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NewEmployee Relations Strategies in

Britain: Towards Individualismor


Partnership?
Nicholas Bacon and John Storey
Abstract
This article addresses the themes of individualism, partnership and collectivism
in British industrial relations by reporting on a detailed three-year case-
study-based research project. Drawing on this data set, we offer insights into
practical developments in contemporary workplaces and into the thinking of
managers and employee representatives as they attempt to steer new paths in
their relations. In particular, we examine what happens in practice when senior
management teams, in previously collectivized organizations, set out with the
explicit intent of shifting the balance of emphasis towards more `individualized'
relations with employees and/or to devise new `partnership' arrangements.
1. Introduction
The public policy debate on social partnership has recently moved to the
centre stage of British industrial relations. Following the election of `New
Labour' in 1997, the government's `Fairness at Work' programme and the
Employment Relations Act introduced new rights for individuals and trade
unions (Undy 1999; Wood and Godard 1999) aiming to `replace the notion
of conflict between employers and employees with the promotion of
partnership in the longer term' (DTI 1998). This new agenda has involved
government engagement with European Union (EU) social policy, a national
minimum wage and an extension of rights for individual employees and
trade unions, including a statutory route for union recognition. This new
public policy environment challenges managers to reappraise attempts made
in the 1980s and 1990s to manage employees more directly rather than
through unions (Purcell 1991; Storey and Sisson 1993) and to reintegrate
unions into the rule-making process.
The main purpose of this article is to explore what happens when
managers in organizations working with trade unions through traditional
Nicholas Bacon is at the University of Nottingham. John Storey is at the Open University.
British Journal of Industrial Relations
38:3 September 2000 00071080 pp. 407427
# Blackwell Publishers Ltd/London School of Economics 2000. Published by Blackwell Publishers Ltd,
108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA.
collective bargaining seek to change their approach. It tracks instances
where managers have pondered both derecognition and partnership
approaches. It reports the results of an intensive three-year study of a
sample of organizations, identifying and tracking new developments in
industrial relations (IR) policies and practices in some considerable depth.
In order to assess these developments, the study examined in detail the
competing management logics that were at play in those situations where
organizations attempted to restructure industrial relations.
2. Partnership in industrial relations
The current debate on `partnership' has developed against the backcloth of
`the further contraction of collective industrial relations' (Cully et al. 1998:
28). This has been evidenced in several ways, including, most notably, the
decline in overall union recognition, from 66 per cent in 1984 to 53 per cent
in 1990 to just 45 per cent in 1998 (Cully et al. 1998: 15). In 47 per cent of
workplaces there were no union members at all `a substantial change
from the 36 per cent of workplaces in 1990' (p. 15). This has been judged to
signal a transformation in the landscape of British employment relations
which has created a `representation gap' (Towers 1997). Many employees
are now deprived of effective representation, and this state of affairs has
triggered debate on whether public policy should fill this gap and if so how
representation might be delivered and implemented.
Accompanying the overall withdrawal of unions from many workplaces,
managers have also reduced the emphasis placed on collective agreements
in those circumstances where trade unions remain recognized. In assessing
change in collective agreements between the beginning and the end of the
1980s, Dunn and Wright (1994) outlined a relative stability in procedural
agreements including issues such as union recognition. However, this
disguised a greater degree of substantive change, especially with regard to
the exercise of managerial prerogative in areas such as changes to working
methods. The 1998 Workplace Employee Relations Survey indicates an even
deeper `hollowing out' of agreements, with joint regulation no longer being
the norm even where union representatives are present. In one-half of the
workplaces with worker representatives there were no negotiations taking
place over any issues (Cully et al. 1998: 110). The evidence now strongly
points to many trade unions `withering on the vine', and where traditional
industrial relations procedures remain in place they increasingly come to
resemble a `hollow shell' (Hyman 1997). It is against this background of
union marginalization that recent public policy pronouncements have
sought to encourage the idea of a `partnership approach' to industrial
relations. Most notably, in his Foreword to the White Paper Fairness at
Work, the Prime Minister stated: `This White Paper is part of the Govern-
ment's programme to replace the notion of conflict between employers and
employees with the promotion of partnership' (DTI 1998: 1). He further
408 British Journal of Industrial Relations
# Blackwell Publishers Ltd/London School of Economics 2000.
stated that his `ambition for this White Paper goes far beyond the legal
changes' proposed and is `nothing less than to change the culture of relations
in and at work . . . Already, modern and successful companies draw their
success from the existence and development of partnership at work' (p. 2).
The central problem, however, is the inherent ambiguity of this concept
a fact that has been noted by other commentators (e.g. Undy 1999; Ackers
and Payne 1998). As Undy (1999: 318) has observed, `What one party, or
commentator, means by ``partnership'' is not necessarily shared by others.'
Some authors have identified in the partnership agenda a leading role for
unions in encouraging the adoption of high-performance work practices
(Appelbaum and Batt 1994; Bacon and Storey 1996; Coupar and Stevens
1998; IPA 1997; Kochan and Osterman 1994). The social actors such as the
TUC, the CBI and the Institute of Directors have revealed `widely differing
interpretations' of partnership (Undy 1999: 318). These range from an
emphasis on unitarism and individualism to one on pluralism and col-
lectivism. Lacking any sufficiently clear statement from New Labour as to
the precise meaning of the term, Roger Undy (1999) in his review is reduced
to inferring that perhaps it aligns broadly with the IPA's (1997) well
publicized stance. Moreover, he records the shifting positions on partner-
ship adopted by the CBI. In this article we argue that, rather than focusing
too much attention on the public pronouncements of the various
institutional heads, a more fruitful set of clues to the likely constructions
of meaning around the partnership concept can be traced in the concrete
actions and interpretations of managers and employee representatives inside
the blackbox of workplace relations. Thus, we unpick the recent history
enacted by social actors who have been actively engaged in the search for
meaning in the domains of partnership, individualization and collective
negotiation.
