Labour Unionism in the Financial Services Sector

Fighting for Rights and Representation

Gregor Gall

• Publisher: Routledge
• Year: 2017
• Print ISBN:
  9781138356320
• eBook ISBN:
  9781351154383
• Topic: Business
• Subtopic: Business General
• Index: Business

In recent years, there has been an acute crisis of worker representation in the finance sector in Britain. Labour union and staff association membership and density has fallen, collective organisation has experienced dislocation and disorganisation and worker self-confidence has been sapped. Prior to this, there was a sense of an identifiable trajectory towards greater 'unionateness' by labour unions and staff associations, with the sector moving towards growing self-identification of employees as 'workers' and the use of traditional tools of collective bargaining such as threats of strikes and strikes themselves. This study documents and explains these changes in wider historical terms, providing invaluable reading for those interested in the future of both the labour movement and the finance sector.

Chapter 1
Labour Unionism in the Financial Services Sector: Struggling for Rights and Representation

Introduction

Worker collectivism, defined in terms of attitudes, behaviour and organisation, in the financial services sector has emerged in a significant quantitative way and developed in important qualitative manners since its beginnings in the early part of the twentieth century. This is particularly noteworthy given the greatest and most extensive employer’s offensive in Britain against independent labour unionism through fostering the ‘peaceful competition’ (Bain 1970:131) of staff associations took place in this sector. Yet it is the thesis of this study that despite these advances, (even) independent labour unionism¹ in the sector has been a historically weak form of worker collectivism. Today, collectivism, in terms of both labour unions and staff associations/unions, now stand as a set of significantly neutered and impotent organisations that are in a prolonged crisis, and this itself now constitutes the central component of the acute crisis of worker representation in the financial services sector in Britain. In essence, the fledgling forms of more ‘unionate’ (Blackburn 1967) collectivism have been overcome by the extent and deleterious nature of the changes enacted by employers, individually and collectively, in the sector. The weak moves towards ‘unionateness’ by weak forms of worker collectivism have provided no robust defence against the storm forces emanating from employers. The quintessential argument of this study is that the form of labour unionism adopted by independent labour unionism in its battle with dependent unionism forewent the creation of workplace unionism and this led to the inability of independent labour unionism to develop the resources and mobilisation capacities necessary to more forcefully and effectively resist the employers, particularly under a re-ordering of the employment relationship since the 1980s.

But the argument is not just that independent labour unionism has become unstuck in contemporary times. Rather, it is that independent labour unionism has been at a great historical disadvantage compared to labour unionism in general. And, for the moment, the main explanatory variable here is that independent labour unionism developed centralised forms of operation in order to differentiate and protect itself from dependent unionism which was based on an internalist version of mutual gains and reciprocity with employers. This also logically led to the pursuit of industry-wide, multi-employer bargaining rather than company level bargaining. In the combined process, as will be explained, workplace unionism was not developed. So this explanation is argued to be the fundamental, singular reason for the ‘undeveloped’ nature and general ‘underdevelopment’² of workplace unionism in the financial services sector as opposed to other factors such as the historically socially conservative composition of the workforce, the historical stability of employment or the paternalistic approach of employers. These latter factors have merely reinforced and concretised the absence of stimuli for the creation of workplace unionism.

Stepping outside the entrenched parameters of competitive unionism to view the totality, the absence of tangible workplace unionism has had significant implications. Foremost, union leaderships have been without independent resource, having no credible counter-weight to employers, and so have been pulled and gravitated towards a particularly close de facto partnership and dependent relationship with the employers (which by far predates the formalised partnership agreements of the 1990s and 2000s). This relationship has been based on resources employers have been prepared to give (primarily of facility time) and on a cooperative ideology where labour unions/staff associations have not had recourse to the necessary resources to engage in conflict. The quid pro quo has been the granting of necessary resources to run a union where the membership is not the key resource in return for a broadly cooperative agenda and relationship based on the superordination of employer interests. In seeking to provide representation for its members, national organs of worker collective representation have been drawn in and incorporated. Of particular note here is that exclusive engagement with the senior national managements by employed union officers (EUOs) has presented a further impediment to the development of workplace unionism. Even if EUOs and national lay officials wanted to pursue a more ‘militant’ agenda based on greater membership mobilisation than had been hitherto witnessed, significant obstacles have existed, namely, overturning the powerful living heritage of past practice and ideology and the inevitable withdrawal of employer support.

