In my previous ‘diary entry’ I explored how to set the strategy for your pension scheme – now it’s time to look at how to navigate the world of industrial relations.
In today’s fast-paced, pressurised and increasingly complex working environment, protection for workers facing harsh and uncertain workplace treatment and conditions has never been more important. With many businesses experiencing significant financial stress in the current pandemic, some are unfortunately facing the prospect of redundancies, changes in business ownership and amendments to employee terms and conditions. Accordingly, many employers are now having to remind themselves of the rules around consultation.
Here are some tips and best practices from my years as a Pensions Manager – putting to good use the soft skills that continue to deliver value in my role as a trustee:
Debate is key to democracy
You want debate? We’ll give you debate!
Rowdy, silly and loud – you may well cringe when you watch our elected representatives hammer it out in the Houses of Parliament, but it demonstrates how debate is a central and transparent element of democracy. The same applies in the Board Room when trade union and management representatives hammer it out before making important decisions that will impact on workers’ lives – without genuine consultation it is not just undemocratic – it will lead to poor staff relations.
Trade unions have represented a safe harbour for employees from all backgrounds and trades from as far back as the 17th century, providing employees with immeasurable support and voice with which to fight for crucial change and reform within the workplace.
Key take-away: Collaboration is more critical than ever. Effective consultation involves taking account of, as well as listening to, the views of employees and representatives and must therefore take place before decisions are made. This is key to reaching a successful conclusion especially in the eyes of the trade unions. Making a pretence of consulting on issues that have already been decided is unproductive and engenders suspicion and mistrust about the process amongst staff.
Plan! Plan! Plan!
When certain changes are made to pension benefits, an employer is obliged to undertake pension consultation with the affected employees usually via a trade union. Trade unions are granted special status under UK law, which provides them with unique rights. They play an important role in the complex interaction that takes place between management and workers.
Experience has taught me that preparation is crucial before negotiating with trade unions and so planning is key. This may include the identification of issues, stakeholders, intent, goals and objectives, the determination of resources and consultation and communication methods.
As a minimum, you should aim to:
- Prepare the business case
- Determine timelines and milestones
- Remember legal entitlements of union representatives
- Understand the unions’ decision-making structure
- Try to secure an agreement
- Do not forget non-union employees.
Both parties should agree on the process up-front – who will represent the workers, or group of workers in negotiations, how often meetings will take place, what issues should be discussed, how a failure to agree will be resolved and how discussions will work if more than one trade union is recognised?
Key take-away: Employers should remain live to the role a trade union plays, either through an existing recognition agreement, or simply by virtue of certain employees being trade union members, and whenever there is a proposed change to pension provision, the employer considers involving and engaging the trade union(s) at an early stage.
Strive to achieve the best outcome for all
Although a trade union usually has no express right to negotiate pension provision with an employer, it can still cause difficulties for an employer if the trade union is unhappy with an employer’s pension provision/proposals by calling for industrial action (as a trade dispute); for example strikes, work to rule and generally applying pressure on the employer through leverage tactics.
Some disagreement is inevitable as interests of employers and employees will not be identical, but there should be some degree of overlap. It is important therefore, that senior management, Pensions Managers and HR colleagues are experienced in industrial relations and collective bargaining and strive for excellent working relationships with the workforce and their union representation to achieve the best outcome for all parties.
Key take-away: With a consultation, the ultimate decision-making power remains with the employer. This is different to collective bargaining where agreement between the employer and the trade union is needed in order to make changes covered by the collective bargaining terms. Nevertheless, it’s unhelpful to see one party as being completely right and the other as being completely wrong.
Compromise without feeling compromised
Understanding the psychology, process and behaviours of the negotiating process will have long-reaching benefits for workers and management alike. It will bring the negotiation to a successful conclusion, avoid issues which can escalate into costly industrial action and work towards building a long term relationship and unity.
Identify your negotiation strengths and weaknesses. Know what you want, know what you don’t want and remember it’s a package. Look for the good in people. Actively listen to what people say, without judging them.
Key take-away: Use the right language
| Do | Don’t |
| Ask questions | Talk too much |
| Listen | Interrupt |
| Summarise | Dilute arguments |
| Build on common ground | Point score |
| Emphasise agreement | Emphasise disagreement |
| Build on their ideas | Make numerous counter-proposals |
| Describe your views | Use antagonistic language |
| Be concise | Be long-winded |
| Use clear, simple language | Use long words/jargon |
| Be firm | Be aggressive |
Believe in yourself
The best pension decision-makers are those who understand the dynamics and challenges of all stakeholders, have a clear view of where they are going and can articulate in the debate. Even better when the scheme has a professional trustee who also understands first-hand the rules of engagement required to get the best outcomes.
Key take-away: Believe in yourself and the end goal
Speak to us about how your business can work with Stuart and the team at 20-20 Trustees.
More to follow in 2021:
- Managing advisers
- Operations
- Working with the Pensions Manager