Towards more disorganised decentralisation? Collective bargaining in the public sector under pay restraint

• Author: Stefania Marino,Jill Rubery,Mat Johnson,Damian Grimshaw
• Date: 01 January 2017
• DOI: http://doi.org/10.1111/irj.12166
• Published date: 01 January 2017

Towards more disorganised

decentralisation? Collective bargaining in

the public sector under pay restraint

Damian Grimshaw, Mat Johnson, Stefania Marino and

Jill Rubery

ABSTRACT

While sector-level collective bargaining can provide the institutional leverage to sus-

tain and improve employment standards, a proliferation of disorganised local settle-

ments may reduce its effectiveness. This article examines this proposition for local

government in the UK, highlights the risks of a ‘destructive’disorganisation of em-

ployment relations and calls for a renewal of articulation mechanisms between sector

and local levels of collective bargaining.

1 INTRODUCTION

Austerity conditions in many countries have heightened the risk of a deterioration in pay

and employment conditions in public sector employment and raised new challenges for

established systems of wage setting. The public sector has thus become a prime site for

research concerned with changing employment relations including a focus on industrial

action, contingent employment contracts, low pay, collective bargaining and

subcontracting arrangements (Bach and Bordogna, 2013; Cunningham and James,

2014; Scheuer et al., 2016). With heightened pressures for more decentralised bargaining

in response to austerity conditions, a key question concerns the capacity of public sector

employment relations to sustain an ‘organised’approach as opposed to a ‘disorganised’

approach to employment relations because this is likely to have consequences for em-

ployment standards (Marginson, 2014; Traxler et al., 2001). Organised decentralisation

relies on encompassing collective bargaining (e.g. at sector level) as a core governance

mechanism for local bargaining and clearly articulated powers across tiers (Crouch,

1993). Disorganised decentralisation is characterised by marketised and often ad hoc ne-

gotiations involving a chaotic mix of local union and non-union agreements under a

weak or absent sector agreement (Traxler et al., 2001). While organised decentralisation

is in principle better adapted to sustaining and improving employment standards over

the long term (Bosch, 2009), disorganised decentralisation risks undesirable outcomes

for labour including a blurring of core and periphery employment statuses (Holst,

2013), weakened union participation (Holtgrewe and Doellgast, 2012) and unilateral

employer wage setting (Nergaard et al., 2009).

❒Damian Grimshaw, Mat Johnson, Stefania Marino and Jill Rubery, Alliance Manchester Business

School, University of Manchester, UK. Correspondence should be addressed to Damian Grimshaw,

Alliance Manchester Business School, University of Manchester, Booth St West, Manchester M15 6PB;

email: damian.grimshaw@mbs.ac.uk

Industrial Relations Journal 48:1, 22–41

ISSN 0019-8692

© 2017 Brian Towers (BRITOW) and John Wiley & Sons Ltd

Yet we know from past detailed research that multi-tier bargaining in the UK pub-

lic sector is unlikely to fit neatly with either an organised or disorganised model of de-

centralisation. Studies reveal a contested terrain of sector and local levels of

bargaining, the nature of which is shaped by the competing interests of employers

and unions framed by pressures from the labour market, government reforms and

the changing industrial relations climate (Bryson et al., 1993; Kessler and Dickens,

2008; Thornley, 1998). In a situation where sector-level negotiations are perceived

to be weak or ineffective, local deals may become more common with or without

union input, which contributes to greater disorganisation with possible adverse out-

comes for employment standards (Terry, 1982). In this article, we combine these

insights with evidence from research on ‘articulation mechanisms’identified in

multi-tier bargaining systems (Marginson and Galetto, 2013; Nergaard et al.,

2009) in order to interpret the developments observed in collective bargaining in

the UK local government sector and the extent to which such developments reflect

a shift towards increasingly disorganised decentralisation in the context of pay re-

straint and austerity.

Our investigation centres on the case of the local government sector agreement in

England, which is by far the largest agreement in the UK covering 1.4 million em-

ployees (of whom more than 70 per cent are female; Labour Research Department,

2015) and therefore of considerable interest. Case-study data of local bargaining were

gathered from six local authorities during the period 2010–13 when the government

unilaterally imposed a pay freeze for all public sector workers. The data point to

the resilience of core features of organised decentralisation (albeit in a weakened

state), but at the same time, there is also evidence of a fracturing of articulation mech-

anisms, suggesting greater disorganisation. This hybrid system is in part driven by

austerity-led, aggressive management actions to improve performance and reduce la-

bour costs, but also unions’willingness to tolerate some downward adjustments

where they have extracted counter-concessions from management (e.g. local pay rises

to offset job cuts). However, if national negotiators do not have the resources to as-

sess the merits of these multiple local ‘deals’, there is a risk that the system overall be-

comes more disorganised and standards eroded and more unequal. In sum, the article

argues that the recent slide to more disorganised decentralisation is not an inevitable

outcome of austerity conditions; rather, it is shaped by deep-seated weaknesses in ar-

ticulation mechanisms in the local government collective agreement and, to some ex-

tent, the balance of political control in local authorities. The article calls for a

reinvigoration of two-tier articulation mechanisms, both to consolidate positive local

progress in uprating pay and to support the actions of trade unions (and the local gov-

ernment employer body) aimed at resisting opportunistic management practices that

undermine employment standards.

2 THE CHARACTERISTICS OF TWO-TIER BARGAINING IN ENGLISH

LOCAL GOVERNMENT

2.1 Identifying the issues

Unlike much of Europe, public sector pay setting in the UK is relatively fragmented:

divided horizontally by employment sectors and vertically between sector and local

levels of joint regulation (Bach, 2002; Bailey and Trinder, 1989). Furthermore, in con-

trast with sectors such as education, health and the armed forces where centralised

23Disorganised decentralisation of collective bargaining

© 2017 Brian Towers (BRITOW) and John Wiley & Sons Ltd