Prima facie, this might appear as an overly structuralist argument and in line with the school of thought represented by Clegg (1976). It is not, for not only is the division between ‘structure’ and ‘agency’ a simplistic and false one where human agencies are the determinants of structure and agency but the decision of independent labour unionism to act in this way, for different reasons and from different trajectories in banking (primarily BOG/NUBE/BIFU/Unifi) and insurance (primarily GIO/UIS/NUIW/ASTMS/MSF) represented informed and conscious strategies based on calculations within, and reflecting, an environment of powerful and hostile employers. In banking, the response was to be the antithesis of dependent company unionism, that is, of internalism and staff associations. By some contrast, in insurance, with not all staff associations being employer creatures but having an enterprise affinity, more ground was given by independent unionism to internalism through the adoption of federalised structures for union organisation whereby constituents had considerable autonomy. This debate will be returned to in the concluding chapter.

A key part of the thesis – and central to the analysis of this study – is the concept of ‘unionateness’, encompassing the notion that a labour union can become a full-blown, full-blooded union to the extent that it declares itself to be a union and is registered as such; regards collective bargaining and the protection of its members’ interests (as workers rather than as consumers or citizens) as its main function; is prepared to use all forms of industrial action, including strikes, to pursue these aims; is independent from the employers; and is affiliated to the Trades Union Congress (TUC) and Labour Party (Blackburn 1967:18–19). Accepting Crompton’s (1976:422–423) criticism of the assumption implicitly underpinning Blackburn’s concept of ‘unionateness’ – that unionateness represents a continuum where unions are more or less akin to manual unions which thus rules out alternative forms of representation with quite different aims – a number of other cautionary points can be made so that ‘unionateness’ can still be productively utilised albeit in a tempered manner. First, Kelly’s (1996) work on militancy is useful to flesh out what forms mobilisation can take and under which conditions mobilisation may be taken. Second, and following on from this, the distinction of constitutional unionateness and ‘actual’ unionateness requires making for a union may have the ability to strike without doing so. The former is essentially an internalised ‘expression’ and the latter an externalised ‘action’. Third, affiliation to Labour is not the sine qua non that it used to be given the ascendancy of the neo-liberal ‘new’ Labour project within it. Indeed, there is a case for suggesting that affiliating to Labour since 1997 could be taken as evidence of becoming less unionate. Fourth, Blackburn along with his colleagues (Prandy et al. 1974, 1983) developed the concept of unionateness further by specifying two types, namely, enterprise and societal, where the former concerned the degree of ‘militancy’ (their term) that would be contemplated in the bargaining relationship with the employer and the latter concerned the extent of identification with, and involvement in, the wider labour union movement. Fifth, the forced diminution of collective bargaining and the use of industrial action to create political and extra-workplace, as opposed to economic, bargaining leverage need to be factored in for contemporary usage. Nonetheless, what is attractive in the fundamental concept of unionateness is its emphasis on members’ interests and mobilisation in the pursuit of these as collective agencies and entities without imposing an exacting criterion of a class or sectional consciousness. In later chapters, two elements will be added into unionateness, concerning democracy and union ‘form’.

In order to substantiate the key components of the thesis and provide the materials for the accompanying analysis, a schema of quasi-distinct periods is put forward which accords with the notion of ‘combined and uneven development’ vis-à-vis different ideologies and forms of collectivism throughout the financial services sector. Here independent and dependent labour unionism are distinguished from each other on the basis of their ideological complexions from which flow issues of form, structure, modus operandi and values.

