UK: The representativeness of trade unions and employer associations in the banking sector
The UK banking sector has been adversely affected by the economic crisis and employment levels have fallen. There are 61,522 companies in the sector. Collective bargaining takes place at the level of the firm and there are no sector-level collective agreements. The main trade union within the sector is Unite the Union, which participates in collective bargaining with employers. There is also an organisation, Alliance for Finance, that acts as an umbrella organisation for several staff unions, although it is not in itself a trade union. The employers’ association, the British Bankers’ Association, does not participate in collective bargaining within the sector.
1. Sectoral properties
Economic background
In the summer of 2007, the UK banking sector was badly affected by the sub-prime mortgage crisis that hit the American financial sector. This initial shock was followed in 2008 and 2009 by a series of high-profile firms in the UK banking sector, such as Northern Rock and Royal Bank of Scotland, suffering financial problems due to the subsequent economic crisis and then being ‘bailed out’ with public money. As a result of this, the sector has been the focus of intense public and regulatory scrutiny in recent years. Tens of thousands of jobs in the sector were also lost as result of the economic crisis. This is reflected in the fall in employment levels that the sector experienced from 1998 to 2009 (see Table 1). The trade union Amicus traditionally organised workers within the sector. Amicus merged with TGWU to become Unite the Union (Unite), the largest union currently operating within the sector, in 2007. Unite is also a member of the umbrella trade union confederation Alliance for Finance (this organisation is a confederation and not a real trade union in itself). The social partners within the sector have worked extensively with the UK public authorities during the economic crisis to address issues such as restructuring and employability within the sector.
Development of employment
| 1996 | 2009 | |
| Number of companies in the sector | 0 | 61,522 |
|---|---|---|
| Source of company data | Financial Analysis Made Easy (FAME). Data refer to number of branches/establishments. | |
| 1998 | ||
| Aggregate employment | 659,296 | 589,602 |
| Male employment | 276,180 | 281,990 |
| Female employment | 383,116 | 307,612 |
| Share of sectoral employment in % | 2.45% | 2% |
| Source of employment figures | UK Labour Force Survey | |
| Aggregate employees | 643,026 | 570,229 |
| Male employees | 267,965 | 261,007 |
| Female employees | 375,071 | 309,222 |
| Share of sectoral employees in % | 3% | 2% |
2. The sector’s trade unions and employer associations
This section includes the following trade unions and employer associations:
(i) trade unions which are party to sector-related collective bargaining (In line with the conceptual remarks outlined in the background information included in the accompanying excel spreadsheet, we understand sector-related collective bargaining as any kind of collective bargaining within the sector, i.e. single-employer bargaining as well as multi-employer bargaining. For the definition of single- and multi-employer bargaining, see 4.2)
(ii) trade unions which are a member of the sector-related European Union Federation (i.e. UNI-Europa – Finance)
(iii) employer associations which are a party to sector-related collective bargaining
(iv) employer associations (business associations) which are a member of the sector-related European Employer/Business Federations (i.e. EBF – European Banking Federation, including EBF’s BCESA – Banking Committee for European Social Affairs; ESBG – European Savings Banks Group and EACB – European Association of Co-operative Banks)
2a Data on the trade unions
| Affiliation to multinational organisations | n.g. |
|---|---|
| Affiliation to European-level organisations | UNI Europa – Finance |
| Affiliation to national-level organisations | Trades Union Congress |
| Engagement in sector-related collective bargaining | yes |
| Type of membership | voluntary |
| Consultation in sector-related matters | yes |
| Union's domain with regard to sector | overlap |
| Domain overlap with other unions in sector | yes |
| Domain overlaps occur with the following unions in the sector | Alliance for Finance |
| 2009 | |
| ‘Active’ union members total (in employment) | 1,572,995 |
| Union members (incl. non-employed), total | 1,572,995 |
| ‘Active’ union members in the sector (in employment) | 150,000 |
| Union members in the sector, total (incl. non-employed) | 150,000 |
| Female membership as % of total members | 0 |
| Source of sectoral membership figures | Est. Social Partner |
| Union density – active members | 6% |
| Sectoral density – active members | 26% |
| Sectoral domain density – active members | 26% |
| Union density – total members | 6% |
| Sectoral density – total members | 26% |
| Sectoral domain density – total members | 26% |
| Description of union's domain with regard to sector | Unite is a general union and represents all sectors in the UK economy. |
| Representation of other groups than employees in the sector | No |
| Table 3: Union Fact sheet: Alliance for Finance | |
| Affiliation to multinational organisations | None |
|---|---|
| Affiliation to European-level organisations | None |
| Affiliation to national-level organisations | None |
| Engagement in sector-related collective bargaining | yes |
| Type of membership | voluntary |
| Consultation in sector-related matters | yes |
| Union's domain with regard to sector | congruence |
| Domain overlap with other unions in sector | yes |
| Domain overlaps occur with the following unions in the sector | Unite |
