UK: Union Recognition: A Loophole Emerges

Last Updated: 22 February 2005
Article by Christopher Booth

Legal challenges to the statutory recognition procedure introduced by the Employment Act in 2000 have been relatively few so far, as have inter union disputes, in marked contrast to the previous attempt in the 1970s to introduce statutory procedures. A recent High Court case involving two rival unions may mark a return to those more controversial days.

The NUJ approached Mirror Group Newspapers asking for recognition for its members in their Sporting Division. Over half the journalists in the Division were members. While discussions were in hand, MGN signed a recognition agreement with the NUJ’s rival union, the British Association of Journalists, which had at most one member in the Sporting Division. When the NUJ applied to the Central Arbitration Committee to commence the statutory recognition procedure, the CAC refused the application because the agreement with the BAJ was already in force.

The High Court held the CAC was correct to refuse. The relevant statutory provisions did not allow it to go behind the formal agreement with the BAJ to see if collective bargaining was actually in progress, nor to ascertain the wishes of the employees in question. As a result the NUJ, despite having the most members in the bargaining unit, was effectively shut out from the recognition process.

Practical Implications

The statutory recognition procedure can be defeated, it appears, by the simple expedient of signing a recognition agreement with any other independent union before the CAC is approached. That union need have no members at the workplace, and need not have conducted collective bargaining pursuant to the agreement. Such an obvious loophole may be plugged by legislation, though to investigate and rule on inter union disputes would complicate the CAC’s task enormously. In the meantime, it may be that unions will resort to industrial action to gain recognition, the very thing the procedure was designed to avoid.

Informing and Consulting Employees: New Rules about to come into force

In another echo from the 1970s (when these issues were dealt with under the heading ‘Industrial Democracy’) the Information and Consultation of Employees Regulations come into force on 6 April 2005. The Regulations have now been approved by Parliament, and both ACAS and the DTI have published guidance.

Implementation comes in stages: undertakings with over 150 employees are covered from this April, over 100 from April 2007, and over 50 from April 2008. An undertaking, broadly, is any legal entity, and includes companies and partnerships and may also include universities and NHS trusts as well as central and local government bodies. Application of the new rules is not automatic. A valid employee request from 10 per cent of the employees in the undertaking is usually needed to start the process. However, there are a number of advantages in negotiating voluntary information and consultation agreements with the workforce before this trigger occurs and your usual Pinsent Masons adviser will be happy to talk through the pros and cons of this option.

Failing that, if an employer waits until an employee request is made, the emphasis in the Regulations is on organisations devising their own information and consultation systems and reaching agreement with employee representatives wherever possible. So, for example, the Regulations allow for different arrangements for different locations or grades of staff; or alternatively several undertakings (for example companies within a group) may be covered by a single information and consultation procedure.

It is only if no agreement can be reached that the default model in the Regulations comes into play. This requires information to be given and consultation to take place on a surprisingly wide range of topics including threats to employment within the undertaking.

A failure to consult is ultimately enforced through the Central Arbitration Committee which can order the employer to rectify the failure and the EAT which can impose financial penalties.

Practical Implications

If they have not already done so employers should be reviewing, as a matter of urgency, how their organisation should respond to the Regulations. One area to consider is the overlap between the new rules and the statutory union recognition procedures. It may be that unions see these procedures as an easier way to gain a foothold in a company where they might normally struggle to gain formal recognition under the statutory procedure described above.

Do You Need To Know …?

Incorporating a Collective Agreement

A recent case involving MG Rover Group illustrates the need for care when incorporating documents such as collective agreements into individual contracts of employment. The case concerned a collective agreement which specifically provided there would be no compulsory redundancies at Rover. Was that promise incorporated into Rover’s terms and conditions so that individual employees could rely on it? The employees’ contracts gave little help, simply stating that collective agreements would be incorporated ‘where appropriate’.

The case eventually reached the Court of Appeal which held that on these particular facts the reference to no compulsory redundancies was aspirational - and so not apt for incorporation. However the case illustrates a more general point. Identifying contractual terms from inconsistent letters of appointment, written statements, staff handbooks and collective agreements can be a field day for lawyers. Do your contractual terms need a health check?

Reprieve for Fixed Term Contracts

The essence of a fixed term contract is that it expires at the end of the term. Since a comparable permanent employee would not be treated in that way (their contract continues), has the fixed term employee been treated less favourably on expiry of the term? This would open up a discrimination claim for every fixed term contract employee, subject to the defence of justification. Rejecting the argument, the Court of Appeal in Webley held that the Regulations which make less favourable treatment unlawful cannot apply to termination itself, since otherwise fixed term contracts would always be potentially unlawful.

Access to Workers During Recognition Ballots

Significant changes to the statutory rules governing trade union recognition are to be introduced in April 2005. These include amendments to the employer’s obligation to give the union access to workers during a recognition ballot as well as new provisions to prohibit ‘unfair practices’, such as bribery or coercion, during a ballot.

The DTI’s existing Code of Practice on Access to Workers during Recognition and Derecognition Ballots has been amended to take account of these changes and a draft is currently out for consultation: see http://www.dti.gov.uk/er/union/cofp-consultation-021204.htm. Responses should be sent to the DTI by Thursday 24 February 2005.

Cases referred to in this update:

R (on the application of the NUJ) v Central Arbitration Committee and MGN Ltd [2005] IRLR 28; Kaur v MG Rover Group [2005] IRLR 40; Department for Work and Pensions v Webley [2004] EWCA Civ 1745.

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