UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 90-iii
House of COMMONS
MINUTES OF EVIDENCE
TAKEN BEFORE
TRADE AND INDUSTRY COMMITTEE
UK EMPLOYMENT REGULATION
Tuesday 18 January 2005
Manpower
MR DAVID ARKLESS
Amicus-GPU
MR TONY DUBBINS, MR TONY BURKE, MR
MIKE GRIFFITHS,
and PROFESSOR EWING
Evidence heard in Public Questions 378 - 457
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Oral Evidence
Taken before the Trade and Industry Committee
on Tuesday 18 January 2005
Members present
Mr Martin O'Neill, in the Chair
Mr Roger Berry
Richard Burden
Mr Michael Clapham
Miss Julie Kirkbride
Judy Mallaber
Sir Robert Smith
________________
Witnesses: Mr David
Arkless, Senior Vice President and Executive Board Member, Manpower,
examined.
Q378 Chairman:
Good morning, Mr Arkless, and welcome.
Perhaps you could start this morning by telling us a wee bit about
Manpower and about the kind of people with whom you deal in the course of your
activities.
Mr Arkless: Thank you for the
invitation this morning. Secondly,
sorry if I look slightly threadbare but I broke six ribs on Sunday so if I look
a little bit tired it is because I have not slept and this is my first outing.
Q379 Chairman:
We will try and not make you laugh then!
Mr Arkless: Please do not make me laugh or sneeze
or cough. Any of those are not welcome!
Q380 Chairman:
Thank you very much for coming.
Mr Arkless: My pleasure. I will tell you a little bit about Manpower. Manpower is a global human resource and
specifically staffing company. We have
been around for 50 years. We are an
American corporation quoted on Wall Street under the ticker symbol MAN. We have had various representations in the
US to change our name from Manpower, but as it is a generic term we stick with
it. We are present in around about 80
countries. Our traditional business was
temporary services. We started in the
US and then spread to Europe in the1950s and 1960s. Over the last ten to 12 years we have diversified our business
significantly and become a $14 billion revenue corporation and we have moved
very much away from traditional temporary services/high street staffing into
managed services, executive search, placement, selection services, psychometric
testing and assessment, off-shoring, out-sourcing, in-sourcing, co-sourcing,
managed services. Just pick one of the
phrases that you know and love and we do most of it. Our business today is characterised at the top level by
relationships with large global corporations which represent around about 40
per cent of our revenues. These kinds
of arrangements involve a full range of human resource services, from
organisation, consulting, human resource strategy, organisation re‑engineering,
through to the provision of appropriate skilled people in the right place at
the right time in the right configuration in many countries in the world. Naturally our focus over the last three to
four years has been working with large corporations in shifting work on a
global basis or reconfiguring it within corporations. That is Manpower. What do
I do? I have been with Manpower about
14 years. I am a Geordie Swiss because
I have lived in Switzerland for 20 years but come from the UK originally. I spent much of my career with Hewlett
Packard and also a consulting company which was acquired by Manpower. Initially I was responsible for running
Europe in Manpower in global marketing and then our mergers and acquisitions strategy
and implementation for four years, and on completing most of the acquisitions that
we wanted last year we created a new function in the corporation called
corporate affairs which is responsible for governmental relationships,
international relationships, thought leadership, Manpower Foundation and
corporate governance.
Q381 Chairman:
Fine. One small point, what
sort of share of the market (or it may be markets) do you have in the United
Kingdom? How do you stand in the
pecking order amongst comparable agencies?
Mr Arkless: We are just about the largest in the
UK.
Q382 Chairman:
We have been talking to a number of people about various aspects of
the flexible labour market and how European Directives are intervening and
changing the character of it, and the one that we really wanted to discuss with
you this morning was the Agency Working Directive because we have had somewhat
of an apocalyptic forecast from the CBI, the lead employers' organisation, and
we just wondered what your take was on AWD as it is currently been promoted or
looking?
Mr Arkless: We have got the benefit of looking into both
the European economy and the United Kingdom's economic performance from the
outside to a certain extent. Although
the UK is a significant market for us changes in legislation of this nature - AWD
- would not be Apocalypse Now. There are some good things in the AWD. There are some very good things happening in
European legislation with regard to labour employment and social policy. However, there are some parts of most of
bits of European employment legislation that have been tabled or reconsidered
at the moment that are inadvisable and will not help assist or promote European
productivity and growth. My first view
whenever I look at a given labour market or economy ‑ and I am an adviser
to the Chinese government, India, Australia, the United States' State
Department and a number of other organisations on employment strategy and
policy - is to say what is working and
what is not working. It seems to me
that it is pretty inadvisable to break stuff that is not broken already. Why fix things that are not broken. When I look at the UK and the 50 quarters of
economic growth, the 12 years that you have outstripped euroland in terms of
growth, I think some of that is to do with the particular nature of flexibility
which I think contributes to productivity in the United Kingdom. In my opinion, the UK labour market is one
of the most appropriately flexible markets in the world. It is not like France, it is not like the
US, it is not like the Netherlands; it is in many ways a unique market which we
think today actually operates very well.
If you would like me to focus on AWD and come down to issues that are of
concern to organisations like ours ‑ and bear in mind we are talking
about the full range of human resource services here not just the provision of
temporary workers ‑ it would be concerns over things like user pay,
concerns over implementation of measures with regard to equivalence of
compensation, benefits packages, and it would be the application of
qualification periods, what that means, how they get implemented and the
consequent impact upon what is a pretty healthy economy in the United Kingdom.
Chairman: Thank you. Richard?
Q383 Richard
Burden: Obviously you would take the view that agency work
contributes to flexibility of the economy and through that to
productivity. However, the point is
also made from a number of quarters that it can also contribute to discouraging
employers from making a long‑term commitment to their staff or taking on
permanent staff that they might otherwise do and that that in itself would be
to the detriment of longer term productivity.
How would you respond to that?
Mr Arkless: I think it is tough to characterise a
grouping called "employers" firstly because you have many, many different
configurations of employment and employers, many of which operate in different
ways. They say that the power house or
the engine of economic growth in any country is small to medium-sized
enterprises. If you look throughout the
UK at the variation in the behaviour and the characteristics of those companies,
they differ vastly. Then you step up to
large corporations and global corporations.
It is my estimation from looking at the UK and Europe that we have got
to look at employers in a number of segments.
First of all, large corporations that have pretty good strategic planning,
tactical implementation, who understand what the relative benefit of
flexibility is and its impact on productivity and the usefulness of a
contingent or flexible workforce. Some large organisations plan this stuff
pretty well. It is my experience that
when we get into private enterprises of a small, creative nature that there is
a whole variety of approaches to engaging the workforce. It is clear - and it is one of the reasons
that I welcome some of the measures in the AWD - that abuses in any part of the
workforce in Europe are possible by employers.
We are fully in favour of protecting workers and ensuring that employers
fulfil commitments to employees. Remember,
Manpower are an employer and we are in fact the world's largest employer
employing more than 3.5 million people full time worldwide every year. That might be quite a lot of millions in
terms of assignments but we are also a responsible employer. The placement of an employee of ours into
another company does not take away our responsibility to treat that employee
correctly, and to give them the right benefits, the right skills and the right
training. Where I think the problem
could lie within this sector, if indeed there is a formalised sector because
there are all sorts of services provided, is with certain organisations and
companies that do not treat their people as employees with employment contracts
and give them all of the rights and benefits of being employed. I have the same concern as you in that area. Because these people are not employed by an
agency or a contractor and where they are put into a company, I believe the
person could be treated like a commodity and they can be traded around like a
commodity. When an employee belongs to
an agency like Manpower they are our employee and we take that as a serious
commitment to the individual and to the organisations into which we place our
people. I think that is one of the
critical issues in this whole raft of legislation. One of the most destructive issues would be to erode the
potential for us to be an employer because we take that as one of our more
serious responsibilities.
Q384 Richard
Burden: I think my colleagues will explore the issue about whether
the employer should be the agency or the undertaking that is commissioning the
agency and also the concerns you have about aspects of agency working directly,
but I was interested that you said there that there are parts of it that you
actually welcome and that you do see the need for protection for temporary
workers in a number of areas. Could you
say a bit more about which are the bits that you welcome and also how those
concerns that you have outlined about exploitation could actually be met other
than through the Directive as it is?
How would you protect workers?
Mr Arkless: On the last one, you are opening up a
whole series of discussions with regard to contractual treatment and the
structuring of employment but I will get to that in a minute. If we look at the parts that we welcome, we
believe that every what we call productive and potential participant in the
workforce has a right to be trained and developed, have a lifetime career and
to gain meaningful, additive work. That
is one of our core values and principles.
Along with that we believe and we have signed up to many, many
international, global, United Nations, International Labour Office projects and
initiatives to ensure that workers are not exploited on a global basis and in
Europe. Exploitation takes many forms. It takes the form of economic exploitation and
we are concerned about that. It takes
the form of exclusion which is a kind of exploitation, excluding people from
the workforce. We believe that people
should be adequately represented by an employer fully and if they so wish by a
union, and that is completely their right, and we believe that the inter‑relationship
between government, unions and employers is absolutely critical to the
effective functioning of the labour market, so with regard to representation we
believe that should be guaranteed. With
regard to basic human rights, basic work rights, we believe that those have got
to be written into every form of European legislation. What we welcome about the AWD is the
potential control of the shady part of the industry in Europe because it does
exist. Potentially, there are hundreds
of thousands of small agency providers throughout Europe that really cannot act
and do not act in the best interests of employees and do not act as employers,
so we welcome the control of the sector at an appropriate level. We also welcome the potential spread of the
provision of agency workers' services across the public and private sector in
almost every industry segment, which is a part of the provision of the AWD, so broadening
the presence of employer‑based agency work across Europe is good. It is no secret to any of you that the
European economy is not doing as well as it should and parts of the European
economy are characterised by extremely long‑term job tenure in permanent
jobs and very high measures of social and job protection for employees. I also find it strange that when you compare
Europe with some other continents like North America you would say that
comparing the two models of employment ‑ the social protection model in
Europe generally and the job creation model in North America generally ‑
one would assume that European workers feel more confident of keeping their
jobs and remaining in their jobs whereas in places like North America, where
you can be given one day's notice and maybe if you are lucky you will get four
or five days' pay, you would think that people in the workforce in North
America would be insecure. It is just
opposite. I brought a small report that
we prepared for you which you might be interested in called Getting Europe to Work which we prepared
in partnership with the European Policy Centre of which we are board members
which says let's look at the most effective employment models in the world, let's
look at the ones that make workers feel more secure and, contrary to popular
opinion, long‑term job tenure does not make workers feel secure. What makes workers feel secure is the
capability of finding new jobs at the right kind of levels. Finding new jobs generally means creating
jobs and flexibility really does help promote economic growth which creates
jobs and I would be pleased to give you this report at the end. I can send it to you electronically. I think it states a very important case not
just for the UK but for Europe with regard to future employment
legislation. Sorry, to get back to your
question. The issues that we welcome
are the control of the sector generally and, secondly, the potential
application of flexibility in many more areas from which we are excluded at the
moment.
