BRIEFING NOTE TRADE UNIONS AND SKILLS DEVELOPMENT 1. INTRODUCTION 2. THE ROLE OF UNIONS IN TRAINING IN THE WORKPLACE: THEORY AND EVIDENCE

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1 BRIEFING NOTE December 2008 (updated January 2011) Series briefing note 15 TRADE UNIONS AND SKILLS DEVELOPMENT 1. Introduction 2. The role of unions in training in the workplace: theory and evidence 3. The social and institutional background 4. Policy and strategic approaches 5. Implications 6. Further reading 1. INTRODUCTION In recent years, demographic changes have shifted the focus of skills policy towards the workplace throughout the developed world. In 2010, for instance, the UK Commission for Employment and Skills concluded that over 80% of the UK s 2020 workforce is already in work. 1 Reflecting this shift, efforts to engage employers in the training debate and to incentivise them to invest in training for their employees have become a cornerstone of skills development policy. The City & Guilds Centre for Skills Development (CSD) is an independent, not for profit research and development body which is committed to improving the policy and practice of work-related education and training internationally. It is part of the City & Guilds Group. This briefing note forms part of a series of notes produced by CSD on issues affecting the global vocational education and training sector. These notes aim to briefly summarise and compare existing research, policy and practice in different countries, and to use this to develop general principles as a starting point for debate among education stakeholders. For more comprehensive information on specific issues please refer to the further reading sections of the notes, or contact CSD directly. This increased focus on workplace-based training has also led to renewed interest in the role trade unions can play in this area. This briefing note will examine the role trade unions can play in skills development both in terms of promoting training in individual workplaces and of developing a broader strategic approach to skills. It will consider the evidence on the direct effects of unionisation on training in the workplace and examine how the nature of unions involvement as partners for promoting the skills agenda varies depending on the prevalent socio-economic model and history of labour relations. The note will also look at the question of the legitimacy of the trade union role in training issues, and consider whether this has yet been fully accepted by stakeholders and within the union movement itself. 2. THE ROLE OF UNIONS IN TRAINING IN THE WORKPLACE: THEORY AND EVIDENCE Alternative theories suggest that unionisation may have either a positive or a negative effect on levels of training in the workplace. On the one hand, unionisation may be seen to encourage training because: It helps to reduce staff turnover, encouraging employers to invest in training as they will obtain a larger return; this training in turn can help to reduce staff turnover further. It engenders a more formal workplace environment that encourages managers to set up formal procedures for identifying and responding to training needs.

2 Alternatively, the presence of unions in a workplace may limit training because: Union negotiation for higher wages means employers have fewer resources to pay for training, especially where higher wages are negotiated for younger workers. Incentives for managers to train their workers can be reduced through the existence of union-induced job roles, which limit management s ability to allocate tasks freely. 2 A number of studies have sought to establish how unions affect training in practice. Evidence shows that workers in unionised workplaces are more likely to receive training than those in non-unionised workplaces: an analysis of the 2004 Workplace Employee Relations Survey in the UK found that training levels at workplaces with union recognition and a union representative were almost 13% higher than those with no recognition or representation. The same analysis found that where recognised unions are also able to negotiate with management over training, the probability of receiving training increases by over 24%. 3 While indicating an association between unions and training, these figures cannot tell us much about the direct effect of unions. Several studies have pointed out that unionised workplaces are more likely to be found in larger organisations and in the public sector, both of which are associated with higher rates of training. Research in Canada 4 and Scotland 5 found that when these factors were allowed for, unions had little effect on the rate of provision of training in the workplace. The Canadian study did, however, find evidence that unions help to increase the participation of firms in the financing of training activities. Unions may also have different effects depending on the nature of the training involved. Some studies, for instance, have sought to differentiate between training that can be applied only within a specific firm and training that can be transferred to other firms and the economy in general. A Canadian study found that unionised workers tend to have more investment in firm-specific training, reflecting the lower rates of staff turnover at unionised workplaces THE SOCIAL AND INSTITUTIONAL BACKGROUND There is, therefore, no simple causal relationship between unionisation and levels of training. The studies cited above considered only whether unions were present in a workplace, but unions effect on training will depend on a number of other factors: The extent to which unions have bargaining powers that include training matters. The extent to which unions themselves see training issues as a priority. The extent to which formalised, structured initiatives to promote union involvement in training exist. The social background against which unions operate, and the history of labour relations in the relevant country. In post-thatcher UK, unions are weaker than in the past and operate in a society where memories of lengthy, bitter conflict between unions and employers are still relatively fresh. The legacy of recent UK history is that workplace organisation is often massively deficient, that employee voice is very weak, that command-and-control approaches to management remain too prevalent, and that labour is often still viewed as a cost to be contained or a commodity 1 UKCES (2010). The 2010 report on Ambition 2020: world class skills and jobs for the UK. London: UKCES. 2 Green, F., S. Machin & D. Wilkinson (1999). Trade Unions and training practices in British workplaces. Industrial and Labour Relations Review 52(2): Stuart, M. & A. Robinson (2007). Trade Union Recognition and Collective Bargaining: findings from the2004 Workplace Employment Relations Survey. Centre for Employment Relations, Innovation and Change, Leeds University Business School, Research Paper 4 4 Green, D. & T. Lemieux (2008), The Impact of Unionisation on the incidence and sources of payment for training in Canada. In Dustmann, C., B. Fitzenberger & S. Machin (ed.), Studies in Empirical Economics: the economics and training of education. Vancouver: Physica-Verlag HD 5 Dickerson, A. (2008). Trade Union Representation and Skills Investment. Futureskills Scotland Research Series. 6 Gilbert, L. (2003). Unions and Training: a study based on the Adult Education and Training Survey. Education Quarterly Review 9(1): Trade Unions and Skills Development 2

