Strikes: when companies collaborate with unions, industrial action can benefit business

More than 4 million working days have been lost to industrial action in the UK in 2023. This is more than at any point since 1989 and around nine times more than the yearly average of 450,000 days in the 2010s.

This is level of activity is particularly high given the lower union membership levels at the moment – 22% of workers were in a union in 2022, compared to 39% in 1989. But the uptick in industrial disputes has happened across a wide range of professions in which people are concerned about stagnating pay and conditions.

Indeed, the cost of living crisis has certainly been a key factor, but it’s not the only thing driving industrial activity at the moment. Supply and demand for labour has also changed, with workers feeling more empowered to fight for improved working conditions.

Unsurprisingly then, a number of strikes have already been planned for 2024 and more workers could be balloted if these disputes are not resolved. It’s possible for organisations and their employees to collaborate to avoid protracted disputes – in fact collective labour movements can actually benefit companies by boosting employee wellbeing and motivation.

On the other hand, new legislation designed to diminish the effects of industrial action could weigh on workers’ enthusiasm for it. Policymakers and the judiciary have a long history of trying to curtail the collective labour movement.

The latest attempt, the Strikes (Minimum Service Levels) Act 2023, is designed to reduce the amount of industrial action and limit disruption to the general public. It will require employers to provide the union with a written “work notice”, which is formal notification of levels of service needed during a strike. Rail workers will be expected to ensure at least 40% of trains run, for example.

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The government passed this act to ensure that the public can continue to access services they rely on during strike action. Most European countries have had some form of minimum service level regime for many years and organisations such as the UN’s International Labour Organization (ILO) have recognised that such approaches can be an appropriate way of balancing the ability to strike with the rights of the wider public.

Preparing for minimum service levels

Once minimum service levels have been set and are in force, employers will need to decide on the staffing resources required to meet them. They will also need to create procedures for issuing work notices to relevant trade unions. This must specify the people required to work and what needs to be carried out during the strike, after consultation with the relevant trade unions. Employers will also need to understand and monitor whether trade unions take proper responsibility for ensuring the relevant people comply with a work notice.

HR departments will need to implement contingency planning for periods of industrial action. Some organisations, such as the NHS, have already set out plans to manage strike action.

Employers can’t plug staffing gaps caused by strikes with agency workers. But HR departments can reassign existing staff to do the jobs of striking workers. These non-striking staff can be temporarily replaced by agency workers if necessary, as long as the employer has the contractual right to do so or has gotten the employee’s consent beforehand.

Encouraging senior management to provide temporary cover is also a common approach. This can be viewed positively by other workers, as well as helping prevent further disruption to business operations. Once industrial action ceases, employers are then able to use agency workers to help clear backlogs.

Wider benefits of industrial action

While policymakers clearly think legislation is needed to deter industrial action and curb its impact on peoples’ lives, collective labour movements can also have benefits for businesses.

Once a strike is over, provided it was settled amicably, companies sometimes see a productivity bounce. Industrial action can have a profound and positive psychological effect on workers who feel they have re-established control over their working life.

More generally, working with trade unions can not only avoid action in the first place, it can actually benefit the workplace. Boosting pay, improving training and striking a better work-life balance helps maintain a stable workforce and can increase motivation and innovation by employees.

Employment relations specialists have become a dying breed in recent decades due to the rise of a more “unitarist” approach to industrial relations. This theory assumes compatible goals, a common purpose and a single (unitary) interest shared by an organisation and its employees. If this interest is managed effectively, the organisation will function harmoniously and avoid conflict, particularly industrial action.

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Indeed, research shows the benefits of a more “pluralistic” approach, in which employers and trade unions acknowledge their strategic relationship and continually discuss working conditions in a clear and transparent way. This can help head off disputes before they happen. For example, the Bank of England prevented strike action in 2023 by agreeing to a 3.5% pay rise for its 4,200 staff, as well as a 1% salary top-up (which benefited the lowest paid in its ranks the most) and a 1% benefits uplift that could be taken in cash.

Minimum service levels may affect people’s appetite for prolonged industrial action in 2024, but there are already strikes planned for the new year. Companies should communicate positively with their employees so that disputes do not become protracted like they have done over the last 18 months.

It’s possible to defuse a strike by understanding the other party’s perspective and avoiding extreme demands. In many cases, simply bridging the worker-management divide could help provide employees with the information and support they need to feel comfortable that they’re getting fair pay and conditions.