Category Archives: Redundancy

Protecting the Industrial Commons: Redundancies at Roll’s Royce and the wider impact on UK industry

By Dr Ian Greenwood,
Centre for Employment Relations Innovation and Change

Ian Greenwood 300x270The announcement by Rolls Royce that in response to the impact of the COVID crisis, worldwide, 9000 jobs are to be cut -most at its aerospace centre in Derby- will reverberate beyond the confines of the aerospace industry.

That the company has been in financial difficulties for a while is no secret. In December 2019 the company announced that it was to reduce its intake of apprentices and graduate trainees by almost a third. This continued a five-year trend and takes place within an ongoing programme of contracting its management head count by 5000. The company has also disclosed that it will experience a £2.4bn cash fall between 2017 and 2023. The crisis in profitability that has beset the company has been exacerbated by serious problems involved in resolving quality issues with its Boeing bound Trent 1000 engines. The aircraft industry is suggesting that 2019 levels of output will take five years to attain.

Further job losses are, therefore, not unlikely and the company has declared there will be a retrenchment in its R&D expenditure. The history of Rolls Royce is one peppered with crises and restructuring (involving nationalisation) and although its share price has dropped 2/3 since mid-February of this year, the demise of the company is not imminent.

The wider impact on the UK’s Industrial Commons

The survival of Rolls Royce is vital to the industrial sectors in which it operates, as well as to the broader UK economy. Clearly one company does not make an economy. Nevertheless, the nature of the jobs that will be lost at Rolls Royce, the contraction of trainees and diminution of R&D effort have significance beyond their headline metrics. Engineering UK, the sector employers organisation, estimates that leading up to 2024, there will be a shortfall in satisfying demand of between 37,000 and 59,000 core engineering roles requiring level 3+ skills. Reducing the demand for engineering graduates and trainees through the contraction of engineering firms might be one solution to the problem of excess demand across the wider occupational labour market. This though, is surely a recipe for a general downward spiral in skills, R&D and innovation and culture for a low skill equilibrium.

Taken together, the R&D, engineering, manufacturing capabilities and supplier infrastructure of an economy has been referred to by Pisano and Shih, as a nation’s ‘Industrial Commons’. Crucially, the health of the Commons depends on a strong and vibrant manufacturing sector, particularly the component of this sector that is associated with high skill, high value output. That is, firms such as Rolls Royce. Pisano and Shih (2012) use the example of the declining international competitiveness of the USA to argue that if this Commons is allowed to wither on the vine, the ability of an economy to innovate and create high tech, high value added products will decline, ultimately depressing wage growth and undermining the health of the wider economy. Furthermore, the ability of innovation to ‘spawn new industries’, will be undermined.

Industrial Commons are often connected to sources of high-level knowledge such as universities, which ensures a vital, symbiotic generation of basic, applied and commercial research.  Commons are also often geographically defined. For example, a feature of the aerospace industry in the UK is that 90% of aerospace jobs are outside the South East, providing a valuable dynamic for a balanced economy. The economic and social multipliers of the aerospace industry are significant. The industry has an annual turnover of £31B. It supports 12800 direct and 14000 indirect jobs with average earnings of £43000, 45% higher than the UK average. Through its supply chain programmes, 330 companies have been helped to ‘boost their competitiveness to world-class levels’.

The focus of concern here is that the retrenchment of a firm such as Rolls Royce rarefies the Industrial Commons that it supports and by which it is -in turn- supported. Pisano and Shih argue that manufacturing is essential for the development of new products: it connects product and process innovation. In contrast, the decline of manufacturing invokes a negative ‘chain reaction’ in which the infrastructure for advanced process engineering and the attendant expertise and jobs are diminished. The high-value up and down stream supply chains that network around firms such as Rolls Royce will be lost or offshored.

Whither the future?

It is not possible for governments to support every company. Governments can, though, act to shape the nature of their economies. UK high-value manufacturing and the Foundation Industries that underpin it, must, however, be supported. UK manufacturing accounts for around 10% of GDP value added. This is an ever-diminishing proportion of the economy and well behind Japan and Germany’s 20% of GDP value added. It should not be allowed to fall further. In 2017 the UK spent around 1.7% of its GDP on R&D. The ambition of the UK government is for this to reach 2.4% by 2027. Assuming other countries do not also raise their games, this will raise the UK from 21st to 12th in the international league table of R&D spending. The government needs to be more ambitious.

Through its Industrial Strategy, (explicitly connected to addressing investment in R&D), the UK government appears to have understood the challenges faced by UK Inc. and specifically, through the Aerospace Sector Deal, companies such as Rolls Royce. This strategy though, must be implemented with great determination, emphasise the local dimension and crucially, it must endure.

