New research on the individualisation of employment contracts

Many UK companies have replaced collective bargaining with individual employment contracts, but research published in February 1999 by the Department of Trade and Industry suggests that this has generally resulted in the greater standardisation of terms and conditions of employment.

In February 1999, the Department of Trade and Industry published a research report on The individualisation of employment contracts in Britain. The report draws a distinction between "procedural individualisation" - ie a withdrawal from collective bargaining as a means of setting terms and conditions of employment - and "substantive individualisation" - meaning the differentiation of individual employees' contractual terms. The research found that, in practice, most attempts at individualisation by employers fell into the former category, and that - paradoxically - procedural individualisation generally led to the increased standardisation of terms and conditions of employment, not individual bargaining, although there was a greater tendency towards linking pay rises to individual performance in derecognising firms.

The research, which was carried out by a group of academics at Cambridge University led by Professor William Brown, looked at 32 firms from a range of industries and services. Some of these were selected as having taken the lead in "individualising" employment relations, whereas others were chosen as firms which matched them in industrial terms but which had not abandoned collective bargaining. The report argues that the firms which derecognised unions did not gain any advantage in terms of either the functional or temporal flexibility of labour over those firms with collective bargaining. Even where collective bargaining was retained, its impact on managerial discretion was greatly diminished.

The government intends to introduce new statutory protection for employees where employers seek to introduce of individual contracts. The current Employment Relations Bill enables the trade and industry secretary to draw up regulations to protect workers from detriment and dismissal for refusing to enter into an individual contract, the terms of which differ from those of a collective agreement which would otherwise apply (UK9902180F).

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