Q385 Richard
Burden: I am still not clear in terms of the regulations what you
see as being beneficial in the sector to deal with the cowboys - and I do not
know if you used the word "cowboys" but that was implication of what you are
saying. First of all, what would that look
like, what is the regulation that you see as appropriate there and, secondly,
in relation to the user undertaking where there is a "cowboy" agency commissioning
there or a reputable agency commissioning there, are you saying there should be
no regulation at all from the Agency Working Directive to the user undertaking,
it should all be to the agency itself?
Mr Arkless: We would like to see the acceptance
that agencies are employers and fully‑fledged employers. That is my number one principle. With regard to that, I think that would
clear a lot of the lower-level operators that we do not think give the right
kind of commitment to employees out of this sector if it was incumbent upon
agencies to be the employer of individuals, which is not the case right
now. Some agencies, as you know, deal
with people just on a placement as an agent basis, so forcing a situation where
the agency must be the employer is beneficial and that would help a lot of the
poor behaviour at the bottom end of this industry. Your second question?
Q386 Richard
Burden: My second question concerns whether or not it is one of the
poor performers, the cowboys, or whether it is a reputable agency in respect of
user undertaking as the place where the employee is actually placed. Are you saying that there should be no legislation
at all regulating that end of the relationship, that it should all be to the
agency or that there should be some and it is just not the regulation that is
implied in the Directive?
Mr Arkless: I think that I would
focus regulating of the sector mostly on the agency end. I think there are certain things that are
absolutely required as an extension of employment law throughout Europe at the
user end because we are all aware of unsatisfactory situations in terms of long‑term
contracting employment where there is no equivalency in organisations of pay,
salary, benefits and there have been quite a lot of cases mentioned in the
press, in the international press, in US court cases, and Congressional
investigations into transfer of undertakings and such like, so I think there is
a requirement for control at both ends of this provision in the supply and
demand spectrum, absolutely.
Q387 Sir
Robert Smith: Taking you on from there in terms of the demand for
control at both ends - and in a way you have shown quite an enthusiasm for
certain rights - what sort of qualification period would you be seeing because
the debate seems to reflect around that?
Mr Arkless: I think an interesting place to start
is to look at current practice and use of flexible labour. The average temporary contract worker has an
assignment of longer than six weeks on average and less than a year. It would seem logical to me that there is
some responsibility for a user employer in the end to, quite rightly, determine
that this job is permanent or it is not.
Given the statistics of utilisation of flexible workers, I think a
logical time period to give the employer to decide that is 12 months.
Q388 Sir
Robert Smith: I think you have answered most of the other questions
already. If the qualification period is
12 months that would pretty well cover it and then after the 12 months subject
to the caveats you have made?
Mr Arkless: I would say that anyone would be able
to decide whether a job is permanent within that kind of period of time. The interesting thing is people say that
12 months is almost a lifetime today in work.
Indeed it is, but there are many flexible contracts for work that
corporations pick up in small and medium-sized companies where the absolute
requirement can take up to a year to fulfil the contract and many of the ones
that we get involved with are of that nature where a tech company takes a
special contract that needs a special piece of something developing or a
special productivity increase for a period of time, not just on a seasonal
basis but over a period to complete a contract, and we think to remain
competitive we need that kind of flexibility but indeed at the end an employer
really has to say, "Okay, it is time this person became a permanent employee."
Sir Robert Smith:
Thank you.
Q389 Chairman:
You hinted there that there are different types of people whom you
employ. What is the breakdown of your
range of worker clients and how many of them are in better paid, high tech jobs
which might fall into the category you described there, and how many of them
are people who are filling in for others, who are on holiday relief, who are by
their nature almost itinerant, they are in for six, eight, ten weeks and then
move on somewhere else?
Mr Arkless: I am not a great fan of the word "itinerant"
but I know what you mean. The
proportion of short‑term assignments - replacing somebody on vacation or
where somebody has resigned today until you find a permanent employee which is
usually what I call light industrial level process workers, admin, support
staff - has fallen quite rapidly over the last five to six years in the
business, which is why we have specialist information technology divisions like
Elan in the UK which only supply high-end IT workers. I would say the split today on light industrial admin compared to
what you would regard as higher paid, more technical domain expertise‑type
workers is around 60:40 but then it is split very much into customer segments
where the business we do for instance with our largest global customers does
tend, strangely enough, to be at the more specialist and more highly technical
and qualified end of the scale whereas our SME business in a place like the UK
does tend to have a slightly larger proportion of administrative, office
support and light industrial work.
Again if you compared the UK to a place like France which is our largest
revenue country in the world (not America which is where we are based and
headquartered) every day we might put 175,000 people to work in France, and
most of them in France because of the nature of French regulation and the
structure of industry, with their 35-hour working week, tend to be in
agriculture, construction and light industrial process manufacturing and then a
smaller proportion of administrative staff.
So it is driven very much around Europe by the application of employment
law by various governments and certain interesting regulations and rules.
Q390 Chairman:
Before you come in Robert, just on this point then would you say
that a European‑wide Directive can really be capable of addressing local
labour market situations one country against another or within one country on
that basis? Is it a bit ambitious?
Mr Arkless: I think it is extremely ambitious and
if I look at the raft of legislation ‑ AWD, Working Time Directive, the Services
Directive and a few other more eccentric pieces of legislation that are being
written and tabled at the moment - I would say virtually impossible for uniform
application. Why do we see so many opt‑outs,
why do we see negotiations on sidelining different pieces of legislation? I think what we are struggling for in Europe
is a sensible and balanced view of employment growth. We are really struggling with it. Germany is a disaster. It
has the highest total cost envelope of labour in Europe, is the worst on
employment and the worst on job creation.
They are going backwards. If we
have got any kind of uniform employment strategy in Europe, please, let's apply
it to Germany, and it might help the rest of us.
Q391 Sir
Robert Smith: On that different kind of work you do, would the
people at the very high-earning end prefer not to be called employees? You were saying that all people whom an
agency places should be employed by the agency. Are there not certain people with certain very specialist, high-value
skills that would prefer not to be working for you?
Mr Arkless: Those people tend to place themselves
into the individual contractor status so they do not normally even come to an
organisation like ours because there are plenty of jobs for a highly qualified
and specialist information technology or financial services expert in the City
and around the UK and what they tend to do is get involved in their own
peculiar form of internet based labour arbitrage and there are labour exchanges
for high-level qualified domain experts in the UK and elsewhere and they tend
to operate in a world that we do not touch.
I think that is another area that needs a very, very close look by any legislators
that are developing labour legislation because the individual contractor area
is one of the areas where I would look to for more regulation because the area
in general gives the potential for lots of abuse in terms of working hours, in
terms of treatment of the contractor, in terms of the return treatment of the
supply into the user company, so it is a very interesting area and a big one.
Q392 Chairman:
It seems to be an area that is so specialised and highly paid that
you do not get involved in it. Is that
correct?
Mr Arkless: We get involved in all sorts of areas
that are highly paid and specialist ‑ research level PhD scientists, a
search for Phillips in Eindhoven for instance, lab technicians for Hewlett
Packard laboratories. There are all
sorts of high‑level jobs we do get involved in but usually those
relationships are characterised not by the individuals who work in them for us
into the user company but by what the user company wants, and typically a user
company would say, "I have got this special technical project that is going to
last six months. I cannot use these
high level people afterwards. I want
them to be your employee, Manpower, so that you can cycle them back into a
university to do more research or you can cycle them into another company that
requires specialist or domain expertise.
Q393 Mr Clapham:
One of the interesting aspects of the UK economy and an aspect we have not been
able to remedy despite legislation in the 1970s is, of course, equal pay. How would you interpret the AWD's reference
to equal pay?
Mr Arkless: This is a corking one. I love this. We could be a couple of hours on this one. In short, I think the notion of user pay is
terrifically difficult to implement.
For my sins I spent three years running a compensation benefits
consulting firm so I used to get heavily into how you assess a rate on a
market, how you internalise it into the company and then how you determine
internal equivalences. I cannot see a
method of legislating equivalence of pay without immense bureaucracy and that
is my concern. Generally we find, and
please understand that I am not talking about workers but about pay rates here,
that wage rates are a commodity on the market and they are driven by supply and
demand, supply of the skill, demand for the work to be done, as you very well
know. Very often it is a lot easier for
us to specify a market rate for a job, be it technical, specialist or a special
kind of admin or financial service every day because we deal with thousands and
thousands of jobs and we know what the pay rates are for the market. We often have a much more accurate shot at
what the right pay rate is than some companies that have their own internal pay
scales. As you know, company strategy
on remuneration is driven not just by market rate supply and demand but also by
the possibilities of investing in pay or remuneration by that company, its
state, its evolution, its strategy and what it intends to do with its
capital. There are so many
considerations when you are in a company.
I would find it very difficult to be able to specify a methodology to
determine user pay. For instance, I
could place the same technical skill in a large corporation in the City of
London that would be at rate X. The
same job in a small to medium size enterprise somewhere also in the City might
have a 25 per cent differential. Who do
we compare? Do we compare people
against the market rates or do we compare people with the user rate inside a
company and then, when we get inside a company, I find it very tough, given the
structure of how you arrive at internal pay rates, to determine what the user
pay would be. I will give you some
examples. The issue of a pay rate
should revolve around a person's performance and general ability to do the
job. If you look at the complexity of
how you judge that it is usually the following items if you look at any job
evaluation performance scheme. It is a
mixture of job knowledge, a set of competences to do the job, some domain
experience in a wider area and knowledge of the company itself and its
operating systems. I have had many
employers throughout Europe say to me, "There is no way I am going to pay your
contractor or temporary in my company the same pay rate as my person that is on
holiday". I say, "Why, because they have got all the competences?", and the
user would say, "Yes, but they do not have the network, they do not have the
relationships, they do not understand our culture, they do not have the
experience". I know that there are
thoughts about building into this in terms of user pay a potential set of pay
scales which is fraught with the same danger.
All employers will do is stretch the pay scales. If you say, "Okay. This person comes in at the bottom quartile of the relevant pay
scale for the user pay of that job", they will just stretch the pay
scales. You can find an updater to
stretch pay scales wherever you want. I
see difficulty in working out for a comparison with the user company the
correct pay rate and the administration, the bureaucracy, to be able to enforce
that and control it. Secondly, what should
determine the pay rate is supply and demand and we know that every day by
transacting people from one place to another.
We know what the pay rates are, so we find that for a large number of
our jobs they are on higher pay rates than people in the user company and we
can justify that because not only do we provide a more skilled person under
certain circumstances for a highly specialised task but we also have to demand
more in the pay rate for that job because we need to run our own company. We train and develop them, we give them
career paths, we give in many cases back-to-back job employment for years to
temporary people from one organisation to another. Do not forget that in the UK this industry creates more than a
million jobs a year. Do not forget that
most of the employers that we have polled in the UK say, "If we could not have
temporaries we would not hire them as permanents". If we take the flexibility away I think the bureaucracy embodied
in some of the aspects of user pay is so complicated that the companies would
just say, "Forget it. I am just not
going to do it". That is the reaction
that we are seeing. I like the notion
of equivalence. I cannot see any
measure which would allow it other than to say that in the end the market decides
and that gives you approximately the right pay rate for an individual.
