Will Scotland be a fair work nation by 2025? An expert explains why he's doubtful

What is "fair work"?

Fair work is a considerable expansion on from what existed before. Previous governments – both the Labour-Liberal coalitions from 1999-2007 and the first SNP administration from 2007-11 – signed Memorandums of Understanding with the Scottish Trades Union Congress (STUC). These non-statutory memorandums were attempts to treat the union movement as a social partner in line with the relationship also established with the third sector of voluntary organisations.

However, under Nicola Sturgeon as the new First Minister, the SNP Scottish Government established the Fair Work Convention in 2015 after the Working Together Review of 2014 recommended taking such a step. The first output from the convention was the Fair Work Framework in 2016. It was developed after consulting with a wide range of organisations, including unions and the STUC.

The convention and its framework aim to go much further than the memorandums by not merely providing guidance for how the relationship of the union movement and Scottish Government is framed, but also how private sector and other public-sector employers should treat their workforces.

The Fair Work Framework states its vision is that “by 2025, people in Scotland will have a world-leading working life where fair work drives success, wellbeing and prosperity for individuals, businesses, organisations and society”, with fair work being defined as that which “offers effective voice, opportunity, security, fulfilment and respect; that balances the rights and responsibilities of employers and workers, and that can generate benefits for individuals, organisations and society”.

So, the framework is strong on aspiration. It is, however, weak on the means of delivering these aspirations because there is no statutory underpinning to it.

This means the levers of state power and compulsion (legislative, regulatory orders, financial penalties) are not being used. Consequently, it is essentially a voluntary system where employers are carefully cajoled into signing up to fair work and not coerced into it even though the convention recorded that many it consulted urged such measures. In other words, there a wide and yawning gap between rhetoric and reality.

READ MORE: Scottish Government ‘confident’ fair work is embedded in new Fringe funding

The Scottish Government and the convention dismissed such pleas because the basis of fair work is a voluntarily induced “mutual gains” or partnership agenda – which they believe will lead employers to adopt “best practice”, because this will provide them with competitive advantage. But an equally credible route to profitability is the race to the bottom in terms of competing on low wages.

All this puts into focus the subsequent developments embodied in the creation of the Fair Work First initiative from 2018. The Scottish Government said it would “adopt a new default position [whereby] … we will extend fair work criteria to as many funding streams and business support grants as we can. We will also extend the range of Scottish Government and public-sector contracts that fair work criteria will apply to”.

But Fair Work First merely asks employers to commit to adopting appropriate channels for effective voice, such as union recognition, no inappropriate use of zero-hours contracts and paying the real living wage. It does not compel or coerce and so remains guidance only. Despite further revisions in October 2021 and May this year, Fair Work First still does not make the adoption of fair work mandatory by those awarding public awards or contracts and those receiving them.

Before looking at what impact these weak measures have had, let’s look at what the Scottish Government itself says of the progress made. In March 2021, it believed “we have made good progress on a number of fronts”, but this related to establishing the processes for fair work and not the outcomes. The one exception may concern the real living wage. Paying it is a key part of the Scottish Business Pledge.

It began in 2016, but while the number of employers that have signed the pledge rose from 184 initially to 711 in early 2020, this only accounted for 127,225 workers or just 5.1% of the workforce in Scotland. Data collection on pledge signers was suspended during the pandemic and has not been restarted. In any case, the number of pledge signers is unlikely to have progressed much during the pandemic.

The only example of a Fair Work Agreement in existence is to be found within the civil service of the Scottish Government with the Public and Commercial Services Union (PCS), Prison Officers’ Association (POA), FDA and Prospect unions. It was signed in November 2018. The Scottish Government has not sought to replicate this in its other areas under its control.

In December 2020, the Fair Work Convention published its own report on the progress made since 2016. It took a critical line: “Greater commitment by government, employers and trade unions to implementing and progressing fair work [is needed] if Scotland is to achieve its ambition of being a Fair Work Nation by 2025.”

The Chartered Institute of Personnel and Development’s Working Lives Scotland 2022 survey did not show any great improvement across the measures of effective voice, opportunity, security, fulfilment and respect.

How the unions feel 

We now turn to the unions’ experience of fair work. It is one of deep disappointment. The expectation was that, in the public sector – which is funded by the Scottish Government – and the private sector – where public funding is significant (such as public construction or green energy projects) – fair work would bring about important changes.

Yet disputes and industrial action were common in the likes of councils, health authorities, government bodies (such as the Scottish Qualifications Authority) and public transport, suggesting that fair work has not changed the way these employers look upon the issues of voice and respect.

Where employers have retreated and compromised, this has not been due to the influence of fair work but rather unions mobilising their members, often though industrial action.

The STUC was one of the prime drivers for the creation of fair work. It remains one of its sharpest critics even though unions are well represented on the board of the convention and the convention advocates for voice through unions and collective bargaining. Highlighting the lack of enforcement, union density in Scotland has fallen from 29.3% in 2016 to 28.4% in 2021 and in Strathclyde the extent of workers covered by collective bargaining has dropped from 36% in 2016 to 33% in 2021.

The train problem

ScotRail has become emblematic of the failure of fair work to be driven forward by the Scottish Government. The Abellio franchise ended, and the state company, Scottish Railways Holdings, took over on April 1 this year. This was an opportunity to create worker directors on the board of the new company, so that voice and respect became embedded at the highest level.

The Scottish Government chose not to do this and instead appointed senior managers to the company – who then made it clear industrial relations would be no different from those Abellio engaged in. It was no surprise, therefore, that ScotRail’s Aslef union train drivers stopped working voluntary overtime when they were offered a mere 2% pay rise for 2022. Meanwhile, there are nine ScotRail managers earning in excess of £100,00 per year.

These are all disappointing outcomes, but they should not come as any great shock. While it is true that the current devolution settlement retains employment law as a reserved matter to Westminster, this does not go very far in explaining the actions of SNP Scottish governments. Rather than being about legislative inability, the more convincing explanation is to be found in political unwillingness.

"Soft regulation"

The political worldview of the SNP Government is a social liberal one, where it believes the economy in Scotland needs to be more efficient and productive in order to generate more employment, profits and private wealth, and tax revenue to pay for its limited social programme.

This means it does not want to coerce employers in any way, not just for fear of disinvestment, but because it needs their co-operation to make the economy more profitable. Rather, it coaxes employers to act in certain ways by appealing to their self-interest.

This amounts to what is known as “soft regulation”. The SNP Government also favours unions, but only so long as they work in partnership with employers to raise productivity and, thus, profitability. This shows the SNP are not, contrary to their claim, social democratic because they do not seek to use the state to alter the existing distribution of wealth and power.

All this means that Scotland will not become a fair work nation by 2025. The only way for that to happen requires giving fair work a statutory underpinning, called “hard regulation”, so that it become mandatory and enforceable. That in itself necessitates a social democratic approach. It would start with using the public sector and public procurement to alter the nature of employment relations and the balance of power within them.

Professor Gregor Gall is Visiting Professor of Industrial Relations at the University of Leeds.