In the here and now, the COVID crisis poses a clear and present danger to the economies of all industrialised nations. Through its announcement of, ‘Project Birch’ (26.5.20) to rescue industries badly affected by the COVID crisis, whose demise might ‘disproportionately’ affect the economy, the UK government appears to has recognised this. The call by some in the UK trade union movement for a National Council for Recovery, that would represent a range of stakeholders, seems a sensible, indeed essential, step that must ultimately reflect a broader engagement with manufacturing, hence the future of the UK economy.

Human Resource Management & Covid-19: Some Uncomfortable Truths

Written by Mark Butterick

The statement ‘people are our greatest asset’ is widely used by many employers. For some this represents a genuine belief from the top of the organisation. For many others, however, this kind of rhetoric can feel like pseudo-socialist guff that actually has limited -if any- meaning.

The recent and ongoing Covid-19 crisis has inadvertently provided a unique opportunity to consider leadership behaviours and the effectiveness or otherwise of contemporary Human Resource Management (HRM) practices. Covid-19 has shined a bright light upon many organisations, their approaches to HRM best practice and whether employees really are treated by their employers as ‘the greatest asset’ that they are said to be.

Presenteeism & Succession Planning

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Let’s start at the top. As the UK Prime Minister stood applauding the NHS on the steps of 11 Downing Street on Thursday 2nd April he was clearly unwell. He had tested positive for Covid-19 on Friday 27th March but stubbornly continued to work rather than rest. By Sunday 5th April Mr Johnson had been admitted into hospital. By Monday 6th April he was in intensive care and clearly very ill. Throughout this period the Prime Minister was unwilling to relinquish power even when he should have been resting. For a time he even tried to conduct business as usual from his hospital bed. Was this exceptional “Churchillian” leadership deserving of admiration. Or did Mr Johnson provide a personal endorsement of the ‘working lots of hours shows greater commitment’ culture that plagues so many workplaces?

In addition there was no obvious deputy to assume Mr Johnson’s duties when he was no longer able to hold virtual court from his hospital bed. The UK was therefore left, for a while at least, in a highly precarious situation. The country faced the very real prospect of losing its Prime Minister during the most serious national crisis in 75 years. A situation that was greatly aggravated by the lack of a clearly defined number two to take over the reigns of power. The seriousness of all this was clear to many. Why was Mr Johnson unable to take a step back when he became so obviously unwell? And why did he not confirm who his second in command would be sooner?

Good leadership necessitates an understanding of a leader’s limitations. It also requires the leader to fully understand and accept these limitations. Good succession planning requires strength, depth and resilience at all levels of an organisational structure. In terms of these two key areas of HRM practice the UK government exposed itself and the country to a potentially catastrophic and entirely avoidable level of risk. The underlying reasons for this will no doubt be debated in the future. But a combination of bad decision making, poor HRM practice and ego clearly played their parts.

The Value of Work

In the social media age that we all now live, the value that society places upon work has become increasingly distorted. Covid-19 brought this distortion sharply into focus. The England footballer Harry Kane reportedly earns £200,000 a week. A Band 5 Staff Nurse on the other hand can currently earn £24,214 to £30,112 a year. At the higher end of this a Band 5 Staff Nurse therefore earns in a full year what Harry Kane earns in a day. By any reasonable measure this is absurd.

Some will rightly say that this is not an appropriate direct comparator and perhaps it isn’t. But the kudos rightly given to healthcare professionals during the Covid-19 crisis has challenged the value society places upon the work that people do. Not only in relation to healthcare workers either. The same also applies to those who empty our bins, postal workers and the often zero hour workers who deliver our parcels, groceries and takeaways amongst many others. It now seems clear -maybe even obvious- that the relentless race to the bottom in relation to labour costs and the widespread lack of value placed upon so many employees now requires urgent reconsideration. A recalibration exercise is long overdue. But whether this will deliver tangible holistic changes in the longer term remains to be seen.

Homeworking is not a Silver Bullet

Picture the scene. It’s Monday morning and you are sitting in your car on the motorway. Every other car has one other person in it and the traffic is barely moving. You know all the pinch points along your commute and the timing cycle of every set of traffic lights that slow your journey. Your heart rate increases continually as the time you start working approaches. You pray that a broken down car or an accident won’t block a carriageway and make you late. Then came Covid-19. The 09:00 meeting that the technology-averse (often older and male) senior managers in your organisation insist on having in person is now taking place online. Not by choice, but because it’s the only option now available. The meeting takes place. The same or similar outcomes are achieved.

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Given this triumph of technology (all of which has been around for many years) will we now see significant amounts of work activity moving online? I doubt it. Whilst there is definitely a place, and indeed need, for more online working its limitations have been highlighted during the lockdown. Human beings are social creatures. We need to have human interaction. Softer interactions can be just as important -and sometimes more important- than hard outputs.