Q394 Mr Clapham:
That is interesting. From what you are
saying you see the agency as the comparator but as to whether the comparison is
to be implemented it is left up to the employer?
Mr Arkless: Actually it is going
to be left up to the legislation in the end and the employer will try and
implement whatever the legislation is.
I know from polling our large customers that the employer's view is, "We
want flexibility with the right pay rate, with the right skills of the person
for the appropriate amount of time we need to increase our productivity or get
this specialist job done. Do not allow
people to take that away from us". If
you were to do a detailed survey of pay rates between temporaries and
permanents you would find a whole range of people in different companies with
the same skills doing the same job at a vast variety of pay rates. Then there is user pay. We have user pay in one company, as I said,
with comparators in inner London, and then you move to Reading and then to
Newcastle and then to the south west of England. What is the right rate for the user pay? Generally one of the other very productive
roles we play is that we know the employment market on a local basis and can
advise employers about supply and demand and about the pay rate. We do that on a daily basis. Our service reps are trained to do that with
their customers. One of the interesting
things is that our customers that are in a long term relationship with us say
to us, "You decide the pay rate. I am
not even going to compare it with anything internally. This is special work. This is an increase in productivity that I
need". It is short term in some cases
and they are more than willing to pay a higher pay rate. In many cases we must apply more than the
logical pay rate for the job because of our overhead and employers accept that.
Q395 Mr Clapham:
A little earlier you were talking about the features that you see as being
included in the job. Would you see, for
example, in that comparator template the inclusion of the occupational pension?
Mr Arkless: I think it is
everyone's right to have a pension. I
think it is one of the reasons that agency companies need to be employers. I think it is very responsible to provide a
pension. Do not forget that throughout
Europe if you polled very agency worker (which has been done) almost 40 per
cent of them want to do agency work because it suits their flexibility, because
they do not want to work full time, because they are older people that want to
come back to work, because they are disadvantaged people who, through
specialist schemes, we put to work, and they just do not want traditional
employment. That is 40 per cent of the eight
million people that work in this industry full time every year. There is a huge amount of people out there
who want flexibility. However, I think
that as an employer we must fulfil our employer obligation and give them access
to pensions, insurance, training, development, cut-price gym membership, all
sorts of stuff. The other one on
equivalency that is a real problem is that many of our temporaries have better
benefits than many of the user companies that we put them into, so if there is
a mandated equivalency on benefits packages I am going to be asking some of our
employees to reduce their package and I do not think they would like that.
Q396 Mr Clapham:
Given, from what you said, that it is a very complex area, do you foresee it
being a ground in which we are likely to see many lawyers involved? Are we going to see long discussions and
dialogues taking place about what are the features of equivalence?
Mr Arkless: Absolutely. That scares me to death. I have seen papers prepared already by some
top Brussels legal firms on behalf of employers with regard to the fact that
they are stating that there is a very sound case already to say that parts of
the AWD are discriminatory and illegal.
There is a whole raft of legal interventions potentially out there for
the future of this directive, I believe.
Q397 Richard Burden:
You put a fair deal of emphasis on the complications of comparisons at the user
end of things and establishing equivalency, and I understand what you are
saying there, but you are also saying that the agency should be regarded as the
employer. How do you establish any
equivalency if the agency is the employer within the agency? I will give you an example. You have two people on your books that have
identical qualifications, identical talents, but you place one of them in a
City firm that has got a high pay rate and the other one in a City firm that
has got a slightly lower pay rate.
Therefore, within your employment relationship you have a
disparity. What is your obligation to
those employees to ensure that they have, with a small "e" and a small "o",
equal opportunity?
Mr Arkless: It is an outstanding
point and we have an obligation to do the following and this is what we do
every day inside our company. If you
think about it this is the most basic commercial common sense in the world. We basically are a company that generates
its revenue from pay rates and a mark-up on top of the pay rate, or a
multiplier, as it is called. Clearly,
the higher value jobs that we can place people into the better it is for our
business. What we will attempt to do is
to take workers through a range of progression and the range of progression
(and they usually go in parallel and hand-in-hand) is increased skills,
increased learning, great curriculum, giving them more capability; therefore we
can place them in higher paid jobs.
There is no sense in us having a massive discrepancy between two workers
who can do the same in different companies.
Typically what we will try to do (and very actively) is migrate workers
through successively higher paid job rates and then fill the jobs that they
have left with workers who are coming up the skills and performance scale. For us that is a normal part of our
business. Is it possible for us to
practise equivalency inside the temporary service agency? I would say it is about as practical as
doing it inside a large corporation. It
is complicated, there are regional differences and you will find that employers
are remarkably adept and skilful and creative in achieving whatever objective
they want and I am sure that they can change job descriptions, pay scales, pay
rates, to suit the requirements of the company. That is what is happening.
Companies always re-engineer their remuneration systems to suit their
commercial reality and that is not going to stop. To pick upon the agency and say, "You are not practising
equivalency", I would say yes, we are, in as much as every other company in the
world practices equivalency and it is not in our interest in any way, or the
industry's, to hold people in lower paid jobs when they have the skills to get
higher pay rates because that is the business we are in.
Q398 Chairman:
Is much of your client base accounted for by the public sector, by local
authorities, the Health Service and the Civil Service, and if it is, do they
exercise that degree of flexibility?
Mr Arkless: That is a very
interesting area. Of the million jobs
that have been created by this government in the public sector, we have just
heard in the last couple of days that quite a lot are disappearing and we would
like to offer our help in outplacements (and we are one of the largest
outplacement companies in the world) for the right management because we know
the right person to contact. I would be
delighted to get in touch with them.
The UK Government is interesting in terms of its public policy with
regard to flexibility. I see a lot more
of the flexibility in UK public services going to companies that are willing to
fully undertake the outsourcing of the work, companies like Capita, who take
whole swathes of public work outside of the public sector and provide people,
buildings, provision of services, on an output basis. Typically we would try to supply companies like that.
Q399 Chairman:
But you do not supply the Department of Work and Pensions or the Child Support
Agency who may have shortages?
Mr Arkless: Not in great
numbers.
Q400 Chairman:
Is that because you do not seek the work?
Mr Arkless: We would seek the
work if it was there. The point I was
trying to make was that it seems to me that the public procurement strategy
tends to take pieces of work and move them out of government circles rather
than have what I call internal flexibility to the degree that some corporations
have. Yes, I think it is a very
additive potential practice and yes, there is some of it on a small scale but
not to any degree. Also, let us just
reflect that in many parts of Europe we are precluded from the public sector in
lots of areas.
Q401 Chairman:
What I was trying to get at is that you have made the point that one of the
ways in which you address the challenge of equivalence and quality is that you
try and place people. You kind of
compromise between the demand of the market and the individual skills. That seemed to be what you were saying. One of the issues that might arise is that
within public sector employment there are clearly identifiable pay scales,
there are qualifications, and there might be, it could be said, a degree of
inflexibility, of inbuilt rigidities in the interests of transparency, ideas of
fairness and the like. Let us say that
a government department, which is not in the business of outsourcing and going
down the Capita route, has shortages of people to undertake certain tasks. They cannot do it internally. Would they come to people like you or would
they just go to the government employment exchanges, the Department of Work and
Pensions, and try and recruit people there?
Would you be interested, even although it was within certain rigidities
that you would not encounter in the private sector?
Mr Arkless: First of all, one of
the most productive routes with regard to public sector productivity in future
is the potential of public/private partnerships which are developing in many of
the largest countries in the world, if you look at some of the models of
sourcing employment flexibility through government and private sector
partnerships in places like the US.
Also, interestingly, we are engaging in programmes with the Chinese
Government on helping them within their public sector. I think it is an area of terrific productivity
improvement within the United Kingdom.
The answer is yes, at the minute they go to government agencies and on
certain occasions, I think for the slightly more specialised jobs, they go to
outside agencies. There is a continuum
of recruitment here. It is not just
temporary services; it is also the temporary contract/permanent service. Let us not forget that in this industry one
of the most terrific benefits of having employers like us is that most people
that take up temporary employment within a year move into permanent employment,
which is a terrific asset for any economy to have. I see the full range of that within the public sector in the UK
but it is by no means practised with uniformity. It is by no means seen as a natural area for an organisation as a
commercial organisation to look for productivity within flexibility. I think it is a great area to focus on.
Q402 Judy Mallaber:
To be absolutely clear on this, to make sure I am following you right, in terms
of equal pay, for someone who is placed in an end user, you are saying they
should not necessarily be given equal pay with the person doing the same job in
that employer, and similarly you are saying that your mechanisms within the
agency for one of your staff to have equal pay with someone else employed for
exactly the same job by your agency but in a different end employer will not be
there. Are you saying that equal pay
should not operate for practical reasons or on principle because it is not
flexible? It seems to be going totally
against any concept of equal pay for which I have campaigned for decades, so I
find this slightly upsetting.
Mr Arkless: I am sorry to upset
you, but, looking at the practicalities of equal pay, it depends upon personal
capability, company performance, individual performance, positioning in
lifetime experience on an area of main expertise or technical expertise. I am not disputing, nor even stating, the
fact that fair pay is not the right thing.
Fair pay is absolutely the right thing and the market decides what fair
pay is. To say that because we pay
person A in this company this rate for 13 years someone entering the company
should immediately have the same pay I think is nonsense. That is just my personal opinion, and no
employer that I have talked to accepts that principle at all. Today I think the issue with regard to
balancing pay with productivity, output and growth is probably one of the most
critical issues in any company today.
The issue of pay should be driven within a range, and maybe that is
where we are looking for equivalencies, so that there should be ranges,
potential open to individuals to do certain kinds of jobs with certain career
patterns and with certain kinds of competences. How do you decide within a range of remuneration, which is usually
measured against outside market values, where the person should be positioned?
Q403 Judy Mallaber:
That is fine. I will move on. It is a principle objection.
Mr Arkless: I understand your
principle.
Q404 Judy Mallaber:
Have you got any indication as to how employers would respond to the
directive? Are they likely to recruit
fewer agency staff because it is going to be more expensive? What is your assessment?
Mr Arkless: With regard to the
general reaction in some companies, the larger ones, it is much more of an
economic calculation. They are looking
at the absolute economy of provision and labour and flexibility and saying, "If
bureaucracy is going to cost us that, if the pay rate is going to cost us that,
if your overhead is going to cost us that, we probably are not going to do
it". Here is why that is
important. We deal with maybe the top
thousand corporations in the world and we work with them on moving pieces of
work and employees from one place to another.
