Ian McCartney - Former Minister of State for Competitiveness (May 1997 - Jun 1999)

Address to the AnUMan "Partnership in Practice" Conference.

Thank you for your kind words of welcome. Very glad to have been invited to speak at your conference today.

Both employers and employees across all sectors have a crucial role to play in improving the climate of employment relations in this country.

This involves taking responsibility for developing constructive relationships in the workplace.

We must move away from the old confrontational structure, from the "them and us" mentality and towards the mutual understanding and trust which is essential for successful partnership.

So what do we actually mean by Partnership ?

The key elements, I believe, are:

• first, the need to recognise and value the central role of the workforce in any business. And by "valuing" the workforce I mean both in financial terms and in terms of day to day recognition of their contribution. Everyone must be encouraged to contribute to the success of the whole organisation;
• second, the need to have a common understanding of the aims and goals of the business, and an agreed work culture. People can only give of their best if they know where they fit in. And they can only be satisfied in their work if they can see the value of their contribution;
• third, employers need to have a strategy for developing their employees - and that means all their employees, not just the highly skilled or the high flyers. Developing the whole workforce is crucial to the Government's agenda for the flexibility of the labour market, but it is also crucial to the prospects and job satisfaction of individual employees;
• Fourth, employees for their part need to be encouraged and supported to identify and enhance their own skills. This will challenge the current waste of talent in the labour market that comes from people being unable to develop themselves and fulfil their potential;
• fifth, finally, and crucially, there needs to be an inclusive relationship between employers, employees and their representatives. There should be a joint approach to solving employment relations problems, which respects and balances the interests of all parties.

The role of Partnership in its wider context

We need to put partnership in its wider context. It has a role to play at all levels - not just in the workplace.

Dialogue between employers and employee representatives already takes place at European, regional, national and workplace level.

And Partnership is the main strand running through many of our policy initiatives.

For example:

• The negotiations on trade union recognition in advance of the Fairness at Work White Paper. These did not resolve all the differences, but they narrowed the gap significantly and helped lead to acceptance of compromise proposals;
• the independent Low Pay Commission was an excellent example of partnership in action. The members of the Commission were drawn from TUC and CBI, from employer federations and trade unions, and from individual businesses and academia;
• a partnership approach is also being adopted for the revision of the TUPE regulations (following amendments to the Acquired Rights Directive under the UK Presidency of the EU) drawing in representatives of contractors, workers and clients involved in public sector contracting. The CBI and TUC are also involved;
• The TUC and the CBI were represented on the Government's Competitiveness Advisory Group by John Monks and Adair Turner, and TUC, CBI and individual unions were represented on the working parties on competitiveness which fed into the December 1998 White Paper Our Competitive Future, and the process of consultation will continue in the implementation of the White Paper commitments, including through the proposed Competitiveness Council;
• the success of inward investment in the UK has been based in part on the co-operation of the social partners regionally and locally. The inward investment by Nissan in the North-East in particular was pivotal in creating a new culture of employment relations.
• Also partnership can be a crucial factor in regional regeneration. For example, the Teesside Chemical Initiative is an agreement between agencies, employers and unions to work together to improve the overall performance of the industry in the region.

The Partnership Fund

Building constructive relationships is not always easy, but the rewards can be considerable. The company that gets its workforce on-side, and working in partnership for the good of the enterprise is the one most likely to deliver success.

For this reason the Government will be promoting these forward-looking practices through the Partnership Fund which was proposed in the Fairness at Work White Paper, to assist and develop partnership at work and to ensure the spread of good practice.

Many companies have already demonstrated the benefits of partnership: I know that your conference will be hearing about this approach and about the agreements at Blue Circle, Hyder, the Co-operative Bank, Tesco and many others.

My vision is for the fund to contribute to the spread of partnership much more widely, to help others to adopt innovative approaches at the workplace level and to facilitate workplace training. I shall be announcing the detailed criteria and arrangements for the fund very soon and hope that many of you will wish to apply.

Partnership is crucial to the Government's wider economic policies for competitiveness and job creation. It will stand or fall by the real bottom-line benefits that it brings - by enabling companies to increase their productivity.

Persuading those in the workplace - both employers and employees - of the benefits of new approaches to work is not always easy.

Attitudes cannot be changed overnight, but "success stories" can often do more to persuade the reluctant employer or union representative than worthy words from academics, consultants or - dare I say it - Government Ministers!

That is why I am delighted today to announce the publication of a set of case studies which demonstrate the benefits of modern work practices including partnership.

This brochure of case studies, called "Working for the Future - The changing face of work practices" draws on the experiences of companies and employees who spoke at the DTI / European Commission Conference on New Ways of Working which I was delighted to host in Glasgow in April last year.

It includes "success stories" from the UK and across Europe. It shows how organisations can respond to change and create new and better workplace relationships, often in difficult economic circumstances.

There is no doubt that working patterns are changing throughout the UK and the European Union.

There are already large numbers of workers who do not work the traditional pattern, and many people are now working part-time, doing shift work, night work and working at weekends.

In manufacturing, processes are changing to take advantage of new technology and information technology, and to respond to greater competitive pressures through more open product, services and capital markets, and changing consumer demands.

These changes are generating whole new patterns of working.

It is therefore becoming critical that we break down the barriers to change; forge new partnerships in the workplace; and improve employability and adaptabilty.

