Since the beginning of 2006, a number of disputes have arisen between managers and the GMB, Britain’s general union, at the supermarket chain, Asda, highlighting the extent to which collective relations have deteriorated in the company. One of these disputes had particular significance in that it was settled by a court ruling, which concluded that the company had breached the law governing collective bargaining [1].[1] www.eurofound.europa.eu/ef/observatories/eurwork/industrial-relations-dictionary/collective-bargaining
In February 2006, an employment tribunal found that the supermarket chain, Asda, had breached the law by offering financial incentives to employees to give up their rights to collective bargaining. The case is one of a series of disputes involving the company and the GMB general union, and highlights the deteriorating state of management–union relations in the company.
Since the beginning of 2006, a number of disputes have arisen between managers and the GMB, Britain’s general union, at the supermarket chain, Asda, highlighting the extent to which collective relations have deteriorated in the company. One of these disputes had particular significance in that it was settled by a court ruling, which concluded that the company had breached the law governing collective bargaining.
Washington depot case
The dispute settled by a court ruling concerned the Asda depot in Washington, Tyne and Wear, in north-east England. A collective agreement covering the depot had been signed in 2004, following a decision by the Central Arbitration Committee (CAC) that the GMB had sufficient support to warrant formal recognition by management for the purposes of bargaining (UK0201171F). Prior to this, management had contested the union’s application but was subsequently bound by the CAC’s ruling. In the following year, however, the company offered workers a pay rise of 10% if they agreed to forfeit the collective agreement. Management argued that this would bring terms and conditions at the depot into line with a comparable depot nearby, which was not unionised. A staff ballot subsequently rejected this move by the company. The eventual settlement, in the form of a collective agreement, was for a more modest pay rise of 3.5%.
Nonetheless, the GMB was not prepared to let the matter rest there, and initiated an employment tribunal case against the company. At the hearing, the union argued that Asda’s actions had violated section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992, by offering financial incentives to employees to give up their union membership and to undermine a collective agreement. In announcing its ruling on 10 February 2006, the tribunal accepted the union’s argument and ruled against Asda, ordering the company to pay GBP 2,500 (over €3,500) in compensation to each of the 340 workers, bringing the total company pay-out to GBP 850,000 (over €1.2 million).
According to the GMB’s Acting General Secretary, Paul Kenny: ‘Asda have been found guilty of trying to bribe their way to a union-free company.’ A spokesperson for Asda said that the company was ‘disappointed’ by the decision and was considering whether or not to appeal.
Other disputes
Nationally, the GMB has about 25,000 members among Asda’s 140,000 employees, and is the only union to have recognition in the company’s stores and distribution centres in England, Scotland and Wales (although the Union of Shop, Distributive and Allied Workers has some recognition rights in Northern Ireland). The conflict at the Washington site is part of a pattern of such disputes in Asda depots. For example, the union has alleged that workers in the Lutterworth depot in Leicestershire, central England, were racially discriminated against when managers sought proof of identity from some existing workers to ensure that they were not illegal immigrants. The union alleges that employees with ‘foreign-sounding names’ were selected for these checks. While management disputes this discrimination, in January 2006, the company paid GBP 750 (€1,075) in compensation to each of the 37 workers at the site.
Another illustration of the deterioration in relations between management and the union concerns events at the Dartford depot in south-east England, where management is seeking major changes to terms and conditions of employment. In February 2006, the head of industrial relations at Asda Distribution wrote to the GMB, arguing that it was necessary to ‘modernise the current out-dated collective agreement at Dartford’, while making it clear that if a settlement could not be reached, then management would terminate the agreement. The GMB responded by calling a ballot for official industrial action across all Asda depots in the UK, which was subsequently called off following an agreement with management in early April 2006.
Asda was acquired in 1999 by the American supermarket giant, Wal-Mart, a company that has gone to considerable lengths in its US operations to avoid dealing with unions. While it is unclear to what extent management’s attempts to reduce the role of collective bargaining in Asda is being driven by the parent company, there is little doubt that a period of unstable industrial relations is set to follow in the British arm of the company.
Tony Edwards, King’s College, London
Eurofound recommends citing this publication in the following way.
Eurofound (2006), Ruling highlights poor industrial relations at Asda, article.