Experiments in these domains raise some interesting questions about the
future role of trade unions. First, does the adoption of a `partnership'
arrangement indicate a broader and significant change in management style
entailing a re-engagement with trade unions? Would new agreements with
unions require managers to devise coherent, long-term strategies for
managing labour in the tradition of companies that Fox (1974) labelled
`sophisticated moderns'? Or are managers simply behaving in short-term,
contradictory and opportunistic ways? The US literature on mutual gains
enterprises (Appelbaum and Batt 1994; Kochan and Osterman 1994)
suggests, at the very least, a strategic linkage whereby managers use part-
nership agreements to underpin important changes in work reorganization.
Alternatively, where managers are reshaping their relations with unions but
are not adopting a `sophisticated modern' commitment to joint governance,
does this amount to the pursuit of a consistent `individualistic philosophy'
associated with non-union companies such as IBM (Dickson et al. 1988)? It
is quite possible that new agreements indicate neither, but simply represent
the mixing and matching of unitarism and pluralism in a time-honoured
British fashion (Edwards et al. 1998).
New Employee Relations Strategies in Britain 409
# Blackwell Publishers Ltd/London School of Economics 2000.
If new agreements represent changes in management style, this would
indicate a break from the underlying pluralistic preferences of managers
which appear to have been remarkably consistent between 1980 and 1990
(Poole and Mansfield 1993). The widespread pluralism among UK managers
compared with their more unitarist counterparts in the USA has encouraged
Towers (1997) to argue for the appropriateness of legislative changes in the
UK in order to support trade unions. However, the opposition shown by
the CBI to New Labour's Employment Relations Bill suggests that Towers
may have underestimated the extent of latent unitarism in current UK
enterprises. The 1998 Workplace Employment Relations Survey (WERS 98)
(Cully et al. 1998) also indicates that unitarism may be the norm, with less
than one-third of managers surveyed indicating they were in favour of union
membership for employees (Cully et al. 1999: 87). In order to assess current
developments, it is necessary to distinguish between partnership as part of
a commitment to pluralism and partnership as part of a non-union agenda.
WERS 98, for example, once again confirms that management attitudes
crucially affect union presence in the workplace (Cully et al. 1998: 19).
A second point, leading on from the first, is the extent to which managers
and unions are sufficiently committed to new forms of relationship
involving closer co-operation. There are dissenting voices at the heart of
both the CBI and TUC over whether partnership is a preferred arrange-
ment. The head of the CBI is expressly opposed to the government's ideas of
social partnership, and the TUC is simultaneously pursuing an organizing
and campaigning approach to membership growth (Heery 1998). Mean-
while other observers have pointed to employer attacks on collective
organization (Claydon 1989; 1996; Gall and McKay 1994; Kelly 1996;
P. Smith and Morton 1993). Although one recent review of partnership
agreements in six organizations discovered that `none gave serious con-
sideration to ending recognition' (IDS 1998: 4), as we will show in this
paper, the emergence of new collective agreements and the apparent
conversion to partnership often follows explicit consideration of union
recognition and may even form part of a longer term non-union strategy.
A partnership agreement may not be the first choice of managers or
unions. For example, at United Distillers the alternative for unions was
`de facto de-recognition' (Marks et al. 1998: 222). In such instances, marked
by mistrust, partnership agreements may fail to improve relations between
managers and unions, remain marginal to the main organizational decision-
making, and in reality represent the lowest common denominator of
agreement.
Finally, the future for a partnership approach is likely to depend heavily
upon what it can deliver. If partnership results in a reduction of union
involvement in management decision-making and less union influence
(Kelly 1996), then union enthusiasm for partnership is likely to wane. Our
focus on a number of case studies explores what happens when managers
seek to reshape industrial relations policies. It provides detailed evidence on
the nature and implications of these new forms of agreement. In addition,
410 British Journal of Industrial Relations
# Blackwell Publishers Ltd/London School of Economics 2000.
we probe the underlying policy preferences of managers with regard to the
role of unions. In the next section we describe the research methods used in
the study before going on to discuss the findings and, finally, consider the
implications.
3. The case studies and research method
In order to examine how managers were reassessing the role of unions, we
sought out organizations in the throes of change across a diverse range of
sectors. We studied large and significant organizations which we knew to
have two characteristics in common. First, they had a history of extensive
collective industrial relations; that is, trade unions had played an important
role and, alongside managers, had over the years devised sets of common
rules and procedures. Second, they now had a number of influential
managers who were seeking to deal less with trade unions and more with
individual employees. Hence we do not seek to generalize our findings
beyond such situations.
