UK: New Rules And Pitfalls For Trade Unions And Industrial Action

If you find yourself working with trade unions, it is vital to understand the structure of trade union law and how it works as well as what the new provisions mean.

The podcast covers:

  1. Overview of how the law has evolved to understand the structure of current trade union law.
  2. The  latest trade union law changes; what they are; why they were introduced and what impact they will have.

Transcript

Jonathan Chamberlain: Trade unions now have so few members in the private sector that it's possible to go through an entire career in HR without ever really having to work with them. That's not the case of course in some sectors, such as manufacturing, and it's certainly not the case in the public sector. So, if you find yourself working with trade unions, it's really important that you understand the structure of trade union law and how it works. Because it's very different to anything that you've been working with before and, if you get it wrong, it's not just with one employee that you are going to get it wrong, you're going to get it wrong with thousands. So, I'm here today to talk with my partner Martin Chitty.

Martin Chitty: Hello Jonathan.

Jonathan: About the structure of trade union law. My name is Jonathan Chamberlain and I am a partner in the Employment, Labour & Equalities team in Gowling WLG.

Now, Martin, this podcast is all about the practical perspective, but I find that if you want to understand trade union law, if you want to work with it, then it really helps to know the history. Of course, a huge part of that history is that for most of their existence trade unions have wanted absolutely nothing to do with the Courts. One of the most striking examples of how that still affects things today is the basic agreement between employers and unions, they're not actually contracts, are they? They're not legally binding. How does that work?

Martin: That's a very interesting starting point Jonathan. I think there's two issues, perhaps we just need to unpack a little bit. The first is that we have recognition agreements, we can have voluntary recognition agreements and we can have them done under the statutory system and they have some degree of enforceability. Notice has to be given by the employer if they want to recognise them as a process to go through. In the same way the unions can push for recognition by getting sufficient support from the workforce. But what we're looking at more importantly is what people refer to as collective agreements and by that I mean agreements negotiated between an employer and a union, or a group of employers and a group of unions, which reflect the terms and conditions of employees, issues about process, issues about consultation in large part. Note that those are not, other than with very, very few exceptions, those are not legally enforceable at all. So, prior to the Industrial Relations Act in 1971, collective agreements were assumed not to be enforceable. During the period of the Industrial Relations Act, the legislation provided that they were enforceable but that was repealed for many reasons, principally, that it didn't work particularly well. Since 1974, we've had a position where the starting point, the presumption, as lawyers like to call it, is that collective agreements are not legally enforceable at all. So they're not contract in the proper legal sense; an employer cannot force the union to abide by the collective agreement any more than the union can force the employer to abide by it. They're not contracts from that point of view, they are merely agreements, they are binding in honour only, if you like.

Jonathan: So, how does it work then if the union and the company agree say, a pay rise, and the company doesn't pay? How does the individual get their hands on the money?

Martin: Well, this is one of the peculiarities of English law, if you like. So, the employer and the union agree something collectively and that percolates down from that collective agreement into the individual's terms and conditions. It becomes incorporated into the contract between the employer and the individual and that flow down gives the individual the right to be paid at the new rate, to benefit from whatever increase has been negotiated, and if they are not paid it, to sue accordingly. Although, over time, as you've said, the proportion of the workforce in the private sector which is unionised has gone steadily down, there are large swathes of the economy, particularly the public sector and areas formerly part of the public sector, which are still governed by very wide ranging collective agreements. But it's the percolation down and incorporation of those terms into individual contracts which actually makes them legally binding. It is nothing to do with the enforceability of the agreement between the employers and the unions.

Jonathan: So can an individual sue the employer for anything in a collective agreement, or does it only apply to certain terms?

Martin: Well, there's this test, which the Courts have evolved, that they require the specific term that an individual wants to rely on has to be apt for incorporation, which is rather old fashioned sounding phrase, but it has to be something that would necessarily form part of, and has become part of, the contract between the individual and the employee. There's been a lot of case law on that. Issues around pay certainly are apt for incorporation as you might expect. Issues around redundancy pay or redundancy selection processes are much more open to challenge. The fact that historically an organisation has agreed with the union what the redundancy pay, how many multiples of statutory pay they are going to get, is much less likely to be as I said apt for incorporation. So, no, it's going to be a question of what is this about? How long has it been in practice? How overtly have or has the employer relied on it over time?

Jonathan: How extraordinarily complicated and a collective agreement on one level isn't much of an agreement at all. Although, when you look at the history though, it is perhaps not surprising that unions have never really trusted the Courts, have never wanted to the Courts to interfere in the relationship between unions and employers. Perhaps another really good example of that is the law on strikes. Can you tell us a bit about how that evolved over time because I think it's really important to understand how it works today?

