The recent rise in industrial action is more about psychological contracts than physical ones.

Employment contracts are formal, written documents that outline the legal relationship between the employer and the employed. By its very nature the employment contract, as far as the employee is concerned, is very much ‘take it or leave it’. Some negotiation may be possible, but only around the fringes for the majority of people.

The psychological contract, on the other hand, describes the real relationship between employer and employee - and it's essentially a set of mutual offers and expectations. The employer will offer (for example) pay, training, and a good working environment; in return, it will expect certain outputs: reliability, flexibility and so on. The employee will also have offers and expectations. The offers could be skills, time, commitment; the expectations pay, security, fairness.

The psychological contract is rarely explicitly discussed. But it's a powerful motivating force behind our behaviour at work. And it's most clearly evident when the psychological contract has been breached in some way.

As such, it's also a major reason for the recent rise in industrial action (both actual and threatened). The recession has meant that many organisations have been forced into re-thinking the way they achieve their goals. This has obviously led to reductions in headcount, and new ways of working. When people say ‘This is no longer the same organisation that I joined,’ it displays a rupturing of this psychological contract. This means that the psychological contract between employer and employee needs to be recalibrated.  

People can, and do, adjust. And new contracts - both physical and psychological - can be put into place. But it takes time. And when employees feel the change is too great, or that it's not what they signed up to, conflict will result.

This is not to take sides in any dispute. However, we have to recognise that this unseen emotional component casts a very powerful influence over the industrial relations problems we are now seeing.  These disputes will be resolved. But if one side feels defeated, a true reconciliation will be a long time coming - with resentment being the biggest issue to be dealt with.


Professor Binna Kandola OBE is Senior Partner at Pearn Kandola LLP www.pearnkandola.com