Employment Update 2022: Developments in trade union rights

Jane Fielding: Good morning everybody. I am Jane Fielding, I am head of the employment, labour and equalities team here at Gowling WLG in the UK and I am delighted to welcome so many of you to this, the fourth and final webinar in our series of annual update webinars for 2022.

Our topic for today is developments in trade union law. Over the last couple of years we have seen the sort of increasing level of activity amongst unions, particularly in the] gig economy but also in the public sector and the private sector as well. And there has been, as you would expect, litigation as a result.

Our topic today aims to bring you up to speed with some key case law developments but, also to give you an awareness of some trends that we are seeing in this area so that, you can be mindful of those going forward and what is coming down the tracks.

Our speaker today is Jonathan Chamberlain, one of the partners in our team here in the UK with several decades, he will not mind me saying that, of advising on industrial relations issues, as have I.

He has a particular specialism over the years in manufacturing and the airline industry, in terms of industrial relations issues and helping clients with their union relations.

Jonathan is going to speak for about 25 minutes. We will leave time for questions at the end before we close at 11.40. As ever, if we do not quite get to your question do not worry we will follow up afterwards by email so you will get an answer one way or another. If you want to use the question and answer function - the Q&A function to ask questions which is at the bottom in the middle of your screen, the chat function is disabled today.

If you have a tech issue, hopefully you will not but if you do, also please use the Q&A function to try to get some help with that. Lucy Strong who is our technical support today will do her best to sort that out for you.

And I will flag this again at the end, but we will be sending feedback forms by email afterwards and would really appreciate it if you would fill those in.

So I will now turn my microphone off and hand over to Jonathan.

Jonathan Chamberlain: Thank you, Jane. Good morning to a select but very interested group of you who have decided to join us for what, 30 years ago - no more than 30 years ago, 40 years ago! In the UK would have been a vital and pressing topic, but is now perhaps more of niche interest, I am assuming that you are here because you are a business which recognises trade unions or that might be recognising trade unions in the near future and that, of course, places you in a small minority in the private sector. Obviously different in the public sector.

For those of you who do have to grapple with these issues, these two cases represent a step change in union power. And they come about not because of recent moves in the political consensus, not because of economic action by trade unions themselves.

But because of the effect of human rights legislation on UK trade union law and, the increasing willingness of judges to take that legislation into account in the industrial relations sphere

Now, as you know if you have been to our webinars before, we are about giving you practical answers to practical solutions. In the unlikely event that any of you have tuned in from a university or you are a student expecting me to write your essay for you that is not going to happen.

We are going to talk about the practical implications of these cases, although the law behind them is absolutely fascinating. I will have to go into it on some level of detail because, quite frankly, you know the cliché 'if you think you have understood what is going on, then you have not' very much applies here.

We are looking at legislation which is having to bear a weight and words which are having to bear weight which they would perhaps - perhaps - never intended to, that is sort of heretical because of course the very jurisprudence of the cases says this is what the words were always supposed to mean but, I am not quite sure that is the case and we will come onto that in a moment.

We are going to have to look in a little bit of detail into the law. But when we sent out the invite for this webinar, there were two questions. The first is, do unions have a veto over changes to terms and conditions. And the second is, we all know that employers cannot lawfully sack employees who take part in industrial action, if that is within the protected period. Can they do anything else unpleasant to them? To punish them or dis-incentivise them if I can put it that way from taking part in industrial action in the future.

The answer to both questions you will be relieved to hear is, no… but; and it is obviously the 'but' that we are going to spending a lot of our time exploring. Let us deal with the first question.

Do unions now have a veto over changes to terms and conditions?

And what this question relates to is, Section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 - TOLCRA - trips off the tongue does it not.

Now you know, you know as soon as you have got a section with a 'B' in it, an upper case B not a little brackets b, that it has been shoved in there later. That it was not part of the original legislative scheme and that suggests it is a bit of a botched job. And this was a bit of a botched job but it is a vital botched job.

Section 145B was introduced because the government lost - the UK - lost a case in the European Court of Human Rights which held that our trade union protection law was insufficiently strong and we will see how in a moment.

We are talking about the case of Kostal and Dunkley and we are talking about a Christmas bonus. So what I need to do is I am going to set out the Section 145B what the case is broadly about, then I am going to talk about the facts of Kostal and Dunkley, then I am going to talk about what the issues were, the very stark issues were and then I am going to try to make sense of a Supreme Court decision which decided the case on a different basis from the Court of Appeal and although it was a unanimous decision in one sense, in that it supported the unions position, the judges were divided as to how the legislation worked, so we will try and make some sense of that and its practical implications.