As you know, one of the more serious challenges for Europe is to sustain
foreign direct investment from outside Europe, the magic triangle of government
spending, exporting, foreign direct investment, creation of jobs with
productivity. There is nothing complex
about developing a productive economy, at least I do not think there is. Foreign direct investment is critical. When we talk to those companies, the global
thousand, they today make decisions on three principles, and we have surveyed
this. Although this sounds a little bit
globally strategic, it is critical for the UK economy. The decisions they make are very similar
across all those corporations. When
they look to invest in a geography or a country they will look for three
principles: number one, a stable government and government policy; number two,
consistent investment in infrastructure that enables business to work more
easily; and number three, great human resources and talent. That is not rocket science. That is what I would look for if I were
starting a company. We asked them to break
down the aspect of, "What do you mean by great human resources and talent? Do you mean appropriate, adequate, from
schools, universities, technical colleges, the right skills at the right time
in the right place?", and the answer is, "Yes, of course". "What else do you look at?". They also look at a mixture of things
between government policy and work, which is, does the government have policies
in place to promote flexibility of the workforce? It is very good, variable utilisation at a competitive pay rate,
so they effectively look at that. One
thing I am concerned about deeply with regard to Europe and our poor
performance against other global economies is that we are not competitive from
a general pay rate and flexibility point of view. If you look at all of the foreign investment there has been in
the United Kingdom over the last ten years, much of it has been because we have
got a skilled workforce. Some of it is
for proximity economics because for American companies value for money is
wanted in the European market, in the UK, but some of it has been made on the
assumption that those companies, as they do in other countries, can get similar
flexibility in their workforce, as they do elsewhere, and once they run their
employment cost envelope calculations, flexibility, a capability to lay people
on for a specific job and then lay them off, have them go somewhere else and
then come back later, is critical to those global corporations. I am concerned that if we solidify the
employment structures within Europe we are going to diminish foreign direct
investment. That is one issue at the
top level.
Q405 Judy Mallaber:
I am a bit unclear. Would your estimate
be that the Agency Work Directive within those factors you are describing would
lead to the recruitment of fewer agency staff?
Mr Arkless: Fewer agency staff
and this would not be translated into permanent employment.
Q406 Judy Mallaber:
How would they then cope with fluctuating workloads if they were less inclined
to use agency staff?
Mr Arkless: We would then have
the same situation throughout Europe regarding some of the more socially
protected, longer job tenure countries in Europe. Companies would grow more slowly. They would not expand. They would move things elsewhere, outside
of the EU. Foreign companies would not
invest in the EU in the way that they have done in the last ten years.
Q407 Judy Mallaber:
But how would the individual employer respond to not being able to use agency
staff? How would they recruit their
people?
Mr Arkless: I think they would
be creative and look for some alternatives which would potentially lead to
greater exploitation of individual workers.
There are all sorts of smart things that they can do and I have tried to
make a list of, if I were a creative employer, what I might do if I did not
like the Agency Workers Directive. It
is stuff like whole work sub-contracting, fixed term service contracts,
individual contractor status, terminal contracts, regularly changing job titles
every two months. They would be very
creative, I think, at the expense of employees and I think what you are taking
away from the individual if you remove our potential to be a large scale
employer is the way that we are custodians and guardians, I think, of the
status and the rights of employees.
What we see here is a disintegration of the irregular workforce, as some
people call it, people who do not want permanent employment with one company
down to the individual level which, as we said earlier, is characterised by
some high level technical experts that just arbitrage their way round the
workforce for the highest pay rates they can get and as long as they are good
they can do it, but a lot of those people do not make any provision for
retirement benefits, insurance, the whole thing. I just get very concerned about diminishing our ability to be a
responsible employer, and I think other employers, if the AWD is too
restrictive, would just get into creative hyper-drive to the detriment of
employees.
Q408 Mr Clapham:
Based on what you have said, would you characterise your approach then as the
unions refer to, as "flexicurity", that is, flexibility with security?
Mr Arkless: Absolutely. In fact, we have worked for many years with
the International Labour Office in partnership to drive the concept of
flexibility with responsibility into as many countries as possible in this
world. This is of no relevance to today
but the work that we are doing in India, the work that we are doing in China,
is fundamentally helping reform not just employment structures but the whole
social security systems into slowly a much more responsible employee orientated
system. That is absolutely part of our
core values in Manpower. That is what
we do.
Q409 Mr Clapham:
We need to get you working in the mining sector of China where there is an
enormous number of accidents each year.
Could I take you to the point you made a little earlier about temporary
workers who are in jobs for about a year actually translating into a full-time
job and relate that to training. Where
people do that, is it because there is training available for them when they go
into the company and, as a result of that training, they are able to move from
temporary to full-time employment?
Mr Arkless: I think there are two things. Remember, I said that my recommendation for
qualification was 12 months. I think as
you go through a year, many organisations will decide that what they thought
was a temporary assignment or a project does actually sometimes translate into
a permanent job, so then they make the decision and that is nothing to do with
training because usually for those project-related jobs, they want a fully
trained person already provided for the flexible employment and contract. Certainly if I take a company like ours, we
have got 1,100 skills and vocational training schemes that every one of our
assigned temporaries has full access to and most of them these days are
Internet based and they can work at home while they are working in their job or
their assignment to improve their skills.
I think a lot of employers like the notion of what we used to call when
we were young lads the 'trial period' in a company and that is where you used
to sign on for a company and you used to have a full trial period after which
if you were the right person, you would be translated into a permanent
job. I think many employers see one of
the roles of agencies as being able to provide people for almost a trial period
and not just whether they have the skills, but whether they have the right
culture and behaviour for the company because, do not forget, very often the
match of the job with the person is not just to do with the skills they have
got and the experience they have got, but it is to do with behaviour, it is to
do with the way the company works and sometimes it just does not work. Therefore, I think for all of those reasons,
extra skills, fitting the job, employers finding out that the temporary
contract has turned to a permanent one, I think all of those are reasons why
there are so many translations into permanent employment.
Q410 Mr Clapham: Nevertheless, skills are important and
training is important in relation to productivity.
Mr Arkless: I would agree.
Q411 Mr Clapham: Given that fact, would you support the
mandatory right to training for agency workers?
Mr Arkless: Yes.
Q412 Mr Clapham: Presumably because you see that as adding to
the prosperity of the economy and adding a feature of dynamism?
Mr Arkless: I start from a grubby commercial point of
view which says that the better I train people, the higher-value jobs I get
them into frankly. It is not totally
altruistic, but as a principle, if you look at North America, what is happening
in North America is that the average skills of the workforce are moving up
increment by increment. Everyone is
talking about all of the jobs that are being offshored, outsourced and
re-engineered, but the fact is that more jobs are being created in North
America than have been outsourced, many, many more. Outsourcing and offshoring in North America has created jobs in
North America. The average pay rate
there is moving up and the pay rate does not move up just from inflation in
North America, but it moves up because people are fulfilling higher-skilled
jobs and if we can engineer that by any mechanism, better training, better
development, we must do it. The single
biggest issue for training and education in every developed economy in the
world today is lack of synchronisation.
Why are there so many unfilled jobs in Europe? Why did Germany have four million unemployed, but 300,000
unfilled IT jobs last year? It is
madness and it is the same in just about every country. We have an inability to fit the vocational
skills output with the right number of people hours in the correct vocational
areas to fit into the market's needs for jobs.
I think the issue is not just providing the training and the development
at the right time and the right place, but it is synchronising it accurately
with market needs at the right time and I think we really need to focus on
that. One thing we do simply because we
provide so much training, I think in terms of people hours for training, we are
the biggest trainer in the UK, strangely enough, because we have everyone
training most of the time and one of the issues is that people actually
perceive a lot of benefits apparently through training. We see a benefit out of better pay rates,
but individuals see a better career path, better potential returns and they
feel better about themselves. I think
one area which would be great to focus on in European labour legislation is the
provision of skills and vocational training because we have not got that right
in Europe, so I fully and absolutely support that.
Q413 Mr Berry: You said that agency workers are typically
employed for longer than six weeks, but less than a year and you made the
comment that it is right that after 12 months, employers have an obligation to
decide whether or not a post should be permanent or not. How, therefore, do you react to allegations
that there are some employers who keep workers on long-term, temporary
contracts to reduce their costs?
Mr Arkless: I do not think they are allegations; I think
they are absolute facts. I think that
employers who do not behave correctly absolutely do that and I think we have
all read of quite a few cases in the City, for instance, in some of the
higher-level, financial services jobs and information technology jobs, and I am
fully in support of introducing measures where many employers make the hard
decision to say, "This job really now is permanent. I find I really have the obligation to take this person off the
agency's employment books and on to my books because this person deserves the
long-term investment and return".
Q414 Mr Berry: How do the big corporations in the City then
get away with it? What is the cause of
market failure which has not enabled the market to work in this case?
Mr Arkless: Clearly people get away with things for two
reasons: one, lack of regulation; and, two, lack of policing, I think. If there are regulations that prevent
certain practices, they will probably happen on the basis that some employers,
for various short-term or medium-term financial needs or strategic needs, will
be, I think, exploited and I think regulation of those cases is absolutely
essential. Secondly, and this is where
I have some difficulty in the whole of the contracting and general employer
employment law, is how do you police that stuff? It is very, very bureaucratic and very difficult, but in
principle we have got to find measures to control it.
Q415 Mr Berry: Is one of the causes of the problem that some
of the larger corporations deal with a very small number of specialist agencies
and basically ship their employees from one to the other or is it that they use
in-house agencies as a way of regulating their workforce?
Mr Arkless: They use both of them and I think they are
very opportunistic. I think a necessary
control of the transition from part-time contractor and temporary to permanent
staff is a critical hinge-point, or should be, of this legislation. I think it really is critical.
Q416 Richard Burden: I just want to be clear on what you are
saying about the relevance of the year.
Is the implication of what you are saying that once a temporary
placement goes beyond a year, it would be reasonable to deem that the employment
relationship at that point switches to the user employer and it would be
reasonable for legislation to deem that?
Mr Arkless: Yes, absolutely.
Q417 Chairman: One thing we just touched on was the issue of
"flexicurity" in that. Now, the country
which seems to embody this within the European Union in its labour market
practices is Denmark, or so we are told and we are going there later on. Does your organisation have any experience
of the Danish situation? Do you operate
in Denmark? I am just asking because is
it one of these areas where flexibility and security are not inimical to the
activities of the organisation?
Mr Arkless: We have a fully-fledged and featured Manpower
organisation in Denmark. Denmark is
interesting because they do have this pretty effective mix of security and
flexibility which still seems to work.
I think if you go and talk to Danish employers, you will find out that
they believe that there are ways the market could be more productive and they
could have more productivity in the market because they do characterise certain
parts of the security bit as being overbearing. Also let's not forget that it is a bit dangerous to compare small
economies with big economies, small groups of workers, and frankly Denmark is
small for workers, with large economies.
I think they can operate and function differently.
Q418 Chairman: Thank you very much. That is very helpful.
Mr Arkless: Can I leave this paper for you? I will send it electronically as well.
Chairman: Yes, thank you.
Memorandum submitted by GPMU
Examination of Witnesses
Witnesses: Mr Tony Dubbins,
Deputy General Secretary, Mr Tony Burke, Assistant General
Secretary, and Mr Mike Griffiths,
National Officer, Amicus, GPU section (formerly GPMU); and Professor Keith Ewing, Professor of Public Law, Kings College,
University of London, examined.
Q419 Chairman: Good morning, gentlemen, and can I welcome
you here. I think I should probably
start off by declaring an interest in the sense that I have had a longstanding
connection with the GPMU in the past, or, at least when sponsorship by unions
was the appropriate expression, I was sponsored by the GPMU, although I have to
say I am not quite sure what the appropriate word is now, but since I am not
standing at the next election, any support that the Labour Party might have had
from them will not be in the form it was in the past, although that is another
matter, but I think I should just say that.