| 2009 | |
| ‘Active’ union members total (in employment) | 200,000 |
| Union members (incl. non-employed), total | 200,000 |
| ‘Active’ union members in the sector (in employment) | 200,000 |
| Union members in the sector, total (incl. non-employed) | 200,000 |
| Female membership as % of total members | n.g. |
| Source of sectoral membership figures | Administrative |
| Union density – active members | 35% |
| Sectoral density – active members | 35% |
| Sectoral domain density – active members | 35% |
| Union density – total members | 35% |
| Sectoral density – total members | 35% |
| Sectoral domain density – total members | 35% |
| Description of union's domain with regard to sector | The trade union is a sectoral trade union organisation for company trade unions that operate in the UK banking sector and for other trade unions that have very limited memberships within the sector. Alliance for Finance has 14 members: ACCORD, AEGIS, Advance, BSU, CWU, DGSU, PCS, Staff Association of Bank of Baroda UK Region, SURGE, UFS, Unite the Union, USDAW, VIVO and YISA. |
| Representation of other groups than employees in the sector | No |
2b Data on the employer associations
| Affiliation to multinational organisations | International Banking Federation |
| Affiliation to European-level organisations | European Banking Federation |
| Affiliation to national-level organisations | Confederation of British Industry. It should be noted that the UK banks Lloyds Banking Group and The Co-operative Bank are members of BBA. Lloyds Banking Group is also a member of ESBG, and The Co-operative Bank is a member of EACB. They have not been included in this study, however, as they are individual banks and not employers’ associations. |
| Engagement in sector-related collective bargaining | no |
| Consultation in sector-related matters | yes |
| Type of membership | voluntary |
| Organisation's domain with regard to sector | sectionalism |
| Domain overlap with other organisations in sector | yes |
| Domain overlaps occur with the following organisations | Confederation of British Industry (CBI); Council of Mortgage Lenders (CML); UK Cards Association; Association for Financial Markets in Europe (AFME); Scottish Financial Enterprise; various regional Chambers of Commerce |
| 2009 | |
| Number of member companies, total | 260 |
| Number of employees in member companies total | 419,400 |
| Number of member companies in sector | 260 |
| Number of employees in member companies in sector | 419,400 |
| Source of membership figures | Est. Social Partner |
| Domain density – companies | High: 76–90% |
| Domain density – employees | Medium High: 51–75% |
| Sectoral density – employees | Medium High: 51–75% |
| Sectoral domain density – employees | Medium High: 51–75% |
| Description of organisation's domain with regard to sector | Although the domain of the BBA does not cover all companies within the sector (and the company sectoral domain density of the organisation is subsequently low), the domain of BBA and its actual membership covers the biggest firms within the sector in terms of employees and market capitalisation. It is also important to note that BBA is not formally a member of EBF’s Banking Committee for European Social Affairs (BCESA). In this case, the UK banks HSBC and Royal Bank of Scotland (RBS) are members of BCESA. However, the practical implication of this is small in reality as HSBC and RBS are both members of BBA and represent BBA on the BCESA. In practice the BBA is therefore affiliated to the BCESA. |
| Representation of particular subgroups of enterprises | No |
It is important to note that the BBA is not formally a member of EBF’s Banking Committee for European Social Affairs (BCESA). The UK banks HSBC and Royal Bank of Scotland (RBS) are, however, members of BCESA as well as the BBA and represent the BBA on the BCESA.
3. Inter-associational relationships
3a Inter-union relationships
3a.1 Please list all trade unions covered by this study whose domains overlap.
The domains of Unite and other smaller company-specific unions that are affiliated to Alliance for Finance generally overlap. In other parts of the sector where there are no company-specific unions, there is no overlap with Unite’s domain.
3a.2 Do rivalries and competition exist among the trade unions, concerning the right to conclude collective agreements and to be consulted in public policy formulation and implementation?
There is no evidence that rivalries occur. The social partner organisations all appear to be consulted by the UK public authorities in appropriate circumstances so there is no apparent rivalry in this regard. With regard to the recruitment of members and the conclusion of collective agreements at firm level, relations between the various trade unions appear to be relatively harmonious. For example, Unite maintains good relations with the many company-specific trade unions that are present within the larger firms in the sector. For example, Unite works particularly closely with the Accord union in Lloyds Banking Group.
3a.3 If yes, are certain trade unions excluded from these rights?
Not applicable.
3b Inter-employer association relationships
3b.1 Please list all employer associations covered by this study whose domains overlap.
The domain of the BBA overlaps, in certain areas, with the Confederation of British Industry, Council of Mortgage Lenders, UK Cards Association, Association for Financial Markets in Europe, Scottish Financial Enterprise, and various regional Chambers of Commerce. None of these organisations are, however, involved in employment and social affairs issues within the sector or are members of the European Banking Federation. Therefore, the organisations are outside the remit of this study.