1918–1969 witnessed the birth of both of independent and dependent labour unionism, while the post-second World War period saw the establishment of a significant presence of independent labour unionism in the sector. The overall period witnessed successful campaigns which eventually gained the rights of recognition and collective bargaining in banking and insurance. In the pre-Second World War period, a number of employers took the step of creating staff associations or continued their policy of support for staff associations as a means to provide an obstacle to the incursion of independent labour unionism into their operations.

1970-1989 comprised the slow growth and consolidation of both types of labour unionism in terms of membership, organisational presence and influence. The period is characterised by a deep enmity between independent labour unionism and the staff associations, particular in banking, emphasising the competition between the two different types of collective representation. The period also witnessed the fragmentation of relative union cohesion as a result of the decentralisation of collective bargaining from sector to company level. Staff associations begin to question, but not reject, their foundation of 'internalism'.

1990–1999 experienced the growing erosion of traditional terms and conditions of employment following deregulation and the ascendancy of the unitarist human resource management (HRM) practice, with three significant trends consequently set in train, namely, those of a) staff associations becoming more unionate indicated by name changes, affiliations to the TUC and merging with independent unions, indicating a decline in ‘internalism’, b) a marked, though not extensive, rise in industrial action, and c) significant move towards ending of divided worker representation, epitomised by the creation of Unifi from BIFU, NWSA and UNiFI.

2000–2007 saw labour unionism and the remnants of the staff unions overwhelmed by the challenges of restructuring, reorganisation and downsizing in tandem with a more assertive management approach couched in terms of ‘partnership’. Their membership, organisational presence and influence have become severely depleted. The previous advances of 1990–1999 have been overturned by these developments while at the same time the enhanced forms of (still low) levels of collectivism proved unable to resist the employers’ initiatives and actions. From a position of weakness, the unions have engaged in partnership agreements and further union merger consolidation.

The chapter structure of this study follows this stylised periodisation of the evolution, development and existence of labour unionism in the financial services sector. Each period forms the basis of a chapter. The final chapter puts the existence and experience of finance workers’ collective union organisation into a historical perspective and assesses the prospects for its future. The reason why the periodisation is a stylised one is because it seeks to take what are argued to be the dominant characteristics of the employment relations of certain eras and present them in a manner in which the transition from one period to another is signified by a turning point. However, this is an inexact science. For example, the ending of the first period is premised upon the granting of industry-wide bargaining and creation of ASTMS while the impact of the ‘Big Bang’ deregulation of 1986 is taken as being one which flowed through the sector in subsequent years and therefore the year of 1986 is not necessarily seen as being a turning point in itself.

The rest of this chapter is concerned with, firstly, laying out the sub-themes that arise from the thesis, and expounding the theoretical perspective underpinning the study. Then a thumbnail sketch of the political economy of the financial services sector in Britain is provided in order to situate the processes and outcomes of employment relations and the research methods used for the study are described.

Sub-themes Explored

Subordinate labour unionism

Labour unionism is a subordinate social formation vis-à-vis employers for employers are 'primary' organisations within the employment relationship (Offe and Wisenthal 1985, cf. Muller-Jentsch 1985). Labour unions are then created and built upon the basis of employment having first been created by employers, with the ramifications for the tasks of interest formation and representation by workers. Within this overarching generalisation labour unionism, nonetheless, represents a challenge to the dominance of the employers but in a diffuse and limited way. The threat is of labour unionism per se to managerial prerogative per se, or, of labour unionism in the abstract to managerial prerogative in the abstract. In the financial services sector, the actuality has been that of an ineffective challenge to the exercise and effect of managerial prerogative and of the de facto subordination of labour unionism to the employer agenda, particularly with regard to resource dependence and incorporation. Financial services sector workers' collective organs of representation (labour unions, staff associations) are a weak form of collectivism that only showed signs of significant developments towards greater unionateness in the period of the late 1980s to late 1990s. They only began to display indications of unionate change (vis-à-vis ideology, organisation and resources) as the hegemonic psychological contract, union-employer relationships and material basis of quiescence began to break down. This breaking down gave rise, for the sector, to relatively widespread conflict. However, financial services sector worker collectivism was unable or unwilling to sustain or take further this trajectory vis-à-vis mobilisation and ideology. This self-limitation is explicable by several historical factors. In general, of those workplaces that are unionised, they are unionised but not necessarily organised, indicating the inhibition of growth of workplace unionism. This signals the weakness of union presence in qualitative terms, i.e. Organisational cohesion and integrity, and activist milieu. In a situation where there are no significant localised structures on the union side, this almost inevitably leads to the domination of the union by the national bodies of the union, company committees, and national executive lay officials, and particularly by EUOs and the general secretary and his/her coterie.