Good access was gained at multiple levels and multiple sites in the
following organizations: Unilever, Royal Mail, National Power, Cadbury
Schweppes, Ford Motor Company, British Rail, three NHS trusts and the
Co-operative Bank. It is notable that half of these are either currently, or
were recently, part of the public sector. This undoubtedly arises from the
fact that a redrawing of employee relations was high on the agenda at the
time of the research. (For an account of the wider public policy and political
background, see Pendleton 1997; Pendleton and Winterton 1993.) In
addition, two of the private-sector organizations Unilever and Cadbury
Schweppes had attempted to move away from their previously con-
sultative and even `welfarist' managerial styles. (For the earlier background
on the latter case, see C. Smith et al. 1990.) Similarly, both Ford and the Co-
operative Bank were notable for their erstwhile strong attachment to
contractual arrangements, and it was interesting to see how they were setting
about distancing themselves from that stance. These cases were selected
because their highly unionized nature provided traditional industrial
relations base lines from which to follow changes. The longitudinal nature
of this study was derived not from a precise comparison of snapshots taken
at the start and end of the research, but by following the dynamics of
management policies as they considered, engaged in and reappraised
initiatives. In each selected case, all main levels of the organization were
included corporate, divisional and business unit levels. Two main
`businesses' (or their equivalent) were studied in each organization. In
addition to lengthy semi-structured interviews with a range of managers
from different functions and levels at each site (lasting between one and four
hours), we also interviewed team leaders, trade union representatives, super-
visors and employees. In all, we conducted over 150 semi-structured inter-
views from 1992 to 1994 and continued to monitor subsequent developments
New Employee Relations Strategies in Britain 411
# Blackwell Publishers Ltd/London School of Economics 2000.
through to 1999. The main questions posed concerned management thinking
on the changing role of unions within a context of broader policies,
including work reorganization and human resource development. The case
studies represent different types of organization: our aim is to portray the
general trends while not overlooking variations between the cases.
4. The findings
The first set of findings reported here concern the experiences of several of
the case-study firms which became more hostile to unions and which had
actively explored the option of `individualizing' industrial relations. This
will establish the background thinking in those organizations that later
signed new collective agreements with unions.
The Pursuit of Individual Industrial Relations
Initial interviews suggested that the steps taken to sideline trade unions
became increasingly confident in the 1990s. For some, this meant a definite
attempt to de-collectivize relations with certain sections of employee; for
example, CadburySchweppes derecognized APEX and MSF for the
purposes of pay bargaining involving 400 clerical and administrative staff
and 350 managers. For others it meant allowing the existing trade union
structure to remain in place (as the `empty shell') while prioritizing indi-
vidually focused employment policies including individual accountability,
target setting, appraisal and reward. In both types of setting management
teams were usually divided on the question of how far and in what ways an
individually focused employment relationship could be, or ought to be,
developed and what it would entail.
This shift towards individual relations was most noticeable in parts of
CadburySchweppes, the Co-operative Bank, in the first wave NHS trusts,
and especially in National Power. At CadburySchweppes, a manager
explained how these factors converged in managerial thinking in the early
1990s in a way that suggested that unions did not sit comfortably with the
new corporate thinking:
Collectivism via trade unions is something we want to remove. . . .We are not anti-
union, it is just that they are incompatible with our current direction. I think we
can win by edict in the current climate and drive through changes against any
opposition hoping that in the end people will see there is no choice. (fieldwork
notes)
A director described how the main board had increasingly come to regard
the company's `benevolence' as `complacency and not being exposed to the
real world'. In making 450 redundancies, the company had considered
working with the unions to `minimize the pain' but had decided eventually
to `select on the basis of demonstrated performance'. Managers in
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CadburysSchweppes, the Co-operative Bank, NHS trusts and National
Power had all contemplated and drawn up action plans for reducing union
power and union presence following on from strategic reviews. These
strategic reviews involved senior managers from different key functions (not
just restricted to personnel managers) and moved beyond the desire for
unions to `wither on the vine'. In one NHS trust a director recalled how, at
launch date, the management board felt it had `a blank page' with which to
work, that `anything was possible' and this was `irresistibly attractive'. The
board decided to `make a stand' and refused to recognize the existing trade
unions despite a membership density of 80 per cent. Similarly, at the Co-
operative Bank in 1991, when unions refused to accept redundancies and a
pay freeze, the new chief executive withdrew recognition, and `exhorted' all
employees to accept `individual contracts'. These managers had become
more optimistic that they could change employee relations, moving beyond
the `safety' of marginalizing unions (P. Smith and Morton 1993), and were
prepared to risk confrontation and derecognize unions.
Yet, in practice, in many of our case companies we discovered that, when
managers reached this critical point of derecognizing unions, they `pulled
back from the brink'. The failure of British management to take full
advantage of their power at this time has been often noted but rarely fully
explored or explained. We sought to probe this phenomenon. The managers
concerned offered two main reasons, which were broadly common in each
of the organizations although the emphasis placed on each varied between
the cases. First, managers reported that heavy threats to trade unions had
contributed to an increasing level of employee apprehension and dissatisfac-
tion. In the case of one of the NHS trusts in particular, after more than a
year of refusing to recognize any trade union, managers acknowledged a
`persisting degree of employee mistrust of our motives even among those
individuals with low affinity with the trade unions'. In the light of this experi-
ence, this trust eventually signed a recognition deal. At the Co-operative Bank,
when managers later reflected upon their threat to introduce individual
contracts, they reinterpreted such actions as `short-term bargaining tactics'
on their part. After a couple of years, collective contracts were reinstated.
