Good morning and welcome to the Trade Union Bill. We are joined by John Cridland, who is the director general of the Confederation of British Industry, Dr Adam Marshall, who is executive director of policy and external affairs at the British Chambers of Commerce, and David Martin, who is chief executive of Arriva plc. This session will last until 10.15 am, so it will be fairly snappy. We will go from Opposition to Government side, and Members will take this as they wish.
First, may I say it is a pleasure to serve under your chairmanship, Sir Edward? I welcome all members of the Committee to the evidence sessions and thank the witnesses for making themselves available this morning.
“Business backs plans to modernise our industrial relations framework.”
Can you explain whether you think there is a unified view across business and industry in support of all the measures in the Bill? Given that you specifically refer to modernisation, do you—perhaps the BCC can answer this as well—support measures to introduce e-balloting and secure workplace balloting to increase participation in the most modern ways possible?
John Cridland: Thank you for that question. I believe the CBI does support the Bill, and I think the business community as a whole supports the Bill. Increasingly, the positive and constructive employee relations that we have built up over the economy are based on direct engagement with the workforce. We believe that there is a valuable role for trade unions but that the nature of trade union law needs to reflect the modern workplace in the way that I described—direct engagement.
I think the provisions in the Bill that are of most concern to businesses are those that ensure that where there is strike action—particularly in public utilities, education and health—it reflects a significant voice from the workforce. The fact that we are coming in with provisions similar to those in the statutory trade union recognition legislation, which has worked well and effectively for a number of years, reflects the sort of mandate of support that business, if it is to be significantly disrupted by the action I described, needs to see reflected. In principle, I think these are the right provisions.
On your particular question of e-balloting, we do not think at the moment the evidence is there that e-balloting can be secure and effective. We do not have a problem in principle with e-balloting, but it is probably premature to have it available.
May I follow up on that point? Even though e-balloting is used by a number of banks, building societies and other organisations, you do not believe that it is secure.
John Cridland: The need to protect the privacy of an individual trade union member voting is important to their employer, and we would want more assurance that that could be effectively conducted. Clearly, even in relation to some of the professional services that you just described, there are significant issues about data privacy.
Dr Adam Marshall: Thank you for the opportunity to be here this morning and to answer the question. It is our belief—fairly similar to that of my colleague from the CBI—that the right to withhold labour needs to be balanced in its application with the right of others to continue to work or to receive essential services, so we support strongly the provisions in the Bill that raise thresholds, for example, and ensure that essential public services are subjected to additional thresholds. It is our belief, however, that questions around the method of balloting are probably for the Government, the trade unions and the Opposition to have a debate over, rather than for us in business to have a debate over. Our concern is principally about the elements of the Bill that help to raise thresholds and ensure that the right to work is balanced with the right to withhold labour.
Do you accept that industrial action is at a 30-year low? Therefore, why is there a need to tighten up the legislation in such a draconian way as the Bill proposes?
Dr Adam Marshall: I think the statistics measure the number of days lost directly to industrial action. They do not measure the number of days lost indirectly because of industrial action, and what our members have asked us to represent is that those days lost to industrial action are significant. They affect business, productivity, the right of individuals to earn a living and access to public services. Were one able to make the argument that the number of days lost both directly and indirectly had gone down, that might be different, but a lot of people are significantly affected by strike action, hence our support for those provisions in the Bill to raise thresholds.
Mr Martin, can you tell us about your experience of industrial relations? There have been a number of high-profile cases where there have been findings against Arriva in its relations with union members and others. Can you tell us a little bit about your company’s experience and why you think this Bill is so necessary?
David Martin: Good morning. Arriva recognises that employees have the right to belong to trade unions, and we recognise a number of different trade unions. We pride ourselves totally on the fact that we are there to deliver highly satisfied employees to deliver services to highly satisfied passengers. We carry about 6 million people a day across the UK on buses and trains.
Frankly, I am extremely proud of the fact that we work very closely with our trade unions on the overall strategic direction of the business. We paint out and include them as a deliverer in the context of developing the strategy over a three-year or five-year timeframe, and that has worked extremely well for us. We all recognise the issues in the overall UK economy and the global economy, and the impact of fuel prices and so on. The ability to work closely with our trade unions has generated a situation where we have had a very low level of disputes over the past 30 years, certainly to my knowledge.
The only interesting disputes, which lead me to support the Bill, have been the London bus strikes this year and the issues in London in 2012 surrounding the Olympics, where the whole issue was union-led rather than membership-led. It was not a dispute within the membership. The fact that 17% of my staff voted and 50% of the buses did not run in London over that period of time shows us that we need a failsafe, and this Bill delivers that failsafe. In the event that industrial relations issues arise, there needs to be a clear mandate from the trade unions.
