Employee representation

Does your business consult and negotiate with employees and their elected representatives in the context of collective bargaining?

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Employee representation is the establishment of mechanisms enabling employees to be consulted and collectively bargain on their terms and conditions of employment. This formalisation of the employer-employee relationship creates channels for people at work to share information, communicate, consult, negotiate, protect their employment rights, and build positive relationships based on trust and cooperation.

Representatives are usually elected and they have many rights which are protected by law – such as the right to training and reasonable time off to carry out their union duties. This can be in the context of legally recognising an independent trade union for this purpose. Representation is also about maintaining good workforce relations and empowering workers and employees. It is the system by which individual employees – either union or non-union representatives – are given the right to speak on behalf of themselves and their colleagues on important issues in the workplace so that feelings and knowledge from the shop floor can be communicated back to management and vice versa.

Whilst independent unions may be the first organisations we think of when it comes to employee representation and collective bargaining, they are not the only system of workplace representation. Indeed, in the UK only 14% of private sector workers are members of a union, whereas 54% of public sector workers are and there is no legally mandated system of workplace representation. Alongside official unions recognised by the employer, there are also unofficial unions, joint consultative committees and work councils which bring together management and employees in the same forum. Workers may be represented at Board level and there are also professional associations and institutions, often bodies with self-regulatory legal status, which may also represent the interests of their members. Employees may also be represented in practice by informal leaders. However, only the trade union enjoys a legal status commensurate with its independence and as such is indispensable to any notion of employee representation.

The advantages to employees of unionisation are clear. Unionised employees earn more, have better holiday and sick pay and are less likely to be in an accident at work - union reps ensure health and safety is recognised and prioritised so there are up to 50% fewer accidents in unionised workplaces. But unionisation also has advantages for employers. There are fewer dismissals thanks to union reps being present at disciplinary cases and unionised workers are far less likely to quit since they have mechanisms to address grievances. This significantly reduces the cost of recruiting and training new employees. Fewer accidents also mean fewer days lost to absences. Representation provides a voice for workers who would not otherwise speak up about health and safety matters, and an alternative channel for managers to communicate with workers to prevent accidents. When representatives are trained on issues such as health and safety they are able to offer a perspective different to that of senior management.

Different organisations will have different needs and methods for consultation with staff. Small ones generally have more informal methods, often through direct contact with employees such as a manager walking around and talking to people. Nevertheless, this should not be used as a substitute for, or undermine collective agreements. Larger businesses lend themselves to more formal structures, the nature of which would be a subject for the bargaining agenda. Staff forums may include electronic communication (e-mails, newsletters and online questionnaires etc.), group meetings and one-on-one meetings. As in smaller firms, none of these tools should be deployed to sabotage existing agreements arising from collective bargaining.

However, it is recognised that while there should - wherever possible - be harmonious relationships between management and staff, there will not always be communality of interest, thus ensuring the need for collective bargaining at the appropriate juncture. Without freedom of association and respect for trade union rights, there can be no employee representation.
Recent developments in the labour market have seen a decline in long term employment and increased casualisation through outsourcing, use of agency workers or reliance on a self-employed workforce. The gig economy, where technology platforms such as Uber and Deliveroo connect customers with workers, has sped up this process. Whilst there are other reasons for needing a flexible workforce such as responding to changing demand and cases where this is beneficial for both employer and employee, there are also cases where this flexibility is forced on employees. This reduction in direct employment has reduced the job security and the negotiating position of some employees whilst making it harder for effective employee representation to emerge.

Businesses can use their political influence through lobbying, public relations and political donations to support policy and legislation which either undermines or enhances employment rights and employee representation either directly or through trade associations or other lobbying coalitions. Even if not engaged in influencing, businesses also have an incentive to ensure effective representation and employee consultation processes to protect themselves from being caught out by changes to legislation. Even though recent UK legislation has made strike action harder, the Labour Party has also committed to repealing the Trade Union Act should they be elected. There is therefore an advantage to implementing structures above the legal requirement.

Collective bargaining

'Collective bargaining' is a process by which employers and recognised trade unions seek to reach a negotiated agreement on issues such as pay and terms and conditions of employment. Both employer and trade union take responsibility for fulfilling the bargain. Unions and collective organisation rights are principally governed by The Trade Union and Labour Relations (Consolidation) Act 1992 which was amended by the Employment Relations Act 1999 and the Employment Relations Act 2004 though there is separate legislation for Northern Ireland.

Trade Union Act

The 2016 Trade Union Act made strike action harder. Ballots will have to achieve at least a 50% turnout of eligible union members, with a majority voting in favour of strike action. In important public services - including the health, education and transport sectors - an additional threshold of 40% of support from all eligible members must be met for action to be legal.

Representation

'Representation' is the establishment of mechanisms that enable employees to be consulted on workplace practices and the terms and conditions of their employment. These mechanisms can be internal or independent.

