A BASKET CASE - a new age for public sector pay negotiations needs a new approach from unions
Whether the Treasury and Government accept it or not, sooner or later, the public sector’s pay Ice Age is going to have to start thawing. Brexit will put added strain on competition for graduates in every sector but even without Brexit the public sector is struggling to recruit and retain the numbers it needs – especially in London and the South East where the economy is increasingly dysfunctional.
When any Ice Age ends the landscape changes, with emerging fault lines evident beneath the surface. Stabilising the uncertain environment will be the first and biggest test for public sector leaders as soon as any thaw sets in. Identifying and mapping these fault lines, and then finding ways to bridge and mitigate them, will be critical for pay negotiators on both sides of the collective bargaining tables.
One advantage the public sector has, when facing such uncertainty and unpredictability, is that remnants of collective bargaining have survived the Ice Age, albeit with scars and the inevitable loss of much institutional knowledge about how to collectively negotiate pay on both sides – something that hasn’t in reality really happened for nearly a decade.
Collective bargaining should come in to its own in the chaotic and unpredictable thaw – as the alternative is terrifying. Few employers will want to unleash individual bargaining on vital services when the employment market is chaotic and unstable and the structural weaknesses in the existing environment are so openly exposed. Engagement and productivity scores across the public sector are as stubbornly low as sickness absence figures are stubbornly high. Pay transparency has weakened after scavenger hunts for scraps of performance pay, which have also undermined any sense of fairness. The public sector’s penchant for being seen to do the right thing, at least on paper, also means equal pay gaps are evident inside and between parts of the public sector – e.g. senior manager pay has risen faster than frontline professionals and support staff pay across almost all parts of the public sector; whilst some have done comparatively better than others, such as prisons and police pay (mostly men) having massively outstripped probation (mostly women) during the Ice Age.
These huge problems can’t be solved in any controlled, safe and strategic way without collective bargaining and the re-emergence of genuine pay negotiations on the horizon presents a huge opportunity to unions to engage with the employers - by using pay as the forum for bridging into professional issues around workloads, training, career pathways and positive performance development. Painful and disruptive performance management systems currently plague the public sector, designed to service a failed PRP agenda.
Equally, being allowed back onto the field allows unions to engage with the new generation of potential members who they’ve struggled to keep in the family fold during the bleak years of the Ice Age. This is a huge opportunity for unions to prove their worth again.
However, there are risks. Unions are by instinct nervous and conservative beasts, tentative about doing new things; nervous about new settings; and prone to looking into their past to find the response to a new problem. Unions tend to react but in this circumstance the opportunity sits in the employers’ side also being lost and nervous and uncertain of what it can and should do. There is a danger of negotiating stasis. However, for once, the player who shows their hand first could win.
Success in such negotiations will, in my view, rest with unions finding the right approach to the process itself.
Firstly, union negotiators will need to accept the answers in the new environment will inevitably look and feel different from what’s been seen and remembered from before. Their members’ experiences will be different. Their priorities and circumstances will have evolved. As work is also organised differently, with more variation and flexibility built into working patterns and expectations, it is also inevitable, that the answers will need to be more varied, flexible and complicated than unions will have sought or expected in the past. The priorities of a new graduate entrant with huge enthusiasm for their new career but massive debt and high rents to pay will be different from an experienced veteran wondering if their pension will be enough to live off if they ever get to retire. One answer may not suit the whole collective.
Secondly, they will do well to use negotiations as a platform to demonstrate (and shape) how their practice reflects their values and aspirations – namely practicing what they preach. This shouldn’t just be obvious from the tests they place on the outcomes of negotiations (e.g. will the impact be equitable) but from how they conduct the negotiations - anchoring their approach to member engagement For example, don’t just tell members and potential members how an offer stacks up against the unions’ perception of what is fair, equitable, transparent and sustainable but test your perception of what fair may look like from the members of the member when shaping the claim and demands; test ideas by listening to and talking to as many members and potential members as possible. Unions should make their process transparent, accessible and engaging. Not just because that’s the right thing to do but because it will also attract potential new members, help break down cynicism about the validity of the negotiating process that has built up during the false negotiations of the last decade.
Thirdly, unions shouldn’t hesitate to use new tools that were not available a decade ago when genuine negotiations would have last been the norm. In particular, unions should seek to utilise ‘Big Data’ to strengthen and refine claims. This will involve shifting the culture on both sides of the negotiation table. That is inevitably likely to make both sides nervous but in a dangerous and unstable environment that is no bad thing in itself. Big Data can help with both of the first two approaches.
An early example is one that I have negotiated with Cafcass, where we will be jointly developing focussed pay baskets. This will involve:
1. Surveying staff with generic questions about their key spending pressures (e,g, mortgage or rent; car v commute on public transport; child care or caring commitments; student loans or debt management, etc).
2. Mapping these against where people live and work; age and gender norms; etc
3. Mapping these against Big Data available from the ONS and elsewhere that interrogates these pressures taking into account regional bias – for example, if you are a young, female graduate with a pre-school aged child renting in London or the South-east and commuting by public transport then the general RPI figure will be of little relevance when it is heavily based upon assumptions about mortgage costs, buying and running a car, or when childcare costs in London are recognised as being significantly more than the rest of the UK.
4. From this producing focussed estimates of disposable income from starting salaries and/or at the top of pay scales to show a more accurate picture of the real pressures on staff – thus informing pay claims and/or offers to address recruitment, retention, etc.
Interestingly, when I have floated the same idea elsewhere the immediate reaction from employers has been to assume this would open up discussions about regional pay – which they’ve sought to explore during the Ice Age but now are evidently eager to shy away from. The Big Data could show significant regional variations but I’d be prepared to risk that being unlikely, not least because one of the reasons the Government’s Regional Pay aspirations fell on barren ground during the Ice Age was Leeds, Manchester, Bristol, Cardiff etc were more expensive than the rest of their regions and the picture was more complicated than simple binary solutions allowed.
However, if Big Data also confirms that London and the South-East has a different economy to the rest of Britain that can’t be ignored. If it helps properly cost sustainable public services and clarifies the case for disproportionately higher spending in London and the South-East then that’s positive - and better than unions and employers ducking the difficult issues and hiding behind lip service to failed London weighting schemes…not least when union’s own data shows the region as having the lowest union density and younger workers less likely to join a union.
