The primary reason why the transnationals are attracted to the United Kingdom is the existing structures and institutions that favour the employers over the employed. For example, the US and Japanese-owned companies setting up operations in the UK have invariably “stayed outside employers’ organizations and multi-employer bargaining in contrast to those locating in other European countries” (Innes, Erik, and Jonathan Morris., p.30). There are also concerns over the transferability of systems. For instance, certain key elements of the Japanese and German systems are not being transferred to the United Kingdom, including union recognition and works councils. Such practices have significantly weakened the trade unions and their legal rights since 1979. This is the culmination of United Kingdom’s industrial relations history and other political economy factors. (Innes, Erik, and Jonathan Morris., p.34)
The recently held rally in Glasgow by The Rail, Maritime and Transport Union (RMT) to call for nationalizing the country’s railways is an indicator of how ineffective free market economy and privatization had been in keeping workers satisfied. These rallies are part of the Rail Against Privatisation campaign. Research conducted by think-tank Catalyst point out that the move would save taxpayers 4.5 billion pounds a year. It also found that nearly a million pounds a year is lost as a result of returns to private lenders and investors. (Planning (UK))
The United Kingdom, with a long tradition of voluntarism in industrial relations, has been quite singular among economically advanced countries in not having, except for a very short period, a legal means whereby employees could seek union recognition. Nor did the union members care seeking for a mechanism. In general, they felt strong enough to do without legal support. Moreover, the unions feared that legal intervention would open the flood gates for intervention in other areas. (Kessler, Sid., p.56)
“The Conservative government has instituted varied legislative reforms in the labor market since 1979 with the aim of increasing the resilience of the labor market for the improvement of UK’s economic performance. However, such reforms contributed to the massive decline in the labor union memberships. This altered the balance of power within the realms of industrial relations in favor of the business owners and entrepreneurs. Worst, the reforms fostered the commodity mentality among business entrepreneurs which could, in the long run, prove disadvantageous for UK’s economic viability.” (Kessler, Sid., p.62)
There is a tendency to accuse the trade unions for inhibiting private sector investment that is crucial for UK’s long term economic success. The unions were also being accused of “holding monopolistic power over corporations”, which is utterly untrue. The amount of power that corporations can wield over governments and their policies to achieve their economic bottom-lines can be learnt from the fact that since 1979, numerous statutes were placed to constrain trade union activity. This is a clear case of victims being perceived as the victimizers. The statutes restrict unions from taking strike action and curb their right to enforce a closed shop. (Farnham, David, and Lesley Giles., p.13)
Government intervention in employer-worker relations had not always been in support of the latter. The power and clout that corporations hold had proved stronger than the majority in numbers of the workers. For example, the Employment Act of 1980 restricted picketing by employees to only their place of work, which means any secondary picketing illegal. The act further restricts other forms of industrial action, such as blacking of goods. Following up, the Employment Act of 1982 narrowed the definition of a trade dispute weakening the trade unions further. The act also prevents unions from constructing movements for change like the one in early 70’s by the miners, however reasonable the case may be. In addition, the employers are empowered to sue the trade unions, placing its funds at risk. (Healey, Nigel M., p.291)