Do you accept broadly, though, that the vast majority of strikes in the transport sector have met the thresholds as envisaged by this Bill, including those in the rail and bus sectors?
I do not want to be too formal and restrict people to one question, and the main Opposition spokesman needs some latitude, but just keep an eye on the time everybody, and if you can just ask one question, fine. All three witnesses do not have to answer everybody; you can divide it up between yourselves.
It is a great pleasure to serve under your chairmanship, Sir Edward. The Bill has already been described by Mr Doughty as “draconian”. Can you give me your impression of how much this is a fundamental change to the way that trade unions operate and how much you think it is more of a step-by-step increase in the modernisation of the trade union movement?
John Cridland: I echo Mr Martin’s comment about a failsafe. In most workplaces, relations are harmonious. Most workplaces are now not unionised, but in the unionised part of workplaces, most relationships are harmonious, and employers recognise that. There is a small minority of situations, which we have already described, where many people—businesses and consumers —are significantly disrupted. If that is to happen, and if the right to strike is to be exercised, I think it is reasonable, given the level of disruption involved, that there is clear evidence of a significant mandate. That is a modernisation of a system that is broadly working well.
Dr Adam Marshall: I would probably agree with my colleague and simply add that having an expiry for ballot mandates is an important thing in this day and age, given that we are in a more complex world for both business and industrial relations than perhaps ever before. Having a clear mandate renewed on a regular basis is very important.
David Martin: I again echo the comments. I can only refer to what I said earlier—that in the event of a breakdown in industrial relations, which does not happen very often, let us have a very clear mandate that reflects the wishes of the membership as a whole, and let us have a situation where we can minimise the overall impact on the travelling public and the UK economy at the same time.
It is a pleasure to serve under your chairmanship, Sir Edward. My question is for the CBI. First, I was a bit unclear in your answer to my colleague about secure workplace balloting. You have said that trade union recognition ballots work well, but in trade union recognition ballots there is scope for secure workplace balloting. Can you clarify that?
Secondly, in your submission, you say that you are looking to extend the notice periods from seven days to 14 days on either side. That is 28 days in total, even without a ballot period. Do you not think that seven days’ notice to ballot and seven days’ notice to strike, with a period in between of at least four working days, is sufficient for a business to look at what they need to do and the steps that need to take place for disruption and any industrial action?
John Cridland: Thank you for the question. On your first point, the analogy I was using for trade union recognition was with ballot majorities. That is a relevant point, I think, about the ballot majorities and thresholds that the Government are proposing for the Bill. The current notice periods are inadequate. Many corporate members of the CBI faced with these situations simply do not feel that they have enough time to provide information and to put in place mitigating measures. I think the business community does want to see longer notice periods.
Part of the difficulty, though, is that the notice for compulsory redundancy is now 45 days. The danger of the Bill—I am curious to hear your views on this—is that trade unions will have to ballot right away when an employer issues a statutory redundancy notice, because it is now 45 days. Given the timescale, does it not worry you that there will actually be more balloting, rather than less?
John Cridland: For employers, we are trying to get the principle of clear consent. If a trade union and its members are going to withdraw their labour, which is clearly their right, we want to see evidence of consent in those situations. The difficulty with the current legislation is that it can leave employers faced with a situation where there is a low turnout—we have already heard the situation that Dr Marshall described of a ballot, prior to a situation where the ballot was some period before. These are not giving clear signals to the employer. So the spirit of our evidence is, “Can we have a system that both in time and in signalling makes it much clearer to the employers the nature of the dispute, and allows the employer to deal with that?” That is what we are after.
It is a pleasure to serve under your chairmanship, Sir Edward. Dr Marshall, you raised the point about productivity, and I just want to ask about some of the wider economic impact of the Bill, if it is passed—in particular, the impact on investment, including inward investment, and on making the UK an attractive place to invest, and perhaps, Mr Martin, in terms of your industry, on whether having greater confidence about industrial relations will enable you to have stronger management and therefore attract more investment into it.
Dr Adam Marshall: Many thanks for the question. Undoubtedly, businesses that believe that the framework for industrial relations is modern and secure will be more confident when it becomes time to invest, particularly in those industries, such as the one represented by Mr Martin, that are affected by some of the enhanced thresholds that this Bill puts in place.