This said, with a fair wind, we now have an obvious opportunity to end the nine to five working day culture and foolish, counterproductive and polluting rush hour chaos this brings. All this can be achieved simply by using tried and tested technology more effectively. It has to happen. But the notion of the majority of workers simply getting up, working from home and then going back to bed before doing it all again is totally unrealistic. Many workers have always gone and always will have to go to “a place or places” to do “a thing or things”. No amount of technology will alter this significantly.

In addition, the goodwill currently being shown by many workers toward their employers has obvious limits. A limit that is fast approaching for some. Many workers are currently using their own equipment (PCs, internet connections, facilities etc). Employers will encounter significant challenges if they choose to migrate to a more home based operating model. Work/life balance considerations, training and development needs, setup costs, health and safety and data integrity are just a few HRM issues that require careful consideration. But there is clearly now an opportunity for more home working and there will be obvious productivity and environmental benefits that could and should flow from this.

Trust and Confidence

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In many organisations a doughnut model is operated by employers. A relatively small core of permanent employees at the centre of the doughnut is supplemented by an ever growing outer ring of contingent employees. An outer ring populated by temporary, contractor, freelancer and zero hour workers. After decades of outsourcing, subcontracting and the widespread peripheralisation of employment activity the so-called “gig economy” in the UK had grown to over 5 million by the time the Covid-19 pandemic began.

Anyone who works in the gig economy develops an inherent ability to pivot and change. They have to be resilient in what can be a Darwinian professional existence. Gig economy workers hope for the best but often expect the worst. This precarious world of insecure employment just got unimaginably worse due to Covid-19. With the likelihood of even peak and trough employment (often with many troughs and relatively few peaks) now snuffed out for many. When combined with other extraneous variables Covid-19 has effectively created a perfect storm for those working in the gig economy.

But what of the favoured few at the center of the organisational doughnut? Some of whom have often fought tooth and nail for permanent contracts of employment. Including the face fits yes men and women who don’t rock the boat and always claim to love their employers come-what-may. Has Covid-19 resulted in their employers repaying this loyalty and obedience? Apparently not.

A staggering 25% of employers plan to make permanent redundancies as a direct result of Covid-19. In addition almost half of companies plan to place employees in the “furlough” scheme. Many of these employees probably won’t return when the dust settles and normality eventually returns. Somewhat bizarrely the question of whether a company can use the furlough scheme to pay their employees isn’t means tested for employers. Unlike state benefits such as Universal Credit, which many employees -particularly those in the gig economy- are now finding at best unfathomable and, for many, inaccessible. For many employees falling out of what, until a few weeks ago, many may have considered to be “safe employment” the pace of recent events will come as a major shock. Attempts to access the benefits system will invariably prove to be emotionally damaging and exasperating. Many will question whether the system into which they have paid national insurance for many years is fit for purpose.

At the heart of a contract of employment is an implied obligation of mutual trust and confidence. As many of the projected 3.5 million employees currently heading toward Universal Credit are now finding out, however, millions of employers had neither the resilience nor a reciprocal commitment to them when the going got tough. For many employees the elastic band of trust and confidence was broken by their employers almost immediately when Covid-19 took hold.

Many employers have had no choice about this. But there will inevitably be employers who make tactical redundancies and adopt unethical HRM practices to deal with perceived problems and legacy issues. For some rogue employers the dark clouds of Covid-19 will have a silver lining. The impact of some employers adopting such approaches will be that the centre of some organisational doughnuts will become even smaller. The gig economy will get even bigger and levels of trust and confidence will inevitably deteriorate further. The low trust, low productivity puzzle that nobody seems willing or able to tackle will appear to be even more of an enigma.

Yesterday’s Greatest Asset?

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Dr. APJ Abdul Karam famously stated ‘love your job but not your company, because you may not know when your company stops loving you’. None of us could have accurately predicted the devastating impact of Covid-19. Or the speed at which this catastrophe has unfolded. But many thousands of employees are now indeed realising that the love of their employers suddenly ran out. The greatest asset, it transpires for many, is no longer in fact the greatest asset. Many workers will understandably -albeit belatedly- be asking if they ever were truly valued as their employers had previously claimed.

Major change is the only certainty that most workers now face. The ability or otherwise to adapt to the huge changes and disruption that lie ahead will have profound consequences for all. Two key choices now present themselves. An acceleration of the race to the bottom HRM practices of the past. Or a root and branch appraisal of and change to how we value and treat people. Nothing can ever be the same again though and those of us in the worldwide HR community will all hope that this proves to be for the right reasons.