Martin: The issue with strike action, as you say, is historical and does need some unpicking. The nature of strike action on an individual level is that you, Jonathan, decide that you don't want to work because you are protesting about something I had done or not done. It might be that I don't want to pay you any more than I already do. But you're entitled to withdraw your labour, if you want to, and equally if you decide not to turn up for work I may or may not decide to sack you, that's an issue between you and I. The position with the unions is slightly different because, if you're a union member and I recognise the trade union, and the union are not happy with me because I won't pay you more, then the union may say to you, well, Jonathan the only way to get Martin to behave properly is not to go into work for a day, or a week, whatever it might be that will bring me to the bargaining table, but you've got an obligation to come to work. So, what the union are doing is saying to you, "Don't go in". They are inducing you to act in breach of your contract with me. Now inducement to breach of contract gives me the right to sue the union. It's a claim in what lawyers refer to as tort. It's not a contract issue and it's not about a dispute between me and you. It's about my dispute with the union for getting you to do something, which you shouldn't do, which interferes with our relationship.

Jonathan: How does that idea of a right to strike grow out of that?

Martin: That's actually a very complicated question which I will try and explain. The question whether we have a right to strike in the UK is open to argument and a lot of academic debate. There are two schools of thought. One is that we don't have a right to strike, per se, but we do have certain protections which are given to individuals and to their unions, if they do go out on strike. The other view is that we do have a right to strike but it's highly qualified and still requires the unions to go through certain hoops to jump over certain hurdles in order to get that protection. Whichever way you look at that, it's all very recent in effect, it's all found in the UK in the Human Rights Act and imported from the European Convention on Human Rights. So, if we go back to the European Convention on Human Rights, then it's about the right to associate what's called an Article 11 right. Now, if you have the right to associate that's great, it doesn't really get you anywhere unless you can use that collective power for your collective or individual benefit and that's really where the right to strike evolves from. So, it's something which has been brought in via the European Convention into the Human Rights Act. It is a heavily subscribed right from that point of view, if it's a right at all, and although that's a relatively recent development, there's a lot of law which emanates particularly from the 1980s and early 1990s about how that right to strike is controlled or limited in some way.

Jonathan: We will come back to the 80s and 90s in a moment but it's really interesting that this isn't so much a positive right to strike as the union is given immunity for organising the strike, for inducing breach of contract if you like, provided it jumps through certain hoops. What are those hoops?

Martin: Right, the starting point is that there has to be a trade dispute. Now a trade dispute, there is a list in the legislation of what that is, it's basically about terms and conditions, hours, conditions of work etc. You've got to get it onto that list. So you've got to have a trade dispute, not between the union and the employer, but between the workers and the employer. So, as an example, if you, Jonathan, wanted more money from me, then that could be in the nature of a trade dispute. It's about terms and conditions. The fact that your union don't like my politics or don't like something which the government is doing as a policy issue is much less likely to form the basis of a trade dispute. So it's got to be something that impacts on our relationship as employer and employee.

Jonathan: So, that's first hurdle it has to clear, it has to be trade dispute. What other things do the unions have to do before they can get this immunity from being sued.

Martin: Well, it's quite a convoluted process, as you might expect. In the 1980s, in the first Thatcher administration, some legislation was brought in which had two stated purposes if you like. One was to ensure that individual workers had the right to express a democratic view before they were called out on strike. The other, and rather more practical view, was that it was a process designed to slow down the unions, to limit their ability to call strike action quickly or without notice and most of all to stop the sort of wildcat action that was very common, let's say at Longbridge, in the 70s and 80s. It was to push back against the winter of discontent and the perception of UK industry as being hampered by the prevalence of that sort of union action. So the legislation is quite detailed and very process driven. The broad brush explanation is that it gives employers a 28 day period between being warned by the union that action is going to be taken and that action actually commencing and within that there are various stages the union has to go through. The first stage is to give seven days' notice to the employer that they intend to ballot the workforce and they have to identify not only that they are going to call a ballot but who is going to be balloted. Not by name necessarily, but by job function and how many people are going to be involved.  Because unless they ballot the right people, those people can't be called out on strike. So if you haven't been balloted, you can't be drawn into the action itself when it's eventually called. So that's the first seven day period.