Works council

A group of employees representing their workforce in discussion with their employers. Also known as a staff council.

Recognition

A trade union is said to be recognised when an employer agrees to negotiate with it on pay and working conditions on behalf of a particular group of workers. Once a union becomes recognised, the employer must comply with certain legal duties. The most common way a union can gain recognition for collective bargaining purposes is by the employer simply agreeing to recognise it voluntarily. In practice this means the union becomes recognised by the employer without using any legal procedures. In the UK, if an employer and trade union find they are unable to come to a voluntary recognition agreement, a trade union can make an application for statutory recognition. This only applies where the employer, together with any associated employers, employs 21 or more workers.

Joint working groups

'Joint working groups' are similar to works councils but usually formed to deal with specific issues.

Trade union membership

'Trade union membership' is the process whereby employees join a trade union, as individuals or as a collective.

Individual trade union representation

'Individual trade union representation' is required when individual employees face problems at work, e.g. if an employee raises a grievance or is subject to disciplinary action.

Outsourcing

Outsourcing is a process where some business functions are contracted out to a different company. Business functions may be carried out by contractors who do not enjoy the same representation as full time employees, despite being equally important to the business’ success, and equally impacted by it.

Answering YES

All Businesses MUST

State their business sector and number of employees

Explain if, how and why any functions are outsourced or subcontracted

Describe how they consult and collectively bargain as defined above, with employees and their trade union representatives

State if they have a protocol in place to encourage trade union membership

State which trade union or unions they recognise for collective bargaining or explain why they do not recognise an independent trade union

All Businesses MAY

State any philosophy or values which influence their approach to consultation and collective bargaining with the workforce

Explain how they encourage or promote workers to participate in the decision-making process by being union members

Indicate how they assess and/or measure employee perceptions of being listened to/involved in decision-making

Provide examples of how they comply with labour legislation and ILO conventions

Offer an example of how meaningful consultation has had an impact in the organisation and on decision-making

Large and Multinational Corporations (MNCs) MUST

Confirm that they are committed to a mature system of employee relations

Mention if their employee consultation practices differ from one country to another and explain any differences, if they exist

Confirm that they engage in collective bargaining with independent trade unions in all countries of operation, even if legal standards differ in certain countries (unless independent trade unions are illegal)

Confirm that they comply with ILO core conventions relating to freedom of association, collective bargaining and labour rights in addition to complying with local legislation

Answering NO

All Businesses MAY

Mention some of the issues that are the subjects of consultation, and how they have been addressed in the past

State any philosophy or key values which influence their approach to employee representation

Describe any relevant employee communication and consultation, even if they do not meet the specifications for answering YES

Mention any future intentions regarding this issue if next steps are outlined clearly

All Businesses MUST

State their business sector and number of employees

Explain why they do not or cannot answer YES to this question, listing the business reasons, any mitigating circumstances or other reasons that apply

Answering NOT APPLICABLE

All Businesses MUST

Confirm that they are made up of directors only and have no employees

Outline how their workforces is supplemented by outsourced providers, self-employed contractors or agency workers and explain their rationale for using such arrangements instead of employing workers directly

DON'T KNOW is not a permissible answer to this question

Version 2

To receive a score of 'Excellent'

Employee representation is of strategic importance for the organisation

Examples of policies and practices which may support an EXCELLENT statement (not all must be observed, enough should be evidenced to give comfort that the statement is the best of the four for the business being scored):

  1. Employee representation is a key part of their philosophy
  2. Demonstrates a strategic approach to enabling employee representation
  3. Employee voices always taken into account in decision-making
  4. Actively engages staff in promoting employee representation
  5. Actively measures employee perceptions of being listened to/involved in decision-making
  6. Actively encourages trade union membership
  7. Regularly consults and collectively bargains with employees and their trade union representatives
  8. Independent trade unions recognised in all countries of operations (where legal)
  9. Differences in consultation practices across countries are justified
  10. Facilitates elections of employee representatives
  11. Facilitates opportunities for representatives to report back to employees
  12. Consultation with employee representatives is consistent and regular rather than just at times of stress
  13. Employees are encouraged that and feel confident that involvement in trade unions, or standing as employee representatives will not be to their detriment
  14. Reasons for decisions are clearly explained and communicated to employees, particularly when the decision is unpopular
  15. Employees understand their rights when it comes to representation (such as the statutory right to be accompanied to a disciplinary hearing)
  16. Creates joint working groups when necessary
  17. Where collective bargaining is illegal businesses try to foster good workplace representation
  18. Employers consult with an individual’s trade union representatives whenever this is necessary
  19. Employees are able to be accompanied in any meeting with the employer
  20. The majority of employees are members of trade unions
  21. Elections for employee representatives consistently have a high turn out
  22. Employees report trusting their representatives to effectively communicate their views and argue for their best interests
  23. Employees are meaningfully represented on the board, and have the capacity to influence strategy through this
  24. The company voluntarily recognises trade unions when there is employee demand for this
  25. The business values trade unions, and this is communicated to employees
  26. Strike action voting is held during hours convenient for employees to cast a ballot
  27. The company does not use outsourced contractors, self-employment contractors or temporary workers to reduce obligations to its workforce. Steps are taken to promote employee representation in the outsourced workforce.
  28. Company has lobbied for changes to the law where collective bargaining/unions are illegal, or opposed to attempts to restrict union rights
  29. When choosing suppliers and subcontractors consideration is given to their practices on employee representation
  30. Attempts are made to exert influence to improve existing suppliers’ and subcontractors’ practices
  31. Exerts influence in trade associations and other groups to promote an approach favourable to employee representation
To receive a score of 'Good'