Let us start off with the first of those. What is the relevant law about? Section 145B says that if an employee makes an agreement with the employer and the effect of that agreement, is to achieve a prohibited result and the prohibited result is that that term is not then determined by collective bargaining, then the agreement is void - torn up, does not work - and! The employee is entitled to a payment and I had to write this down because it is a very exact figure - £4,431. And it is a fine - not compensation, it is a fine.

The effect of that means that if an employer agrees new terms and conditions with the workforce that contravene this section, then not only is that agreement void, but the employer is going to have to pay a price of thousands of pounds per employee for having reached the agreement in the first place. You can immediately see that this is material, hence this talk of a veto.

Secondly, what is Kostal and Dunkley about? Well it is about a Christmas bonus primarily, it was negotiations between employer and union on the pay round and what was the amount of the annual Christmas bonus? And then, changes to terms in return for increased pay and the bonus which were revised over time with Sunday working arrangements.

Negotiations began in October and by the time we are getting up to Christmas, time off Christmas bonus, no deal has been reached so a ballot has been taken, the workforce are not in favour of accepting the employer's offer so with Christmas coming up, the employer goes over the head of the union, writes to employees individually and says, if you accept these changes then you will get your Christmas bonus and otherwise you will not. So guess what, in the few weeks before Christmas, most people sign up.

Now, the union say, right - and here is my third point what is at stake here, what are the arguments in the case - the union say, you have achieved a prohibited result because an agreement has been made which has deprived the employee of a turn that would have otherwise been collectively bargained.

The company initially say, well that cannot be what Section 145B means. Because, we are going back to collective bargaining with the union, it is only this round as it were that we have opted out on, we have negotiated with the employees directly, not de-recognising the union! All the agreements remain in force and this time next year we will be back on the table talking in the usual way!

And the union said, no! The meaning cannot be that it deprives a collective bargaining completely. It has to relate to the particular term that we are talking about and, that was the battle line and that went back and forth in the tribunal, for the union in the EAT and the Court of Appeal which found in favour of the company and here is the interesting thing okay. The Court of Appeal took the line that I have just described to you, that it must mean to deprive collective bargaining altogether.

By the time it got to the Supreme Court that was no longer an argument that the company was running. And it was not running it because it was obviously in the real world, completely unsustainable. Because how could you possibly tell whether this was a forever bargain or not, you would not be able to see at the time and there are three month time limits for bringing these claims so what are you supposed to do? Wait until next year's bargaining round and then if that takes place, you have not got a claim and if it does not take place then you do have a claim but you are now out of time because the relevant event took place last year.

So it is a nonsense and having it argued it in front of the Court of Appeal with a straight face and won on that basis, the company realised they could not sustain that in the Supreme Court so dropped it and put forward a much narrower argument that it has to be about, well the obvious intention is to deprive of collected bargaining. It has to be the express intention of the employer.

And the Supreme Court said, no! That is not how it works. It does relate to the particular term and there was division between the majority of the Supreme Court and the minorities as to how that worked. The majority went with a sort of causation argument. If this was the intention of the employer to do it, but as commentators pointed out, that does not really work because sometimes you are not dealing with a recognised trade union and the only discussions that can be had in those circumstances are about the size of the bargaining unit and it is one-off. So it does not really work.

The minority decision was really much simpler and it said, does it have this effect? And has the company done this to try and opt out of collective bargaining or does it have another business reason for doing so. A legitimate business reason for doing so. And I think the better view is that the minority are probably right and it will only make a difference though in a very few cases.

The effect of that, the practical effect of that is this. The employer has to exhaust the collective bargaining procedure with the union and it has to do so in good faith. Now, that second point is a really novel concept for English lawyers. We are not used to looking at people's good faith in entering into negotiations and discussions but that is what employers now have to do. They cannot just do this is as a tick box exercise.

What are the practical implications for employers? Well, the one that immediately struck me, is having worked with unionised clients for decades as Jane so politely put it, is that there are collective agreements and then there are collective agreements! And some of them, are about two pages long and some of them, would fill a lever arch file. Indeed they probably still do because nobody got around to digitalising them.

And some of them will have exhaustive processes! And you have that old concept, failure to agree. We now register a failure to agree and you see that in the car plants where there has been strong union presence for many, many years.

But a lot of bargaining agreements literally just say that the union is recognised for pay and conditions and not much more than that. So how does a company tell when it has exhausted the collective bargaining procedure? And how much time have companies spent in recent years looking at those agreements. They are not legally binding anyway, they were only ever binding in honour that is in the legislation itself ironically.

