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Personal services

17th November 1994
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Which of the following most accurately describes the problem?

Until recently the introduction of personal contracts as opposed to collective bargaining as a method of setting wage levels was seen as a phenomenon restricted in the main to managerial, technical and professional grades. It was not thought to be a major issue in the haulage industry other than a few well publicised instances in the oil industry.

However, the "trickle" of cases is starting to form a stream if not a flood, to the level where the unions are registering concern over the long-term implications There are no statistics on personal contracts among transport workers: best estimates from the unions are that the numbers affected range from 1% to 10%, including drivers in the oil industry.

The figures owe their lack of accuracy to the fact that unions had not regarded the trend towards personal contracts to be in numbers significant enough to give them cause for concern. Danny Bryan, national secretary road transport commercial, of the TGWU, commented that while the introduction of personal contracts is totally unacceptable to the union, "it is not regarded as a major problem because of the small number of people it has affected."

However, the introduction of personal contracts into a company usually equates to derecognition of the union or unions, or a least a side-lining to representation on disciplinary and other non-monetary matters, and the slow but steady increase in the number of companies taking this route, means the unions are beginning to focus their attention on the possible long-term effects on pay and conditions.

Both Rod Goodwin, TGWU officer for region 1, and Danny Bryan believe a common reason for the introduction of personal contracts is a last-ditch solution to failed union negotiations. Goodwin's comment was: "Personal contracts have usually been prompted by the lack of a pay rise and/or changes in conditions, working hours and flexibility which the union cannot condone." Bryan says: "In our experience companies don't introduce personal contracts as a first option. They resort to it as a tactic when they can't get what they want by collective negotiation. It is not a strategically thought through option as the best long-term way forward for the company" Victor Ross, human resources director of Excel Logistics/BRS, which has collective bargaining and a small number of personal contracts on different sites, comments: "The route we take is dependent on the nature of the job and the wishes of our customers. The important thing is to reach a set of terms and conditions. In many instances when individual contracts are introduced it reflects a change in the particular contract. Personal contracts are not a big issue for us." Tim Inman,director of operations at the Road Haulage Association, believes that personal contracts "create an interesting relationship, I would have thought enlightened employers would go for them."

The association's northern regional manager Geoff Dunning says that with the demise of group negotiations through traditional JICs and wages councils, many operators are already negotiating with employees on an individual basis, and that personal contracts may be a "middle path" for those hauliers that no longer bargain collectively and which ,due to the strict interpretation by the Inland Revenue on self-employed status, cannot declare their drivers as self-employed.

According to Dunning personal contracts could also allow a typically-small fleet operator to tailor employment contracts to each driver's specific workload, But he offers one word of caution on personal contracts: "There could be complications further downstream, not least when it comes to selective redundancies. Nobody's really explored that as to whether it would be easier or not. It hasn't been considered" Two of the most recent instances of companies introducing personal contracts are at Calor Gas and its third party distribution company Calor Transport.

Three hundred drivers, plant operators and distribution workers at Calor Gas received an ultimatum that if they did not sign personal contracts they would no longer have a contract of any sort with the company. The management move came after overwhelming staff rejection of the scheme, but the proposition was sugared with an extra week's wages for those accepting before a specified date. Although there was a rise in basic pay and eligibility for a company pension scheme, typically the contracts increased "flexibility" by reducing holiday pay and introducing an increased commitment to seven-day working.

The company's reasoning for the introduction of personal contracts came from John Harris, operations and human resources director. He says: "We want to be a singlestatus company with the same pension and other benefits from top to bottom."

The introduction of contracts at Calor Transport is an example of what Bryan described as "last resort" management,

Threat

An element of threat accompanying the introduction of personal contracts seems to be a common feature as, in the union view, companies trade on peoples' fear of losing their jobs. However, the unions point out that the situation in the economy now is different from when personal contracts were introduced into the oil transport sector back in the early '90s. "I have no evidence that people are better off on personal contacts," said Bryan. "We have evidence that people who have been working under those arrangements for a few years now are so fed up and dissatisfied at how their positions have been eroded over time that they are actively seeking union reinvolvement. Ultimately I believe the situation is going to turn again to collective agreements.

"From the management point of view too. They have been finding that the administration of personal contracts is both more costly and highly inconvenient."

David Higginbottom, general secretary of the United Road Transport Union, says: "The challenge for the unions is to find ways of accommodating the companies' business needs while protecting the working conditions of the drivers and other personnel through collective bargaining. However, I predict there will be a swing back to collective bargaining."

To assess the extent of the problem more accurately URTU has undertaken a "Skills Audit" of a driver's job with a view to quantifying its professional worth in comparison to other skilled jobs such as airline pilots. "The answer is not just to give everyone a huge pay rise," said Higginbottom. "Future negotiations have to include all considerations such as the professional skills required for the job, the state of the haulage industry, the state of the UK economy, and even the global economy" 0 by Elisabeth Daly


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