An empirical examination of the role of trade unions at a UK steel firm
Chris McLachlan, University of Leeds
Mark Stuart, University of Leeds
This paper explores the connection between responsible restructuring and integrative bargaining at a UK steel firm. Through a qualitative case study of the negotiation process between management and trade unions, and drawing on Walton and McKersie’s (1965) seminal framework of labour negotiations, the paper argues that trade unions are able to induce management into more responsible forms of employment restructuring by realising the ‘integrative potential’ when bargaining over restructuring.
Research by Pulignano and Stewart (2012; 2013) highlights two distinct union responses to job loss, described as confrontation based on job protection and cooperation based on job transition. Findings suggest these strategies point to both the positive role unions can play in addressing the social and economic effects of restructuring for affected employees. For instance, unions may cooperate with management in the early stages and bargain around issues such as redeployment, retraining and severance payments. Alternatively, unions may take a confrontational approach that refuses redundancies initially yet uses this as a platform for subsequent negotiations. Although much of the prevailing research tends to accept that unions engage with management to shape the outcomes of restructuring, caution has been raised around whether this reduces unions’ independence from the actions of management and their ability to contest managerial initiatives (Martinez Lucio and Stuart, 2005; MacKenzie, 2009; Rodriguez-Ruiz, 2005).
Recent debates in industrial relations literature have highlighted the relationship between trade union activity and Corporate Social Responsibility (CSR), suggesting unions are well placed as key stakeholders to engage with CSR initiatives in order to improve outcomes for their members and wider society (Harvey et al, 2017; Preuss et al, 2014). Nonetheless, there has been little empirical research on the role of trade unions in relation to specifically responsible practices. With regards to restructuring processes, the term responsible restructuring represents a range of practices implemented by organisations in order to ameliorate the consequences of redundancy for affected employees (Forde et al, 2009). Responsible restructuring has thus been viewed as connected to an organisation’s CSR agenda, with research suggesting ways in which a more ethical approach to restructuring may also bring strategic benefits (Tsai and Shih, 2013; Rydell and Wigbald, 2013). Moreover, a burgeoning consistency has been identified between responsible restructuring and integrative bargaining, whereby unions may engage with management when bargaining over restructuring in order to seek a quid pro quo when agreeing concessions in relation to job losses (Walton and McKersie, 1965; Teague and Roche, 2014; Garaudel et al, 2008). That is, in an era where restructuring and redundancy is considered inevitable, unions may acknowledge certain complementary interests with management in times of restructuring and utilise these in the negotiation process. Garaudel et al (2008) refer to this as ‘integrative potential’, where by unions engagement in restructuring processes may help mitigate some of the negative social and economic effects of redundancy for employees.
A key point of departure in this paper is thus to explore burgeoning claims in the literature that integrative concession bargaining may offer a strategy for unions to induce management into implementing more responsible forms of restructuring and redundancy (Teague and Roche 2014; Garaudel et al, 2008; Ahlstrand, 2015; Rodriguez-Ruiz, 2015; Kirov and Thill, 2018; Harvey et al, 2017). In particular, Teague and Roche (2014) have pointed to a consistency between integrative concession bargaining and the management practice of responsible restructuring, though in the specific context of responding to recessionary pressures. The authors suggest that greater union involvement may be mutually beneficial as unions can secure certain ‘institutional gains’ related to extended recognition or representation rights, whereas for management union involvement in restructuring programmes can bestow a legitimacy upon the process amongst the workforce. Research into partnership arrangements between union and management has also demonstrated this, where union presence in restructuring processes, and wider workplace change initiatives, afford management a ‘legitimizing rhetoric’ and help consolidate employee consent (Butler et al, 2011; Martinez Lucio and Stuart, 2004; 2005; Butler and Tregaskis, 2018).
Through an examination of a restructuring process at a UK steel firm (SteelCo), this paper explores the dynamics of management and trade unions bargaining over restructuring. Through interview and ethnographic data, the analysis highlights contextual conditions and critical moments that were indicative of an integrative bargaining approach between management and trade unions and hence shaped management’s claims to have implemented a responsible restructuring process. Three critical stages in the bargaining process are identified. First, the early engagement between senior management and senior trade union officials six months prior to the restructuring is considered. Second, the establishment of an internal redeployment process (cross-matching) shortly after the restructuring announcement which was jointly managed by the HR team and senior trade union officials. Third, contentious incidents in the subsequent delivery of the restructuring are explored. Each of these stages is analysed in relation to three criteria: how legitimacy between management and unions was established; areas of integrative potential; and the outcomes and tensions for each party. There is a specific conceptual focus on understanding an integrative bargaining approach in the restructuring process. Attention is afforded in the findings to analysing the interactions in the negotiations, the concessions sought from either party, critical moments that shaped the bargaining process and implications for trade unions’ role in the implementing of responsible restructuring. The paper concludes with an extended discussion on the subsequent implications for trade union strategy in relation to responding to restructuring processes more widely.