So it is not something to which we lawyers have paid much attention, much of the time. But now we are all going to have to.

And the second practical implication is around something - another hot topic in employment law at the moment - which is fire and rehire because this - it is a sort of reverse Yellow Pages for those of you of a certain age, this term is not just there for the good things in life, but it is for the bad things as well if you are trying to reduce terms of employment and you go over the head of the union and you are saying to the workforce, you must sign up to these new reduced terms of employment because if you don't then there will be redundancies and in those circumstances people often sign up and you go through a fire and rehire exercise.

You can do that in consultation with the union, but they do not have the power to block it. Well, here that process is now underpinned by a much tougher statutory regime. Where what you say to the union, when you said it, how you said it, is deemed to be subject to the courts scrutiny if the agreements you have reached with the workforce are not going to be torn up and you are not subject to a whopping great fine, well it is effectively a fine.

On that cheery note, we shall move on from Section 145B and we will not go very far, because we are going to go to Section 146. And this one is legally even more confusing but let us just take a step back. What is Section 146 about? You remember my second question, if an employer wants to - I hesitate to use the word punish because obviously we never ever want to punish our employees, we do not think in those terms and certainly as this is being recorded, it is not something I particularly want to be going around live on the internet as it were.

It is such a useful word though. If - and as you will see when we come to the facts of the case in question, it was where employees had taken industrial action and they employer said right, if you are going to do that then I am going to do this. What other word can you use? Well the legislation uses the rather dry term, 'subject to a detriment' so perhaps I should stick with that. If one is going to be euphemistic about it, how can the employer dis-incentivise employees from taking industrial action? Because there are specific restrictions on dismissal, we know that. But what about actions short of dismissal?

Well, there was not anything specific in the legislation. Section 146 is not about that. Section 146 is about protecting trade union officials, trade union members going about the course of their duties or activities. That is where it originated in the scheme of - conceptual scheme of UK industrial relations and we are calling it a conceptual scheme is giving it the dignity and a sense of structure that it does not really deserve.

As you all know, our trade union legislation is built on decades of economic warfare and represents victory in the 1980s of Margaret Thatcher not really compromise. Something has now been done to the language which, I mean it literally is not written in there. Section 146 contains a prohibition on detriment to an employee in connection with trade union activities.

And we have had two recent cases. Mercer and Ryanair where trade union activities has been held to include taking part in industrial action and the effect of that is best seen in the second of these cases, Ryanair where it was about pilots and one of the great benefits of working in the airline industry is travel. You get travel concessions. Normally standby. You can hang around at the airport where you may well be hanging around anyway, because it is where you work and if there are free seats on the plane, you can take them.

It is a fantastic benefit. After the pilots had taken part in industrial action, Ryanair withdrew that benefit from the pilots. They are not sacking them. They are though, subjecting them to a detriment. And Section 146 talks about trade union activities within outside of normal working hours and, you can see there it is talking about trade union official with meetings in the evening and things like that, or within normal working hours, with the employer's consent and that obviously covers the situation which you get in workplaces with longstanding union recognition where - you know there are full-time officials paid for by the company actually embedded in the organisation, they have their own office on the shop floor.

Some of you will be very familiar with that, others of you on the webinar will be scratching your heads a little now, but that is how it works. And so, what the EAT did in Mercer, confirmed in Ryanair was to take, once again, human rights legislation, Article 11 Freedom of Association and say that the legislation had to be read consistent with that. And you can read down into the legislation that taking part in industrial action, which is lawful, must because it is lawful effectively be with the employer's consent because that is how it has to be, there is - the whole steam of the organisation, the whole thrust of Article 11 is that it can be lawful to take industrial action.

And so, taking part in trade union activities includes industrial action, after all, industrial action is an inherent part of trade union activities. Now, there are lots of judicial language explaining well that must be what the Section had meant. Speaking personally and as someone who has been doing this for decades, thanks again Jane, I am not convinced by that. This Section smacks of, protecting trade union officials going about their duties primarily or ordinary employees in respect of joining a trade union and doing stuff in and around trade union.

I do not think it was ever intended to apply to industrial action but now it does. So the answer to the second question I posted is, can employers punish subject to a detriment, dis-incentivise employees for taking part in industrial action provided they do not sack them, the answer is no. That is now prohibited by the statutory scheme. You cannot withdraw the travel allowances, but how far does this go, and here is the practical implications of this.

This is where it can get really, really difficult. Because of the way the Section is worded. Let us suppose a scenario like this.