3 to be bought and sold at will. 7 Furthermore, unions themselves have not always prioritised training as an issue, placing more emphasis on issues of fair pay and better working conditions for their members. Nevertheless, a new co-operative era of labour relations, with skills formation as its centrepiece, was envisioned as long ago as The Trades Union Congress, for instance, put training at the centre of its new bargaining agenda in the aftermath of the tense labour relations of the 1980s. 9 This led to the creation of UnionLearn, the Union Learning Fund (ULF) and its network of workplace-based Union Learning Representatives (ULRs) in 1997, with the explicit aims of both promoting collective action to increase individual opportunities to learn in the workplace and to provide unions with more strategic support in the field of learning. 10 In recognition of the fact that UnionLearn s objectives fit well with Government targets to upskill the British wokforce, UnionLearn has received generous public subsidies via the Union Learning Fund (ULF). The Union Learning Representative model has been held up as an example of good practice internationally for providing employees with a source of support and advice on training matters and a point of liaison between employees, management and training providers. Training is still, however, very rarely included in collective bargaining, only 9% of union-recognised workplaces include it. 11 Early evaluations of the ULF were inconclusive about its practical impact: one 2005 survey of ULRs concluded only that respondents generally felt it had had an indirectly beneficial effect. 12 More recent work has reached stronger conclusions: an evaluation by the Leeds University Business School in 2010 found that three out of ten learning initiatives under the ULF would not have taken place without the Union role, that the majority of workplaces with ULRs had seen improvements in organisational policy towards learning, and evidence that employers see Union activity as contributing to the upskilling of the workforce. 13 The study also found that in the vast majority of cases, employees who were not union members were also able benefit from the training on offer. This stronger evidence base may help persuade senior union representatives that training is a legitimate area of union activity: the 2005 study cited above also found evidence that ULRs felt unsupported by senior representatives and that the argument still needs to be won within the union movement itself. 14 The UK s recent history of labour relations is marked by particular hostility, and this continues to be evident in the way labour relations are managed and the impact unions are able to have on training matters. In other countries without this legacy, unions have arguably found it easier to exert a positive influence on training in the workplace. In the Netherlands, which draws on a long post-war tradition of social partner co-operation and consensus, unions have a central place in the work of the sectoral Centres of Expertise that develop the Dutch qualification structure for vocational education. 15 Unions will be best equipped to play a positive role in promoting skills development in the workplace in a system of industrial relations based on a high degree of collaboration and trust. In countries with historically hostile industrial relations, attention must be paid to the underlying institutional structure and workplace culture if unions are to fulfill their potential in skills promotion. Unions are also more likely to have a beneficial effect on training if they are empowered to address the matter in a structured way, through initiatives such as UnionLearn or through the inclusion of training matters in collective bargaining. 7 Keep E., K. Mayhew & J. Payne (2006). From Skills Revolution to Productivity Miracle not as easy as it sounds? Oxford Review of Economic Policy 22 (4): Streeck, W., Skills and the Limits of neo-liberalism: the enterprise of the future as a place of learning, Work, Employment and Society, Green et al. (1999), ibid. 10 Clough, B. (2007). From voluntarism to post-voluntarism: the emerging role of unions in the vocational education and training system. Union Learn Research Paper Clough, B. (2007), ibid. 12 Wood, H. and S. Moore (2005). An evaluation of the UK Union Learning Fund its impact on Unions and Employers. Working Lives Research Institute Paper. 13 Stuart, M., H. Cook, J. Cutter and J. Winterton (2010). Assessing the impact of union learning and the Union Learning Fund: union and employer perspectives. CERIC policy report no Wood, H. and S. Moore(2005). Ibid. 15 Trade Unions and Skills Development 3