We have been very supportive of the definition of which areas should fall under those enhanced thresholds, in part because those businesses are extremely capital-intensive and do things that are extremely important to the functioning of the broader business community. So whether we are talking about transport, the delivery of energy supplies and indeed—vis-à-vis the supply of future skills—whether we are talking about the education sector, these are things that have a huge knock-on effect on the rest of the economy. So we believe that these measures are proportionate to help with that particular challenge.
Vis-à-vis our attractiveness to overseas businesses, one only needs to look at the media impact of transport strikes in London—how they are reported—and what you see are the knock-on effects on the economy of this particular area, and of course we have seen that played out in other cities as well, right across the UK. That has a deterrent effect on would-be investors, and I think that we would see that deterrent effect being lessened with a modernised system.
Mr Martin has obviously had some experience of industrial action. If his management were more confident in the future that there would be less disruption, would that enable his company to attract more investment, to expand and all those things that we want to see across industry?
David Martin: Undoubtedly. It is an obvious statement but investment is all about confidence, and confidence breeds a situation where, from my viewpoint, effective trade union relationships and effective employee relations are a fundamental part of what we do. We employ 60,000 people all across Europe—25,000 people in the UK—and those relations are fundamental to us. And we deliver passenger journeys to more than 2 billion people a year, so we are fundamentally a massive part of overall GDP in local areas and in national areas. Clearly, if confidence is higher, then investment undoubtedly will reflect that.
Would that be a major issue? Frankly, I would say that it would not be, because it would not stop us investing. It is up to us as a management team to manage our industrial relations practices, but if it all goes wrong and it comes to it, I think it is absolutely fair that a proper mandate is there with our trade union colleagues to leverage their position on behalf of the employees.
If you want to ask a question, try to give us plenty of warning, so that we can fit you all in. It is going well at the moment; I hope that we will get everyone in.
It is a pleasure to serve under your chairmanship, Sir Edward.
From the perspective of the three witnesses, what are the main drivers of supporting this Bill? We have heard that industrial action involving strike action is at a 30-year low, but the witness from the British Chambers of Commerce has said that industrial action has an impact, for instance, on productivity. Does strike action have a detrimental impact on productivity that is as bad as other factors in the economy, for instance, bearing in mind that, overall, British workers are about 25% behind French workers in terms of productivity? Is it factors such as industrial action that are causing that 25% gap? I doubt it, given the 30-year low in strike action. I also wonder whether you are really supporting this Bill just because it is an opportunist-type thing—the opportunity presents itself, and therefore we might as well go gung-ho and support it.
David Martin: I will happily respond to that one. In my sector, which is the delivery of a public service, passengers rely on buses or trains to get to work, school, leisure activities and retail outlets, where they spend money. I think it is fundamentally wrong if there is not a clear mandate from the workforce when taking up a dispute with the employer. Assuming that the legislation goes through, the modernisation of the process to provide clarity and a practical, working situation can only be beneficial.
John Cridland: The concern in the business community has always been about disruption. I have the privilege of speaking for an organisation that represents 190,000 companies, and clearly the overwhelming majority of those companies are small. As small businesses, they are consumers, too. When getting their products to market and their employees to work, disruption is the factor that impacts on their business. That has been CBI policy for more than five years, so it is not opportunistic. We have advocated this sensible modernisation for more than five years.
Do you agree that the CBI has a major concern about the impact on productivity and that there are clearly other factors in the economy that are impacting more on productivity at the moment than industrial action?
John Cridland: I would not underestimate the impact of significant disruption in the running of an economy on the overall performance of the economy, but the argument I have made is one primarily related to disruption. I agree that productivity relates to a range of factors. It is a cocktail of factors, of which this is only one.
Dr Adam Marshall: I would simply add that the vast majority of my members are in 52 accredited chambers of commerce the length and breadth of the United Kingdom outside the M25, so business support for some of the measures in the Bill is not a London phenomenon.
On productivity, I raised the statistics very early because arguments are made about this Bill using only statistics that count direct days lost to industrial action. Had National Statistics been collecting information on the indirect effects of industrial action for many years, we could have a much more informed argument. I know that when millions of people are out of the workplace because they cannot get to work, and when millions of people are at home because their children are out of school, for example, there will be a productivity impact. I completely agree with you that that does not mean that the productivity per hour gap between the average British worker and the average French worker is entirely down to this, but there is certainly an impact.
In the aftermath of this session, will you write to us to present us with the evidence you have to back up those statements?
Thank you all very much for being here. I am sure that everyone here agrees that the intimidation of non-striking workers and illegal activity on picket lines is wrong and that it is concerning to read reports of that. What are your experiences of picketing from an employer perspective? What are your thoughts on the current status of the code of practice and the provisions in the Bill to put that on a statutory footing? Do you think it does enough to reduce the concerns that some of us might have about behaviour in this area?
