days of parallel lobbying and occasional tripartite meetings. Repeatedly, the TUC hammered out some kind of legislative architecture with Labour, only to find that the CBI had refused to accept it and to end up with an often messy and complicated compromise.

There are many examples of this in the Fairness at Work White Paper, that preceded the Employment Relations Bill of 1999. Applications for statutory recognition would be made to the Central Arbitration Committee (CAC), which would determine whether the union could proceed, then determine the “bargaining units”, the composition of which would have to be agreed by the CAC, who were given a duty to consider the business case.

The bargaining unit had to include a percentage of union members. This was changed in the Bill to include the union also having to demonstrate that it would be likely to win a ballot. The ballot would include a forty per cent turnout threshold plus a fifty per cent majority. (This formula was later applied to strike ballots, but never suggested by Labour for the Brexit referendum many years later, although that affected the entire population, rather than just a workplace).

Other parts of the Bill that were added at the behest of business were the exclusion of small businesses and the so-called mirror de-recognition procedures.

This pattern continued throughout the whole period of Labour rule. The TUC and the CBI (or increasingly the small business groups, such as the British Chambers of Commerce) asked for legislative changes, or objected to proposed legislative changes, and the Government came up with a compromise, sometimes after asking the TUC and CBI to try to reach an agreement.

Will it be different this time?

With the CBI recently hugely weakened by its internal problems, it may be that an incoming Labour Government will seek to bring the various employers’ groups together as appropriate to consider proposals for reform of employment and union rights. When it comes to sectoral collective bargaining the public sector employers would presumably be part of the dialogue, as well as private sector organisations to represent the contracted-out services.

Judging by the relationships already forming between the Opposition and various employers’ organisations, together with the messaging to unions about restraint and economic necessities, it is likely that the process of legislative change will essentially be similar to that that which went before.

It is also important to bear in mind that the economy is not going to be in the same relatively healthy state as it was in 1997. The Labour leader and shadow Chancellor have warned that expenditure will be tightly restricted. Unions will need to consider how to maximise opportunities in areas of the economy where there is to be investment, eg, green energy, while working to embed new methods of pay determination through new statutory collective arrangements.

At the same time, the promised improved individual rights for all workers, eg, the ban on zero hours contracts, will need a great deal of attention to secure maximum effectiveness. The TUC and affiliates will need to be closely involved in the design and the Parliamentary passage of the Employment Bill, both of which could be fraught with technical difficulties.

Employers will no doubt be involved in parallel lobbying and even with a large majority, Labour may err on the side of caution, as they did previously.

It is important therefore that unions reflect on the past when approaching relations with an incoming Labour Government.

What to watch out for

Now that the UK is no longer in the EU, formal social dialogue between unions and employers is no longer required in relation to EU employment Directives. It was never required for domestic legislation but was nonetheless often used. If it is to emerge under a future Labour government, for example, in relation to collective agreements at sectoral level, unions will need to secure from the outset an agreed mechanism for negotiating and enforcing the agreements.

Relations with the new Government in 1997 often resembled negotiations. The TUC was offered union recognition but was told that this would be all it would get in terms of trade union legislation. There would be no repeal of the Tory laws on industrial action. The laws restricting trade union activity that were introduced under successive Tory governments remained on the statute book – and are still there today.

It is important for unions, through the TUC, to privately decide which reforms and changes are the most important to the Movement. It is very unlikely that the TUC will get everything that it wants, so focussing on what is both necessary and achievable is crucial – and very challenging! It will also be important to keep up the public campaigning to maximise pressure on issues where legislation is not forthcoming.

In this context, keeping as close an eye as possible on the reactions and lobbying of employers is essential.

The Government may argue that not doing some things, eg, not repealing EU derived legislation under pressure from employers, counts as giving something to the unions – it can get very transactional at times.

The TUC will have to consider how important it is to them for the architecture of Government to change. It would no doubt be much better for employment relations and for workers and unions if the former Ministry for Labour, or some such department, were to be formed, taking in parts of the various Business departments and parts of the Department for Work and Pensions.

However, is this really a priority, given the huge pressures on an incoming Labour Government and the time that it would take up? Already the Labour Party is hinting that reform of the House of Lords and Regional Government will more likely be a second term priority. Will a Ministry or Department of Labour similarly be postponed and how much does this matter? On the other hand, if there is to be a new statutory system of collective bargaining at sectoral level, doesn’t this necessitate a Ministry for Labour?

