Pay and productivity: more dynamite
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from the PIB
THE Prices and Incomes Board report "Productivity Agreements in the Road Haulage Industry" is full of dynamite and it deserves to be taken seriously. As noted last week it poses the challenge to the professional haulier: "Put your operations on as efficient a basis as the best C-licensees are doing, or face the consequences." Childish attempts to ignore or deride the effective criticisms the Board continues to make of the industry—its analysis of BRS maintenance workers' pay will be examined next week—are to be deplored.
The reference to the Board by the Minister of Transport and the Secretary of State for Employment and Productivity included agreements made by 11 Scottish firms with the Scottish Commercial Motormen's Union. Here again, as stressed last week, it was the union that made the running. The 11 firms were approached by the union individually towards the end of 1967 and early in 1968. When it was realized th,at the firms were being asked to conclude a similar agreement the RHA woke up and proposed that negotiations should lake place on a collective basis. Were there no area discussions about productivity before this action was taken? It would be interesting to know if the RHA was advised by the first one or two firms approached, or if, indeed, an informal approach was made to the RHA by the union before any firms were approached. Certainly, a more dynam
ic trade association might have been expected to approach the SCMU before the union started door knocking.
Eventually, a sub-committee of three was appointed on the employers' side to negotiate for the 11 firms. The main elements of the agreement concluded called for a 10 per cent increase on Wages Council minima with an additional 5 per cent for drivers operating within a WO miles radius of base subject to working for five shifts—plus a Saturday morning shift at one depot. Long-distance drivers were to qualify for an additional lOs a week in addition to the 5 per cent and long-distance schedules were to be based on average speeds of 26 mph (for multi-axled vehicles) or 27.5 mph (for two-axled vehicles). Improved subsistence allowances, additional holidays for long service and an ex gratia payment of £6 each for employees of the firms concerned were also negotiated. The agreement provided for both sides to devise negotiating machinery for the regulation and improvement of conditions of employment—scarcely a revolutionary proposal in 1968!
The Board says that the agreement does not appear to have worked satisfactorily in any of the 11 firms—indeed, one of the firms has not been able to operate the new scheduled speeds at all. "Its main drawback lies in its attempt to apply uniform conditions to diverse operations and to diverse companies." This finding is interesting be
cause it will be recalled that in the Midlands virtually the same agreement was concluded between the Transport and General Workers' Union and eight member firms meetmg at the RHA office at Tipton.
The Board rightly points out that a different speed could be expected for a heavy vehicle travelling along Highland roads from light vehicles travelling along motorways. It is really extraordinary that both sides in these negotiations should see nothing abnormal in agreeing the same scheduled speed regardless of location. By the same token, it has always seemed odd to me that winter and summer scheduled speeds are generally identical, as fog ice and snow clearly slow down driving speeds.
Why does the industry continually put itself in the position of being told to suck eggs by the Prices and Incomes Board? Is it not obvious that "the benefit of increased speeds will depend considerably on the extent to which firms are operating scheduled trunk services, regular fixed runs or operating irregularly"? Yet apparently no account was taken of this consideration. And in the negotiation of the agreement the fact that differing rates of wages were already being paid seems to have been ignored in the application of uniform wages rates. "Most of these problems" says the report, "could have been avoided if the agreement could have been modified to suit the requirements of individual firms after a careful analysis of their operations."
The Board notes the desire of both sides in Scotland to negotiate collectively. It seems that negotiations were and still are being carried out amicably without the threat of industrial action. A satisfactory basic agreement may yet emerge from current discussions, we are told.
But management in Scotland must cer tainly pull its socks up. "In Birmingham. Merseyside and in Scotland we found that the drivers themselves did not know what was expected of them by way of cost decreases in return for wage increases. The Scottish employers considered it to be the responsibility of the union to keep their members informed. This points to a serious lack of communication between unions and their members and between managements and their staffs—and indeed in some cases between local union officials and their re gion al office."
The Prices and Incomes Board was at pains to say that the agreements referred to it for consideration could not be considered sensibly without comparison with other agreements negotiated about the same time.
One such agreement commended to the Board by the TGWU was hammered out over a period of four months between the union and a Birmingham area general haulier. This showed, says the report. "that a general haulier can make a satisfactory agreement provided that the management has bargaining skill and the knowledge to enable planning for greater productivity, i.e. decreased costs, to be achieved". In this agreement "both the management and the union took steps to ensure that the drivers clearly understood what it entailed: indeed. the drivers were asked to endorse each stage of the negotiations".
Schedules based on an average speed of 40 mph on motorways and 28 mph on other roads; journey times and pay hours based on these schedules and extra payments made only under special circumstance; complete flexibility as regards work undertaken; and agreement to fit tachographs on all vehicles, are features of this enlightened agreement which has resulted in working hours being reduced and the same work load being carried by fewer drivers and vehicles.