Employee representation is evident in the organisation’s policies and practices

Examples of policies and practices which may support a GOOD statement (not all must be observed, enough should be evidenced to give comfort that the statement is the best of the four for the business being scored):

  1. Regularly consults and collectively bargains with employees and their trade union representatives
  2. Demonstrates a commitment to employee representation
  3. A protocol is in place to encourage trade union membership
  4. Employee voices are often considered in decision-making. When decisions are made that are contrary to the views of employees justifications are provided and communicated back
  5. Communicates policies on employee representation to employees
  6. Differences in consultation practices across countries are justified
  7. Independent trade unions recognised in all countries of operations
  8. Attempts to measure employee perceptions of being listened to/involved in decision-making
  9. Employees report feeling comfortable being active members of trade unions
  10. Time and training is provided to union representatives
  11. Employees are able to be accompanied during disciplinary hearings
  12. Employees are offered time off for trade union duties and this is agreed and clearly specified
  13. Union representatives and other representatives are periodically consulted, rather than being ignored until times of crisis
  14. Employees are represented on the board
  15. Management demonstrate that they are open to recognising trade unions
  16. Business has made an assessment of the costs and benefits associated with trade union membership and communicated this to employees
  17. When choosing suppliers and subcontractors consideration is given to their practices on employee representation
To receive a score of 'Okay'

Takes some measures to practice employee representation or clearly explains why employee representation is not a business priority

Examples of policies and practices which may support an OKAY statement (not all must be observed, enough should be evidenced to give comfort that the statement is the best of the four for the business being scored):

  1. Employees regularly consulted on important decisions affecting company
  2. Has invited employees in encouraging trade union membership
  3. Employee representatives are only consulted in times of crisis
  4. Complies with legal obligations on when to consult with employees
  5. Adheres to ILO Conventions wherever it operates
  6. Where possible, recognises independent trade unions
  7. A recognition agreement is in place with a trade union
  8. The board listens to employee representatives
  9. The company has communicated that it is open to recognising trade unions, but only when legally required
  10. Statement of intent to improve, with clear next steps outlined
  11. (Small business only) Employees decide formal involvement in trade unions is unnecessary due to excellent internal mechanisms for employee representation
  12. Company is made up of directors only and has no employees
To receive a score of 'Poor'

Company fails to adopt appropriate and credible levels of employee representation despite arguments and opportunities to do so

Examples of policies and practices which may support a POOR statement (not all must be observed, enough should be evidenced to give comfort that the statement is the best of the four for the business being scored):

  1. The organisation acknowledges performance below expectations
  2. Statement of future intent to improve
  3. No evident efforts to practice any employee representation
  4. No consideration of recognising unions
  5. No mature system of employee relations
  6. Employers do not ask for or take into account the views of their employees
  7. No procedure is in place to facilitate trade union membership
  8. No unionisation guarantee is in place
  9. Employers do not support individual trade union representation
  10. No consideration is given to suppliers’ practices
  11. Where there are employee representatives they are seen as puppets of management
  12. Company does not recognise unions in some countries of its operations where it feasibly could
  13. Company fails to facilitate alternative forms of employee representation in countries where trade unions are illegal
  14. Company provides little or no justification for outsourcing functions
  15. Does not have a Collective Bargaining Agreement
  16. Company fails to recognise trade unions despite legal obligations to do so
  17. Company is complicit in union crackdown/making strike action more difficult (eg. MNCs donating to campaigns of known anti-union MPs)
  18. Company has failed to act before strike action where the union has argued that this is due to workplace or client safety
  19. Company takes deliberate action to prevent unionisation (eg. structure categorises workers as independent contractors rather than employees)
  20. Company deliberately sites activities in areas where unionisation is limited to avoid having a unionised workforce
  21. Business discourages unionisation or collective action by employees, such as blacklisting, breaking strikes, dismissing representatives
  22. No forums available for staff to air grievances or communicate with upper level management