None the less, as one senior manager observed, the company had `tested the
parameters'. Another explained the rationale very frankly:
I did ask the chief executive quite directly if he wanted us to move to derecognize
the unions. I even offered him various worked options and drew up the blueprint
but it was not the route he wanted to take . . . He had formed the judgement that
someone else would just come along and fill the gap. (fieldwork notes)
In many of these cases managers regarded employee apprehension as
quite natural, given what one manager described as `uncertainty about the
future of the business'. However, some managers interpreted such a reversal
of policy as a victory rather than a defeat for their plans to bypass unions.
This was often due to the second main reason some managers identified for
`pulling back' from derecognition the very threat of derecognition alone
New Employee Relations Strategies in Britain 413
# Blackwell Publishers Ltd/London School of Economics 2000.
had allowed managers to introduce many of the changes they had wanted to
drive through. Consequently, managers did not revise their agreements with
unions to enable changes to work organization and human resource policies
as had often been the case in the United States. Rather, such changes were
introduced by managers unilaterally with agreements subsequently signed
consolidating the changes. At another NHS trust this was the key, as managers
reasoned that threatening the unions enabled them to sign a recognition
agreement with binding pendulum arbitration, and in the meantime to
introduce a single pay spine and a performance management system.
The issues of both trust and unilaterally imposed change were even more
important at National Power. Here major corporate restructuring and
redundancies involved a cut in the workforce from 17,000 to just 7,000
employees in just five years. One senior manager described how he had
`sought to totally redraw the traditional pattern of employment relations',
and another explained a mood among managers where `the virtuous circle in
industrial relations will be that people expect nothing out of it'. Many senior
figures envisaged an entirely `union-free environment', and acknowledged
that `some of our directors simply do not like trade unions'. But in fact, the
senior management team overall was deeply divided on the issue. These
divisions contributed to the company eventually signing a new agreement
with the unions (see below) after initially imposing changes and negotiating
subsequent programmes of organizational change from what managers
described as `a position of considerable strength'. Directors at the centre
forecast that future negotiations would become `increasingly less important
for the company'. However, managers again referred to the engendered
`lack of trust' among employees as an important factor preventing a further
shift to individual relations. Moreover, managers were satisfied with the
changes they had achieved using the more limited methods which stopped
short of full derecognition.
Overall, then, when managers in our case-organizations had set out on the
path of individualizing industrial relations, most of them had not gone
through with wholesale derecognition of trade unions for two main reasons:
first, because of employee mistrust of their motives, and second, because
managers had successfully imposed their required changes without having to
take that ultimate step. The thinking of many of these managers remained
generally hostile to unions, yet they were prepared to be pragmatic at least
in the short term. Nevertheless, it was plain that they had given serious
consideration to ending trade union recognition and that, although
managers did not in the main actually derecognize, the unions had none
the less become less important.
The Pursuit of New Collective Agreements
As we have described thus far, even the companies most determined to
manage without trade unions had generally stopped short of full-blown
union derecognition. In some of these organizations and in the remaining
414 British Journal of Industrial Relations
# Blackwell Publishers Ltd/London School of Economics 2000.
cases we discovered managers were working on redesigning traditional
collective industrial relations. These initiatives were targeted at revising the
kind of procedural agreements that Dunn and Wright (1994) had described
as `stable'. They amounted to attempts to move union relations on to a new
footing. Instead of directly undermining, ignoring or marginalizing unions
and worker representatives, a general tendency to engage them in new types
of arrangement was revealed in the cases. This entailed a strategy to involve
worker representatives, in identifying business problems and enjoining them
in agreed working solutions. However, there were some marked differences
between these initiatives and the `new industrial relations' model famously
described by Bassett (1986). This thrust involved all the cases that initially
explored derecognizing unions and in addition, Royal Mail, InterCity,
Unilever and Ford.
The New Framework Agreements (NFAs):
.
were reached following an extensive process of preparation and analysis;
.
are unusually far-reaching in scope;
.
commit the parties to the `needs of the business';
.
are novel in their extensive revisions to traditional custom and practice;
.
give considerable recognition and security to trade unions;
.
give worker representatives access to business information and strategic
plans;
.
give union representatives a say in important business operational matters.
Table 1 provides a broader view of the NFAs. These agreements represent
early forms of what are now more commonly termed `partnership agree-
ments' (IDS 1998). We found that there were two types of approach. The
first was to create outline principles and targets at national (company) level
while leaving detailed implementation to the local level (as in the case of
Royal Mail, Ford, National Power and InterCity). The second was to
concentrate energies at the local level and to encourage lengthy and detailed
joint problem-solving. This second approach can be further subdivided. In
certain instances the result was a comprehensive document, as in the case of
the `ground-breaking' `Horizon 2000' agreement in Lever Brothers and
several NHS trusts. The `Horizon 2000' document, for example, contained
details of new working practices, annualized and `banked' hours, new
gradings, revised roles and agreed development targets (see Table 1). In
other instances the outcome was not codified into a single agreement but
involved commitment on the part of management and unions at plant level
to co-operate more closely on key issues. Examples of the latter included
Ford's plants at Bridgend and Dagenham, the Elida Gibbs company, and
Cadbury's Mouldings Factory at Bournville. All types of NFA involved
long-term negotiations between managers and unions, but they took longer
to agree where unions were stronger. We discovered that the different types
of NFA reflected a range of management aims and objectives that give an
insight into the thinking behind policies towards trade unions.