CERIC Doctoral Conference 2018

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Emma Partlow

By Emma Partlow, Postgraduate Researcher, Department of Social Policy, Sociology and Criminology (University of Birmingham)

I was honoured to have been invited to present my research at the Centre for Employment Relations Innovation and Change (CERIC) Doctoral Conference on the 20th June at Leeds University Business School. As a doctoral student from the University of Birmingham, it was a pleasure to network within a room full of people who articulated original and innovative research in such an engaging manner.

The conference encompassed a wide-range of disciplines, including: Social Policy, Languages and Cultural Studies, Psychology, Performance and Cultural Industries and of course, Business and Management in its many forms. It was exciting to see how a diverse range of talks could marry together under the banner of Inequalities in the Workplace. These talks encompassed everything from: sexual harassment in the workplace, strategic human resource management, apprenticeships, inequalities in skills developments during recessions, collective labour conflicts in China, case study on the Nigerian Electricity Distribution Sector, sex work, organisational stress management, pay gaps and inequality, labour insecurity, marginalisation of theatre lighting designers, power in modern management, and the employment experiences of people with Multiple Sclerosis. Not forgetting the key note talk from Professor Chris Forde who kicked off the day so eloquently with the ‘Inequalities of Work in the 21st Century – The Rise of the Gig Economy’.

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Participants of the Doctoral Conference

I am fortunate to have had the opportunity to present my research project looking at the impact of equalities legislation on disabled people in the workplace, which critically analyses the concept of ‘reasonable adjustments’ in the policy context of the Government’s White Paper Improving Lives. The audience were receptive to my theoretical framing, which sees me draw upon the concept of bio-power and subtle coercion in the form of Libertarian Paternalism.

Doctoral students eloquently presented their work and the day flew by with methodological discussions, engaging debate and suggestions within an entirely supportive and ‘safe’ space. It has to be said that this was one of the most supportive academic spaces I have had the pleasure to participate in. The development of spaces where doctoral students can engage in supportive discussion about their work is important and something we must actively continue to arrange.  I am sure I am not alone when I say that questions, comments and suggestions received in this manner are invaluable and can go a long way in supporting a thought-process or the development of ideas.

I would like to thank CERIC and Leeds University Business School for their generosity and hospitality. Not only did they host this doctoral conference and provided refreshments and lunch but prizes were provided for the prize winners and I am honoured to have been chosen as one of these prize winners. The prizes were put forward to help with the cost of attending conferences of choice; I think this is an excellent incentive to encourage people to share their work, regardless of the stage they are at within their doctoral journey.

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From left to right: joint 1st prize winner for best paper presentation Maisie Roberts (CERIC), Dr Jo Ingold, joint 1st prize winner  Marina Boulos (CERIC), joint winner for the best poster presentation Sophie Morrell (Bradford) and 2nd prize winner for best paper presentation Emma Partlow (Birmingham)

The success of this doctoral conference has inspired me to adopt the theme of ‘Inequalities and Work’ to host a conference at the University of Birmingham so please do watch this space! It would be my pleasure to welcome some familiar and friendly faces to Birmingham and to hear how your work has developed since this event.

Brexit, EU labour migration & worker rights: the story so far

Immigration and restricting EU migrant rights to freedom of movement were core issues in the lead up to the referendum vote, yet agreement on the detail of a new UK immigration policy continues to be a way off, leaving employers, workers and their families in limbo. Researchers based in the Centre for Employment Relations Innovation and Change (CERIC) at LUBS working on labour migration, mobility and changing patterns of work, have been working with different interest groups (business, unions and civil society) in a unique way to enhance understanding of how these groups are coping with the uncertain impacts of the Brexit vote. This exploratory research provides insight into the ongoing challenges of trying to anticipate, respond to and shape migration policy for and on behalf of their members in an uncertain context. This blog sets out the background and how the CERIC team’s research agenda is being shaped by bringing different interest groups together on this emotive and evolving topic.

Current context

After the BREXIT vote in June 2016, UK and EU negotiators signaled that reaching agreement on the rights of EU and UK citizens already living in another member state was a priority. Yet, it was only on 8th of December 2017 that UK and EU negotiators published a joint report outlining principles on the treatment of EEA nationals in the UK and UK nationals in the EU and on 21st June 2018, that the UK government announced details of the ‘settled status[1]’ scheme. Campaign groups point to many ‘unsettled’ questions about this process and the new forms of regulation of EU labour mobility post-Brexit. An immigration bill was announced in January 2017 but was subsequently put on hold until wider Brexit negotiations are progressed. The UK government has indicated EU freedom of movement will end, but migration policy continues to be shaped by the wider negotiations with the EU and ongoing internal political processes and policy analysis. The Home Secretary instructed the Migration Advisory Committee (MAC)[2] to report by September 2018 on the impact of EEA workers on the UK labour market and the Home Affairs Select Committee is undertaking an inquiry into Post-Brexit Migration Policy.[3] Thus, there continues to be both formal and informal spaces for dialogue between different groups of social actors seeking to shape these outcomes.