New patterns of work offer opportunity. They can help workers with family responsibilities to work and run the home. Flexible labour markets enable the individual to find suitable work and helps companies to respond better to changing markets.

I hope that the case studies contained in the Brochure "Working for the Future" will help to show once again what can be done through the development of modern approaches to work organisation.

Need to maximise opportunities offered - Modern Unions

I would now like to say something about the role of modern trade unions in the development of partnership-based employment relations.

Some people still say unions belong to a long-gone era of employment relations.

But Government recognises that, for partnership to work well, we need a modern trade union movement which provides a strong voice for employees in the workplace.

Modern unions have a major role to play in building competitiveness and I want to see them working with successful companies on this.

Government is giving unions a fair deal; for instance:

• by encouraging civil servants to join trade unions;
• inviting many TU people onto task forces and working parties.

New employment rights - in particular right to be accompanied, and statutory right to recognition - should create more predictable relations at work and remove some of the uncertainties which unions face. This will give unions a better chance to recruit.

And we all know that union membership is falling, so recruitment is a key issue.

I am delighted to see that unions are at last beginning seriously to target groups of employees in expanding sectors of the economy.

Repealing the check off will help hard-pressed union officials. It has removed a bureaucratic headache, releasing union representatives to go about their proper business.

But legislation won't remove requirement on unions to organise themselves efficiently.

Trade unions have already made huge efforts over the years to change and modernise. Modernisation through the New Unionism project and the Organising Academy which is bringing a modern, business-like approach to the role of recruiting new members.

Unions are absolutely right to have put the emphasis back on what their members really care about - protection against arbitrary management behaviour or discrimination; fair levels of pay; safe working conditions; a pension to look forward to and the other essentials of decent conditions of employment.

Trades unions cannot rely, and should not, on governments to deliver them a bigger membership. Unions have to win their position by demonstrating their value to members and potential members, but the Government does have some role in helping unions to represent their members in the most effective and most constructive way.

I would like to say a few words about the Government's legislative agenda for employment relations. The Government has a clear strategy for promoting fairness at work, for creating a truly fair balance between the rights and responsibilities of workers and their employers.

Before talking about fairness at work, let me mention just a few of the steps we have already taken to implement our employment relations agenda:

• Introduction of a National Minimum Wage to take effect in April 1999 - on the basis of LPC recommendations;
• Implementation of Working Time and Young Workers Directive - came into force on 1 October 1998 - gives workers for the first time, minimum holiday entitlements and rest periods;
• Introduction of Public Interest Disclosure (Whistleblowers) Act in July 1998;
• Signed the Social Chapter and will be implementing Directives on:
• Parental Leave and European Works Council - both by December 1999;
• Part-Time Workers Directive - by around 2000;
• Burden of Proof Directive (in sex discrimination cases) - by April 2001.

So - we have already done a great deal.

As you may know, the Fairness at Work White paper has resulted in our Employment Relations Bill which received its first reading in the House of Commons this afternoon.

I shall just mention the key proposals now.

• Qualifying period for unfair dismissal: will be reduced from two years to one.
• Limit on unfair dismissal compensation: increased substantially to £50,000. And henceforth it will be index-linked. Abolishing the limit entirely would benefit only a very few high earners while making it much more difficult to reach 'out of court' settlements in unfair dismissal cases.
• Right to be accompanied in disciplinary and grievance hearings: workers will have the right to be accompanied by a fellow employee or a trade union official in disciplinary hearings and grievance hearings about serious issues.

Collective rights and trade union rights

• Recognition can be achieved by three routes, as indicated in the White Paper :
• by voluntary agreement;
• by a ballot (with twin tests of a simple majority and 40% of the unit voting in favour);
• by the automatic route where more than 50% of the bargaining unit are union members.

The statutory procedure will apply to organisations employing more than 20 people.

The Government is going ahead with all the White Paper proposals to help people combine working and family life. These proposals include:

• extending maternity leave to eighteen weeks to align with maternity pay;
• providing rights to extended maternity absence and to parental leave after one year's service, as opposed to two years at present;
• providing three months' adoption leave;
• providing a right to reasonable time off for family emergencies;

Other Matters not in the White Paper

In addition to the matters set out in the White Paper, the Government has decided to include provisions in the Bill to amend the terms of reference of ACAS. We are looking at the possibility of increasing ACAS's proactive, advisory work to help improve employment practices and prevent disputes from arising.

Conclusion

I have talked about the Government's aims - and my vision - for the future of employment relations in the UK. Our agenda will create a future based on a legal framework of minimum, decent standards, and on partnership between employers and employees.

I believe that this approach will create modern companies and a skilled and flexible workforce, working together to meet the challenges we all face in increasingly competitive world markets.

I look forward to working with you all to create a fair workplace and a new climate of employment relations in this country.

Other speeches by Ian McCartney - Former Minister of State for Competitiveness (May 1997 - Jun 1999)

(the following are available from the archive)
• Launch of NMW Best Practice Materials (07/07/99)
• 'Institutional And Organisational Obstacles To Labour Market Participation' (05/07/99)
• Speech to the British Youth Council (23/06/99)
• "Stimulating Inward Investment within the North West" (17/06/99)
• Speech to Allied Distillers (04/06/99)
• Speech to the ICAEW (30/11/98)
• Working Time Directive (26/10/98)
• Speech to the Communication Managers' Association Annual Conference (11/05/98)
• Post Office Review (24/11/97)
• GFTU Conference (12/05/97)