New Employee Relations Strategies in Britain 415
# Blackwell Publishers Ltd/London School of Economics 2000.
TABLE 1
Details of the New Framework Agreements (NFAs)
Type Company Name of
NFA
Unions Reasons for NFA Contents Other features
National
level
Royal Mail
(Post Office)
New
Directions
Union of
Communication
Workers
Strong unions opposing
flexible working, low
morale, business re-
shaping
Union involvement in strategic
business decisions from national to
local; new disputes procedure to solve
local disagreements at divisional level
Patchy up-take in
different regions
leads to re-
launching
National
level
National
Power
Company
Agreement
(identical
for 3 groups
of
employees)
AEEU,
NALGO,
GMB, TGWU,
UCATT &
others
End of industry-level
bargaining, weak unions,
decentralized to power
stations, privatization
Harmonized terms and conditions;
new integrated salary structure;
service-related increments abolished;
performance-related pay; local
disagreements not referred to
company level
Linked to 3.95%
pay rise plus a lump
sum
National
level
InterCity
(British
Rail)
New
Bargaining
Agreement
RMT, ASLEF,
TSSA, CSEU
Match industrial relations
to new regional businesses
prior to privatization
New grievance procedure to solve
local and individual disagreements at
local level; new bargaining
arrangements from industry to local
levels
Businesses pursue
different
arrangements after
privatization
National
level
Co-
operative
Bank
Partnership
Approach
BIFU Improve relationship with
union after forcing
through redundancies and
restructuring
Three-year pay deal, job security
clause and joint project teams to
tackle issues
Made possible after
changes in senior
management and
union posts
Local (single
deal)
Lever
Brothers
(Unilever)
Horizon
2000
(10 unions) Changes in detergents
market requiring faster
innovation and higher
quality standards
New working practices; annualized
hours and performance payments;
harmonized terms and conditions
with new gradings; revised roles;
development targets for training
Employees voted to
accept although
union
recommended
rejection
4
1
6
B
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i
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h
J
o
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n
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s
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.
Local (single
deal)
NHS trusts Recognition
agreements
RCN, COHSE,
NUPE,
NALGO and
others
Trust status presents
opportunity for new
contracts, internal market
Single pay spine; performance
management systems with PRP
Trust terms and
conditions forced to
track national
Whitley conditions
Local
(relationship)
Elida Gibbs
(Unilever)
(no special
term)
USDAW, MSF New demands after
company focuses
production; TQM agenda
Ad hoc union involvement in joint
working groups on employee attitudes
and communication
Continuous yet
marginal role for
unions
Local
(relationship)
Ford
(Bridgend
and
Dagenham)
(no special
term)
TGWU, AEEU,
MSF
Need to secure new
investment for
replacement models
Wider consultation on local decisions;
union involvement in business
planning
Develops
relationship from
Ford's EDAP
scheme
Local
(relationship)
Cadburys
(mouldings
factory)
Partners in
Change
TGWU Quality problems, poor
health and safety
Union involvement in business
planning and quality improvement
Unions involved
but questions over
incorporation
Local
(relationship)
Cadburys
(assortments
factory)
New
Horizons
TGWU Reduce financial loss Five-year end-game of wish lists
including ending clocking-in, move to
salaried pay, and teamworking
Sidelined by
conflict over pay
and then jobs.
N
e
w
E
m
p
l
o
y
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R
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l
a
t
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n
s
S
t
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7
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2
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.
National NFAs
The national NFAs signed by Royal Mail and InterCity sought to overcome
the resistance of strong trade unions to management plans. In the case of
Royal Mail, managers pursued this approach to overcome opposition from
the Union of Communication Workers (UCW) to plans for flexible work-
ing. At InterCity, managers sought to consolidate IR negotiations around
the new regional businesses. Although these national agreements were very
important and marked a step change, many key issues of detail remained
unresolved, and further investigation revealed important disagreements and
subsequent power struggles to establish new precedents and routines. It is
these struggles, rather than the agreements themselves, that provide an insight
into management values and attitudes. Here we discovered different develop-
ments in separate businesses of the same organization. In the case of Royal
Mail, one director explained how he was personally committed to the partner-
ship approach outlined in the `New Directions' agreement. He described it
as `joint consultation for the 1990s'. However, he observed how `the inter-
pretation and application varied significantly across the country'. In the
South East, senior managers described their commitment to involving the
UCW in business planning, as the personnel director in the area explained:
My fellow directors have been pretty supportive of the direction of the agreement.
The Processing Director has used the trade unions a great deal in seeking to
develop an automation strategy. They have become very involved strategically in
issues such as which offices would close and which [would] survive as part of the
automation strategy, and also the investment patterns. (fieldwork notes)
The union confirmed this picture, with the framework agreement used as
a vehicle to pursue a more genuine joint problem-solving approach and
involve unions in long-term business strategies. Managers had an initial
concern that, after taking the union into confidence, `we run the risk of
being embarrassed by seeing our plans up on the union notice board'.
However, this eventually gave way to the realization that `the unions have
needed to act responsibly in order to keep their credibility'. In the Midlands,
by contrast, Royal Mail managers described their `interpretation' of the
agreement as a `green light to exercise unilateral power'. One manager acted
out the tough version on one of our visits by arranging a meeting with a
UCW representative during which he dismissed complaints about new shift
arrangements. Immediately following this meeting, the manager explained
to us how he had used the new agreement to `establish a new culture for
negotiations'.
Echoing the above divisions among managers at Royal Mail, we found a
similar state of affairs among regional directors at InterCity. Some saw the
new agreements as `enabling tools to develop a partnership with unions'.