Can I welcome you here this morning and make the point, Mr Dubbins,
before I ask you to introduce your colleagues that we would like to look at, on
the one hand, the flexible labour market and we have a number of questions
relating to that, and then we would like to move into the somewhat uncharted
seas of union-busting which in some respects is the flip side of the flexible
labour market insofar as it affords privileges and benefits to employers which
may or may not be deemed to be to the detriment of workers, and that is one of
the issues we wish to explore with you.
Perhaps before we get any further, Mr Dubbins, you could introduce your
colleagues.
Mr Dubbins: Thank you, Martin, and, like yourself, I
certainly will not be standing at the next election either, so it is a similar
situation actually. On my left is Tony
Burke, our Assistant General Secretary, and on his left is Mike Griffiths, one
of our national officers, and on my right is Professor Keith Ewing who has been
advising the union over a number of years on labour law and labour legislation
and particularly with relevance to small business.
Q420 Chairman: Perhaps you could just put into context where
you stand in relation to the union Amicus of which you are now a section
because I did make reference to the old organisation and I understand that
since October there has been a change.
Mr Dubbins: We merged with Amicus along with Unify, the
bank workers' union, on 1st November 2004 and we are now the GPM
sector of Amicus. As far as our
collective bargaining industrial side is concerned, it is the dominant sector
within Amicus and of course we are very much a part of Amicus as far as
administration, finance, political relations and everything else are concerned.
Q421 Chairman: If we could just move on then to the
industrial role of the union, as I understand it, you operate within a number
of areas, printing, paper and graphics, an industry in its broad sense because
it is dominated by small- and medium-sized companies. What is your penetration of the sector? What percentage do you have and what percentage of wages and
conditions do you organise for them in the sense that obviously you will have
areas where you do not have 100 per cent membership, but on a reduced
membership you have organising rights, so maybe you could give us an idea of
the membership and general penetration.
Mr Dubbins: Indeed.
Since the merger on 1st November, we are now the only union
operating in our sector. The sectors
vary very considerably. In the paper
sector I would guess that the union penetration is well over 90 per cent. Most of the companies we deal with in the
paper sector are very major, multinational companies. In the converting and packaging sector, it is somewhat lower than
that and our estimate would be around 85 to 90 per cent. When you come into the mainstream printing
sector, which is the sector which is dominated by small- and medium-sized
companies, my guess is that our penetration there is around the level of 70 per
cent, and moving into the newspaper sector, which was the subject of the
widespread derecognition campaign during the 1980s, we have now restored our
recognition in the entire production area of newspapers, except for the
provincial arm of the Daily Mail Group, so the production side of newspapers is
now again pretty highly organised. We
are assisted, it is fair to say, in industrial relations terms from the point
of view of joint regulation by the fact that we do hold national agreements
with the paper employers, with the converting employers and also with the
printing employers. There are no national
agreements in the newspaper sector. The
printing employers are around 50 per cent of the printing employers in the UK,
perhaps a bit higher, and our membership of the BPIF, the largest employer's
federation in terms of the number of employees, I would guess they actually
employ over 80 per cent, my guess would be, of the employees in the industry,
those members of the BPIF. The BPIF
again is dominated by small- and medium-sized companies. The national agreement, I think it is fair
to say and I am sure both sides of the industry would openly admit, has stood
us in very good stead throughout some very difficult times and very difficult
periods, a heck of a lot of technological change and a heck of a lot of
structural change in the industry as well.
The national agreement is really a two-tier agreement. It provides a baseline for the industry as a
minimum wages and conditions arrangement which is renegotiated annually, but
the actual wages and conditions in the plants are roughly around one-third higher
than that provided for in the national agreement. There is a second tier of bargaining at local level which adds on
to the national minimum standards which are set. The agreement provides for very widespread flexibility,
productivity arrangements, hours and shift arrangements. It is now the subject of a considerable
renegotiation. We are in the process
with the assistance of Professor Frank Burchill of renegotiating the national
agreement to take account of some of the further changes which are happening in
the industry. That has been going on
for several months and we anticipate it will reach conclusion hopefully
successfully early next year.
Q422 Mr Clapham: So we have got quite a diverse industry. Given that there is a lot of competition
there and employers of course can ease the situation of competition by
non-compliance with employment regulations, are you able to monitor employers'
performance with regards to compliance to employment regulations right across
the industry or are you only able to monitor the compliance in the unionised sector
of the industry?
Mr Dubbins: In the unionised sector of the industry we
certainly can monitor compliance. In
the non-union sector of the industry it is much more difficult and it is really
anecdotal evidence. That evidence comes
to us when we are organising and recruiting people to take into membership and
the circumstances that we find which are very often standards which are below
the national agreement standard and very often of course it is other employers
drawing to our attention the fact that they are suffering from the competition
from someone who is not applying a level playing field, so there is an interest
from other employers in assisting us or certainly in guiding us towards
organisation and recruitment because it tends to undermine the standards which
have been set. It is fair to say also
of the BPIF that there are a number of BPIF members who are members of the
organisation, but on the basis that they do not apply the national agreement so
they receive the commercial services from the BPIF, but negotiate agreements
either separately with us or some of them are not unionised at all and of
course we pick up a significant amount of information from the Employers'
Federation, and the conclusion we arrived at quite frankly is that there are very
few non-union employers where proper monitoring, proper regulation and proper
working conditions apply. It is usually
when we get into organisation and recruitment that we find generally that the
standards are lower than have been set in the printing industries.
Q423 Mr Clapham: And, as you were saying, the information from
the non-unionised sector is obviously anecdotal, but are you able to influence
the non-union sector, do you feel, by what you are doing in the union sector
and, given that employers need to be competitive, that they do look to what is
happening in the union sector?
Mr Dubbins: Yes, it is limited, what we can do. What we attempt to do every year on the
conclusion of the national agreement, which is of course virtually
automatically applied to BPIF member companies, certainly those that work under
the terms of the agreement, is that that is circulated to all of our branches
and to our members, but we also circulate the basic terms of the new agreement
to all of those plants who are not in membership of the BPIF itself. Some of them are unionised and we have
recognition and in some of them we only have individual members, so the terms
and conditions are pretty broadly known across the industry and I think it
would be true to say that the vast majority of the industry does apply those
terms, but there are some significant gaps.
Q424 Sir Robert Smith: Just moving on to the working hours culture
in the printing industry, would you say it was long working hours?
Mr Dubbins: It has got an extremely bad reputation and I
have to be frank and say that some of it is warranted. We have a high incidence of overtime working
and part of that is due to customer requirements and a rapid change in customer
requirements. Everybody, particularly
when it comes to stealing a march on their competitors in the publication
field, is looking for shorter lead times and for a more competitive level of
production and different publication times, but I do not think that is the main
problem. The real problem is in the small
and medium companies where, it would be fair to say, the wage levels would tend
to create an incentive to our members to work overtime and to make up their
money by overtime working. That is not
true in the medium and larger companies.
Frankly, the overtime culture in the medium and larger companies is down
to an inability or an unwillingness on the part of management to actually
manage working hours properly and to manage production properly. To try to give you an example of this, in
the working time opt-out we have managed to negotiate a number of national
agreements, unfortunately not with the BPIF because of the dominance of small
and medium companies, and the BPIF area has probably the highest level of
overtime working. When we have gone to
individual plants to negotiate working time agreements, we have very often
found a 48-hour, a 55-hour and in one case a 60-hour working week at a very
major publication company. We had
difficulties with our own members because they had got used to the culture of
working 60 hours a week. We managed to
persuade both our members and the company to introduce new working arrangements
and new shift systems which cut the working hours dramatically, first of all,
to 48 and since that was negotiated a couple of years ago we are well down
below 48. The problem with the industry
in the larger plants, in my judgment, is really an unwillingness on the part of
companies to bring in new shift working arrangements and to control production
in a more effective way than they do at the present point in time. I believe that the Working Time Directive
actually is a damn good incentive to push them into more efficient ways of
working and, consequently, in the plants where we know it has gone in, it has
tended to improve quality as well.
Q425 Sir Robert Smith: In the larger plants where there is a
management issue in your eyes, has that meant that they have brought in extra
workforce or they are just using the same workforce more efficiently?
Mr Dubbins: Mostly it is using the same workforce more
efficiently. It has on occasion,
depending on the shift coverage, meant some additional people, but, to give you
a for instance, if you rearrange shift working to cover for six days and have
four lots of 12-hour shifts and three days of 12 hours, you can actually get
six-day production cover and take account of changed publication times. If somebody is working two shifts or a
three-shift system, you have not got that extra day, you have not got that extra
cover and it is the same with seven days, it is the same with standard shift
arrangements and it is the same with particular shifts arranged for weekend
working which we would encourage employers to do to avoid Saturday and Sunday
working as that is a disaster. From the
productivity point of view, it is disastrous and it is also disastrous from the
health and safety point of view. Long
hours tend to reduce, we have found again and again, productivity.
Q426 Sir Robert Smith: In the smaller companies then, the problem is
that the basic remuneration is not really enough and, therefore, the incentive
is to try and get extra hours of work?
Mr Dubbins: Yes, I think certainly at this level amongst
all of us, it is fair to say, there would be more understanding and more
sympathy with members in the smaller companies because the wage levels and the
condition levels are generally lower than in the medium and large companies.
Q427 Mr Berry: I must declare an interest. I am a member of Amicus and I am standing at
the next election. Could we stick to
the long hours culture or the long hours issue. From what you are saying, Tony, the larger companies have been
persuaded to move to more acceptable hours and it was simply by improving
productivity and it was about getting their act together. That raises the question of why are they not
doing it in the first place? You may
well be better managed than they are and maybe that is the reason, but it is
about productivity improvements, is it not, essentially substituting the longer
hours? Why do they not do it without the
trade union coming along to apply pressure?
Mr Dubbins: Well, it is a very difficult one to
answer. There are varying responses to
it when you talk to employers about it.
Very often you will find that some of the management are very much
coming out of family companies and have not necessarily got the real management
skills that are required to manage what now is a very high-tech industry. We also know that in the kind of competitive
situation we are in, the natural response of the employer to a customer,
particularly if it is a large customer, is to say, "Open all hours. We will meet whatever production demands you
have got" in order to maintain that volume and to maintain that contract and
they are afraid to say, "Well, we are bringing in new working arrangements
which you must now fit in with. We will
try to respond to what you want, but you can't keep changing it every week",
and the nature of our industry is that a lot of publishers do tend to change
that every week. I would not suggest
that it is okay in the larger companies as I do not believe it is. There are still a heck of a lot of larger
companies where there are high levels of overtime working, poor levels of
productivity, in my judgment, and work arrangements which could be considerably
improved, but we have a process on a joint basis with the Employers' Federation
to try to improve productivity, to try to improve working arrangements and we
are more than happy to continue to do that.
We have got a policy in the organisation of, frankly, where there is low
productivity, where there is bad management, we need to draw it to the
attention of the employers and to our own members and to try and get that
changed where we can.
Q428 Mr Berry: Where there is a serious problem of long
hours, is it partly because of reluctance by employers to provide the necessary
investment to improve productivity? Are
they saying, "Look we could operate with shorter hours, but part of the problem
is we have to invest and that costs money", and so on; is that a constraint? Is the overriding wish to be able to appear
to publishers and purchasers to be flexible 24 hours a day?