While these deliberative processes are ongoing, net migration has slowed considerably since the referendum vote. According to the ONS[4], the largest drop in net migration to the UK to occur in decades was experienced in the period June 2016 to June 2017 falling from 336,000 to 230,000: three quarters of this fall was due to the drop in migration from the EU. More recent statistics show that migration from the EU has continued to fall. The ONS reports notes that ‘the numbers of EU citizens coming to the UK looking for work decreased by 58,000 over the year to September 2017, particularly driven by the fall in numbers of citizens from EU15 and EU8[5] countries (24,000 and 18,000 respectively). For the latter, this is the lowest number recorded since accession. Recent polls[6] suggest that the UK general public’s perception of immigration has softened since the Brexit referendum, yet the ONS migration data are indicative of the material effects felt by workers, and by extension employers, of the ongoing uncertainty of how the UK will regulate EU labour mobility post-Brexit.

Employers, legal advisors, trade unions, civil society and faith groups and local, national and international authorities all have concerns around the implications of Brexit for their various constituents and are variously involved in the political debates noted above. The positions and actions of these different interest groups, therefore, have important implications for the changing socio-economic relationship between the UK and the European Union and for the UK’s own social model. Some of these groups seek to be a counterweighing power to social, political and media forces seeking a ‘hard’ Brexit outcome and stricter regulation of EU labour migration to the UK. These groups are also critical in shaping the environment that affects the everyday experience of those that exercised their right to free movement between the UK and the EU. CERIC’s research has been on exploring actions and reactions of these groups within this extraordinary period of uncertainty by asking a set of inter-related questions: How do different social actors imagine the migration landscape post-Brexit? What challenges and consequences of Brexit do they anticipate for labour mobility? How are they formulating policy positions and trying to shape the debate around the new post-Brexit immigration system?

 

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CERIC BREXIT and labour mobility roundtable
September 2017

By critically exploring the competing visions of what the UK’s new social model might look like and bringing together the voices of different interest groups we are generating new data and promoting dialogue as part of our commitment to developing research that is co-produced: giving different stakeholders a voice in shaping the key research questions and design[7]. The framing of these questions aims to not only understand and amplify these diverse voices but also to bring different actors together to discuss complex questions. To realise this aim CERIC researchers have undertaken scoping interviews and both hosting and participating in roundtable events exploring common concerns and areas of difference with respect to the question of labour mobility around four connected and overlapping themes, employment and legal frameworks; social protection; regulating labour mobility and migration policy. For example, in September 2017, CERIC held a roundtable with employer groups including the Chamber of Commerce and Sector Skills bodies, civil society organisations campaigning for the rights of EU citizens in the UK and trade unions. Members of the CERIC team have also participated in roundtable events hosted by other partners including the Chamber of Commerce and regional migrant support networks and undertaken wider interviews with employment lawyers, faith and community organisations. The following summarises the themes emerging from these discussions and we conclude by setting out the implications for our research agenda.

 

The significance of labour mobility and freedom of movement

The different groups taking part in the research had contrasting positions in advance of the referendum vote. For example, most, but not all, trade unions advocated for ‘remain’ and were generally in favour of continuation of the free movement of workers. Business organisations took a more neutral stance due, in part, to business members being both ‘leave’ and ‘remain’ supporters, reflecting that some sectors such as hospitality, construction and the public sector are much more likely to be adversely affected by restrictions in the movement of EU workers, whereas other parts of their constituency were less likely to employ migrant workers. Unsurprisingly, those campaigning for the rights of EU citizens were in favour of remaining in the EU. Overall there was limited reflection given by employer or worker representatives on the merits or challenges presented by the existing policy of freedom of movement. Much more emphasis was placed on what might come next. There was an acceptance (albeit for some, a very reluctant acceptance) that there will be restrictions placed on future migration from the EU.

The discussion developed more broadly to cover future scenarios for the UK economy informed, in the main, by existing understanding of what had led to pre-Brexit levels of EU worker migration to the UK. These drivers were seen by business and worker representatives as inextricably linked to economic considerations such as UK and EU labour markets, pay and wages, skills supply and demand, levels of employment (and under-employment) and UK trade and investment decisions. Yet, the civil society groups that were campaigning for the rights of EU citizens in the UK reminded us that, while key drivers for migration is often work and employment, there also many social factors that shape labour mobility such as the quest for family re-union or education. In this regard a worrying report by colleagues at the University of Birmingham has been published recently[8], highlighting the legal limbo in which many EU families will find themselves in the field of family re-union. These observations made it problematic to talk about migration policy in isolation and illustrates the need for future migration policy to be developed with reference to wider policy considerations.  Rather than re-thinking the regulation of migration in isolation, remarks from the participants reflect that post-Brexit migration policy needs to be developed in the context of wider economic and social considerations.  This accords for example with the objectives of the current MAC commission on the employment of EEA workers which seeks to ‘aligning the UK immigration system with a modern industrial strategy (p20),’ yet many other aspects of related policy also need to be considered in terms the affect worker rights, labour standards, social and welfare rights.

