In August 1974, Peggy led the workforce in a fight against the management for union representation. The girls faced a difficult battle as director Sir Julius Berlin was against unions, and Peggy dealt mostly with inflexible personnel manager Edward Pollard who enforced company policy to the letter.
With the girls threatening to strike due to Pollard refusing to offer them any concessions, Pollard passed the buck to Sir Julius's new Northern Executive Administrative Assistant, Ken Barlow, warning him that Peggy was a "22-carat troublemaker". In Ken, the girls had a more sympathetic manager, which caused a few of them, Edna Gee among them, to reconsider their need for a union. Calling a meeting to force the matter, Peggy rallied the girls, reminding them that Ken was on Sir Julius's side, however it may appear. Ken managed to avert a strike by arguing with Peggy for one last chance to talk to the workforce, which ended with the girls getting their union in exchange for Peggy's resignation.
Peggy moved immediately to a new job at the union, which she'd been offered before she left the warehouse. Her new position required the occasional return to Coronation Street on union matters, such as in November 1974 when she went there to deliver union cards. No longer in opposition, Ken and Peggy got on surprisingly well, and he drove her home, meeting her dad George Barton and brother Frank. Sharing a similar political outlook, Peggy and Ken found each other stimulating company and met up for drinks several times. On one occasion, they were seen out by Edward Pollard, who warned Ken that he was fraternising with the enemy. Ken took no notice, but when Peggy was called in by Ivy Tilsley when the company starting enforcing retirement at sixty, only for Peggy to tell her that the company had the union's backing, Ivy accused her of sticking up for her boyfriend. Peggy realised that the conflict of interest was too great and told Ken that they could no longer see each other.