What the ‘dine-and-dash’ scandal tells us about industrial relations in 2019

As the UK’s labour market evolves, the rules of industrial and employee relations are being rewritten. HR and ER leaders need to be aware of the shifts in traditional collective relationships – and the move towards more fluid, advocacy-based protest.

Last month, Mexican restaurant chain Wahaca was driven to reassess a business practice overnight.

In one of its London outlets, as per company policy, a waiter was asked to contribute towards the bill of the customers he’d been serving when they left without paying. A former Labour leader of Camden Council was dining nearby, and took to social media to denounce the practice. By the following day, the company had changed the unpopular policy.

It’s the latest in a series of incidents in which companies have been forced to tackle an industrial relations issue at high speed, in an incredibly public arena.

Seeking improvements in working conditions has traditionally been the role of unions – their power anchored in organised, collective action. But their role is under challenge from a downward trend in membership, constraints on industrial actions and a more fragmented labour market. The gig economy has created a different type of worker with different employment challenges, and social media is providing a new, populist platform for calls to collective action.

Taken together, these trends have important implications for HR and ER leaders looking to meet the needs of their employees, and minimise the likelihood and impact of an ER scandal.

How the UK labour market has changed

Over the last 25 years, the British labour market has become increasingly fragmented.

Pressures on British industry have grown, outsourcing has increased, and employment patterns have changed. A recent study estimated that 2.8 million people had, at some point in the previous 12 months, been employed in the UK’s gig economy – commonly defined as “a labour market characterised by the prevalence of short-term contracts or freelance work, as opposed to permanent jobs”. The majority of these workers are young, with 56% aged between 18 and 34.

Whether you see the gig economy as empowering its participants with more flexible working opportunities, or exploiting them with very little workplace protection, one thing is clear: it presents a challenge to traditional models of collective action.

Trade unions are fighting for members

Where the UK’s labour market has evolved, traditional trade unions have had to fight to maintain their position. Union membership is lower among younger workers – in 2018, only 4.4% of union members were aged 16 to 24 – and those with shorter stints of employment, both hallmark the gig economy workforce.

This mismatch compounds a long-term decline in overall union membership, which has been particularly marked among manual workers and those in the private sector. Of all employees:

• 50% were union members in 1980
• 30% were union members in 2000
• 27% were union members in 2010
• 23% were union members in 2018

And in recent years unions have also faced legislative constraints on their ability to take industrial action, particularly around balloting.

The new age of industrial relations

As unions manage the effects of declining membership, industrial relations conversations are moving to a less predictable, less structured space.

From smartphones to social media, the technologies that have helped enable the gig economy are now providing a new and powerful medium through which its fragmented workforces can make their voices heard.

Spontaneous strike action taken by UberEats couriers in autumn 2018 provided a collective voice for employees dissatisfied with changes to the company’s remuneration policies and feeling like their objections were being ignored. These gig economy workers took advantage of WhatsApp groups to rapidly co-ordinate strikes in several cities.

Later they would occupy the lobby of Uber’s London offices, and even target its supplier relationships, engaging workers at Wetherspoons, TGI Friday’s and McDonald’s in joint action.

As such cases demonstrate, UK workers increasingly have the tools to:

• Rapidly organise collective action outside traditional union structures
• Contact and engage other groups with aligned interests
• Gain the attention of a connected society that’s quick to react to and vocalise their concerns about practices they perceive as unjust.

The key questions for HR and ER leaders

In this new era of industrial and employee relations, HR and ER leaders need to ask themselves a number of questions about their organisation’s approach to IR issues:

• How are we getting feedback from our workforce?
• Do we have formal union relationships?
• Are they being leveraged effectively? Are there any gaps?
• What additional feedback processes do we need to put in place?
• Are our policies transparent and accessible?
• Would we be able to respond rapidly to an IR issues that went viral on social media?

A time for reflection, analysis and transformation

It’s clear that the industrial relations rulebook is being rewritten. Employers in all industries need to carefully consider their response – or risk falling out of step with both their workers and public opinion.