Mr Dubbins: I
do not think, in our experience, investment is a major constraint. I think the general investment levels in UK
print pretty well compare with most of Europe.
I think it is under-utilisation of equipment. We have certainly had an excess of capacity in the industry over
the past few years, which has made things a bit more difficult. It really is a lack of ability to be able to
manage the use of that equipment. It is
a very high tech industry, as I said a bit earlier, but on cost of investment
now and the lifespan of investment the cost is getting higher by the year
significantly (because of the technology which is increasingly being
introduced) and the lifespan is getting shorter. You are being squeezed from both ends. I would not say it is a major complaint. I am not saying it
does not exist - it does, I am sure - but I would not say that investment is at
the top of the list.
Q429 Mr Berry: Finally, where you and your members have
negotiated more reasonable hours what has happened to the pay of your members?
Mr Dubbins: Obviously it is part and parcel of the
arrangements we do. We have an
arrangement, for instance, if there is a treble shift arrangement there is a
standard national premium of 33⅓ per cent. If it is a six-day working four shift arrangement the standard
premium is usually 40 per cent. We have
difficulty and I would not want to mislead you about this. If you go to a group of GPMU members and try
to get them to do six-day working, boy, you have got some problems. They resist it. The ironic thing is we always manage at the end of the day to
persuade them to give it a try, once they have had a trial of six-day working
you cannot get them off of it. The
opportunities it throws up: they can
see the improvements in efficiency, productivity, and the work/life balance
changes and changes quite dramatically.
They really do have a lot more available time to spend with their
families. It is a proposition which is
never responded to positively at the time when people try to introduce it, but
within a few months of being introduced you cannot get them off the shift.
Q430 Richard Burden: Could we look at things from the other end
briefly where employees themselves may come forward and ask for greater
flexibility in working, whether it be work/life balance or whatever. Are those opportunities increasing, or are
they decreasing and getting shunted into arrangements with the employer?
Mr Griffiths: You are right,
there is now - with the publicity and some of the changes in legislation - a
desire by workers in the industry to look at alternative working patterns. We have not had an awful lot of experience
of that, in fairness. We have very set
arrangements for a lot of workers. It
is also true to say, by and large, that has not been responded to favourably by
employers, for the same sorts of reasons we are talking about - the need for
different shift arrangements to spread the working week in order to make
publication dates or just general contract delivery times. There is not much desire to see individual
requests accommodated. We have had
instances where we have had to raise it with the use of legislation
particularly for women; but it is very, very difficult to persuade them for the
need for individual requests.
Q431 Richard Burden: When you do negotiate, say, a change in shift
pattern would it be a standard part of your objectives in those negotiations to
build into that some recognition of exceptions being made to cope with family
circumstances, say?
Mr Griffiths: The sorts of shift patterns Tony has
described are generally greeted with pleasure once people try them. Of course, it is a huge change for people
initially, particularly for those members who have family responsibilities,
caring responsibilities, mainly women.
There is often a total inability to suddenly move from day working or
double day shifts stretching from perhaps six in the morning to nine or ten at
night to 12-hour days and nights. The
night working element is often a problem.
In those particular instances we always make an arrangement whereby
individuals would be asked by the company but if anyone has particular reasons
why they cannot they should be accommodated.
In those instances obviously accommodations are made; but requests, as
in the earlier question, to change as a result of a change in family
circumstances are not generally accepted by the employer.
Q432 Judy Mallaber: Obviously you will be seeking protection for
your members but, given the areas you represent where there are such a
substantial number of small firms, do you have any sympathy at all with the
argument that employment regulation can be overly burdensome?
Mr Dubbins: Not really, I would have to say. Our experience is the reverse - it is the
lack of joint regulation which I think leads to difficulties and problems in
the industry, certainly as far as wages and conditions are concerned. There are three key crucial areas where I
think we need more regulation, if I can answer the question that way: one is the end of the opt-out. I see that not only from the heath and
safety point of view, which is obviously a major factor, but quite frankly if
we are ever going to really address the productivity question in the UK and
bring ourselves up around the European average in terms of productivity, the
pressure on working hours is a major contributory factor. I am quite sure of that, so I think it is
useful in two ways. The second is
agency and temporary workers. We are
more and more concerned (and this has been around for a while) but in the last
couple of years we have seen more and more large companies, some of them in
major groups of companies, who are allowing their unskilled workforce to leave
and replacing them with agency and temporary workers at rates and conditions
which are well below the industry standards and the industry norms. That was pretty unusual two or three years
ago but now it is just going up. The
numbers involved are tremendous and we have some of the largest companies in
the industry who clearly have policies to move towards a core workforce, the
vast majority of them being skilled workers and to outsource to agencies the
unskilled areas. That has created a lot
of insecurity and a lot of vulnerability.
I think the other area where we see some further regulations being
helpful in small companies is the removal of the 21 employee threshold for
statutory underpinning of recognition.
We have had some difficulties with that. I would not want to suggest that most of our recruitment resource
is going to small companies. It does
not, because we can see if we get to the end of the road in a small company you
can spend a hell of a lot of time and resources recruiting and organising only
to find you cannot obtain recognition.
Generally, the burdens that business carries, in my own judgment, are
pretty wildly exaggerated. Keith, you
actually have been involved directly, and it might be better for you to
supplement this because you are involved in a survey at the moment.
Professor Ewing: We have been doing some interviews of small
businesses in printing, textiles and light engineering, and we have been
speaking to employers about some of the issues which you have raised today -
one of which is the burden of regulation - and asking expressly, "Do you feel,
in a sense, that there is too much red tape of over-regulation" of the sector
in question. I have got some of the
transcripts with me so I can read to you some of the responses we have been
getting. With one employer in the
Midlands to whom I spoke the interview went something like this: "So you're not bothered by red tape, like a
lot of employers complain about?
Respondent: No. Interviewer: No? Respondent: No.
I ring up one of my contacts and say, 'What are you doing about
this'. Interviewer: You don't think that there's too much
regulation then? Respondent: It depends on how you look at it. I mean, I can't afford to have anyone
here looking at red tape all the while.
I certainly can't do it myself, so we streamline it". Then I have another from a micro company
where some people would think the shoe pinches tightest. The same question to the company in question: "Do you feel there's too much red tape as an
employer in terms of what you have to do?
Respondent: What, just
generally? Interviewer: Yes.
Respondent: Yes, I think there
is. She [his wife] handles all that
side of things. Just general red tape,
tax, VAT, that's what you're talking about, isn't it? Interviewer: What about employment
regulation, you don't feel there's too much protection for the people you
employ, or too many rules?
Respondent: No, nothing that
gets in the way of us running our business.
Interviewer: So you don't feel
that the protection for your staff frustrates your ability to run the business
in the way you want? Respondent: No, no, no, I wouldn't". Then we go off and discuss something
else. That would be a view expressed by
a number of employers, in the sense that the regulation which they have to deal
with is something they can deal with and is not a burden they feel too
heavily. With another employer I spoke
to I said to him, "If the general regulations in employment conditions were to
be relaxed how would they change the way in which you run your business?" He said that it would not, in the sense that
he could not think of ways in which things would be done any differently. There are a group of employers who feel quite
relaxed about the specific issue; but there are a number of employers who do
complain about red tape, but when pressed specifically about which issues
trouble them, when the questioning is persistent, they are unable to identify
any specific issue which is a real and consistent concern. There are other employers who say, "Yes, red
tape is an issue, or regulation is an issue", but when you raise the issue of
red tape the issue they are concerned about is how to dispose of chemicals and
it is waste management which tends to be the problem. This is the kind of evidence which is coming forward from this
study. That is not to say there are
some employers who do feel some things in particular are a bit unfair. There was one employer who was troubled by
paternity rights. It was something he
did not have to deal with in the past.
People of his generation in that situation were never entitled to this,
and this particular employer was clearly anxious about that. Again, a number of other employers (not
those I have referred to) were perfectly relaxed about paternity and accepted
this was a good thing and were perfectly happy to support those employees who
felt the need to take leave. So far as
printing is concerned, the response we have been getting is that
over-regulation is not something that employers, on the whole, are complaining
about.
Q433 Judy Mallaber: Do you have any information from that
research you have done, first of all, on the degree to which employers just do
not know about the things they are meant to be doing, or how knowledgeable they
are; and, secondly, if something does then suddenly hit them which they have
not realised (such as paternity rights, which you have mentioned) how easy it
is for them to access information without it taking them an inordinate amount
of time and difficulty?
Professor Ewing: What is interesting is the very complex
networks by which information is shared, or by which information is obtained by
employers. It would be the case, for
example, that many of the employers we have spoken to are members of the BPIF,
even very small employers. They would
be getting the information there and would be very happy with that. It is also the case that some of these
employers employ a considerable number of people who, it should be said, retain
their membership of a union. You have
some employers still members of Amicus, as it now is, and they are getting
information from the union and getting support from the union in terms of some
of the issues that arise in the workplace.
For other employers, they will subscribe to various advice services
which are available commercially.
I think it would be true to say that in some cases the information
does take time to filter through. I do
not think you can generalise about the issue.
Some people are pretty well clued-up on what is going on and are
well-informed and well resourced as it were; but in other cases it does take
time to get through.
Q434 Sir Robert Smith: What stage is this research at in terms of it
being published?
Professor Ewing: That is a very good question, as they
say. This is a very helpful occasion because
it compelled me to go and read very carefully some of the transcripts and to be
able to bring them today. We are
probably about two-thirds of the way through.
We have some interviews we still need to do, particularly in one of the
sectors.
Q435 Judy Mallaber: Is it possible for us to have access to that
information?
Professor Ewing: Yes, when it is completed. I will have an advance copy of the
information. It is very difficult to
recruit small employers, or indeed any employers. It is not an easy process.
We do have to give various undertakings in terms of anonymity and so
on. I think the best thing from our
point of view is that we get this information into a workable form and would be
looking to produce an interim report quite soon. When that is available I would be very happy that it should be
passed to the Chairman for distribution to the Committee. I would not like to be pinned down to a
date, but as soon as possible.
Q436 Chairman: That
would be helpful. I have to say to you,
Professor Ewing, the evidence you are alluding to (if I can put it that
way) seems to be in contradistinction
to evidence we have already had from bodies like the FSB, the CBI or the
British Chamber of Commerce, whom I think it is reasonable to say anticipate
the apocalypse relatively soon. I
notice your questions were fairly gentle and non-specific in character. Do you think if you had pushed some of the
employers on issues like maternity, as distinct from paternity, that the issue
is being extended with opportunities for additional leave? The impression we got was there are certain
employers where this was really rather difficult.
Professor Ewing: One employer did express concern about
maternity and having to leave the job open for 12 months. The point of an open question is to invite
response, is it not, to pour out your concerns? It is not really to invent responses, or create responses for the
interviewee. It is to give an opportunity
for the interviewee to identify the problems which are of concern to him or her,
rather than put words into people's mouths.
This is what we have done since we have provided this opportunity. In the questioning I think we have been
quite persistent. We have not simply
raised it and moved on but we have queried it.