You are a big company. You outsource a bit of your company where you have got the most trade union issues. Now you know because TUPE applies, that it just means they are still going to be working there, the same people but they are going to be someone else's problem. And there is industrial action, there is a strike, so instead of giving that contractor the jobs to do on the site, you give it to another contractor whose employees have not gone on strike.

Now, who is subjecting whom to a detriment? In that scenario. The new contractor is saying, well it is not me, it is nothing to do with me, I am just not being given the work that I can pass on. But the original employer as it were, the producing company may well have taken the decision precisely to punish those individuals. And there is nothing in the legislation that, on the face of it, covers that scenario. The employer of the individuals can say, I am not subjecting to a detriment because they took part in industrial action. I am just not giving them work which I have not got to give.

What I can see, is that there might be some more dragging in of the human rights provisions there because otherwise you have got back door, back route around the legislative protection. But that is going to require a lot of judicial drafting. And these are real scenarios, these are happening today okay. This is not something that I have just made up before I came in here.

Because the legislation is a botch, because of how it came about it is not clear how this is going to work itself out, but we can see there will be lots of problems coming down the tracks. The practical advice is check your collective agreements, see what the dispute resolution procedure is, make sure it is followed in good faith, everything is going to take longer and have to be better documented and in the outsourcing scenario as I have just described, if you are the contractor with the people who are taking industrial action, make sure your contracts with the client, protect you in that scenario from decisions taken by the client over which you have no influence.

That was a whistle-stop tour of some really very difficult law. That was the 25 minutes that Jane allocated to me, so Jane do we have anything in the Q&A? Anything you having heard that you would like me to pick up on in any more detail?

I have got some questions here so I will pick up on some of them.

Is failure to agree something the company has to recognise? I think the answer to that is yes.

Here is one question I can answer straight away. Are we meant to be able to see some slides? No. I do not think the slides add to this unless we particularly want to get into the word by word statutory construction and I am not sure that is helpful for this audience where we are trying to focus on the practical results rather than history of how we got here. Fascinating and in my view it absolutely is.

Do I feel the protection from detriment makes extend to industrial action which may be unlawful? Yes, I think it does.

What if the employer does not believe the trade union is acting in good faith during wage negotiations i.e. stringing it out to frustrate the process. Very tricky. That is going to happen a lot. To some extent, no change there, it often has happened. But it is going to require close management, close tension. It is going to be very difficult to do without lots of highly artificial emails and correspondence going across, I believe you are not acting in good faith here, all this sort of stuff. But there is going to be new level of skill and commitment required in conducting negotiations with the trade union.

Jane: It cuts both ways as well does it not Jonathan. The good faith. The union also have to, so there may…

Jonathan:Can I just say, thank you very Tracy. You did not freeze, you saw the whole presentation. I am going to take that as being a good thing, so I am really pleased you have said that to me otherwise I would be feeling very uncomfortable now. Jane do you want to pick up on any of the other highlighted questions which you think I should go to first. I am just skimming through them, you will have had more chance to see them.

Jane: When I dropped off, the ones that were already there disappeared, but there was one around - you mentioned failure to agree.

Jonathan: Yes. I gave a very quick answer to that. Because I was just scrolling through. Does the company have to record failure to agree, the answer is very much yes and the company has to record how it got there. And the company has to try very hard not to get there. And for those of us of a certain age, there may be a bit of a heart sink moment there, because we have been in environments where failures to agree were almost every day occurrences?

Unions would raise points, management would go, what? It would go nowhere, we would talk about it and then there would be a failure to agree.

We are now going to have to approach those much more carefully where we - the company and the employer - want to produce change at the end of the process. A lot of failures to agree used to come from, as a say, requests from the union. I have one particular example and it is so client specific I cannot give it because it would absolutely tell you what the client was, so confidentiality rules prevent me from doing that. But the union asked for an absolutely extraordinary benefit because, another plant had it and when it was explained to them that that plant had very particular circumstances, that meant that benefit was necessary and there were no such circumstances present in the plant which were asking it for, the union was very disappointed by managements attitude and registered a failure to agree. And you would get that sort of thing coming in.

Now I think it is going to require a much more substantial and important character. As I say, there will be those of you on the call who are thinking what is a failure to agree? Because it is not an expression used in your bargaining process at all. And the last thing that many of you will be wanting to do, is to revisit that bargaining process particularly, because if you do so, then you are guaranteeing that you are going to be spending hours in meeting rooms with trade unions talking about process rather than talking about substance.