John Cridland: The principal concern of business is where picketing action does not fit in with the code. Generally, I think the code works well. The Bill contains a sensible provision to bring legal recognition to the part of the code that it covers, and I think the major provision in the Bill that would impact on picketing is the requirement to have an official who is clearly responsible, and who the employer knows to be responsible, for the actions of the picket line, which is something that employers welcome. I think that is a relatively moderate change to the existing legislation. It builds on a code that has served us well.
As ever, it is a pleasure to serve under your chairmanship, Sir Edward.
Dr Marshall, I want to come back to something you have just said. What evidence are you referring to when you talk about all the indirect days lost? You have referred to that quite considerably in your evidence, but you then said that you looked to see what there is. Do you have any evidence?
You have also talked at length about what your members think. Can you advise the Committee on what surveys or interaction you have had with your members on the Bill and what came out as their top five priorities? Do the features in the Bill figure in that?
To follow that up, you have said at length in all your evidence on this point that you are representing the views of your membership on this, but how can you say that if you have not surveyed members and asked them the question?
Normally, we would go to the Government and then to Labour, but I do not want to be too formal. If somebody is bursting to ask a really telling supplementary, they can come in. I think Steve Doughty is burning to ask a question.
Just to follow on this point specifically, I am also concerned about the lack of evidence. We have a bit of evidence here that findings from the 2011 workplace employment relations survey revealed that despite an increase in public sector strikes in 2010-11, only 3% of managers were experiencing any disruption as a result of strikes in another workplace. So that is a piece of evidence and I wonder if you or the CBI have any comments on that: very low levels of industrial action and then very low levels of disruption shown in an actual survey, actually evidenced in figures, unlike some of the comments that we have heard from the panel.
John Cridland: If you think of a strike in education, for example, like last year with schools, most employees in most workplaces in the affected area have to provide alternative childcare arrangements. How is that caught in national surveys? It is very difficult to capture—a point that Dr Marshall made. How is that aggregated in employer surveys? It is very difficult.
With respect, you are saying that it is very difficult, but you and Dr Marshall are making some very broad statements about this issue without having evidence to back them up. That is what I do not understand. It is a very broad assertion to make.
You talked about work environments modernising and work practices modernising. I think one of the big changes in the last decade or so is the fact that people want more confidence in companies and public bodies, which means that they have to be more transparent and accountable. One of the clauses in the Bill wants to bring trade union practice up to date with existing best practices as public bodies have to publish all spending over £500. Do you agree with that?
John Cridland: The CBI has concentrated on the core parts of the Bill that most affect our membership, which are the strike thresholds and the confidence around strike arrangements. We support the Bill as a whole but we would leave those other arrangements for the Government to determine through Parliament and the certification officer. Those are probably not the aspects of the Bill that most employers would have at the front of their minds.
Going back to Stephen’s question about the clause, where you are saying that you want trade unions to support a Bill that has a clause providing that there should be more transparency on trade union spending. That is possibly one of the areas in this country which shows the most transparency on spending. You have then come here, and Dr Marshall has given evidence to this Committee, providing no evidence for your statements. Do you think that may undermine your argument in support of the Bill? You are asking for that type of legislation to be put through, but we still have not been given any objective evidence.
Going back to an earlier comment, Mr Cridland, you talked about concern about disruption and said that, to provide more confidence, you wanted to support this Bill to stop potential trade union actions, yet you also said that it was too difficult to investigate an illustrative example about striking workers in the education sector. Your colleague, Dr Marshall, also said that those investigations had not been conducted. What is the Committee supposed to believe? We are getting subjective statements, but not one of you can show us any objective investigation into your own members’ views on this matter.
John Cridland: With respect, I think that there are two separate points there. There is the mandate that we have to speak for the CBI as a representative body of the views of our companies. There is a separate issue of how the Office for National Statistics captures the impact of industrial action on the economy. I am responsible for the first. I am not responsible for the second.
John Cridland: The CBI operates under a royal charter. We are a democratic body. We have elected regional councils. Those councils formulate the opinion of the CBI. We have 140 trade associations, which contribute to that policy-making process. We formulate a point of view which is reflected in the submission we have made on the Bill. That is a process of policy formulation, where employers judge the impact on the economy of disruption and come to a view on how we can promote positive industrial relations.