The second trigger point for the union is they have to give the employer three days' notice of what the ballot paper looks like and what it says and that's quite prescriptive. They've got to identify on the ballot paper whether they need a scrutineer for instance. What the nature of the question is? What the dispute is, that's a recent change, so there's a lot of detail that has to be in there. But most important of all it has to be a yes/no question. People have to understand what they are being asked to do - is it strike action? Is it action short of a strike - so work to rule? How long might it last? Those sorts of details have to be on the ballot paper so that people make an informed decision. Once the ballot has been concluded, the union has two obligations. To give notice to the employer of the outcome and how the votes were cast and also to the individuals. There have been lots of cases on this simply because, as time has gone by, the unions have become better and better at ensuring that the front part of the process is done properly. The ballot paper is right. The right notice has been given. So arguments have to be taken on employer's side that there is some other defect and this is where the focus has been. So, have the right people been balloted? Let's assume so. Have the right notices of outcomes been given? Now, one of the issues there, because it became such a contentious point, is that the legislation was modified. So that, if there was a minor defect in the process, and let's assume it was a minor defect in notice, it wouldn't matter. As an example, if 50,000 people vote and six people don't get the right notice of outcome, does it matter? Not at all and the Courts have become very clear that they are quite prepared to enforce that sort of de minimis rule in the legislation. So the right notice has to be given of the outcome and then the right notice has to be given of the commencement of action. Now it used to be before the 2016 Act came in, that that notice was seven days before any of the actions started. That has now been increased to 14 days. So the employer has got even more planning time, time to perhaps challenge the support that the unions seem to have or to put forward a different proposal. So they've now got 14 days' notice before the action actually commences.

The last point to think about is this - the union action is only mandated now for six months and then the protection that the ballot gives is lost and that's the issue. Without compliance with this whole ballot process two things happen. One is that the union is exposed to a claim for inducement to breach of contract, they've got you to withdraw your labour and that's in breach of contract and also it gives protection to you as an individual. As an employer, I can't dismiss you within 12 weeks of the strike, action otherwise I face a claim for automatic unfair dismissal. Not to mention the fact that I have to find someone to replace you, which is sometimes difficult.

Jonathan: So that deals with strikes, the withdrawal of labour, which is obviously the major part of industrial action. But what about some of things that happen around the edges and certainly we used to see a lot of in the 60s and 70s, like picketing, for example. What's the law on that?

Martin: The law on picketing has been, I think you'd have to say, very effective in the sense of reducing the frequency of picketing. The numbers of people, generally speaking, involved picketing and the use of picketing as what is referred to as secondary action. So, either picketing away from your workplace to influence your employer or getting support from people not involved in the dispute to picket at your place of work. Now, that legislation has been in now for almost 30 years in some form and has recently been modified under the 2016 Act, where the union now has to have greater control over the limited number of people who are on the picket line and they have to be better identified, there has to be somebody who is overtly in charge, who is identified as being from the union side. All of that was brought in simply because the pictures, which many of us can still recall, of mass picketing at places like Orgreave were seen as, from an employer's perspective and politically, unacceptable. The impact, of course, is that the restriction on picketing has undermined to a large extent the effectiveness of that psychological and physical barrier of people going into work where there is an existing dispute.

Jonathan: So, most of those reforms as you said were introduced by Margaret Thatcher in the 1980s. Surely Tony Blair just turned the clock back or what did he do?

Martin: Well, he did remarkably little, to be perfectly honest. Clearly, the Thatcher administration came in with an agenda, just as the current Conservative Government has come in with an agenda, which has led to the 2016 Act. But the Labour Government, under Tony Blair, seemed to take the view that while this was all very unfortunate and unpleasant, it didn't really do very much about it. They watered down some of the provisions very slightly, to make it slightly easier for the union side. But to all intents and purposes, just left things as they were and, in some ways, one can see why they did it. Because what it had created was the perception, if not the reality, of a calmer industrial relations environment. Strike action dropped, there were far fewer, if any, what used to be referred to as wildcat strikes, because wildcat or unofficial union action without the benefit of a ballot leaves everybody exposed. The union can be sued, the individuals can be sacked selectively and that was allowed to continue simply because it was seen as acceptable at least in new Labour eyes. Now the most recent changes in the new legislation are likely to lead to a further challenge to the way in which industrial action process is being legislated for. What happened some years ago was that a case was taken to the European Court of Human Rights on this question of whether Article 11 right to association was being impacted by the fact that we have to go through all this process and the European Court of Human Rights decided, no, it was an acceptable degree of qualification. It doesn't stop people doing it, provided they go through the process, and indeed the Union could call a strike without a ballot, unofficial action, provided they accept the consequences of that which is that they can get sued and their members can be dismissed.

Jonathan: But Tony Blair did introduce compulsory recognition for trade unions.

