The Report on Trade Unions
In theory Royal Commissions are set up so that a government, before introducing legislation to deal with some complex problem, can have the advice of an independent body of people who have first collected and then studied all the relevant information. The initiative rests with the government since they lay down the terms of reference, appoint the members, and can please themselves whether they accept or reject the recommendations: though if a Royal Commission makes a unanimous report it is a little difficult for the government to disregard it entirely.
In practice Commissions are sometimes appointed simply as a device to postpone reaching a decision until what may seem to the government to be a more opportune moment. The Donovan Commission on Trade Unions and Employers’ associations appears to fall into this category and the fact that six out of the twelve members, including the Chairman, Lord Donovan, express doubts and reservations about the main body of their own recommendations will enable the government to put a good face on selecting whatever parts it wants to take notice of. It may reasonably be supposed that the government had some such outcome in mind when it appointed to the Commission members whose divergent views were well known beforehand.
The reception of the Report has been equally divergent; from the Times “Few can have expected . . . that Lord Donovan and his colleagues would achieve so much”; to the Economist “A report to forget—its proposals are actively harmful”. If what the Wilson government chiefly wanted was delay, the Commission was a great success —it took over three years to report.
Its main conclusions are concerned with what it describes as the two parallel systems of industrial relations — the system of national negotiations and agreements entered into by trade unions and employers associations on the one side, and on the other, the system of local negotiations through shop stewards at the factory and workshop level. The Commission considers that with near-full employment the centre of gravity has shifted to the local agreements and that these should now largely replace the remote and ineffectual national agreements, leaving to them a much restricted role, largely that of laying down guide lines for the local negotiators.
This part of the report has received fairly widespread approval but trade unionists who remember the years of bitter struggle to achieve national agreements for the protection of their members in less well organised firms and districts may find the change a mixed blessing in face of company decisions to shift factories away from “high wage” to “low wage” areas.
The Report anticipates that the changeover will help to solve the employers’ problem of having to deal with “unofficial strikes” (95 per cent of all strikes are “unofficial”). It explains that lightning unofficial strikes can be more damaging to the employer than an official strike because they are unpredictable and have the effect therefore that they prevent managements from making plans with any confidence of being able to implement them quickly, or at all.
The Report lays much blame on company managements for this situation and expects them to bring about the desired change. They are required to create comprehensive bargaining machinery at company or factory level, conclude agreements on the handling of redundancy, ensure regular joint discussion of safety measures and make agreements regulating the position of shop stewards.
Legislation is recommended to establish a permanent Industrial Relations Commission to advise the Department of Employment and Productivity (the new name of the Ministry of Labour) on the reform of industrial relations and to investigate and report on problems arising, but without any power to compel.
The local agreements will have to be registered with the Department, at first by large firms, but eventually by all firms. Employers are asked to encourage workers to join trade unions, unions are encouraged to amalgamate and to reform their organisation and rules.
The existing industrial tribunals set up under the Industrial Training Act 1964 which also deals with disputes about redundancy payments and contracts of employment would be renamed “labour tribunals” and would have their powers enlarged to cover all disputes between employer and worker about contracts of employment, etc., including a new statutory protection against “unfair dismissal”. These tribunals would also deal with employers’ claims for damages for breach of contract.
When the Royal Commission was set up there were those who feared drastic changes in trade union law, measures to cut down the activities of shop stewards and penalties against unofficial strikers. The Report contains hardly anything to confirm the fears—hence the anger and disappointment of the Economist (also of the Sunday Times and Financial Times).
The Economist (15 June) starts off with the following lament:
The report of Lord Donovan’s royal commission on trade unions and employers’ associations represents the high water mark of the particular sort of British indecisiveness which has done most to damage the country in this third quarter of the twentieth century. After three years’ study, the commission reports that Britain’s system of industrial relations is in a uniquely horrible mess, but that it is for boards of directors of individual companies to bring about a change: except that it oddly believes directors would be helped to do so by a requirement that all firms with more than 5,000 employees (and, eventually, smaller firms) should register every factory agreement they make with trade unions, or else an explanation why they have made no such agreements, for vague vetting by a body of bureaucrats in a new Industrial Relations Commission, which would not, however, have any executive powers.
It is not a caricature to say that the establishment of this vacuous research body is the main government action definitely recommended in the general body of the report, although half of the 12 signatories then express significant dissatisfaction with what they have just unanimously signed.
The Economist is particularly irate over the Commission’s lack of unanimity about withdrawing from unregistered or deregistered bodies (all unions would in future be registered) the protection which the 1906 Act gives against suits for damages when strikes take place without due notice.
The majority of the Commission’s members want this immunity to continue for registered unions but not for unregistered bodies, but Mr. Woodcock, General Secretary of the TUC, and four other members of the Commission strongly dissented and the Economist fears that the Government will follow the Woodcock line.
The Government did not immediately declare what action they proposed to take on any of the Commission’s recommendations though Mrs. Castle promised quick consideration and an early announcement. The Economist, which wants strong action to curb the unofficial strikes and to remove the immunity now possessed by trade unions under the law, expects nothing to its liking, and is resigned to seeing “the horrible mess” continue—but not indefinitely. Counting on a Conservative Government after the next General Election it looks forward to the reopening of the issue. “The practical result is that the real reform to trade union legislation is now likely to have to be left to the next Conservative government and will probably have to be fought through the next Parliament as a partisan measure against fierce opposition from a Labour Party which will say that a Royal Commission intimated that reform was wrong”.
When the Royal Commission was set up it was given the task of considering the role of trade unions and employers’ associations “in promoting the interests of their members”. Had there been any socialists on the Commission they would have pointed out that the interest of the workers is not to co-operate with their exploiters, the capitalists, but to replace capitalism by Socialism, a social system in which employers and employed, the wages system and trade unions alike would have no place.
Edgar Hardcastle