Visions for EU labour migration under different Brexit scenarios

Different visions of future migration policy were expressed by the various stakeholder groups. Employer organisations taking part in the CERIC research were, over-time, less ardently free market oriented than might have been expected.  Initial positions stated by employer organisations in the months immediately after the referendum strongly expressed the desire for open migration regimes to meet the needs of employers seeking sourcing both high and lower skilled workers[9].  Over time, the tone expressed by some employer groups had shifted slightly to the acceptance of a migration system that may be more restrictive due to the need to be mindful of ‘politically acceptable’ outcomes. FlipchartHowever, umbrella organisations such as the CBI and Chamber have continued to push government for greater certainty on the rights of their EU workers, on hiring from EU countries during the negotiation period and to avoid overly bureaucratic processes for post-Brexit hires. One employer group, the CITB, were hopeful that a case could be made for special conditions to more easily allow recruitment from the EU to address ‘strategically important’ skills shortages. Others, such as the British Hospitality Association (BHA) have suggested a sector-based quota system for hospitality, considering that predicted annual recruitment need is over 100,000 people, assuming zero labour turnover amongst British born workers.[10]  The likely restrictions associated to the terms of residency for workers under these quota systems need however to be considered as part of the wider social implications that migration reform has on migrants’ rights and those of their families.

debateThe TUC and union participants in the CERIC roundtable were more clearly advocating for free movement and for the importance of free trade and the single market as an important mechanism in establishing a ‘level playing field’ making particular reference to the value of the Social Chapter[11] and its benefits for both ‘good’ businesses and for workers. Underpinning this position was a common assumption that withdrawal from the EU would lead to employment protections being weakened, threatening a ‘race to the bottom’ in terms of worker rights and employment practices that also adversely affect those ‘good’ employers. There have been public assurances from the Government that workers’ rights will be maintained and even strengthened but many, including trade unionists, remain skeptical that this will be the case.

Current activity

The current activity of different interest groups could be grouped into three categories: developing more intelligence on labour mobility issues affecting members; developing support and guidance for constituents and looking to shape the political debate. The employer bodies participating in CERIC discussions were trying to improve data and analysis on the use of migrant labour amongst their membership to help assess the potential impact on the future workforce. They were also developing understanding of the potential for and limitations of employers using alternative strategies to make up for any loss of EU worker recruitment[12] through for example more training and development of indigenous workers or investment in new technologies. Yet the employer groups noted that gaps remained in their understanding of patterns of migrant labour demand or the longer term historical drivers that had shaped labour migration in specific sectors and regions. Many unions and employers were using legal services to keep themselves up to date with the negotiations between the UK and the EU, advising EU migrants among their members on how to apply for permanent residence under the current regulation. For example, the BHA is providing materials to help ensure that workers can exercise their rights to certification of permanent residency where applicable. This work also aims to have a positive effect in terms of boosting goodwill with EU workers towards hospitality sector employers. Trade unions were also directly engaging with EU migrant workers and community networks to provide advice to those concerned about their rights during the transition period.

Influencing the debate

CERIC’s initial research involved participants from international, national and regional organisations in order to explore the nature of dialogue at, and between, different levels.  At the international level, UK civil society groups have been campaigning to develop alliances with those leading campaigns promoting the interests of UK citizens in Europe and engaging directly with the EU negotiators to stress that EU labour mobility should be an intrinsic part of integration undertaken by the people of Europe themselves rather than a purely economic matter deriving from the rules of the single market. At the national level, all groups are making representations to government through formal and informal channels including to the relevant parliamentary scrutiny committees of DEXEU and Economic Affairs and the Home Office appointed commission on EEA migration being undertaken by the MAC. Regional groups, perhaps inevitably, made reference to the possibility of regional flexibilities in any migration system, notably to meet particularly localised skills needs. This focus is shaped by broader political tensions around the devolution of powers to the UK nations and regions of the UK including the devolution of budgets around skills training and infrastructure. This view was given focus by an early report by the Institute of Public Policy Research which contained six proposed options for the new immigration policy one of which included the suggestion of sub-state solutions to migration policy[13].

