Shropshire council has sacked all its workers, then re-employed them on lower wages. What can unions do to prevent this?
The move by Shropshire county council to sack all its workers and re-employ them on inferior terms and conditions ? including a 5.4% pay cut ? is a clear sign of the effects of the coalition's age of austerity.
How widespread is the use of this tactic?
Shropshire is far from the first employer in the public sector to do so. By late November last year, Rhondda Cynon Taf (10,000 employees), Sheffield city council (8,500), Birmingham city council (26,000), Walsall (8,400), Croydon (4,000), London fire service (700) and Northumberland county council (14,780) had all begun the process of dismissing their workforces in order to then re-engage them on poorer terms and conditions of employment. The main focus of the imposed deterioration here was pay, because it gives a more immediate saving on labour costs.
Other employers in the university and college sector and the fire service have used this tactic. Although the particular mechanism used here to force through the pay cuts is a specific one, pay cuts have been widespread in manufacturing. Pay specialists estimate that some 30% of the workforce in manufacturing has experienced direct pay cuts since 2007 (rather than cuts in real pay as a result of inflation). The spread of pay cuts in the private sector may, therefore, have softened up public sector workers to some extent. It seems many of them think that keeping their job is more important than fighting a pay cut. In the voluntary and not-for-profit sector ? and with funding sources starting to dry up ? pay cuts have also started to occur.
How legal is this?
Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 allows employers to lawfully dismiss workers and then re-engage them on different and inferior terms and conditions of employment, provided that a proper period of consultation has been gone through. Here, consultation means that workers are notified about the changes to their terms and conditions in advance of them being made. The European sense of consultation has not yet permeated our shores, where employers are legally obliged to not only take seriously any counterproposals from the workforce about how alternative savings can be made, but also to show how and why they may come to reject these proposals.
Is this the only tactic open to public sector employers?
Some, such as Birmingham city council, have recently made plans to cut costs by offshoring local government work, while others are trying to negotiate and cajole pay cuts. That Shropshire city council has already used the section 188 method ? firing and re-employing their workforce ? shows that employers will use whatever tactics they feel are necessary to reduce their wage bill. Public sector employers argue that they only use the section 188 method as a last resort after negotiations with unions have failed. But the unions point out that it is inevitable that negotiations on pay cuts will fail because their job is to protect their members' pay and conditions ? not connive in their downgrading. Consequently, unions suggest that other avenues for cost-cutting have not been explored properly, and that the public sector employers should stand up to the government and campaign for more funding.
What can unions do about it?
As employers have a lawful means by which to institute cuts in pay and conditions, whether they are able to do so ultimately comes down to the balance of power between the employer and the workers' unions. Unions can use legal remedy if they believe the changes have been imposed in a way that contravenes the law, but that is not a strong card to play. Essentially, this situation then becomes a trial of strength between employer and union. So far there have only been the first small signs of industrial action. This may suggest that the unions are having trouble mobilising their members to fight pay cuts, at a time when many of their members take the view that they are still lucky to have a job at all. It still remains to be seen whether the co-ordinated strike action on 30 June will prove a shot in the arm to those that want to resist these pay cuts, but do not think they can.
Source: http://feeds.guardian.co.uk/~r/theguardian/commentisfree/rss/~3/wWJtexJ7RPY/council-pay-cuts-unions
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