3b.2 Do rivalries and competition exist among the employer associations, concerning the right to conclude collective agreements and to be consulted in public policy formulation and implementation?
In the industry-related issues in which the domains of the organisations overlap, the organisations work together in order to submit joint responses to the UK public authorities.
3b.3 If yes, are certain employer associations excluded from these rights?
No
3b.4 Are there large companies or employer associations which refuse to recognise the trade unions and refuse to enter collective bargaining?
A Unite official reported that there are instances of firms in the sector that refuse to recognise trade unions or to engage in bargaining with them. No other information was available to cross-check this information, however. This would particularly appear to be the case with the smaller firms within the sector. The Unite official also reported that many larger firms preferred to negotiate and deal with company-specific trade unions rather than larger trade unions such as Unite.
4. The system of collective bargaining
4.1. Estimate the sector’s rate of collective bargaining coverage (i.e. the ratio of the number of employees covered by any kind of collective agreement to the total number of employees in the sector).
Approximately 20% (Unite the Union estimate).
4.2. Estimate the relative importance of multi-employer agreements and of single-employer agreements as a percentage of the total number of employees covered. (Multi-employer bargaining is defined as being conducted by an employer association on behalf of the employer side. In the case of single-employer bargaining, it is the company or its subunit(s) which is the party to the agreement. This includes the cases where two or more companies jointly negotiate an agreement.)
There are no multi-employer agreements within the sector (as is typical within the UK private sector). All collective agreements within the sector are agreed at the firm level.
4.2.1. Is there a practice of extending multi-employer agreements to employers who are not affiliated to the signatory employer associations?
No. This procedure does not exist in the UK system of industrial relations where the role of the state is traditionally limited.
4.2.2. If there is a practice of extending collective agreements, is this practice pervasive or rather limited and exceptional?
Not applicable.
4.3. List all sector-related multi-employer wage agreements* valid in 2008 (or most recent data), including for each agreement information on the signatory parties and the purview of the agreement in terms of branches, types of employees and territory covered.
* Only wage agreements which are (re)negotiated on a reiterated basis.
4.4. List the sector’s four most important collective agreements (single-employer or multi-employer agreements) valid in 2008 (or most recent data), including for each agreement information on the signatory parties and the purview of the agreement in terms of branches, types of employees and territory covered. Importance is measured in terms of employees covered.
| Bargaining parties | Purview of the agreements | ||
|---|---|---|---|
| Sectoral | Type of employees | Territorial | |
| Unite/Barclays Bank | Firm level | All | National |
| Unite/Lloyds Banking Group | Firm level | All | National |
| Unite/Royal Bank of Scotland | Firm level | All | National |
| Unite/HSBC | Firm level | All | National |
No further information is available on these agreements with regards to the employees covered and content of the agreements
5. Formulation and implementation of sector-specific public policies
5.1. Are the sector’s employer associations and trade unions usually consulted by the authorities in sector-specific matters? If yes, which associations?
The social partners within the sector are consulted by the UK public authorities on a wide range of issues. On the trade union side, Unite has responded to government and other public authority consultations including the Financial Services Authority (FSA), HM Treasury, the Bank of England, the Office of Fair Trading and the Financial Services Skills Council. Unite has also given oral evidence to government committees on finance sector specific issues. The Alliance for Finance also regularly responds to consultations by the UK public authorities on sector-specific issues. The issues that the sectoral trade unions tend to be consulted on include lifelong learning within the sector and employment law.
On the employer side, the British Bankers’ Association also responds to consultations by the UK public authorities. According to the organisation’s 2009 annual review, the BBA responded to over 100 public authority consultations in that year. Owing to the fact that the BBA primarily represents its members on commercial/industrial issues, many of the consultations it responded to were unrelated to employment/social affairs in the sector. However, the organisation has previously responded to consultations on issues such as lifelong learning and employment law.
5.2. Do tripartite bodies dealing with sector-specific issues exist? If yes, please indicate their domain of activity (for instance, health and safety, equal opportunities, labour market, social security and pensions etc.), their origin (agreement/statutory) and the interest organisations having representatives in them:
Typically, the UK public authorities consult the sectoral social partners on an ad hoc basis, and there are few permanently enshrined tripartite bodies that deal with sector-specific issues. One example of a permanent tripartite institution is a tripartite body called the Financial Services Skills Council, which addresses the issue of skills and lifelong learning within the UK banking sector. The Financial Services Skills Council is one of a series of sector skill councils in the UK, government-sponsored organisations that aim to improve the skills of UK workers. Unite and the British Bankers’ Association are represented on this council, alongside a number of large UK firms operating in the sector.
| Name of the body and scope of activity | Bipartite/tripartite | Origin: agreement/statutory | Trade unions having representatives (reps) | Employer associations having reps. |
|---|---|---|---|---|
| Financial Services Skills Council | Tripartite | Statutory | Unite | British Bankers’ Association |
| No bipartite policies exist | No bipartite policies exist | No bipartite policies exist | No bipartite policies exist | No bipartite policies exist |
* Sector-specific policies specifically target and affect the sector under consideration.