Can anyone seriously argue that such an agreement had to wait until 1968? I suggest that hundreds of such agreements could have been in operation in Britain in the last five years, with great benefit to both sides, and to the country.
A number of C-licence productivity agreements were examined and the Board makes the predictable and I would think well justified comment "although these operators have greater control than the general purpose haulier, we feel that some of the lessons learned in this sector can be applied more widely. In general, the C-licence operators we have examined are large firms with a record of good management; they show that road haulage operations are susceptible to modern methods of method study and work measurement."
The Co-operative Wholesale Society, for example, has been particularly successful in applying work study techniques to transport activities. (How fortunate is the RTITB; its north west regional manager, Harry Floyd, must be well aware of these CWS activities!) The CWS obtained union agreement to introduce work study in the Newcastle upon Tyne area and union and employees were consulted at every stage of an intensive study. "As a result, the operations are now carried out more effectively and in much less time than before. It has been the intention to apply the same sort of studies in the other CWS depots in turn as it was appreciated that different standards would require to be set taking local circumstances into account. Early indications from similar studies that have been started in the Manchester area, however, have shown that the standards established are unlikely to differ much from those established in Newcastle; certainly it is espected that studies can be carried out in a shorter time following the earlier experience. The scheme has proved so acceptable to the unions and to the employees that the society is now under considerable pressure to extend it rapidly to the other depots. (My italics.) Of the BRS agreement which provides increases of around £1 a week for drivers in return for flexibility of duties, a review of local arrangements and practices and acceptance of schedules determined at local level based on 40 mph running, the report says it is similar to many others in that it allows for 40 mph running without agreeing the details—which are left to local negotiation. It differs from many others in that 40 mph, schedules carry a special bonus paid only for work done at the higher speed. The sum agreed nationally for 40 mph running was ls per hour (Is 6d for overtime hours) which means that in a week of five 10-hour days a driver can earn up to 55s extra, depending on the number of hours at which he is scheduled at 40 mph. The PIB says that this is a simple and effective way of ensuring that payment for increased productivity is made only as productivity increases or as changes in working practices occur. There have been initial difficulties in negotiating schedules at local level but the Board understands that satisfactory progress in the introduction of 40 mph scheduling locally is now expected.
It is perhaps worth noting that the BRS 40 mph bonus is not paid to othet staff. The PIB does not comment on this but it does not require much imagination to see that the organization of faster scheduling imposes considerable extra burdens on traffic office staff. If the payment of the bonus is not to be a slap-happy business a good deal of precision will be necessary. There is a case, in my view, for associating traffic staff and indeed management grades generally in these higher productivity arrangements. There are already many drivers—notably in some. of the petroleum distribution firms—whose earnings are higher than many transport managers. This is merely a plea, in passing, for more realistic salary levels for the people in road haulage whose work is complementary to the drivers' and is, in many respects, much more responsible and arduous.
Two other points made by the PIB road haulage team deserve to be kept in the forefront. The question of demurrage is again looked at and it seems the investigators consulted a number of transport users. They were told—and road hauliers should note this carefully—"that on occasion it may well be more economical in the conduct of business deliberately to incur demurrage charges rather than to interrupt other schedules in order to deal rapidly with a contractor's vehicle". Therefore there is an acceptance on the part of the user, that reasonable demurrage charges are justified; at the same time we have detected a general reluctance on the part of the haulier to attempt to levy such charges, certainly unless a warning has been given. (Author's italics.) The Board says that this is clearly a matter for good commercial negotiation. When negotiating contracts both sides should agree on a reasonable time during which a vehicle may be kept at the premises of the consignor or consignee, after which demurrage rates would be levied. That piece of advice is well worth the 4s charged for Report No. 94!
The second point goes some way to echo my feeling that the financial rewards of productivity benefits should not be confined purely to drivers. How true is the PIB's comment about the inadequate briefing of drivers! "Some managers do not concern themselves with the selection of the best route from place to place having regard to roads and traffic conditions and to give proper directions to the driver in finding destinations in what may well be a strange location". It suggests that customers would often be willing to provide local information and road directions on the best approach to their premises. To organize all this, traffic staffs at home base and possibly at the customers' end, will have some extra chores.
The same considerations apply with drivers seeking return loads. Says the Board: "It is much cheaper to employ some office time in assessing a task and in the proper briefing of the driver than to send out an expensive vehicle with rudimentary or nebulous directions. Another obvious management point that is sometimes overlooked is the proper co-ordination of vehicle loading with journey scheduling, so that the goods to be unloaded first will be the last to be loaded."
These general points are of course quite valid, but there are only 24 hours in a day, even of permanent summer time. Most transport managers and traffic office staffs are quite busy enough already. What work do they throw overboard to undertake the many additional challenging tasks suggested by the PIB?