4 4. POLICY AND STRATEGIC APPROACHES In addition to the role that unions can play in promoting training in the workplace, there are clear arguments in favour of engaging them in the development of strategic approaches to skills. Skills development is, in theory, one area of policy in which union interests and government objectives have the potential to be closely aligned. Whereas employers focus on specific business benefits such as profit may overshadow their commitment to longer-term skill investment for the benefit of the sector as a whole, unions concerns in relation to training focus more on developmental aspects for the benefit of their members. Arguably, this has a natural affinity with policy objectives to raise the general level of skills in the workforce and to ensure that those skills lead to rewarding employment. This approach has been successful in a number of European countries: in Denmark, for instance, unions have negotiated the right to two weeks paid training a year for all employees with the express purpose of giving them opportunities for obtaining the right skills to qualify them for tomorrow s jobs. 16 Historically, however, trade unions have rarely seen training as a priority issue. This has sometimes had a damaging effect on training. In the 1960s in the UK, for example, as unions successfully narrowed the wages gap between trainees and older workers, employers return on investment in training was reduced and thus the incentive to train suffered. 17 This has shifted in recent years as UK unions have recognised that improved training can increase morale and offer greater job satisfaction for their members. The Netherlands shows how trade unions can be a key partner in developing strategic approaches to skills development. Unions are a key participant in the Centres of Expertise, the bodies charged with promoting skills development in specific economic sectors and ensuring that the training on offer matches job requirements. Unions engage in initial identification of skills and competency profiles, make recommendations about the number of trainees that should gain their training on and off the job, and influence additional training through negotiation of social contracts 18. This engagement of unions in the Dutch sector-based approach also allows for the development of transferable skills, enabling individual employees to gain recognition for their wider skills in the labour market 19. This helps the system to achieve a broader legitimacy among the labour force, although it should be pointed out that in a period of declining union membership which in the Netherlands has declined from 28% of employees in 1995 to 21% in the extent of this legitimacy is limited. In contrast, the UK s Sector Skills Councils (SSCs) have tended to involve unions in a much more observational capacity. This reflects a desire to make the sector bodies employer-led and focused on the needs of business. Research, however, suggests that such employer-led bodies can be more effective when they are part of a carefully designed system for designing and delivering skills development through structured partnerships between state, capital and organised labour 21. The SSCs, which vary widely in terms of their institutional origins, approach and capacity, lack this sense of a coherent system. Again, the effectiveness of union involvement in skills promotion is highly dependent on the socio-economic context. 5. IMPLICATIONS For policy makers: Trade unions should be fully engaged in any demand-led system for skills development, to ensure that short-term business needs do not dominate and to help achieve buy-in from the workforce. 16 retrieved on 10 January Clough, B. (2007), ibid. 18 Sung, J., A. Raddon & D. Ashton (2006). Skills Abroad: A comparative assessment of international policy approaches to skills leading to the development of policy recommendations for the UK. Sector Skills Development Agency Research Report Ashton, D. (2006). Lessons from Abroad: Developing sector based approaches to skills. Sector Skills Development Agency Catalyst Issue retrieved on 11 January Keep et al. (2006), Ibid. Trade Unions and Skills Development 4

5 Initiatives such as UnionLearn should continue to be supported as they provide a route to learning for individuals who might otherwise not find their way to it. For union leaders: In some cases, unions themselves still need to establish a clear approach to training matters and to recognise and promote their legitimate role in this area. For researchers: There is scope for further research into the conditions under which unions can have the most positive impact on training. 6. RECOMMENDED FURTHER READING Clough, B. (2007). From voluntarism to post-voluntarism: the emerging role of unions in the vocational education and training system. Union Learn Research Paper 5. Green, D. & T. Lemieux (2008), The Impact of Unionisation on the incidence and sources of payment for training in Canada. In Dustmann, C., B. Fitzenberger & S. Machin (ed.), Studies in Empirical Economics: the economics and training of education. Vancouver: Physica-Verlag HD Green, F., S. Machin & D. Wilkinson (1999). Trade Unions and training practices in British workplaces. Industrial and Labour Relations Review 52(2): Sung, J., A. Raddon & D. Ashton (2006). Skills Abroad: A comparative assessment of international policy approaches to skills leading to the development of policy recommendations for the UK. Sector Skills Development Agency Research Report 16. Stuart, M., H. Cook, J. Cutter and J. Winterton (2010). Assessing the impact of union learning and the Union Learning Fund: union and employer perspectives. CERIC policy report no. 4 Wood, H. and S. Moore (2005). An evaluation of the UK Union Learning Fund its impact on Unions and Employers. Working Lives Research Institute Paper. Chris Sims City & Guilds Centre for Skills Development December 2008 (updated January 2011) Trade Unions and Skills Development 5

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