Comparison Of Two Companies

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Comparison of Two Companies

Comparison of Two Companies


This paper considers both issues. It uses a matched case study of two British firms in the second half of the 1990s. Both operated as subsidiaries of regional utility companies. Both used the same technologies and competed in the same product market: the 'facilities management' market within the business services sector. Both had emerged in the mid-1990s from the same background of nationalised industry and sector-wide collective bargaining. They chose radically different approaches to employment relations. One not only retained but even promoted collective bargaining, recast pro-actively as 'partnership.' The other rejected collective bargaining, offering 'personal' contracts to all employees and excluding trade unions from any formal role in employment relations.

Research context and methods

The two case studies presented here developed from a wider research project, concerned with what was depicted as the widespread 'individualisation' of employment contracts during the early 1990s. The project established that the essence of the individualisation was the withdrawal, formal or informal, by employers from collective arrangements for fixing terms and conditions. There were few signs of substantive individualisation, meaning the differentiation of the content of employment contracts between individuals. If anything the reverse, greater standardisation, was more common. The evidence pointed however to a widespread procedural individualisation, with trade unions excluded from the process of determining the content of employment contracts. Sometimes this occurred through formal derecognition. In that case, individualisation typically involved a mix of positive inducements to employees to forswear coverage by collective bargaining in favour of 'individual' or 'personal' contracts, individual freedom of choice concerning union membership, and the exclusion of trade union representatives from the regulation of employment relations. More often, individualisation involved less dramatic, incremental action by employers to reduce the coverage, scope and influence of collective bargaining, while still retaining some degree of formal union recognition - e.g., for some occupations only (Brown et al. 1998). Derecognition has played a secondary but nevertheless significant part in the decline of union presence in Britain, particularly in the early 1990s. Where it occurred it tended to take the largely tacit individualisation route, rather than more confrontational approaches, such as the firing of union members and activists, as practised occasionally in the UK and more extensively in the US (Rogaly 1977; Bronfenbrenner 1994).

The background and evolution of the matched companies

Indivco and Recogco were formed on the same day in spring 1996. Each company had evolved from the same nationalised industry background of industry-wide bargaining, conducted until 1990-92 through National Joint Committees, as statutorily required under public ownership. The old water and electricity supply industries had respectively three and four joint committees, whose remits covered different occupational strata up to and including senior management. These joint bodies were responsible for negotiating changes to the national agreement, for consultation over changes in working methods, and for the adjudication of interpretation disputes under the agreement. The negotiation and consultation functions of joint bodies had been combined in water, but kept separate in electricity (Pendleton and Winterton, ...
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