Martin: They did introduce compulsory recognition, which merely gives the union a right, if it can meet the threshold, numerical requirements, evidencing the support, those sorts of things, to recognition. But it didn't actually unpick very much by way of these limitations on strike action or the fact that the union has to go through all this sort of process together.

Jonathan: How much of a difference has compulsory recognition made do you think?

Martin: I think that based on our experience with clients, very little, do you agree with that?

Jonathan: Yeah I think I would...a complete waste of time...yes I would agree with that...

Martin: ...actually if you mapped it back from when that came in, straight line, you would probably see an almost straight line decline in the number of union members.

Jonathan: I think that's probably right and certainly it hasn't made a huge difference in union penetration, if you like, in the private sector, which is what was thought at the time.

So, I think that brings us up to date with the history. What about the latest changes that have just been introduced? What impact are they designed to have? What impact do you think they will have?

Martin: Well, I think we need to split that down into two separate parts. Let's look first at the changes that have come in and think a little about why those changes have been made. The level of strike action in the economy is very low, at an all time low. There is some, but not much, evidence of an increased level of industrial unrest but that is combined principally to one or two areas. So, there's very little of it in the purely private or manufacturing or financial services sector. The areas where there is a greater concern are in, what might be described as the public sector, so transport; rail particularly, and in one or two other areas, particularly in the health service.

Another area of concern has been that strike action has been carried on, or intermittent strike action, has been carried on for a long period of time particularly by teaching unions, without the benefit of a recent mandate from a ballot, so that may have gone on for one or two years in some cases.

The final concern was about the level of turnout because all that a strike action ballot required was a simple majority. So that more than half of all the people voting, voted in favour. It didn't matter how many people voted and in some sectors which are highly unionised, if a call went out for strike action, the assumption was that enough people would vote to get a majority, but it didn't need very many people to vote at all and those are the issues which the Government made clear in its manifesto it was going to address.

What has actually happened practice is two-fold. The first applies to everybody, so all sectors, all sorts of employers and it's this. That for a ballot to be effective, more than 50% of those who can vote have to be involved, they have to turn out and vote. That has not been the case before, so that's wholly new, and, as I say, it applies to everybody.

The second only applies in relation important public services. Now, there's a list of important public services which is available and basically it's confined to health and focussing almost exclusively on those who work in hospitals. And you will see a pattern here emerging, which is that there are high levels of union membership in relation to all of these sectors. So, there's health, there's education, but confined to teaching in state schools for under 16s, again highly unionised and historically quite active in terms of union action, and then, most importantly, in relation to transport. But the transport area is quite actually narrowly drawn because what it relates to is bus services in London, but nowhere else, and it relates to passenger railway services. And there are some obvious overlaps there between the impact which recent action by ASLEF and RMT has had on Southern Rail and on London Underground and the impact on the capital. There is very little strike action outside of London, which has a material impact because the rest of the country isn't quite so focussed or dependent on rail transport to get in and out of work. There's one other area which is border security, but we are not going to dwell on that too much. Now, in those areas, there's a second qualification on the effectiveness of the ballot and it's that at least 40% of those who could have voted have to vote in favour. So if you get a very small turn out, let's say it's only just over 50%, 80% of those who did vote have to vote in favour. Now, this has clearly been done to make life more difficult for the union and I don't think anybody can sensibly argue against that. They've got to have a higher level of support, they've also got to give longer notice as we've talked about before. But where it leads is this. The unions will need to get greater interest amongst their membership, amongst the electorate. They are going to have to wind them up a bit a further in order to make sure they hit the ballots and that's going to make it much more difficult, for everybody involved, then to march everybody back down the hill if, a deal is then to be done. Emotions will have been aroused that much more, more extreme positions will have been taken on both sides in order to get across the seriousness of the dispute and why it is that the union needs people to vote in these numbers. But the more interesting thing than all of that is that in recent disputes, particularly in Southern Rail, particularly in relation to London Underground, is these ballot thresholds have been met and exceeded massively. So, the new legislation would have made absolutely no difference whatsoever.

Jonathan: Extraordinary. So the impact of these new changes, and its certainly something that we've been hearing from our contacts in trade unions, is that we may see fewer industrial disputes around the margins but the ones we do see are likely to be more bitter, more protracted, harder to solve.

Martin: Oh I think that's absolutely right and as you can see from recent events in London, on London Underground, on Southern Rail, the position of both parties has become more and more entrenched. And if you're forced to get more people out, more people to engage in the process, if you get them to engage they are going to want to see it through to the end.  I think that's highly likely.

Jonathan: It's going to be very interesting to see how all this pans out. Martin, thank you very much.

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