Others recognized what one manager described as a `unique opportunity to
sideline the unions'. Similarly, in InterCity, although the agreement offered
a role for the unions `at every level', the personnel director observed that the
418 British Journal of Industrial Relations
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unions had `not been prepared to be involved in strategic business decisions'
and warned that, although the agreement `is a potentially big opportunity
for the unions, if we wanted to, we could be very hard in its use'. Eventually,
restructuring as part of privatization overtook the NFA at InterCity as an
important issue. A typical management view of the InterCity NFA was that
`we don't really know why it has taken the form it did . . . it was dreamt up
when we were in conflict and it represents the lowest common denominator'.
In both InterCity and Royal Mail, managers were also aware of the internal
political difficulties unions encountered in restructuring to match new
bargaining arrangements and the concerns of `trade unionists who fear that
they are becoming part of management'.
A further factor dampened management enthusiasm for NFAs. Such an
elaborately codified set of understandings could be, and was, used as a very
effective weapon by shop stewards when they felt that certain local
managers were acting outside the spirit of the agreement. An area union
representative from Royal Mail put this point to us rather well, indicating
the mismatch between partnership agreements and partnership values:
When managers come along with the old attitude and try to be macho I quote
from the agreement. When they develop policy in isolation and we do not like
what they produce, then again I quote from the agreement. (fieldwork notes)
Consequently, although these new agreements symbolize a `strategic response'
by managers to the trade union question at the level of formal policy, such
agreements fell some way short of a coherent long-term approach for
managing with trade unions.
At National Power, the thinking behind the NFA was rather different and
followed on from the drive to individualize industrial relations outlined
earlier in this article. Senior managers reported `we came to the conclusion
that jointism cannot work'; and, reflecting on the NFA, a manager recalled
the ambitious nature of the approach when he commented `we only get one
chance and we went for the lot'. Another director explained the thinking of
managers in National Power further:
We couldn't say to the staff that we believed jointism couldn't work. We had to
say the opposite. So in terms of wording the agreement, we have to make the
right noises. There is a role for trade unions but it is a diminishing role and it is
different. We will spend more time with them on non-negotiable issues; we'll talk
business plans but not the serious stuff. (fieldwork notes)
Hence the NFA in National Power did not represent a long-term commit-
ment to managing with unions and constituted a further erosion of union
involvement in management decision-making. This was also the case at
workplace level in the two power stations we studied (Drax and Rugeley).
The unitarist values of managers in National Power reported earlier were
also continued in the NFA, and although the NFA combines both unitarist
and pluralist perspectives, it constituted a discernible shift towards a more
consistent `individualistic philosophy'.
New Employee Relations Strategies in Britain 419
# Blackwell Publishers Ltd/London School of Economics 2000.
Local NFAs
Where the local approach to NFAs was adopted, the `preferred' negotiating
partner for management in all these cases was not the external full-time
officers, but invariably a body composed of internal representatives who
had been engaged in the task of working out a future for the workplaces in
question. These new types of agreement marked a departure from the
traditional bargained approach to change on the one hand, and the
complete bypassing of traditional industrial relations on the other. A
director responsible for one of these agreements argued that the intention
was to establish a `common destiny of shared interests'. At Unilever it took
five years to finalise the `Horizon 2000' agreement. A senior manager
contended that `in a highly unionized environment it is not really feasible to
do it incrementally, sooner or later the stewards who are watchful will call a
halt'. However, at the end of the process the same manager somewhat
ruefully reflected: `if we had done it sequentially then it would probably
have taken about the same time anyway'.
Overall, many managers felt that single-deal NFAs constituted `a compre-
hensive solution' to the union issue. Most matters were covered in the NFA
and a majority of managers felt there was `little need for future negotiations
with trade unions', the agreements marking a `permanent dilution' of the
role of trade unions. In the words of one senior manager at Unilever when
invited to reflect on the future after Horizon 2000:
We don't have much more to add in terms of formal agreements, we just have the
bits to pin down. It will be predominantly about getting the right systems and
working together. The unions are weaker and more realistic, but over the next five
years, unless they can find a new European direction, it is difficult to see them
playing anything other than a reducing part. (fieldwork notes)
Whereas national NFAs often involved significant differences of interpreta-
tion in different businesses within the organization, managers in companies
with single-deal NFAs were more likely to share a common approach. This
was due mainly to the greater involvement of plant and middle managers in
designing the agreements and ensuring that they matched local needs.
Managers reported that local NFAs with strong trade unions could be
quite successful even though, or because, both sides recognized some
persisting conflicts of interest. This was despite the rather `open-ended'
nature of these agreements and what some managers regarded as `shaky
foundations' upon which to build long-term partnerships. Nevertheless, the
local-level variants did amount to what Windolf (1989) and Edwards (1995)
have termed `productivity coalitions'. It was the potential of these local
coalitions that we found attracted managers towards the reworking of
collective arrangements although they expressed `frustration' at the pace of
change. At Ford Motor Company, the unions were involved at plant level
in `significant' consultations over business unit decisions, and managers
claim that these happened on a `full open book basis'. Significantly, a Ford
420 British Journal of Industrial Relations
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manager noted: `I do not distinguish between the concepts of ``trade union
involvement'' and ``employee involvement'' because union involvement at
Ford is local and close to the employees.' This new relationship can be
traced to the early 1990s when a local management and union partnership
secured investment to build a new car model at Dagenham. Senior managers
offered two reasons why a national agreement featuring a commitment to
partnership was not pursued. First, as the company could see no end to job
reductions, it could not offer job security guarantees. Second, even plant
managers realized that employees did not share a common destiny with
a global company threatening the future of plants through constant
productivity comparisons.
