Custom Essays and Free Coursework

Economics Essays | Labour Disputes and Strikes

'Are strikes no longer necessary?'

The strike is the ultimate weapon that an employee is able to wield in an attempt to exert any influence or bargaining power vis-à-vis their employer. Strike activity is not a new phenomenon; indeed its history parallels the development of industrial societies.

The strike is therefore, a powerful political tool, which ought to be used sparingly in order to exert maximum effect. A strike is likely to exert a substantial financial burden on the participants namely the employer and the employee. The strike action has to be weighed against the likelihood of attaining ones aim.

In terms of the history of strikes, the UK being the first industrialized nation has the greatest experience of industrial conflict and represents the changes that are taking places in the employee -employer relationships over the long period of time. To look at the trends in the UK strikes in the last couple of years can give us a picture of the current employer employee situations and most importantly putting us in front of a big question regarding the necessity of the Strikes in the present day scenario.

In this assignment, we try to see the changes in the in the strikes in the UK in the last couple of decades to find out the trend in the process .we are further looking into the process of analysing the apparent causes in the decrease in the Strikes in UK from the measures taken within the country and finally we are taking a closer look in understanding the changing faces of Unionism in the world; the social economic and the political factors behind the decline in str4ikes in the industrialised nations during the last couple of decades

The present day scenario in UK has shown significant decline in the number of strikes and raises the issue of the necessity of strikes in present day .The climate of industrial relations in the UK is far removed from the strikes, stoppages and general work-place strife associated with the 1970s and early 1980s. The annual survey of industrial action by the Office of National Statistics reveals the extent to which relative harmony has become the norm in workplaces across the UK. Official statistics on the incidence of labour disputes published by the Office for National Statistics show that strike activity in the UK is at its lowest level since records began over a century ago. This feature highlights strike trends in the UK since the 1960s and assesses the explanations for the declining use of industrial action by trade unions.

An analysis of labour disputes in 1998, published by the Office for National Statistics in the June 1999 issue of Labour Market Trends, showed that strike activity remains at its lowest level since records began in 1891. The number of recorded disputes was the smallest ever and the number of workers involved the fewest for 70 years,

Source: Labour Market Trends, Office for National Statistics, June 1999.





The figures confirm what is by now a well-established trend. However, in a comment on the new statistics, Trades Union Congress (TUC) general secretary John Monks hailed them as evidence that "the partnership approach to industrial relations is now the dominant mode". He also referred to the TUC's own annual survey of affiliated unions, also published in June (Focus on balloting and industrial action: trade union trends survey 99/3). This showed that in the period June 1998-May 1999, only 464 ballots on strikes and other forms of action had been held, compared with 702 in the previous year; and that only a minority of those ballots yielding a "yes" vote were followed by strike action. This, he argued, showed that unions were establishing increasingly effective bargaining relationships and rarely needed to apply the strike weapon. The survey (to which affiliates representing three-quarters of the TUC membership responded) showed that the Transport and General Workers' Union was responsible for roughly half of all ballots. While pay was the most frequent strike issue, its importance had declined since the previous year, while redundancy had become an issue in a third of all disputes.

The cause for the changing scenario in UK:

Why has the strike, once regarded as a central feature of British industrial relations, now become so peripheral? There are several possible explanations, not mutually exclusive.
What made the UK distinctive a few decades ago was the frequency of small, short, usually unofficial strikes. These reflected a highly decentralised system of collective bargaining and often-chaotic payment systems in some manufacturing industries. Institutional reforms brought some reduction in strike numbers in the 1970s, though those that did occur were often larger and more protracted than before.

Firstly, the much sharper decline in strike numbers in the 1980s and 1990s can be attributed, first, to the altered structure of UK employment. When strike activity was at its height, it tended to be concentrated in particular sectors (such as coal-mining, engineering, docks and public transport) and often-in particular companies or workplaces. To a large degree, these are the areas of employment, which have declined most sharply in recent decades, whereas employment has grown in sectors without a tradition of collective militancy. Changing demographic, industrial and technological conditions have also undermined labour cohesiveness and effectiveness. The increased incorporation of technologies in the work place has significantly altered the structure of the economy.

Second, there has been a shift in the balance of power. Unemployment has risen and trade union membership has fallen sharply, trends, which in most countries are reflected in fewer strikes. Changes in the law in the 1980s are also important. In the UK there has never existed a "right to strike" as this is understood in most of Europe; strikers are in breach of their contracts of employment and are liable to dismissal (though in the past, few employers would have contemplated such action). Traditionally, however, trade unions were protected against liability for calling a strike; this immunity has now been removed, and the circumstances in which they can legitimately organise a strike are now tightly circumscribed. In addition, some employers have shown a new willingness to dismiss strikers, or to threaten to do so.

Third, the withering of the strike might be seen as evidence of the end of adversarial industrial relations and the growth of a partnership approach: the TUC interpretation. Certainly there are many employers whose handling of labour relations have become more sophisticated, and whose preference is to achieve change through agreement; reciprocally, more trade union representatives than in the past see strikes as a last resort. The priority of survival in an ever more competitive world reinforces the pursuit of peaceful solutions. Whether this has stimulated a fundamental shift in orientations in UK industrial relations remains to be seen.

A final point to note is the significance of the change of government in 1997. Some Conservatives argued at the time that a Labour victory would encourage union militancy but the reverse has occurred. This is particularly noteworthy because since the 1970s, as in many other countries, the focus of the most serious disputes has moved from private manufacturing to public services. Although the Labour government has maintained the tight spending limits of its predecessor, unions in the public sector have remained largely quiescent. Unless the restraints are relaxed, the honeymoon may not endure.

