While the press is full of talk about contagion from Europe and on the back of a huge economic crisis, it might seem a bad time to be looking at a pay rise in a company which makes steel components for the building industry. But despite the carnage in the public sector, under the surface the cyclical nature of the capitalist economy means that economic activity is still going on, even though the market is very competitive as the employers slug it out to get a slice of the pie.

Workers at the Dalton site in North Yorkshire, as reported last March, were facing a wave of redundancies and pay cuts. After a lengthy battle that began in June 2009, the dispute was finally settled as reported on Socialist.net  on the 10^th May 2010. This article explains how the GMB managed to win a pay rise this year. The situation at Severs also demonstrates the fact that companies producing capital goods – Severs makes steel structures for buildings such as the Emirates Stadium in London - face a market which is fiercely competitive and the company clearly wants to avoid a position where the workers shut the factory down for the sake of a couple of per cent pay rise. In a situation like that good trade union organisation and effective leadership can make a huge difference.

This year, at around the time of last years’ settlement, the union began talks with management over pay and conditions. The workers demands were not excessive, but amongst a demand for more flexibility on holidays, went the demand for a substantial pay rise.

However, prior to the commencement of talks, the C.E.O, announced to the Yorkshire Post, that a wage freeze was to be implemented across the group. This, naturally, angered workers at the site and the union issued a notice to management that they were in dispute on the grounds that the company had broken the recognition agreement by not consulting with them prior to the press release.

When talks began, in April, the management team went immediately on the defensive, claiming that the statement had, in fact, been a misquote and that only staff wages were to be affected by the freeze. The union put forward their demands which were for:-

• A substantial pay-rise
• More flexible holidays
• A company sickness scheme
• Paid leave for appointments

Another meeting was arranged, where these matters were to be discussed.

The start of the second meeting did not bode well, since the union was told that the company did not wish to talk about a pay rise, but would consider negotiations over the other matters. After lengthy discussions, the meeting broke up with management agreeing to look at proposals put forward by the union on flexible holidays and a possible sickness scheme. Management were also left in no doubt that some agreement on pay was vital for talks to continue.

When details of the talks were relayed to the workforce, anger again broke out, as it was clear that the company’s press release had, in fact, meant exactly what it had said, and that a wage freeze was, indeed, to be implemented. Strike action seemed inevitable.

The next meeting took place, with the rejection of any proposals for a sickness scheme. It emerged that the company did not want to contribute to any type of scheme and, since the union felt that workers could ill afford to fund the scheme entirely by themselves, agreed to drop the demand. Agreement was reached, however, on flexible holidays, but, the company’s offer of a 2.5% rise deferred until January was rejected by the union. No agreement was reached on paid leave for appointments. The workforce's claims, however, were in no way excessive but more representative of the company's profitability over the last 4 years (2010-£15m, 2009-£50m, 2008-£52m, 2007-£43m).

Talks were, however, also due to take place at the Bolton site where the company’s proposals were immediately rejected and a pole for strike action taken, which was unanimous in favour. After talks between union represntatives at both the Bolton and Dalton sites revealed a similar outcome, management at Dalton agreed to further discussion.

These took place on Thursday 14^th July, where management produced a statement from the board and agreed they had to offer something in response to workers demands. “ This “ something “ turned out to be this:-

• A 3.1% increase backdated to the 4^th July ( being the first Monday in July ) and all subsequent rises would be paid from this point in future
• A 5% increase in the annual bonus which, at present, is calculated on £67 per million group profit, now increased to £70 per million group profit ( before tax ) effective from January 2012
• And flexible hols.

Although no agreement could be reached on paid time off for appointments, the union took the decision to take this offer to the workforce who voted to accept by a margin of 79% in favour to 21% against. The union at the site has recently celebrated its’ second birthday and feels justifiably pleased with the results it has achieved during this period, the rejection of the demand for paid time off for appointments is a bit of a disappointment, but remains the starting point for future negotiations as does the demand for sickness payments. Who knows what tomorrow will bring?

The efforts of the workforce to reject any unrealistic offers in the face  of opposition from managers have now come with some reward. More importantly it demonstrates that when the workers realise their collective strength, they become a formidable force and one, which given the right conditions, is better prepared for the future struggles we all will face.