Here is a question that you may have asked your members. At the moment I do not think that you have asked your members any question whatever, but here is a question. Have you asked your members about the potential for the rise in wildcat strike action by non-unionised workforces?
John Cridland: The overwhelming view of British business as formulated by our own policy and decision-making process is that—using the phrase that Mr Martin described—it is sensible to provide a failsafe against a small number of pieces of industrial action where there is not currently a strong enough mandate from the workforce through trade union ballot. That is the part of the Bill that we are most concerned about.
John Cridland: Yes. We discuss those issues, we look at the implications and we come—as an independent organisation entitled to form its point of view—to a conclusion. I reiterate that we were advocating this change five years before this Government brought it forward. This is not something where we have simply come to a conclusion on the basis of the draft proposals of the current Government.
It is a pleasure to serve under your chairmanship, Sir Edward. Thank you to the witnesses. We have spoken about certainty and clarity in business. Of course, the most essential component of any business is the employees. Will the clear description of the trade dispute and the planned industrial action, which will now appear on the ballot papers, provide more clarity for union members and help them to know what they are or are not voting for?
Dr Adam Marshall: I am happy to begin on that. We support clauses 4 to 6 of the Bill and the requirement for greater information so that everyone can have that information. The point has been made very well through the course of this process that a very small proportion of the private sector workforce are unionised, so this impacts only a small minority of my membership but the point has been expressed to us that they want employees who are being balloted on the possibility of strike action to have maximum information available to them in order to take a decision on the way that they choose to vote.
So you think that it is better for them to understand exactly what they are voting for—to give everybody in a business clarity. That would help to cement better relations between employers and employees.
It is a pleasure to serve under your chairmanship, Sir Edward. As a former Government lawyer, compliance is always of enormous interest to me. Do you feel—this is for all of you—that the enhancements to the role of certification officer are really sufficient and that they will make a difference?
John Cridland: We look to harmonious employee relations. It is very important to us that we work with recognised trade unions and that we work strenuously, as trade unions nearly always do, to avoid these strikes. If there are strikes, they need to be properly and fairly regulated. Compliance is therefore important. You cannot have rules that are not properly enforced. We think these are sensible provisions to strengthen the compliance requirements but I put my answer to your question, if you will allow me, in the context that I have because I think we all want to see these rules applied in the smallest possible number of circumstances.
John Cridland: If I may answer that, it is certainly the case that facility time is best agreed between employers and trade unions. It is primarily an issue of concern in the public sector, not in the private sector. This is not a matter that the employers in the private sector that I speak for have strong views on.
You spoke about the importance of communication with your workers and harmonious employee relations. Have you consulted the workforce at all about their views?
I just want to push John on whom he is representing. I would contend that there are actually a number of voices in business and industry who are concerned that the Bill will do the opposite and will promote less positive industrial relations, which could have an impact on productivity and the ability to negotiate. A whole series of measures in the Bill could foster dissent rather than the agreements and constructive relationships that lead to avoiding industrial action in the first place. I was on a panel with a CBI representative a couple of weeks ago and a representative of a major industrial employers’ organisation said, “Let’s put it this way: we didn’t call for this Bill.” Could you just explain, very clearly, whom you are representing and whether there is an absolute consensus of view across business and industry that this is a good thing for business and the economy as a whole?
John Cridland: I do appreciate that there are a variety of organisations and a variety of voices speaking for the business community. The CBI is an important one, but it is not exclusively the voice of business. Our own organisation has consulted fully and widely through our open and transparent governance processes, and this is the view that we have come to, as reflected in both my written and oral evidence.
Thank you for allowing me to ask a question just before the end, Sir Edward.
You have all rightly made clear your views about the important and positive role that you see trade unions playing. Equally, you have touched on the impact that stoppages have in terms of the economy, productivity and people’s lives and how it disrupts them. I agree that the ONS being able to collect statistics around indirect impact would be a benefit to all of us, wherever one stands in this debate, but it is clear and self-evident that any stoppage in a vital public service will inevitably have an impact indirectly on days lost.
As a final, broad-brush question, do you think that, given all that and given the discussions that we have already had with you, the Bill strikes the right balance between the rights of unions and members and a recognition of their positive role and the rights of businesses and the public to get on with working and producing?
David Martin: From my perspective, that balance is the absolute key to ensuring that we maximise and protect the interests of employees and passengers alike. In many respects, the Bill itself, if it comes into practice, has to be extremely transparent, very clear, very workable and not subject to legal disputes at all stages of anything happening in the future.
Thank you, gentlemen. That concludes our evidence session with you. Thank you for answering our questions in such a competent and brisk way. We are very grateful.