"Are you sure?" This is part of
a general discussion over a wide range of other employment issues as well. We have not just been looking at the burden
of red tape; we have been looking at the role which the trade union may play in
dealing with problems which may exist in the workplace. We have been looking at why small businesses
feel the need to comply with the National Pay Agreement, for example. We have been looking at a wide range of
issues, of which this is one. It would
not be fair to lead people into directions of the kind you might otherwise
imply.
Chairman: We certainly get the impression that
questionnaires are issued on the basis of, "Tell us five things you hate about
employment regulation", and then give them seven options!
Q437 Judy Mallaber: Just following on from the Chairman's
question, how far might those responses reflect the general make-up of
particular industries you are working in with, for example, maternity rights
where women are employed a lot and whether it does or does not create in practice
more or less difficulty within a particular industry? If you are looking at the question of maternity rights, obviously
the difficulty that will create for a firm depends on whether they have women
employed in particular jobs which are difficult to replace. Have you tried to identify the make-up
within the industry?
Professor Ewing: No, I have to say in fairness that the issue
of maternity rights, particularly, has not really arisen, except in two
cases: one was the chap who was quite
hostile to all forms of regulation anyway and this was one issue he identified;
and in the other situation where it arose there was quite a degree of sympathy
for the position of the employee and her husband - both of whom are employed in
the same company. You cannot generalise
about employer attitudes. One thing
about this study is the fact that we are actually speaking to employers -
employers who actually have to deal with the situation as it is. Hearing from them what they really feel is
actually quite interesting.
Q438 Mr Berry: It seems to me it is pretty obvious why
organisations like the FSB do not like regulations. They know the more regulations there are, the more likely their
members are to get on the phone and ask for advice. The rational response is to be anti-regulation for that reason
alone. Professor Ewing, presumably your
research cannot be the first research in this area about how firms react to
regulation. Apart from your study, what
is your interpretation of the evidence?
Is it, as I thought you said earlier, that the argument "regulation is a
problem" is greatly exaggerated when you actually ask employers about how they
operate? Would that be the consensus,
or are you out on a limb here?
Professor Ewing: It is hard to say. It is like with all scientific questions in the sense that there
is probably no consensus. There is a
range of position in the sense that there would be people who would take a view
that regulation is a problem; and there would be people who would take a view
on the other side that lack of regulation is a problem, because regulation
creates better productivity, improves competitiveness and so on. The best answer I could give would be that
there is no consensus position on this.
There is a range of responses, and this range of responses is reflected
in the different evidence you receive from different witnesses to this
Committee. On the one hand, you have
the employers' lobby which will take one view, and you have the trade union TUC
and others who will take another view, in the sense that they will be coming to
this with differently informed positions.
Q439 Miss Kirkbride: I was interested in your last response
because, listening to what you told the Committee a minute ago, just because an
employer does not rant and rave about one specific piece of regulation does not
seem to me to mean he is not upset about the aggregate burden of it? Very often people think it is unreasonable
to criticise someone they know and like for wanting to take maternity leave
but, nevertheless, it can be very aggravating as an aggregate. I would take that from some of your
responses. I was interested to see how
you interpreted it. My question is
whether or not there were any individual regulations that you think could be
dismantled or got rid of?
Mr Griffiths: I think that
question was in part covered by an earlier response where we see some of the
regulations that should be removed. I
think Tony gave detail there, in particular the opt-out from the Working Time
Directive.
Q440 Miss Kirkbride: To remove the opt-out?
Mr Griffiths: To remove the
opt-out, yes.
Q441 Miss Kirkbride: It would not have the effect of removing the
regulation?
Mr Griffiths: There is a certain
amount of time and resources involved with employer-led issues to see about
that. He has to actually get each
individual to sign away their rights.
In our experience that means spending some time explaining why it is
better for them to be able to work unlimited hours and not be constrained by
the Working Time Directive. In a number
of instances, particularly when the regulations first came into this country,
we had instances of employers saying, "Look, we will not be able to do overtime
any more unless you sign this opt-out".
We have also got experiences of contracts of employments being offered
to people when they join a company with a requirement or an option to sign away
their rights under the Working Time Directive.
Q442 Miss Kirkbride: The Working Time Directive is a deregulatory
measure?
Mr Griffiths: You can make your
own judgment there. What I am suggesting
is that it is a regulation on business.
Q443 Miss Kirkbride: No, it is your opinion we want.
Mr Griffiths: In my opinion it
is a regulation on business which should be removed for a number of
reasons. As you will be aware obviously
the Working Time Directive gives an ability to average the 48 hours over a
period - the default period being 17 weeks but up to a year. In every single instance, and I have
negotiated a number, when we have had discussions with employees their first
reaction is, "We want the 12 months. We
want maximum benefit". In all cases I
have said, "If you need that, you can have it, but I would like you to actually
examine and consider whether the 17-week period (which is obviously more
limiting) is capable of being worked".
In all bar two cases they have accepted the 17-week period. Where they did not want it, they have had a
bit longer and had the six months rather than the 12 months. I am suggesting that the rush to sign away
those rights to require people to give an acceptance of the opt-out is
unnecessary.
Q444 Miss Kirkbride: Therefore, there is always a case for more
regulation and that would be it?
Mr Griffiths: That is one way it
is happening. Could I perhaps broaden
my answer, if I may, because it links in with a number of the other questions,
but specifically on that: I have not
done surveys, as Professor Ewing is suggesting, but I have spent a lifetime in
the private sector both as an employee and now as an official. We work with a great many companies that are
more enlightened, certainly that are very comfortable with trade union
membership and are happy with the relationship they have with us. Almost without exception, I have never known
companies that immediately embrace what we are describing here as
"regulations". The example I would like
to cite - and this applies in the main to larger companies - is talking about
information and consultation which is just coming in, if you talk about the EWC
regulations and generally the arrangements for partnerships, the reaction
amongst most enlightened companies at first is, "We don't need this. This is going to be an extra cost to
us. This is going to be an extra burden
to us". Yet in all of those cases, once
they get into it, and once they start engaging and once they start informing
and empowering their workforce, they see benefits; they see benefits to the
bottom line in terms of productivity.
My view, which is a view based on my experience and you can take it or
not, is that there is always reaction from employers against any outside
interference of whatever type - taxes or the individual regulations we have
been talking about - but that does not necessarily mean in the long-run they
are bad for the business. We work in
the private sector so the bottom line for us is that unless the company makes a
profit our members are not employed.
Q445 Chairman: Just for the record, EWC is the European
Works Council. There is always a danger
with our witnesses that they lapse into jargon. One of the aspects of the flexible labour market as it was
developed by Mrs Thatcher and her colleagues in the 1980s, and I think you
referred to it earlier on, was the issue of the capacity that was afforded to
employers by one means or another to derecognise unions. Without wishing to get into the merits of
the argument one way or the other at this point, because this is an all-Party,
non-Party, investigation in some ways, there was in 1997 a signal given by the
Government that there would be a change of step on this. You can argue that the steps have not been
big enough, or whatever. You have
indicated in your evidence earlier that you have been comparatively successful
in securing recognition with employers who have derecognised your members for
organisational purposes. It has to be
said we have not had a lot of evidence from employers' organisations that the
opportunities for securing recognition have been a burden to them. On the other
hand, in your experience, and some of your evidence would tend to suggest this,
have you found that there are ways in which so many employers can side-step the
thrust of the legislation, if not the actual letter of it? I wonder if you can let us hear something
about this at this stage?
Mr Dubbins: Chairman, I think it
would be best if I ask Tony to fill you in on the detail of the problems we
have found with individual attempts at obtaining recognition. Generally, one of the things we have been
pressing very strongly for is to extend the legal right to recognition to include
companies with under-21 employees. In
an industry such as ours, with so many small and medium companies, it does
exclude and discriminate quite strongly against people in small companies if
they cannot have the same basic right to recognition and representation. We found that mitigates disproportionately
against woman, black and ethnic minorities because, again, the composition of
small companies is skewed generally in the fact that more people from those
backgrounds are employed in those larger companies, generally there is a
discriminatory element built into it.
We have been pressing very strongly for the extension of the right to
recognition to lower the threshold of 21. If I could say so, no-one is under
any doubt, certainly we are not and have not been suggesting as a parallel to
that, that in those small companies there should be the same kind of
recognition procedure which we have to go through in larger companies. We believe in a very simplified form, we
should apply a criterion saying there has to be proof that more than 50 per
cent of the employees are in union membership and if that needs ACAS to confirm that, that is
fine, but without all of the ballot paraphernalia
and this so-called bureaucracy that is associated with it. That
should be very, very easy to do in small companies. Tony has been the hands-on
person as far as the difficulties in the whole recognition field are concerned.
Mr Burke: As we indicated in our
evidence earlier, we have had some success in the printing industry and, as
Tony said, in the newspaper industry, in winning recognition, not only in
companies where we were de-recognised but in companies where there had never
been a union. In some respects that is
because there was a considerable interest among employees to join a union and
they approached us. In many respects we have been successful. We have had
voluntary arrangements with various employers who have looked at the
legislation and felt it was better to work with the union. Generally, we utilise the services of ACAS
to provide assistance and guidance in the main to help the company through.
Certainly over the past two to three years what we have been experiencing from
certain companies has been what we describe as heavy duty American style
anti-union tactics, union and union avoidance.
We have a number of good examples and if you would like to hear them I
can give them to you.
Q446 Chairman:
I think we have them in the written evidence.
Mr Burke: As Tony said earlier
on, in general terms in the newspaper industry, the biggest culprit is the
Daily Mail Group, Associated Newspapers, where we have tried to achieve
recognition at a number of their plants in Stoke, Gloucester, Exeter, Swansea
and Bristol. The workforce has wanted to join the union and they have made
approaches to us, they have issues at work which have been very important to
them and they raised them with us and we have given them advice. We have begun
to build up a membership based around those colleagues who want to join a union
and want to be represented by a union.
The first major confrontation we had with the Daily Mail Group, in the
first instance, was at Stoke Sentinel
where we had over 50 per cent in one of the departments. We were forced to go down the CAC route -
the Central Arbitration Council route - which is the legal route to achieve
recognition, as they would not go down the voluntary route. Of course what the
company did in advance was to take a number of steps, which included the
dismissal of our union representative, our key representative in that
particular department who was supporting the union's campaign to recruit. I have to say, what happened to the previous
GPMU has happened to the NUJ and I am sure they would give you very similar
evidence. At Stoke Sentinel, we were
faced with the dismissal of our union representative. The ballot was ordered by the Central Arbitration Committee. Individuals were brought in before
supervisors and managers, they were pressurised into saying which way they were
going to vote, they were pressurised into dropping out of the then GPMU and literature
was circulated which not only put the company's arguments forward but made some
quite disgraceful comments about our union and what we were about. On each and every occasion in the Mail
Group, where we have been involved either in working towards a ballot or
working towards gaining recognition, we faced the sort of tactics which I have
described: dismissal of union representatives; pressure to drop out of the
union and pressure to indicate to supervisors and managers which way people
were going to vote in advance of the meeting and in advance of the ballot. Also, we have got other experiences, which
we have described, and some of them tend to come to the surface because of the
names of the businesses. As you know Amazon.co.uk at Milton Keynes is a large
book distributor on the Internet. We
recruited around 50 per cent of the permanent workforce at the Milton Keynes
facility, we were doing quite well. We
tried to meet the management and suggested they should sit down with us. They invited our full-time officials to the
site to get into discussions with them and then the company brought in their
own American advisers to run a campaign against GPMU. They ran their own ballot
in advance of us even getting to the basis where we could sit down and talk to
them about testing the workforce on union recognition. They had T-shirts and all the usual American
style paraphernalia about why the workforce should not vote for a union. This included the door of the managing
director's or the plant director's office always being open and people could
solve problems which they had by setting up a staff association which, to all
intents and purposes, was worked around the basis that people would be selected
for it who were not going to give them any difficulties. Again, the dismissal of our union
representatives was involved. We had union representatives who had been at the
company for not a long period of time because of the high turnover, but were
actively encouraging their work colleagues to join the GPMU and they were faced
then with dismissal on charges which did not hold up quite frankly. It is interesting to note that in the Daily
Mail and Amazon cases, we took it to tribunal and won, all of the companies
settled outside the tribunal. At the
end of the day it shows you some of the ideas the employers had been using, if
they had come before the tribunal, would have been totally exposed for what
they were.