Turning-points and specific junctures

In historical terms, there have been several turning points and key junctures that have given a pronounced indication of the dynamics and tensions underlying the employment relationship and employment relations in the financial services sector. So at certain points, the forces behind these tensions become sufficiently strong as to ‘breakout’ and alter the existing trajectory. These turning points exist in varying degrees of magnitude. With regard to the purpose of developing ‘unionateness’, and particularly conflictual ideology and power to mobilise, the disorganisation and dislocation of the post-1999 era after the period of the early-to late 1990s is, arguably, the most critical. Other turning points of a lower magnitude are, for example, a) the rise in industrial conflict in the early to late 1990s, precipitating moves towards partnership, the most obvious example being Barclays, b) the tranches of redundancies which have so depleted Unifi membership and ended its ambition to remain an independent union, just four years after coming into existence, and c) the emergence of the call centre as a major means of service delivery with its implications for work organisation, workforce composition and thus union presence and organisation. The notion of turning points in this usage is reflective of a perspective of dialectical materialism and stands in opposition to a perspective of gradual, evolutionary change.

Crises of representation

Collectivism of both labour union and staff association types is experiencing a prolonged crisis. As presently constituted, labour unionism can be characterised as a ‘busted flush’ vis-à-vis influence and presence while staff associations, despite substantially transforming themselves, have been overtaken and outmanoeuvred by employer action and changes in labour markets. Critical in explaining these outcomes, employer paternalism has been replaced by employer authoritarianism cloaked in the form of HRM. The movement from one to the other here reflects the qualitative change in market configuration and employer objective, namely deregulation, new players, and a drive to increase rates of accumulation. The shift from paternalism to authoritarianism has not led to the creation of genuine or effective mechanisms of non-union worker voice. Consequently, a general representation crisis can be talked of, not only in quantitative terms (extent of nonunionism and non-coverage of worker voice mechanisms) but also in qualitative terms (the efficacy of union and non-union mechanisms). Representation is defined here as not merely as access to, and use of, mechanisms but the degree to which these mechanism are able to produce effective consultation and negotiation over issues concerned with terms and conditions of employment and the employment relationship.

Representation under new work regimes

The traditional terrain on which the organs of worker collectivism operate has experienced considerable retrenchment. Collective bargaining on annual pay rises has been replaced by individual performance-related pay where the union/staff association role is relegated to trying to influence the size of the total sum available to fund performance related increases and the implementation of the schemes, i.e. assessments. In this regard, and others like the removal or restriction of fringe benefits, the terrain of collective b...

Table of contents

• Cover
• Half Title
• Dedication
• Title
• Copyright
• Contents
• List of Tables
• List of Insets
• List of Abbreviations, Acronyms and Organisational Names
• Preface
• Acknowledgements
• 1 Labour Unionism in the Financial Services Sector: Struggling for Rights and Representation
• 2 Historical Genesis and Development of Labour Unionism and Staff Associations
• 3 Development of Labour Union Presence and Organisation, 1970–1989
• 4 Weathering Storms: Stimuli, Opportunities and Challenges, 1990–1999
• 5 Blown Asunder: Dissolution, Disorganisation and Dislocation of Collective Organisation, 2000–2007
• 6 Putting Historical Processes into Perspective and Prospects for the Future
• References
• Index