When working with a Labour Government on proposed legislation, it is crucial to ensure that those involved understand how legislation is drafted, and how Parliament works. All sorts of details can be missed, for example, the title of the Bill. It must include broadly what will be in the Bill, so if trade union law is to be repealed as part of an Employment Bill, the title should provide specifically for that.

The Employment Relations Act 1999 put all the statutory recognition provisions into a Schedule, that was inserted by the Bill into the Trade Union and Labour Relations (Consolidation) Act 1992. This could have been repealed very swiftly indeed in Parliament when the Tories came into power – although it never was, which might say something about how effective the legislation turned out to be in practice.

Other issues to watch are the commencement dates, the number of provisions that will be enacted by subsequent secondary legislation, any sunset clauses, exhaustive lists of those to whom it will apply, consequent repeals of older legislation and more besides. Unions should ask to see a draft Impact Assessment and draft clauses for the Bill.

Unions will want to campaign for full and speedy repeal of the Trade Union Act 2016 and the Minimum Service Level legislation, as promised by the Leader of the Opposition. Unions will also want  to include other reforms, such as the introduction of electronic balloting for all union ballots – which stands a good chance of being adopted – and repeal of the old Tory anti strike legislation – which is less likely to succeed but important to attempt.

Previous Governments, both Tory and Labour, have made a fetish of regulation. It has been elevated from a process to a principle. The Tories want less of it, as a principle, and Labour wants it to be better. Surely all that needs to be agreed is that doing regulation well, making sure that it is enforceable and ensuring that it addresses actual risks, should be the underpinning of good government. This could be achieved by training for civil servants and indeed MPs and peers and by moving the internal Better Regulation Executive, which is part of the civil service, out of the Business and Trade Department into the Cabinet Office.

The existing quasi-independent Regulatory Policy Committee (RPC) was set up in 2009, following on from various other iterations (Better Regulation Task Force/Commission/Committee). The TUC decided during the 2000s that it would involve itself in the various bodies and was successful in using them to gain some small regulatory improvements to TU and other legislation which had not previously been agreed.

Is there a need for a separate body to achieve this and is there a risk that if so, it will get in the way of policy objectives?

More recently, the TUC has been helped considerably by the RPC issuing “red lights” against proposed TU legislation which had defective Impact Assessments. But how would the TUC react to having a Labour Employment Bill, or parts of it, held up and “red lighted”?

Some of the legislation introduced by former Labour governments has proved to be very hard to enforce, including the statutory recognition legislation and the Agency Work regulations. It is important to look at putative legislation from the other end of the telescope. An initial question should be “Is it easy to enforce?”

The current system of taking breaches of employment rights to Employment Tribunals is cumbersome and expensive. It may not be a first order issue, but the TUC may want to consider whether there are better ways to enforce employment rights, especially where a claim has the potential to impact groups of workers.

In 1997/8 the new Labour Government added quite a lot of “extras” into the Employment Relations Bill, eg, rights for part time workers (derived from joining the Social Chapter of the EU). This can lead to hurried drafting and can distract from the main political objective of a Bill – although of course the rights themselves were very welcome and important.

In this context, although unions want changes to discrimination legislation, it may be unwise to try to add this into the first Employment Bill.

On issues such as discrimination, legislation generally goes wider than employment. Much equality legislation also covers the provision of services for example. For that reason, it is usually better to work with other organisations to achieve change. Although it is important for unions to be at the forefront of progressive changes to social issues, this does not mean leading them, especially where there may be differences of view within and between unions.

While arguing for employment and union rights it will help if the arguments are based on the improvements for productivity that have been shown to result from a happier workforce that has an independent collective voice.

There are some small but important reforms that are needed, for example, restoration of the duty on ACAS to promote collective bargaining.

Finally, successive Tory governments have removed TU representatives from the Boards of many regulatory bodies, even where the TUC has statutory representation rights. Where they have not removed them altogether, they have chosen people who were not nominated or supported by the TUC. This is unacceptable. Previous Labour Governments have been generously pluralistic, allowing Conservatives to take places on various public bodies. This caused problems on several occasions and should not be repeated.