Bosses fear new union law free-for-all

While many employers are anxiously waiting for the Low Pay Commission’s findings on a minimum wage, engineers are focusing on a new role for unions. The White Paper Fairness at Work, due out in May, is designed to make it easier for unions to recruit. Discrimination against employees on the basis of union membership will […]

While many employers are anxiously waiting for the Low Pay Commission’s findings on a minimum wage, engineers are focusing on a new role for unions.

The White Paper Fairness at Work, due out in May, is designed to make it easier for unions to recruit. Discrimination against employees on the basis of union membership will be illegal. Unions will have to be recognised where they can demonstrate support. But how much support is required remains contentious.

The Trades Union Council held crisis talks this week, believing the Government is lining up behind business. The TUC wants recognition where a majority of those voting in a ballot choose union representation; the Confederation of British Industry wants a majority of the whole workforce to decide.

A possible compromise which has been discussed is that 40% of the workforce or 70% of a ballot turnout would be sufficient to make a vote count in favour of recognition.

Engineering has always been a strong industry for unions. About two-thirds of the 400,000 engineers working in the UK are union members. That still leaves plenty of engineers for unions to chase up.

The 725,000-strong Amalgamated Engineering and Electrical Union (AEEU) is the country’s fourth largest union, but it does not have the engineering industry to itself. All of Britain’s biggest unions also rely on engineering and manufacturing for their membership base.

The GMB, the third largest union, has 740,000 members, the Manufacturing Science Finance union (MSF), the fifth largest, has 446,000 members, and the Transport and General Workers Union (TGWU) has 896,000 members, the second largest. All are aggressive enough to take advantage of new opportunities for expansion.

The MSF admits it wants more members. ‘Unions recognise there is going to be competition in workplaces,’ a spokesman said. ‘Engineering has always been hotly contested.’

Engineering companies operating their labour relations with joint union councils fear that individual unions could use the new industrial climate to try to squeeze out rivals.

Meanwhile, single union companies fear other unions will be after new members, threatening the stability of existing labour relations.

David Yeandle, head of employment affairs at the Engineering Employers’ Federation, said all unions had lost membership over the past 20 years and would now want to make up for the lean times.

‘The vast majority of larger engineering companies do recognise unions and a number recognise only one union,’ he said.

‘We have very serious concerns about statutory union recognition.

‘Companies that recognise only one union could find a small group of employees are disenchanted and become disruptive. Our concern is very much about potential inter-union difficulties.’

Both the CBI and the TUC accept that agreements on union recognition should be voluntary wherever possible. Any statutory resolution of union coverage disputes will need to be carefully clarified. An embittered union is potential trouble.

The Government’s Advisory Conciliation and Arbitration Service (Acas) already exists to help unions and employers sort out recognition problems, but cannot impose a solution.

But the TUC remains confident the legislation eventually adopted for union recognition will be drafted to prevent inter-union disputes. ‘Unions try and avoid competition where they can,’ a TUC spokeswoman said.

Many employers are worried that the minimum wage due to be announced within weeks will provide a ready-made campaigning issue for unions keen to attract new members.

‘We are concerned there will be pressure from the unions to maintain differentials between lower and higher grade employees,’ Yeandle said.

He believes the Low Pay Commission will recommend about £3.70-£3.75 an hour, well below the lowest wage for most engineers.

Yeandle also argues that engineering companies will want to take up welfare-to-work subsidies under the Government’s New Deal scheme for the long-term unemployed, more as a social obligation rather than expecting any major benefits.

This is because the six-month subsidy period for work and training is unlikely to produce enough proficiency to take on an otherwise unqualified engineer.

Yeandle said the sector hoped it could contribute to the New Deal because everything should be done to try to ease the problem of youth unemployment. ‘Engineering companies recognise there are social reasons to support young people. Having large numbers unemployed is storing up problems for the future.’

The CBI wants all welfare-to-work recipients exempted from the minimum wage, but the Low Pay Commission has not been specifically charged with making a recommendation on the New Deal programme.

The Department of Trade and Industry has not ruled out a minimum wage exemption for welfare-to-work, but refuses to clarify the Government’s position.

A great deal depends on what that wage turns out to be. Even though the sector is not directly affected by the minimum wage, it could have a knock-on effect for the wage structure in all large engineering firms.