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The Rail Dispute - Rail Company Consortium Representitive
The Rail Dispute - Rail Company Consortium Representitive
Introduction
A consortium is an organised group of employer organisations who join together to maintain, and
advance the financial and collective interests of their members – the railway companies. Consortia,
like The Railway Consortium, lobbies the Government for legislation and policies favourable to
railway companies, promotes the railway companies to the public, and negotiates with trade unions.
A trade union is an organised group of employees who join together to maintain, and improve, the
pay and working conditions of their employment. Historically Trade Unions are organised around
“trades” (e.g. dockworkers, textile factory workers, warehouse workers, railway workers, teachers,
etc). Trade Unions have an organisational structure, usually with a General Secretary at the top,
supported by a team of professionals and volunteers who may be either appointed or elected to
their positions by the workers who constitute its membership.
This negotiation simulation regards the pay and conditions of railway workers, negotiated between
the union’s General Secretary and you, the lead negotiator working on behalf of a consortium of
railway companies.
Your role
You are the lead negotiator for The Railway Consortium. Your membership are the employers who
operate and run Britain railways. The membership of the consortium includes London and Northern
Railways, Westcoast Lines, Southern Eastern Railways, Themies Link, and Southurn Railways. In total
you represent 15 rail companies, that employ 189,000 workers. 81,200 of those workers are
members of the Rail Union. This represents 42% of all railway workers (less than half, but well above
the 23% of workers who are in a union across the UK as a whole).
As the lead negotiator for The Railway Consortium, you are responsible for implementing the rail
companies’ policies and advancing their interests. In this simulation, you are to negotiate with The
Rail Union over proposed changes to the pay and working conditions of railway workers’
employment.
The rail companies cannot continue the way they did before the pandemic. We need to reduce the
amount of money we spend on staff, and automate as many systems and processes as possible.
As part of these reforms, we are looking to cut back on the number of staff we are employing, as
well as make much-needed savings in our massive wage bill. We also need our staff to become more
flexible to deliver for our customers and the secure the rail industry for the future. We will have to
impose new, less generous, contracts on the railway workers.
The trade union, The Rail Union, have reacted badly, and is now in dispute with the rail companies.
So far the rail companies have not responded to the demands of the trade union. The unions have
now called for industrial action
“Industrial action” can include “working to contract” (sometimes called “action short of strike”) –
which is when staff refuses to work any overtime or carry out tasks that are beyond those outlined
in workers’ employment contracts. It can also include “strike action”. Strike action involves a large
group of workers refusing to work. By refusing to work, workers seek to disrupt the business
operations of their employer (i.e. your membership), causing the rail companies financial and
reputational harm. However, the employer, in turn, does not pay the workers for the time they are
striking – causing financial harm and risk to the workers.
The threat of strikes means that this dispute has reached a crisis point, and the Government has
become unhappy. The rail companies need to urgently negotiate with the Rail Union to settle the
dispute before it turns into a strike. If you cannot settle the dispute, and a strike is called, then the
Government is threatening to either fine or revoke rail licenses for the rail companies. You cannot let
the union call a strike!
The railway companies which form the Consortium have authored you to enter into negotiations on
their behalf regarding renegotiating the working conditions and pay of the railway workers with the
General Secretary of The Rail Union. If these negotiations end as a strike, then the government will
impose large fines on your membership, and potentially lose their licenses to operate trains.
Issues to negotiate:
1. Number of redundancies
One of the most important issues for the rail companies is to try and reduce wage costs by reducing
the number of workers.
The rail companies want to reduce the number of workers by 12%, through a combination of
compulsory redundancies, voluntary redundancies, and staff attrition. This would represent a loss of
22,000 workers on the railway, saving the rail companies £800million per year. This is a high priority
for the rail companies because it will save so much money.
However, the Government also wants to reduce road traffic and increase rail traffic to combat
climate change, and this may actually mean there is a need for more staff on the railways in the
coming years to handle increased passenger and freight traffic, not less.
Furthermore, the public is unhappy about fewer rail staff working on the railways. Reducing staff
means fewer guards on trains, fewer catering staff, cuts to cleaning, and the closure of almost all
ticket offices. The public is not happy about this.
Redundancies Points
12% reduction +200
10% reduction +100
8% reduction +50
5% reduction +25
0% No change -25
+5% increase in staff levels -50
+10% increase in staff levels -100
2. Nature of redundancies
If you managed to get the trade union to accept that there would be a reduction in the number of
staff (above), then you will need to negotiate how those redundancies will take place.
As briefly noted above, there are three ways an organisation can reduce the number of staff. These
are through:
The Scottish and Welsh Governments have both guaranteed that there will be no compulsory
redundancies and have protected staffing levels. If the UK Government were to let rail companies
reduce staff through compulsory redundancies, then it would increase the reputational damage to
both the UK Government and railway companies in the eyes of the public.
However, using compulsory redundancies is the quickest and cheapest way to reduce the number of
staff. As such, while it comes with reputational risk, the rail companies would prefer compulsory
redundancies over voluntary redundancy or staff attrition.
If you accepted redundancies in issue (1) above, then your best-case scenario is to have a reduction
through compulsory redundancies, but other options are available too, and have points attached to
them.
Redundancies Points
Compulsory redundancies +25
Voluntary redundancies +20
Staff attrition +5
3. Pay
The third issue that requires negotiation is pay. Inflation is soaring, currently at 12%; meaning that
workers’ real wage1 has dramatically fallen. The union is asking for a pay rise to compensate for the
rising cost-of-living for its members. However, with Covid-19, the number of rail passangers has
dropped, and the rail companies are now highly reliant on the UK Government for funding to
prevent financial losses. The rail companies argue that they cannot afford to offer more than a 3%
increase – even if this represents a pay cut.
As the representative of the rail companies, you will argue that you understand that a 3% pay cut is
below inflation, and therefore a real-term pay cut, but simply put, the rail companies cannot afford
to pay any more.
If you are to offer more than the 3% pay offer, then it must be linked to more job cuts or other
changes in conditions (see other negotiation points).
1
Real wage refers to a person’s wages adjusted for inflation. Imagine you are paid £10,000 in 2022. In 2023
there was 10% inflation, and your salary remained the same. This means that while your income remained at
£10,000 in 2023, the value of that your wage has reduced by 10% because the costs of goods and services have
increased, so you can buy fewer things with that £10,000 in 2023 than you could in 2022.
4. Conditions
The rail companies are looking to change other aspects of railway workers’ working conditions:
On Call premium.
Some staff are ‘on call’ during the night, meaning that they can be called into work with 1 hours’
notice to address urgent business or emergencies. This is usually done by station staff and train
yards staff. At the moment, workers who are ‘on call’ are entitled to a £50 ‘on-call’ fee, and a further
£100 if they are called out to the station or the train yards during the night. The rail companies are
trying to change this to a flat fee of between £50-£79, regardless if the workers are called out during
the night, or not. This will save the rail companies money on call out fees.
Terms Points
Keep Sunday rest day voluntary -10
Voluntary Sunday Rest day working is removed +10