Rail Dispute : Who’s in Charge?

Peter Whitelegg

The revised offer (19/1/23) lauded by much of the media is nothing more than a charter for the complete dismemberment of anything approaching decent employment conditions. With no pay rise in many cases for 4 years, and inflation running above 10%, the current offer of 5% for the current year and 4% for 2023 goes nowhere near addressing the devaluation of earnings over the past 4 years. But as the leadership of the RMT has said on numerous occasions this is not solely about money. 

I have covered the details of the changes required by the government in a previous article. The current offer does not materially change any of the demands made by the government.

The RDG will now require all staff to have “flexible” working contracts combined with no “home” station. This will inevitably enable the employer to turn every employee into casual labour but with a permanent (of sorts) contract. One week you will be working 20hrs in one location the next 46 hours in a completely different location. 

New annual leave and sick entitlements will be imposed, it is clear these will not be an improvement on the current terms. All booking offices to be closed and the staff “repurposed”. This will inevitably lead to the removal of many services and products the traveling public require. It is clear the RDG want to significantly reduce the working conditions for rail workers.

A core claim by the RDG is that the concessions in working conditions is essential to an improved rail service. As far as I recall that’s always been the claim by the privatised rail companies during industrial disputes. It’s the existence of archaic working conditions that are standing in the way of a better rail service, according to them. If the unions concede on conditions, it will lead to an improved service. But the long-promised improvements never arrive. It has proved to be a false equation. 

Prior to covid the franchise model was essentially collapsing. The Tocs (Train Operating Companies) were finding it increasingly difficult to make any money. Much of the rail network had reached full capacity together with a chronic lack of investment over many years. Under the franchising model companies bid for the right to run rail services on certain routes.  Provided they maintained payments to the treasury and operated within the specifications of the franchise arrangements, Rail companies were free to negotiate and settle with the unions.  

What is generally not understood within this arrangement is the rail infrastructure has, for the most part, been retained by the state. Ownership of the core rail infrastructure has not changed ownership even under the franchise model. Essentially it has been a rentier model. This is the case more so now under the new management contracts.

Post covid all Tocs were placed on management contracts. No bidding process. The current crop of operators, regardless of their performance, were simply rewarded with new contracts. All Tocs are now run on a management fee basis. This means the rail companies take none of the revenue risk. The risk is now taken by the tax payer. If there is a fall in passenger numbers for whatever reason, the rail companies will still receive the contracted fees, but any revenue short fall will ultimately be met by you and me, the tax payer. A licence to print money. 

Over the duration of the current rail industrial action, there has been considerable discussion on who, ultimately, the rail unions are negotiating with. Who has the final say on any settlement and who sets the framework within which talks take place.

Mick Lynch, General Secretary of the RMT (Rail, Maritime and Transport Union) has stated on numerous occasions it is the government, in particular, the Secretary of State for Transport, who is responsible as the contract holder for deciding the terms of any resolution. 

Both the current and previous Secretary of State for Transport have asserted that it is for the employers to negotiate any settlement to the dispute. Mark Harper, the current SoS has said “On the specifics about detail, detailed negotiations are taking place between employers and trade unions. It is not the Government’s role to micromanage the detail of the reform”.

The Department for Transport has also stated that:

“It’s extremely misleading to suggest the Transport Secretary should get involved in these negotiations.”

The trade unions are not saying the government should get involved in the dispute, they are insisting they are already involved, deeply involved. 

The rail companies have a duty to inform the SoS, within 3 weeks of any communication, written or verbal, from a trade union concerning any “In-Scope” matters. In -Scope matters include pretty much everything that a union might want to negotiate on: 

(a) pay negotiation strategies; 

(b) changes to any remuneration strategy, pension arrangements or staff benefits; 

(c) any proposed restructuring or redundancy plans; 

(d) any proposed changes affecting Business Employees…which either Party reasonable believes is likely to give rise to material industrial relations risks (including a risk of Industrial Action). 

(e) any proposed variations to terms and conditions of employment of any Business Employee… ……. 

(h) any negotiation or consultation strategies regarding any of the matters at (a) to (g) above.

If the rail operator fails to fulfil their obligations within the mandate, then any cost will be borne by the rail operator rather than the DfT. 

Michael Ford QC comments: 

“The broad intention and practical effect of this is to prevent any discussions or negotiations with unions about any changes to workers’ pay, pension, benefits or terms and conditions, or about any proposed redundancies or termination benefits, unless and until a “Mandate” has been agreed with the SoS. Once the Mandate in relation to those matters is agreed with the SoS, the Operator must act in accordance with it.”

Clearly the government, and in particular the Secretary of State, have the final say in any settlement as well as setting the agenda for the rail industry as a whole. The government cannot maintain the position that this is just a simple industrial dispute between the employers and the union. The contracts with the rail companies explicitly state that all decisions concerning the direction the rail industry takes is theirs, that is, the government’s, to take. At the core of this dispute is a political agenda by the current government that seeks to permanently reduce, not just the wages of rail workers, but to drive a coach and horses through their terms and conditions. Only by doing this can the government guarantee the excessive profits of unaccountable rail companies.