At CadburySchweppes, in the chocolate mouldings factory the unions
were `fully involved' in the quality improvement programme to the extent
that the unions `actually run' the Quality Improvement Group responsible
for safety matters. Whereas in Ford both management and unions cautiously
felt that they gained equally from the new arrangements, in the Cadburys
factory management confessed: `in reality it does undermine the unions and
I don't really understand how we got away with it'. One manager gave a
specific example of events when he proposed moving to one shift on a
production line and the union objected:
We established a Quality Action Team chaired by the [shop] steward whose brief
was to increase throughput by 25%. They were very successful and the result was
one shift working. You could argue the stewards have cut their own throat, but in
reality we would have had to close it one month earlier, well that is a half-truth
anyway. As long as we are sensible to the people who are displaced it's justified.
(fieldwork notes)
Although this indicates that close co-operation with management can
weaken union influence (Kelly 1996), the above manager alongside others
expressed some unease about union weakness. This suggests that the values
of at least some managers who were pursuing closer co-operation with
unions were far from overtly `hostile' to (moderate) unions.
The one unsuccessful attempt at a relationship NFA in our sample
occurred at Cadbury's assortments factory. A new plant manager, appointed
to turn around a plant that had lost 7 million in the previous three years,
outlined his approach:
I asked the convenors to share openly a new approach (we called it `New
Horizons'), to be open, and to share with me a five-year end-game for both
management and employees. We did this and the convenors ran workshops on
issues with management. We drew up honesty lists of what managers and unions
wanted, no matter how ridiculous they looked on paper. (Cadburys factory
manager, fieldwork notes)
This new relationship failed when the company refused the factory manager
permission to make a generous pre-emptive pay offer in the annual pay
round and a dispute developed over a four per cent pay rise and shorter
New Employee Relations Strategies in Britain 421
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working time. The five-year plan went `on to the back burner' and, although
the factory manager maintained `I do still feel that we have an agreed
agenda . . . I want to revert back to New Horizons', he had become painfully
aware that `Cadburys may not want the unions'. As we finished our
fieldwork in this plant, a former operations manager was appointed as
the new personnel manager for the factory. His assessment of the `New
Horizons' agreement was not so favourable, and the views he outlined
indicated that he did not value a more strategic role for the unions in the
factory:
The unions are not changing. We hear the words from their national officer that
`we'll come along', but not locally. Their weakness is that they are responsive, not
proactive they can't decide on what the best strategy is. They just make the
climate worse and seek to monopolize issues. It is easy to be reactive, and in reality
the unions will do anything that works. They really don't believe in the need for a
new shift and to be more responsive to the market. At the bottom of it, they are
behind the times. (fieldwork notes)
Where management commitment to partnership was weak, as in this case,
then relationship NFAs could fail. However, because such agreements were
built upon shared interests between local managers and unions, the failure of
the new relationship in one part of an organization (Cadburys assortments
factory) did not directly weaken the agreement in another part (Cadburys
mouldings factory). The manager in the latter was concerned as to what
might happen to the agreement if he were to leave the factory. He regarded
it as dependent on his `personal credibility and trust'; other managers in the
company accused him of `being in the union's pocket'.
5. Discussion and conclusions
To what extent are significant new pathways being forged in labour
management relations in Britain? The evidence relating to this is somewhat
ambiguous. On the one hand, each of the major organizations in our study
did (eventually) negotiate some form of new style agreements with one or
more of the recognized unions. However, there was little evidence that they
were achieving stable arrangements that would persist in the long term. The
new modus vivendi continues to be contested within these management
teams. The present situation, to this extent, remains with the traditional
British pragmatism in industrial relations elaborated by Edwards et al.
(1998).
On the other hand, the overall level of revision to procedural agreements
was surprisingly high. This suggests a break with the continuity in agree-
ments previously recorded by Dunn and Wright (1994) as characteristic
of the 1980s. Also, it can be observed that the build-up and the realization
of the new agreements was more complex than the `industrial partnership'
concept that has dominated recent headlines (Coupar and Stevens 1998).
422 British Journal of Industrial Relations
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The substantial new industrial relations procedures that we uncovered,
including those with partnership features, reveal managers behaving in a
short-term, contradictory and opportunist way.
In all, the complex arrangements that emerged from explicit attempts to
shift the balance of emphasis towards more `individualized' relations with
employees did not result in either successful union derecognition or secure
partnerships. In those organizations that had considered derecognition, the
headlong rush to abandon relationships with unions in favour of individual
arrangements with employees was not followed to a conclusion in National
Power, CadburySchweppes, the NHS trusts or the Co-operative Bank.
Many of the managers in these organizations had expressed the desire to
shift the balance towards more individualistic approaches to labour
management. But, following tentative explorations, the majority remained
pragmatic about whether individualistic approaches could, in the foresee-
able future, replace the need for a union presence, even where a longer-term
commitment to joint governance was absent. In several of these organiz-
ations initial management optimism had given way to feeling the need to
`tread cautiously' in managers' pursuit of an appropriate balance between
dealing with individual employees and maintaining collective relations with
trade unions. As many of these managers had decided it was the relationship
between managers and individual employees that made the difference, they
had become reluctant to sacrifice employee trust. Consequently, signing new
framework agreements with unions was a pragmatic decision, even where
unions were aggressively sidelined, as one manager pointed out:
Management control is not about making no role for the unions; if we can exercise
the first, then who cares what role the unions play. We are not here for industrial
relations: it is all about delivery. Our job is not to stuff the unions. The significant
feature is not the role which the unions play but the relationship between manage-
ment and staff. (National Power director)
As we reported, those organizations acting as if they would prefer unions
to `wither on the vine' discovered that the insecurity felt by employees was
a potential future problem. These firms ultimately failed to pursue a con-
sistent `individualistic philosophy'. We would not interpret the subsequent
signing of agreements by these organizations as evidence of an increased
interest in joint governance. The firms discussed above all signed agreements
after unilaterally introducing major change programmes rather than seeking
a joint approach to change with unions.