6. Statutory regulations of representativeness
6a Statutory regulations of representativeness for trade unions
6a.1 In the case of the trade unions, do statutory regulations exist which establish criteria of representativeness which a union must meet, so as to be entitled to conclude collective agreements? If yes, please briefly illustrate these rules and list the organisations which meet them.
In order to enjoy certain legal privileges, trade unions must be certified as being independent by the UK Certification Officer. The criteria for being on the list are that the trade union must be able to demonstrate independence and that it is a genuine workers’ body. Below is a citation from the annual report of the UK Certification Officer:
For trade unions, listing is an essential preliminary to any application for a certificate of independence under section 6 of the 1992 Act [Trade Union and Labour Relations (Consolidation) Act 1992]. It is also one of the requirements for obtaining tax relief in respect of expenditure on provident benefits (section 467 of the Income and Corporation Taxes Act 1988) and a listed union enjoys certain procedural advantages in connection with the devolution of property following a change of trustees (section 13 of the 1992 Act). There are no equivalent advantages for employers’ associations. However, there are two benefits of listing which are shared by trade unions and employers’ associations. The fact of being on the relevant list is evidence (in Scotland, sufficient evidence) that the organisation is a trade union or employers’ association. Further, the name of a trade union or employers’ association is protected by the provision that an organisation shall not be entered in the relevant list if its name so nearly resembles the name of an organisation already on that list as to be likely to deceive the public.
However, under the voluntarist nature of the UK system of industrial relations an employer is free to conclude whatever agreement they wish with any party (including, for example, a staff association that is not deemed to be independent).
6a.2 In the case of the trade unions, do statutory regulations exist which establish criteria of representativeness which a union must meet, so as to be entitled to be consulted in matters of public policy and to participate in tripartite bodies? If yes, please briefly illustrate these rules and list the organisations which meet them.
No, see above.
6a.3 Are elections for a certain representational body (e.g. works councils) established as criteria for trade union representativeness? If yes, please report the most recent electoral outcome for the sector.
No, see above.
6b Statutory regulations of representativeness for employer organisations
6b.1 In the case of the employers organisations, do statutory regulations exist which establish criteria of representativeness which an organisation must meet, so as to be entitled to conclude collective agreements? If yes, please briefly illustrate these rules and list the organisations which meet them.
No such representativeness criteria exist for employers’ organisations that wish to conclude collective agreements. This is due to the voluntarist nature of the UK system.
6b.2 In the case of the employer’s organisations, do statutory regulations exist which establish criteria of representativeness which an organisation must meet, so as to be entitled to be consulted in matters of public policy and to participate in tripartite bodies? If yes, please briefly illustrate these rules and list the organisations which meet them.
No, such regulations do not exist in the UK system of industrial relations.
6b.3 Are elections for a certain representational body established as criteria for the representativeness of employer associations? If yes, please report the most recent outcome for the sector.
No, such regulations do not exist in the UK system of industrial relations.
7. Commentary
Between 1998 and 2009 the UK banking sector recorded a fairly steep drop in levels of employment within the sector. As stated above, this is likely to be attributable to the effects of the recent economic crisis and the particularly marked effect it had upon the UK banking sector. Indeed, the European Restructuring Monitor (ERM) records a series of notable cases of job loss announcements at banking sector firms such as Royal Bank of Scotland, Lloyds TSB and Barclays from 2008.
Although rates of trade union density and collective bargaining coverage are not high within the sector, the sector rates of approximately 20% for collective bargaining coverage and 25% for trade union density compare favourably with other sectors in the private sector where rates of union density and collective bargaining coverage are at single-figure levels. The relatively favourable situation in this regard within banking may be attributable to the larger average firm size in the sector and the existence of a tradition of trade union recognition and negotiation inthe larger firms. Rates of industrial action in the banking sector also appear to be low. From 2006 to 2008, official UK Government figures reveal that no industrial actions were recorded in the sector.
With regard to the issue of demarcation, there appear to be few problems. Relations between Unite and the smaller company-specific unions are generally good, and no cases of disputes between the various unions over the recruitment of members and responses to public policy have been reported. Trade union recognition in the sector does also not seem to be a particularly marked problem. Although some smaller firms within the sector are reluctant to recognise trade unions, in the bigger firms trade unions are generally recognised.
Thomas Prosser, University of Warwick