Trade unions mobilise against pay and pension cuts

In August 2009, a strike took place at aircraft refuelling company ASIG, and trade union members voted to support industrial action at the information technology company Fujitsu in response to its policies of pay freezes and pension cuts. Meanwhile, statistics revealed that the value of median pay settlements in the UK had dropped to just 1%. These developments pose questions about trade unions’ response to pay and pension cuts in the face of economic recession.

Unions respond to pay and pensions cuts

On 31 August 2009, members of the UK trade union Unite engaged in strike action at the Aircraft Service International Group (ASIG), which provides 70% of all refuelling services at Manchester Airport, a major UK regional airport. The strike took place between 05.00 on Monday 31 August and 12.45 on Tuesday 1 September, and involved 29 member unions of Unite. The strike occurred over the August bank holiday period, a particularly busy time for the airport, and followed a 0% pay offer by ASIG to the workers.

Unite regional officer, Lawrence Chapple-Gill, declared:

These workers cannot afford to accept a derisory zero percent pay deal. They have food to put on the table and homes to run like everyone else. They do a dangerous job and deserve a fair wage for it, and we are determined to see that they get it.

Unite members at the Japanese-owned multinational information technology (IT) manufacturer Fujitsu also voted overwhelmingly in favour of industrial action against the company at the end of August 2009. Following the company’s policy of a pay freeze and plans to close the company’s main final salary pension scheme, 87% of balloted members voted for strike action and 96% voted for action short of a strike. Fujitsu, which employs 12,500 workers at sites across the UK, also announced the loss of 1,200 UK jobs in August 2009 (see factsheet of the European Restructuring Monitor (ERM)).

The Unite National Officer for IT and communications, Peter Skyte, stated:

Fujitsu Services is not struggling or failing. It is a highly profitable and successful company but one which is seeking to take advantage of the recession to attack jobs, pay, pensions and conditions. Our members are insisting that the company should pay fairly and provide decent pensions for all its employees.

In parallel developments, there has been speculation in the UK media about the possibility of strike action at the financial services companies Barclays and the partially government-owned Royal Bank of Scotland after announcements that the banks would be making cuts to their pension schemes.

New statistics demonstrate fall in pay settlements

New statistics released on 27 August by Income Data Services (IDS), a leading UK pay research body, also show a decrease in the level of pay settlements in the UK. On the basis of a survey of 75 pay settlements covering 525,474 employees, IDS found that the median pay settlement in the UK for the months of May, June and July 2009 was 1%. Furthermore, IDS found that just under half of the 75 settlements monitored were pay freezes.

UK trade unions responded to the statistics with concern. General Secretary of the Trades Union Congress (TUC), Brendan Barber, highlighted:

The main period for pay negotiations is now past and this analysis is based on a relatively small sample of pay deals settled relatively late in the year. During the year to date the median pay settlement is 2.3% and earnings are continuing to grow. While unions have negotiated pay freezes and short-time working in companies badly hit by the recession, many employers can afford settlements that provide real growth in wages. If the trend in this survey continues, it will have serious knock-on effects for the economy if consumers have less money in their pockets.

Commentary

Although there has been speculation in UK political and media circles that the worst of the economic recession may be over, the IDS figures suggest that pay deals and levels of pay are nevertheless being adversely affected by the recession. Trade union responses to pay freezes and pension cuts also raise interesting questions about the effect of the recession on UK industrial relations. There is evidence of UK trade unions concluding deals with employers to implement pay cuts and shorter working hours (UK0811029I). However, there has not yet been a marked upsurge in industrial action as trade unions respond to cuts in pay and pensions. The strike at ASIG and the threatened industrial action at Fujitsu, Barclays and RBS suggest that this could change in the future.

Thomas Prosser, IRRU, University of Warwick

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