Conflicting and Common issues

Our roundtable discussions included some robust (yet cordial) difference of opinion around:  visions of future policy and the impact of new migration regulations on employers and citizens. In particular we noticed different understandings of what “regulation” means. Employer bodies associated migration policies with the possible risk of increased bureaucracy, notably at the point of recruitment. In contrast, trade union representatives regarded regulation positively in the form of protections of standards for workers. Unions stressed that proposals requiring workers to have employer sponsors could make migrant workers more dependent upon those employers, limiting their voice. An obvious paradox emerges in that employers were highlighting the cost of compliance and unions the cost of non-compliance or regulation that enables the potential for greater exploitation of workers, thereby lowering labour standards.

In terms of common threads, there were four areas where there was a convergence of views: firstly, the need to assure security for those EU workers already in the UK and their families; secondly, that student numbers should not be included in migration statistics; and, thirdly, that there was need for greater dialogue between different groups of stakeholders to build a better consensus on the way forward, not just toward Brexit, but after the exit date and beyond. Finally, it was also notable that there was a common view amongst stakeholders that investment in local, indigenous, labour was seen as a possible alternative strategy that could mitigate against the need for migrant labour. This runs counter to an alternative perspective: the  skills and training of indigenous workers could be seen as positively related to the use of migrant labour. This is a theme that the interim MAC report of March 2018 noted,[14] providing illustrations of how the recruitment of skilled European workers contributed to improved training levels. The final report by MAC on EEA workers, due in September 2018, will look specifically at the impact of the employment of EEA workers on the UK resident population, including the impact on training.

Next steps

It remains to be seen how UK government and EU negotiators will re-shape labour migration regulation to adequately address the demands of civic, business and labour organisations in the UK while giving regard to the outcome of the referendum vote. This continues to take place within an uncertain and volatile political environment.  The early stage research undertaken by CERIC researchers has provided insights into the ongoing challenges and activity of different groups trying to anticipate and shape policy appropriately for and on behalf of their members. Key themes emerged for the future directions for research. This includes the need to improve understanding of the regional and sectoral dimensions of the ‘EU workforce’, how patterns of migrant employment have developed and the roles that different institutional actors have played in facilitating these trends and finally, how migration policy will evolve in relation to related (socio-) economic policy such as the UK Industrial Strategy.

This requires taking more historical and sociologically informed perspectives to help move the debate forward. A deeper analysis will help different interest groups anticipate the implications of ‘hard’ and ‘soft’ BREXIT scenarios. The co-production approach has illustrated the willingness of different parties to strengthen and deepen the level of debate, enhance understanding of different positions and provide opportunities to influence debate at the local, national and international levels. Participants recognised the value of exploring policy proposals through joint analysis of tensions and common ground to help unpack the content of proposed policy develop understanding of potential impacts on the rights and responsibilities of different groups helping to move the debate beyond current political narratives focused primarily on annual immigration targets. CERIC researchers will continue to bring these voices together, highlighting points of tensions as well as commonalities, contributing to the development of research informed public debate and policy that will shape the social model of a post-Brexit Britain that will, whatever the outcome of specific migration policy, to continue to be inextricably linked to that of its European neighbours.

[1] https://www.gov.uk/settled-status-eu-citizens-families/applying-for-settled-status

[2] https://www.gov.uk/government/collections/impact-of-eea-and-non-eea-workers-in-uk-labour-market-responses

[3] https://www.parliament.uk/business/committees/committees-a-z/commons-select/home-affairs-committee/inquiries/parliament-2017/inquiry4/

[4] Office for National statistics. Migration Statistics Quarterly Report: February 2018 Available at:  https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigration/bulletins/migrationstatisticsquarterlyreport/february2018#fewer-eu-migrants-coming-to-the-uk-for-work

[5] EU15 country members prior to the 2004 enlargement; EU8 those joining in the 2004 enlargement

[6] YouGov Top Issues Trackers (2017-2018); Ipsos-MORI Issues Index (May2018)

[7] For a discussion of co-production in social science research see for example https://www.n8research.org.uk/view/5163/Final-Report-Co-Production-2016-01-20.pdf

[8] https://eurochildren.info/2018/03/28/a-generation-of-children-of-eu-parents-to-be-lost-in-the-intricacies-of-brexit-research-reveals/

[9] http://www.britishchambers.org.uk/policy-maker/policy-reports-and-publications/business-brexit-priorities.html

[10] http://www.bha.org.uk/wordpress/wp-content/uploads/2016/11/BHA-Brexit-Consultation-11116.pdf

[11] https://www.coe.int/en/web/turin-european-social-charter

[12] http://www.britishchambers.org.uk/Business%20Brexit%20Checklist%20BCC.pdf

[13] https://www.ippr.org/research/publications/an-immigration-strategy-for-the-uk

[14] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/694494/eea-workers-uk-labour-market-interim-update.pdf

Steel in Crisis: Restructuring for People

ChrisMacpicture
Chris McLachlan, Leeds University Business School.

