Flexibility and collaboration the key to future employee relations

As small and medium size businesses provide the driving force behind economic growth, a more collaborative style of relations between owner managers and unions is required. A new alliance between the Federation of Small Business and the General Federation of Trade Unions may provide just that.

While the papers were bemoaning the job losses at Vauxhall, few people outside the East Midlands will have been aware of the loss of 1,200 jobs at textiles giant Coats Viyella.

The Coats Viyella factory closures are just the latest catastrophe to hit the UK's textile industry. Nearly 70,00 jobs in companies of all sizes have been lost over the last two years as high street retailers have started sourcing clothes from manufacturers in the developing world, or put the squeeze on prices from their UK suppliers.

Difficult times call for innovative tactics. In the textile sector, niche marketing has been the key to survival. In the economy in general, the decline in manufacturing has been matched by the growth in the services and high tech sectors, as the UK moves towards a post-industrial future.

But management techniques, particularly in the small business sector, remain stuck in the past. Many owner managers regard unions - and legislation designed to improve working conditions - with suspicion. The result is, believes Richard Beresford, manager of the Enterprise Centre at Oxford Brookes University Business School, that employee relations and the overall performance of the business have suffered.

Although the case for improving worker/ management relations has been proved at the level of the large corporation, Beresford feels there is a grea deal of work to be done to bring small businesses and the specialised trade unions together.

He has therefore enlisted the help of the Federation of Small Business and the General Federation of Trade Unions. With funding from the DTI Partnership Fund, the two groups will initially explore how to deal with the problems facing small textile firms.

The project will focus on five key issues currently facing the sector. The first will be work/life balance and will include the organisation of a joint seminar in March 2001. Other topics for discussion will be the legal and regulatory environment; health and safety; education and training; collaborative marketing ventures and strategies for business growth. The project will last one year and lead to the dissemination of research findings to stakeholders in the sector.

But that's just the beginning. With a combined membership of 450,000, the Federations hope best practice will be trickle down to affiliated business associations and trade unions. The GFTU also intends to draw up a best practice guide manual for other industries.

We are trying to develop a new model of employee relations for SMEs in a struggling industry, says Beresford. If we can find a successful approach in the textile industry, perhaps it can work in other areas, for instance in high tech industries.

Management groups have welcomed the plan. We support the collaborative approach to help small businesses because they don't have the resources to compete with large corporates, said Petra Cooke, Head of Policy at the Institute of Management. And Patrick Burns, Policy Director a the Industrial Society, said the move represents a new dimension in the trend towards partnership.

Burns added that small business owners should not be worried by the plan, despite the fact that the GFTU makes no secret of their intention to recruit more members. Employers shouldn't be worried, because unions can work cooperatively with business, says Burns. In fact, GFTU members may be worried about whether this compromises the traditional role of their organisation. This is a brave step for both sides.

Beresford points out that higher union membership is no problem if the two sides are working together. The process will help unions recognise the needs of small businesses. Besides, the trade union movement is very different from 15 years ago. So this is an opportunity to raise awareness. And if that happens, the lobbying potential of the GFTU and FSB together is huge.

Beresford says that not only will the alliance with the unions allow staff to go on management training courses - and gain a greater awareness of the macroeconomic issues affecting their companies - but it could also provide real savings for employers. An obvious area would be in health and safety where unions could carry out inspections at a much lower cost than a consultant.

Meanwhile, the FSB says the first thing will be to look at ways to help staff and employers in ailing textile firms to save their jobs. This may involve the formation of workers cooperatives to buy out management or helping staff become self-employed. Either way, this shows that you don't have to legislate to get people working in partnership, says David Hands of the FSB.