That said, if you have got an occasion on which you can invest in those processes without a major distraction of effort and causing yourself a major industrial relations problem, I do think that is worth doing to have some sort of milestone process which you will then at the end of it be able to evidence to court to say, look we tried. And so when we went over the heads of the union to employees directly, we had done everything we could, what is more, we had done everything the union said we should have done.

So I think those old failure to agree processes will once again be useful and perhaps should be brought into some collective agreements where they are not at the moment.

Jane: At the moment if you tried to re-negotiate a dispute resolution mechanism in a recognition agreement, what incentive have you got to reduce the steps involved? It's crazy.

There is a question here about TUPE. So what happens if you do not have a collective bargaining agreement? You do not have a recognition agreement. But you inherit a union under TUPE.

Jonathan: Well if you inherit a union under TUPE you have inherited the collective bargaining agreement. Or at least inherited the union recognition and the scope of that recognition. There is not much case law on this, but union recognition of course is not a term of art. There is not recognised - a statutory procedure for union recognition and there are certain compulsory terms of recognition agreements which are included if you go through that route, but most union recognition is still voluntary and therefore you do not necessarily have the same obligations even if you have a recognised union.

The safe thing to do in the scenario I have just described is to assume you do not just inherit a union, but you inherit the collective bargaining agreement that they used to work under, provided it is practical to do so and it will not always apply and there is a reason these things are not legally binding, they do not - things change and recognition agreements do not always catch-up but again the practical advice there is work with the recognition agreement that they were working to previously.

Now, it is not to say that is going to be easy, not least of which you are first going to have to persuade the union to give you a copy.

You might be able to persuade the client to give you a copy, but that assumes the client has still got a copy, because these things have often been lost over the years and you will often find that the union has got a much better archive and a much better record than if you are an outsourcing provider, than your client. That very frequently happens. The unions forget very little, in our experience. You may find yourself saying well if you want me to go by a particular bargaining process, you are going to need to tell me what it is. And you may then be able to go back to the client and say, is this what it is. The client might not have the document themselves because that does happen.

Jane: Yes. There is a slightly broader question here about trends and we have actually seen this with one of our clients. They are unionised in the UK and are involved in some sort of dispute/grievance from a union official in the UK and they start getting lobbied or on social media, support from foreign unions? So the question is, are we seeing an increasing level of co-operation between unions at a multi-national level? And if so, does it really make a difference do we think?

Jonathan: Is it increasing? Yes. Is it at the level where it is going to make a difference? Not yet. International labour has not kept up with international capital and that still remains the case. Unions' primary duty is to defend their members interests in their countries, the people they are accountable to. So yes, we do see it happening but not much and it is not making a huge difference at ground level in terms of industrial relations.

In terms of social media pressure and things like that, well absolutely. But in that scenario, campaign groups are just as much a concern as trade unions.

There is one question which I can see Jane which I do want to answer which is a very specific one on the wording of Section 145B referring to an offer being made to an employee and if you are simply unilaterally enforcing a detrimental change, I assume it is the case that this Section is not engaged.

I would disagree with that because it does not have to be a good offer and the whole way that the contract is framed is in terms of offer and acceptance and if you are enforcing a detrimental change, it is exactly the fire and rehire scenario that I touched on. The offer is a worse deal than you have got at the moment but it is still an offer. Now in terms of unilaterally enforcing a change if you are not going through any offer and acceptance method, well as a matter of basic contract law that does not work.

You cannot unilaterally change terms of employment. I know there are clauses in some contracts which say the employer can and I know that in one case, that clause was determined to have worked and I do not know any practitioners who think that that can possibly be right. Even if you have a unilateral variation clause I think the way that I would put it is, the more significant the variation that you are seeking to impose is, the much less likely that that clause is to work if it ever should work at all which I doubt. So sorry, I was not picking on that question, I just thought it was a really interesting one but this is fire and rehire is very specifically a context to which the unions have said, we are going to use this and the unions are all over this. We have had letters from unions which have been now referring to Section 146, referring to Section 145, they are absolutely live to these issues.

Jane: Yes. Okay. Well we have run out of time. We have got a few questions which we will follow up on afterwards but thank you Jonathan. Hopefully that was a useful flag to all of you who have joined us today and are clearly grappling with these sort of issues day to day and hopefully it has given you a practical steer.

As I mentioned earlier, we will send around the feedback forms by email when we close the webinar. Please do take a couple of minutes to fill them in and send them back, we will be looking at our mid-year webinars shortly but we will also be looking at whether there are discreet events we want to put on, if there is sufficient interest to people.

So finally just thank you very much to Jonathan and to all of you for joining us today, so I hope you have a good rest of the day.