The remaining organizations we studied that sought new agreements to
overcome strong union resistance to management plans (e.g. Royal Mail
and InterCity) also appeared not to be acting strategically. Although these
agreements involved integrating trade unions into joint problem-solving
activities, few managers considered these new agreements as establishing a
long-term basis for union influence or reversing the overall drift away from
managing through unions. In certain sections of the business, pluralist
management values led to effective partnership arrangements with unions,
New Employee Relations Strategies in Britain 423
# Blackwell Publishers Ltd/London School of Economics 2000.
and these agreements were far from `hollow shells'. However, where strong
union resistance met managers with unitarist values, the result was conflict
rather than increased co-operation. For example, in 1995 the Royal Mail
signed a second new agreement after the first had run out of steam, and by
1996 industrial relations had slid once more into conflict.
Pragmatism notwithstanding, the new agreements did in the main re-
establish a role for trade unions and offered forums to establish joint rules
and procedures, although the agreements were firmly management-driven.
However, handling collective bargaining and consultation in this fashion, as
managers had done with previous attempts to `manage by agreement'
(McCarthy and Ellis 1973), appeared paradoxical. Managers made attempts
to restrict the agenda of issues as the new framework agreements excluded
bargaining over details and substantive terms and conditions; at the same
time, managers embraced consultation on issues of business policy. In the
case particularly of Ford, there was evidence that company negotiations at
plant level had changed form and moved closer towards collaborative plan-
ning (Walton 1987), although conflict continued in national negotiations.
Underlying these pragmatic arrangements, the evidence we unearthed
from extensive interviews with managers at all levels and across all functions
pointed towards an enduring strain of unitarism in management prefer-
ences. Whereas Poole and Mansfield (1993: 19), drawing upon large-scale
survey data, recorded a `high degree' of consistency in management prefer-
ences for particular patterns of union activity, our in-depth interview
methodology revealed that, even in workplaces with collective arrange-
ments, large numbers of managers did not accept that unions should be
allowed to continue with their traditional activities. Moreover, a significant
proportion would clearly have been happier with continued progress
towards union exclusion. Furthermore, in several organizations managers
invited the agreement of unions only after managers had introduced the
most substantial changes. Managers requested unions to agree post hoc
partnerships to a new status quo in order to legitimize the unilaterally im-
posed changes. Union representatives were generally relieved and thankful
that managers were prepared to reach any agreements at all. For example,
shop stewards at Cadburys mouldings factory were well aware of the great
interest being shown by some of their senior managers in the practices of
non-union companies in the confectionery industry.
The signing of the new-style agreements across these cases can not
therefore be taken as an indicator of change in management preferences
towards union activity and behaviour. Even in Royal Mail, where we found
a higher proportion of managers committed to a pluralist perspective than
in anywhere else in our study, pluralist managers recognized they were in a
minority, and joint governance constituted a short-term pragmatic
commitment. In the words of one Royal Mail manager,
Our solution is partly strategic involvement, but we need employee involvement
along with that. The unions are after all just one part of employee involvement. It
424 British Journal of Industrial Relations
# Blackwell Publishers Ltd/London School of Economics 2000.
is employee involvement that is the real aim and the more important of the two.
(Royal Mail director).
It is thus important to underline the qualifications in the significance
of this renewed activity in industrial relations. For many managers who
favoured a union-free `end game', the new agreements, along with the
simultaneous flirtations with individual contracts, were but `the first steps in
a longer process'. Furthermore, co-operation with unions had not spread in
many cases because some managers remained unconvinced that this would
prove beneficial. Consequently, the future of the industrial relations experi-
ments described here is at present uncertain and falls short of US-style
`mutual gains' partnerships.
The agreements signed primarily to reassure staff where trade unions
were weak (National Power and Unilever) resembled a pluralistic shift in
management thinking even less, but constituted a temporary halt in what
managers regarded as a longer-term move away from managing with unions.
In such instances, the new agreements representing pseudo-partnership did
appear to mask employer hostility to collective bargaining and union
recognition (Kelly 1996). However, hostility was not a feature of manage-
ment attitudes towards all agreements; important differences were
uncovered between different businesses and units in the same organization.
This suggests that genuine partnership is possible between unions and
certain groups of managers, and in a public policy environment that
promotes social partnership these isolated agreements may prove effective.
Certainly in the current environment some of the managerial comments and
behaviour reported from the mid-1990s may appear dated, for example the
belief that managers can `win by edict' or can refuse recognition to unions
where membership density is 80 per cent in a workplace. However, what
impact the Employment Relations Act will have on management thinking
remains to be seen. Although some companies may espouse partnership,
there is evidence that the underlying management attitudes towards joint
governance may be little changed.
Final version accepted 13 January 2000.
Acknowledgement
The authors wish to acknowledge the support of the ESRC in funding the
research project on which this article draws.
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