Q447 Chairman:
On the other hand, even if you had won formally in the tribunal, there would be
no entitlement to reinstate them?
Mr Burke: That is right,
absolutely.
Q448 Chairman:
In a sense it is really a kind of moral/financial victory?
Mr Burke: Yes, Chairman, it is.
If it is a large company the total maximum that can be outlaid is a very, very
cheap price to pay and more than they are prepared to pay.
Q449 Richard Burden:
In the evidence you put forward one of areas where you say certain employers do
manage to get around obligations and recognition procedures and so on is by
playing around with what is defined as the appropriate bargaining unit for
employees. From the written evidence
you have put in I understand the objective is there. How would you like to see
legislation change so you can have a different definition for bargaining units?
Mr Burke: One of the difficulties
is that it is the union's duty to put forward the bargaining unit. Usually we work around the basis that people
renewing membership and those people who fit in with the structure of the
company. In a number of instances what
we have found is that the company will challenge the bargaining unit by adding
in supervisory staff, temporary and agency workers, the boss's wife and anybody
they can put in to make it much more difficult for us. What we would like to
see is a very straightforward situation where we can approach the company,
using ACAS if necessary, to define the bargaining unit a lot tighter and not be
dragged through the CAC where we can get into a very complex argument as to who
should be in and who should not be in. We would prefer a much smoother
transition where we can provide the information, the employer provides the
information and at the end of the day, ACAS
can decide very quickly, "They should be in the bargaining unit" and
both sides can agree to it rather than go before the Central Arbitration
Committee and have to have, as we have had, sometimes two, possibly three
hearings, just on that while there is an argument at the CAC.
Q450 Judy Mallaber:
If all the recommendations which you put forward here were implemented, you
would still have the problem of getting recognition and representation rights,
the employer not being interested in acting in good faith. How meaningful does that make getting
representation, if you manage to get it through because you have got these new
provisions but it was within a company that would naturally have used union
techniques? What do you think would be
the next stage after that once you have recognition and representation rights formally?
Mr Burke: The situation is what
we are proposing would assist and make the situation fairer. Also, I think it
would help make sure there was this level playing field with an employer. It would be very nice to have a system where
we turned up and the employer granted union recognition because we asked for
it. The reality is employers are always going to put forward their counter
proposals and their view about how recognition would work and the sort of
agreement that could be reached. What
we are saying is, certainly it would assist us in the long run in being able to
achieve recognition because at the moment what we have got is the legislation
and whilst it has been successful in some respects where companies are
determined to keep a union out, irrespective of the law, they will undertake
all of the sorts of steps which I described earlier to try and break open, as
we call it, our union organising campaign.
These proposals would help but at the end of the day if an employer is
absolutely determined, as we have seen, to bring in American style tactics,
which we are now increasingly seeing in some companies, then it is very, very
difficult for us but it would curb some of the things the employers are doing
and, certainly, in the long-term it could assist us in gaining
recognition.
Mr Dubbins: We have approached
it from the point of view that the main priority must be to protect the
individual's right to have a trade union and recognise that the trade union
must be able to bargain on the individual's behalf. The activities of the employers, which Tony has been describing,
infringes the spirit of intention of the legislation. From our own experience,
I am quite convinced, also, that once an employer has come to terms with the
fact that with all the reservations they may have, the vast majority of our
employees want a union to represent them, they will do that in good faith and they will
bargain in good faith. One of the most
remarkable things we found was with DC Thomsons of Dundee, who did not de-recognise the GPMU in the 1980s, they
de-recognised us after the General Strike in 1926 and as a result of this
recognition of the legislation, we managed to reorganise DC Thomsons, not
completely the Dundee plant, that is not finished yet, but their Glasgow
plant. It was a remarkable effort
because the two guys I met - you may not believe it - were telling me about the
last union official they had run into was a guy called Briginshaw and that was in the 1930s, so I was
the next union official they met. With
all the concerns that were on both sides, we concluded an agreement and it has
gone very, very well. I think if you
ask DC Thomsons now: "Has the experience of dealing with the union been a bit
better than you would have anticipated?", they would probably say: "Yes, of
course it has its ups and downs and always does, but generally it works
well". I am one of those people who
believes that once the parameters are set, people are more frightened of the
implications than the reality of that kind of experience.
Q451 Chairman: One of the arguments which has advanced in
favour of the "flexible labour market" is that it affords employers
opportunities to come in to established businesses easily. I realise a lot of
your members are employed by what might be called "indigenous companies" and,
on a number of occasions this morning, Mr Burke has referred to American style
tactics or American organisations doing this. With the exception of Amazon -
one can understand why they would want to come to Britain to distribute books
because of the English language market - are there instances of inward
investors into the UK - in paper, packaging or printing across the spectrum of
your membership - and deciding to leave because of the pressure to unionise?
Are there people who are involved in the union, if I can put it that way, and
are they UK employers or inward investors who resent this tradition? Can you generalise
it or give me numbers?
Mr Burke: They are mostly UK
employers. There are occasions when we
have got some overseas companies coming in or they have a different base. Sometimes they are a bit reticent but we
have reached agreements on recognition with them. At the moment it tends to be
those companies, such as the ones I described, who are determined to try and
keep us out by using these tactics.
Q452 Chairman:
These employers who de-recognise, notwithstanding the Associated Press issue,
the other ones, where would they come into the frame? Would these other ones have been firms that de-recognise when they have the
chance under what might be called "Thatcher- led employment legislation"?
Mr Dubbins: The only other major
company of any real substance is News International. The plants at Wapping have never been reorganised and, frankly,
we would not attempt to at the present point in time. News International is going to relocate outside of the M25 anyway
and, I think that would be the appropriate time to look at News International
as a whole. I think it is fair to say that we have not got too much experience
of foreign companies coming in with a view of de-recognition.
Q453 Chairman:
I was thinking more about the paper industry where you have large investment?
Mr Burke: No. The paper industry
is an entirely different field.
Mr Griffiths: In my experience -
the view is obviously mixed - at one time there were fewer companies which
de-recognised the union and are now resisting our entry back in. It is companies where, as a result of a
change in the industrial climate, members are saying: "Yes, we want to join the
union" and we are trying to organise companies where the union has not been
established before. Traditionally they
are non-union companies. They may be a new company setting up or an expansion
of a group which has brought in people from the locality and there has not been
recognition because there has not been a company there before. It is the
attitude of companies. In some cases - I cite groups - we have groups where we
have really good relationships, where we have many, many plants in union
membership and where a new plant was set up, and there would be the initial
resistance until we go in and speak to people and then we have to go through
the procedures. It is not so much de-recognition, as very often it is in the
new companies where we are gaining membership where there are difficulties.
Mr Ewing: When the legislation
was first introduced there were organisations in this country which took an
initiative to invite American consultants over here with a view to getting
advice about how to manage trade union relations under this legislation. I
think in your introductory remarks to this line of questioning you said
something about not meeting employers who have been able to identify any issues
relating to union busting. If there is
a line of inquiry which you might hope to pursue it might be worth going beyond
the employer to the people who are giving advice and speak to them getting some
sense of what they do, why they do it and, generally, to get some measure of
this conduct. I am sure the information could be readily available about the
type of organisations which were engaged in this activity over the last two for
three years.
Q454 Chairman:
Are we not saying that when the Labour Government introduced the right to be a
trade union member and, as it were, firmed up the facilitation of union
recognition being achieved, this was a kind of trigger mechanism for either
entrepreneurs in America to say: "We can frustrate that" or, alternatively, for
employers in the UK to say: "We do not want this, how do we frustrate it"?
Mr Ewing: There was an article
in The Observer newspaper
around the time the legislation was introduced. It drew attention to the fact that there was a conference being
held in London which people had been invited to from the States. It was about
how you manage to stay union free in a legal environment where there is support
and where work is wanted. The best line of inquiry would be to speak to the
people who are engaged in that kind of activity rather than directly to the
employers themselves.
Mr Burke: There are a number of
American businesses and legal companies who are looking around and providing
this sort of advice to companies. One
of whom is called the Burke Group, unfortunately, but they appear to be a major
player in this arrangement in the USA.
Q455 Chairman:
We are not always responsible for our relatives.
Mr Burke: Not at all. In terms of our regulations, in our written
evidence we make eight specific recommendations about changes to the procedures
and that would be lifting the burdens on companies, as we see it. Notwithstanding the response given by the
Deputy General Secretary, once we establish
recognition it usually flows and the fear is more in the perception than in
reality. The direct answer to the
question: "If you had a company that was determined to keep you out, what
happens then?", we make the point of recommendation that once recognition is
granted they should be seen to be negotiating or joining the collective
bargaining measures in good faith, which is a
phrase used in other legislation. I do
not believe it should be permissible for a company then to seek de-recognition
after the requisite period of time unless they have demonstrated that they have
engaged in good faith. If the union was able to prove that they have not, then
I think the procedures for de-recognition should apply.
Q456 Chairman:
To what extent are you satisfied or relieved with the proposals in the current
employment legislation going through the House?
Mr Ewing: On recognition?
Q457 Chairman:
Yes.
Mr Ewing: I can express some
concerns. It is now enacted as Employment Relations Act 2004, which I am sure
everybody is intimately familiar with.
There are provisions which have been introduced dealing with unfair
practices which are designed to deal with both employer and trade union
misconduct during the recognition campaign.
The problem, as far as we are concerned, is that the legislation dealing
with unfair practices applies only during a ballot period, whereas a lot of the
misconduct may take place at a much earlier stage while the union is trying to
establish itself, organise, recruit and build up some kind of structure. It is
at the time when the union is beginning to flower that it is most vulnerable
and it is at that time that it needs better protection than is provided
currently. In a sense, our view is that it would be helpful if legislation were
to be brought back to an earlier stage in the campaign.
Chairman: On that point we will
finish. Thank you very much for your
evidence this morning. If there is
anything we need to follow up on, any names of organisations, we would be grateful
and it would be helpful if you could provide that within a reasonable
timescale. You may appreciate that we are under a little bit of pressure to get
our report out so the Government will respond before a General Election. In
that sense, we have a deadline of probably towards the middle of next month, it
may be a short time but do what you can. Thank you.