The construction of an industrial strategy for UK steel is essential. Within the debate over this requirement and as part of its development, it is important to have an understanding of what happens at plant level when restructuring and redundancy occur. A plant that is of key focus in the current steel crisis is Tata Steel’s long products site in Scunthorpe. The plant has undergone successive restructuring processes in recent years, with ‘Project Ark’ in 2011, ‘Path to Profit’ in 2013, and now the decision to sell the long products division.

Some 2,600 job losses have been announced over this 4 year period, which leaves the Scunthorpe site with approximately 3,000 employees. Since the divestment decision the security of the entire site has been under threat. The recent announcement of the potential sale of the long products division to UK based investment firm Greybull Capital provides hope for the Scunthorpe site, but for its employees a worrying period of uncertainty remains. This contraction of the UK steel industry workforce has, of course, been in train since the 1980s. Amidst the prevailing industrial context, the recent bout of restructuring is having profoundly negative effects on not only the lives and careers of individuals but also the communities affected by the restructuring. Banners at recent Save Our Steel events in Scunthorpe and Sheffield simply stating ‘HELP OUR TOWN’ (image below) are testament to the extensive impact of the current steel crisis. How might firms maintain their social responsibility to workers and communities in the face of these job cuts? Indeed, do organisations have a social responsibility for their employees?

Tata Steel Demo

At Scunthorpe, a notable step in attempting to develop a socially responsible approach to restructuring was the Project Ark process in 2011. This process was framed around a broader commercial strategy that reduced the volume of steel produced at the site, and further justified through a focus on producing higher quality, higher value added steel products along with a plan of investment in skills and training that sought to create a more flexible workforce. The consequence of this, however, was the announcement of 1200 job losses due the mothballing of the bloom and billet mill. The Project Ark strategy was a critical moment between Tata and the affiliated trade unions, as the job losses were essentially agreed by both parties to on the promise of future investment in skills and the broader commercial plan that promised to ensure the survival of the plant. Evidently, these promises were not upheld by Tata. At Save Our Steel rallies, senior union officials and MPs continue to bemoan the Project Ark process, with the subsequent Path to Profit process (500 job losses announced) perceived as a residual restructuring from the failures of Project Ark. Meanwhile, the HR team were rewarded for their efforts in managing the job losses, receiving an internal CEO award for their efforts in conducting a socially responsible restructuring process. Therefore, it is clear that Tata appreciate the need – the requirement, even – to ensure their restructuring practices are conducted in this way, with the process also being used as benchmark across the rest of their UK operations.

Tata claims a social responsibility to ameliorate the impact of these job losses for affected individuals and the local community. This commitment is laid out in its most recent Annual Report (2014-15). The socially responsible restructuring processes at Tata Steel UK have typically been characterised and managed through the avoidance of ‘hard’ (compulsory) redundancies – through redeployment practices such as cross-matching affected individuals in vacant positions internally – a close working relationship with the trade unions, and the provision of basic employability support in CV writing and interview training for those made redundant. As long as people who wish to leave do so voluntarily, this allows those wishing to remain to take up alternative employment within the organisation. The joint management-union goal of plant survival, has always been the key rationale underlying these processes. Amidst the prevailing industrial context the threat of restructuring within Tata seems more imminent than ever. The announcement of more job losses (18.1.16) at Tata UK’s Port Talbot site is clear evidence of this. In this context, the sustainability of this socially responsible approach to restructuring is subject to increasing amounts of pressure. The coming negotiations between Tata and its trades unions will prove historically significant not only for the fate of the Scunthorpe site but for the UK steel production more broadly. The feet of steel workers are being held firmly to the blast furnace fire.

Up to £6m has been pledged by UK Steel Enterprise (a CSR-based subsidiary of Tata that supports steel areas affected by restructuring) and the government to aid regeneration and job creation in Scunthorpe, along with another £3m aimed at funding retraining for affected individuals. Supportive measures like this, however important and in real terms quite limited, become devalued when CEO of Tata Steel Europe Karl Koehler claims that the long products division has no future beyond the end of the financial year. Moves like this further disillusion the workforce, creating a reluctance to engage with the range of support measures on offer. Additionally, recent changes in organisational structure in order to prepare the plant for being a ‘standalone’ business, then the subsequent decision to sell the division off, has put further pressure on the Scunthorpe plant to control costs and hence pressure on jobs. Given that previous restructuring processes have been necessarily framed around the survival of the plant, the imminent threats that these events pose bring into question any notion of a socially responsible approach. What is crucial in the negotiations around restructuring, job losses and sell off, is for Tata to continue to engage with trade unions in order to ameliorate, and where possible limit, the amount of job losses so as to ensure the process is conducted in a socially responsible fashion.

Chris McLachlan is a PhD student at Leeds University Business School and a member of the Centre for Employment Relations, Innovation and Change.