By Claire West

On the eve of Chancellor George Osborne's announcement to slash public spending, international legal practice DLA Piper reveals that 66% of employers believe that industrial disputes are in danger of stifling Britain's economic recovery.

Economics of Employee Relations, a research study of more than 500 senior UK decision makers drawn from DLA Piper's public and private sector client base, highlights the fear that 88% anticipate increased industrial action in the coming months. Within the private sector, two thirds of leaders predict that industrial action by public sector workers will have a detrimental impact on their business. When considering the TUC's call for widespread industrial action by public sector workers, more than a quarter of larger private companies (29%) with annual turnovers in excess of £250m see this action as a significant threat to their business.

Calls to change the law and curb strike action Subsequent to a string of legal actions between employers and trade unions, Labour MP John McDonnell introduced a Private Members' Bill to extend the circumstances when unions are immune from legal action. With the Bill due to receive its second reading on 22 October, only 26% of respondents were in favour of the proposed measures - agreement was 24% for private sector and 33% public. In sharp contrast, Government proposals to change the law and introduce a minimum threshold in strike ballots received a three quarters majority (76%). Reflecting the concern of business leaders, more than half of respondents believe the Government should intervene to prevent strikes in the transport and communications industries - with more support generated from the private sector compared to their public sector counterparts (58% and 37% respectively).

This past year has seen several high profile industrial disputes including the long-running battles at Royal Mail and British Airways to threatened strike action at Network Rail, BAA and BT - breeding both anxiety and anger from management. Business leaders were evenly split on whether it is a mistake to make any changes to industrial relations law until economic recovery gains more pace with 41% wanting to wait while 39% were supportive of change now.

David Bradley, partner and EMEA Group Head of Employment, Pensions and Benefits at DLA Piper, said: i]"As the threat of a double dip recession remains, it is worrying that industrial unrest is on the rise and potentially could thwart economic recovery. In a volatile economy, employers face multiple risks and challenges making it imperative to focus resources and attention on employee relations to protect and nurture performance and profits. We welcome and support the high level of priority that employers have given to 'employee relations' in this study. The study's findings provide strong encouragement for the Government from business leaders to tighten the laws around strike action. Careful consideration will be required as trade unions already consider existing laws as punitive and disproportionate. A further tightening is bound to bring a greater challenge at a European level based on workers' human rights."[/i]

Other findings from the survey include:

*Despite the implementation of the Equality Act on 1 October 2010, only 4% of those employers in companies with more than 250 employees ranked equality and diversity as the most important staff issue for management to address from a list of five issues. Employee relations was ranked first by 39% followed by employee commitment at 23% then reward/compensation/benefits (19%) and absence management (15%)

*Three out of five industrial disputes are over pay/benefits (47%) and pensions (13%)

*A majority of private sector respondents engage with trade unions (54%) either through collective bargaining or talking to unions on relevant issues