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Joint Ventures

The President: I now call on Motion 42, Joint Ventures. The General Council supports this motion.

Andrew Case (The Union for Woolwich Staff), moved motion 42:

He said: At the risk of boring some delegates, I thought it would be useful to start by actually describing what a ‘joint venture’ is and, indeed, what it is not. Put briefly, a joint venture is a decision by two separate companies to join forces to create a new company, jointly owned, which becomes the joint venture. The joint venture is a company in its own right and the two companies which create it continue to retain their separate identities.

It is a substitute for organic growth whereby two companies together create something which neither of them could afford to create alone. A joint venture is not an old-fashioned takeover or merger. We are not asking Congress to oppose the principle of joint ventures. Indeed, we recognise that they contain the potential for job creation. We do, however, believe that this relatively new development needs to be researched and guidance provided by the TUC to help any union involved in the creation of a joint venture.

Joint ventures appear to be the next big thing. As such, all unions should be aware of the potential problems which they pose, not least the threat to existing union recognition rights.

In the joint venture which we were involved in, a large number of staff were TUPE-transferred from the Woolwich, where we have an agreement, to a newly created joint venture company, where we did not. It took some time to achieve recognition for a group of staff who had been members and who had been represented by us for some years. We did get recognition. If we had not achieved recognition, we could have balloted and probably we would have won. We were lucky, however, in having a strong membership in the new joint venture company from day one. Other people may not be so fortunate. Why should unions have to re-negotiate an agreement for groups of existing members caught up in the joint venture?

Having achieved recognition we built up a relationship with the new company. It has not, however, been without its difficulties. I think it would be useful to touch on some of those difficulties, and I am sure that we will not be the last to encounter them.

With a joint venture comes restructuring and re-engineering of work processes, with all the disruption and uncertainties that this causes. Following on from this is a very real threat of redundancy or redeployment as the changes are made and as they start to hit home.

There are also problems specific to joint ventures, not the least of which is that the left-hand not knowing what the right-hand is doing. Who is actually in-charge? You would think that that would be an issue which would be sorted out early on in discussions between the two companies, but this appears not always to be the case. This can cause immense difficulties for a union in trying to consult with and trying to obtain information from the new company.

There is the issue of dealing with a new set of managers, in our case Americans, with no previous experience of dealing with a union and a unionised workforce. Again, that involved a whole group of issues which we have not had to deal with before.

The final problem which we incurred, which we did not encounter, is that of there being more than one union involved in the joint venture. It is perfectly conceivable that staff in two separate companies with two separate unions could find themselves together in the same joint venture company. Again, this could cause immense problems for the unions concerned, with the result that members suffer.

Congress, I am pleased that the General Council is supporting this motion and I look forward to the production of some well-researched, best practice guidelines to help any union involved in the creation of a joint venture. Please support.

Steve McKenna (Manufacturing Science Finance) seconding the motion, said: Joint ventures are a fact of today's commercial scene. Post Office employees have recognised that the prosperity and success of that business is dependent on effective joint ventures. Motion 45 specifically mentions joint ventures regarding the future of the Post Office. There are already more than nine joint ventures in the Post Office and more will follow.

In terms of recognition rights, statutory UK regulations will still apply. However, due to the inevitable confusion stemming from joint ventures such as the Woolwich and New Global Home Loans, a US company, recognition may be slowed and employee relations’ responsibility fudged. A further potential problem which could arise after the above issues have been addressed is the remoteness of the employer/employee relations responsibility from the workforce, as with the Woolwich staff members who have been transferred under the US company's responsibility.

A best practice guideline is needed so that these problems can be accounted for and overcome in good time before they impact on employee relations or give employers the opportunity to negate their responsibilities.

For MSF there have been no such joint ventures in the finance sector as yet, but there have already been examples where these problems have come into play with our members who work offshore in the oil and gas industry. So we are aware of the problems that can arise.

Companies enter into joint ventures, as this motion notes, to grow and increase profits. This should be to the benefit of our members who are integral to a company's future. A best practice guideline is one way in which we can ensure that this tendency serves to benefit our members and not hinder the rights that we, as trade unionists, expect.

* Motion 42 was CARRIED

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