The loosing relevance of Strikes:

The variations in strike patterns and trends have shown three main reasons put forward by Ross & Hartman's study (Changing pattern of the Industrial conflict1960)

" The employees have developed more sophisticated policies and more effective organization
" The state has become more prominent as an employer, in economic affairs, in the provision of the benefits and in the supervision of the industrial relations. These roles of the state have ensured more benefits to the employees in terms of the rights and privileges

" The politicization of the labour unions .The new affiliation within political arena has allowed the labour unions to be more powerful in terms of their bargaining with the state and the employers .The unions are forsaking the use of strikes in favour of the broader political activity.

The widening of the role of the trade unions in industry with centralised collective bargaining has given the trade unions to be more successful to negotiate the terms with the employers and the state without getting into strikes .In the study done by Kerr et al in 'Logic of Industrialism', they sought to highlight the consequences of industrialism. They have argues that there is a link between industrialisation and the industrial conflict .the earlier stages of industrialisation would lead to conflict connected to adjustments of new methods of production but as the industrialization proceeds conflict would lessen. Union organization would develop eventually becoming accommodated within the system and mechanism like collective bargaining would be established in to bring order to the industrial relations. This process of collective bargaining in a newly developing scenario, which is quite present in the industrialized nations has lead to continuous decrease in the strikes and replaced it with better negotiation within the set framework created with the new legislations and better power sharing of the unions with the government in deciding the employment issues.

The inclusion of state in decision-making process between the employees and the unions allowed the state to intervene increasingly in disputes between labour and the business and on occasions the state took control of the industries. This lead to a situation where political questions increasingly dominated the relationship between the employers and the employee and the state's intervention on political grounds. This has lead to policies, which have become more flexible for both the parties from the employers and the employees to negotiate on equal basis and lead to reduction of strikes

The economic analysis done by Ashenfelter & Johnson 'Bargaining theory, Trade Unions &Industrial Strike Activities' lead to a revelation of sorts. They found that in might instances member expectations of the wage mat be greater than the union leaders are able to deliver. In a situation of
Lesser collective bargaining power of the unions this could have lead to strikes. But the present union leaders are now able to negotiate with both the employees and the employers to reach equilibrium for the process. They can try to lower the expectations of the union member during the process of negotiations and thus be able to propose an agreement, which is acceptable to both the members, and the employer's .The lowering of the aspirations of the members by the union during the uncertain economic terms have lead to fewer strikes in the industrialized nations.

The economic factors like level of profit and the demand for labour are assuming significant roles in the industrial societies and becoming parameters for deciding the course of actions for the employees and the employers .The mutual acceptance of the parameters are reducing the conflicts and helping the negotiations on accepted parameters of economics not used before for the negotiation or collective bargaining between the employees and the employers. As the aggregate level of strike activity will be related to the degree of the tightness of the labour market and the previous rates of change of the real wages are affecting the discussions more economics rationale is getting in to the bargaining between the employers and the employees and reducing the numbers of the strikes.

The introduction of factors like inflation on collective bargaining as studied by Davies
('Economic Activity, Incomes Policy and Strikes ') has redefined the process of collective bargain by the unions and the employer and made negotiation for flexible and more structured for discussion .In the study the researcher found that during the times of higher inflation the disagreement increase during the wage discussions and the process of equilibrium for settlement of the negotiation make both the parties to concede. This can be an unusual process in absence of the acceptance of inflation as a parameter for discussion and could have lead to strikes in absence of that.

The current negotiations between the unions and the employers are able to take care of the issues like unemployment without getting into strikes and thus reducing the chances of the strikes to the greatest extent. The introduction of economic factors and the intervention of state as an employer and as the facilitator in the discussions between the parties and the increase politicization of the unions have allowed the negotiations to have a broader objective than a single point views as observed by the unions of the earlier times.

Studies conducted by Hibbs ' On the Political economy of the Long Run Trends in strike Activity 1978 'have found a negative relationship between the unemployment and the strike activity. The conclusion put forward the researcher indicates that the inverse relationship between the volume of industrial conflict and the rate of unemployment demonstrates considerable sophistication used by the unions in using the strike. He argued that strikes are times to capitalise on the strategic advantages of a tight labour market.

The conclusion:
The new realities in the employee -employer relationships across the industrialised nations have opened new doors of negotiation between the parties .the new situation has given the parties to work their way through the disagreement using factors of economics, state intervention, better legal protections and better acceptance of the realities compared to the earlier periods. This has significantly reduced the number of strikes in the nations as well as better productivity .At the same point of time we should not forget that the right of strike is still with the employees and though the right is not used frequently, it has not lost its relevance completely and can be used if the proper negotiations fail between the employers and the employees to meet the expectations and needs of the employees.


Bibliography:

• Ashenfelter O.C et al: 'Bargaining Theory, Trade Unions and Industrial Strike Activity'. American Economic review, Vol.59 No.1-1969
• Hibbs ' On the Political economy of the Long Run Trends in strike Activity 1978
• Davies:'Economic Activity, Incomes Policy and Strikes' British Journal of Industrial Relations Vol.17 No.2 July 1979
• Kerr et al: 'Logic of Industrialism'1962
• Office for National Statistics: Data for Strikes in UK over the last decade
• Ross & Hartman: Changing pattern of the Industrial conflict 1960