Labour Government & Trade Union Law

Labour Government & Trade Union Law

The Labour Government elected in 1997 had manifesto commitments to reform some aspects of trade union law and to reinstate, to a degree, those trade union rights which had been lost through the erosion of industrial democracy and the social partnership during the preceding 18-year Conservative administration, particularly following the Employment Acts of 1980 and 1982 and 1990. The Thatcher years had seen the removal from civil and statutory protection of the practice (sometimes described as a right) to secondary industrial action. In fact this “right” which is perhaps better described as a freedom, can still be “enjoyed”. 

The consequences of exercising it, however, which previously were limited by statute in respect of economic impact and civil actions, are no longer protected, except in specific circumstances where the “industrial torts” are in contemplation or furtherance of an trade dispute. Put simply, the exercise then of secondary action was to engage the might of trade unions, unconnected with a dispute, in industrial action in support of that dispute, and often in so doing creating economic loss for employers, business and customers, not directly connected with the dispute in question. One manifestation of this were flying or secondary pickets; much in evidence during the “Winter of Discontent” which afflicted Britain in 1978/9 and which did much to bring about the change of Government as well as, with the Grunwick Dispute [1] and later miners strike of 1984, statutory trade union reform. 

Thus the TULR(C)A [2] 1992 in s 244(1) defined what is sometimes referred to as the “golden formula” for establishing whether industrial action was legitimate. That is to say; was it in “contemplation or furtherance of a trade dispute”? If it was, it was given immunity by statute from civil action. Another aspect of statutory reform concerned “wildcat” strikes, initiated by union members or local shop stewards without the support of the trade union itself and the sudden “downing of tools”. This may not have carried official or explicit union support, but nevertheless, may well not have been exposed to any restraining influence or even could have experienced tacit support from a publicly silent yet complicit union hierarchy. These unofficial actions were a prized weapon of the shop floor militant, such as “Red Robbo”, during the British Leyland disputes of the late 1970’s and were disproportionately chaotic in their effect when compared to more conventional industrial action. They also had the effect of undermining local workforce agreements and collective bargaining arrangements, so much a feature of modern industrial and social democracy, as well as challenging government pay policy of the time.

Section 226 of TULR(C)A 1992 required formal ballots in order for the subsequent strike or purported official action to be immune from civil action, this was later to be strengthened under the new Labour Government by the Employment Relations Act 1999 and supported by the Code of Practice on “Industrial Action Ballots and Notice to Employers” (2000).

Perhaps most inimical to the Conservative Government in the 1980’s was the “closed shop” (a “union membership agreement” to give it its correct, if euphemistic nomenclature) [3] and the concomitant powers of expulsion, which led automatically to loss of employment. This was found to infringe article 11 of the European Convention of Human Rights in 1983 [4] but was not barred by statute until the 1988 Employment Act came into force, the relevant conditions of which are now contained within s 152 of TULR(C)A ,1992. This states that it is automatically unfair to dismiss an employee on the basis of union membership or non-membership. The exceptions to the right not to be excluded from membership of a trade union are set out in s 174 of TULR(C)A 1992.

The Employment Relations Act 2004 has introduced limitations on employers who seek to induce workers not to join trade unions or a means of usurping collective bargaining. These provisions have been inserted into TULR(C)A 1992 under sections 145A and 145B. This again follows a judgement by the European Court of Human rights that such practices were a breach of Article 11 of the European Convention, following the case of Wilson and the NUJ v United Kingdom [5] . 

Frequent references to the Trade Union and Labour Relations (Consolidation) Act 1992 are inevitable. As its title implies, and through subsequent amendment, it has consolidated all the previous statute law affecting the status and running of trade unions. By virtue of s 10 of TULRA(C)A 1992, trade unions continue not to have a corporate legal identity, although they can nonetheless be sued or prosecuted, but cannot possess property, which instead is held on trust.

The influences on statutory trade union reform, from 1997 following the arrival of the first of the two successive (Labour) administrations to date, are not confined to the attritional motives of a left of centre political new world order to redress the balance and settle old scores. As will be seen, the freedoms under the law of the trade union movement in the UK have not been restored to those that obtained when Hugh Scanlon, Len Murray and Jack Jones [6] struck terror in the “Corridors of Power” and enjoyed beer and sandwiches at No 10 Downing Street.

A number of other reforming strands of statutory intervention can be discerned, pervading the whole of the employment law landscape. These include European Directives, human rights legislation, and developments in occupational health and safety. It was a feature of the later part of the final Conservative Administration that it found itself reluctantly acceding to enactments of the European Parliament in the area of industrial relations, particularly in matters of working time and acquired rights. The current administration too has found itself in similar difficulties, for example, with age discrimination bringing up the rear in a protracted legislative timetable which, if it is achieved (and the labour Government are returned to office), will in 2006 provide just-in-time compliance with the relevant European Directives [7] . These Directives require member states to eliminate discrimination on the grounds of race, sexual orientation, religion or belief, disability and age in employment and training. It has also persistently dragged its feet in updating the 1981 Regulations [8] governing the rights acquired by workers upon a business transfer, including union membership and recognition rights, the new Regulations have been promised for the past two years and are required in order to comply with the latest European Directive on the subject [9] . It is particularly striking that his should be the case since the new Labour Government brought a distinct change in policy towards the Social Chapter of the European Union which, amongst other things, espoused developments in European labour law. In the first month of office, the Government announced its intention to commit to the Social Chapter, which the Conservative Government had rejected before Maastricht [10] in 1991 and consistently ever since. 

The change of policy was reinforced by the new labour Government’s commitment to the European Treaty of Amsterdam which it signed in October 1997 and which committed the UK to a revised Social Chapter. One legacy of the new Labour Government’s avowed commitment to the Social Chapter is the application of the European Works Council Directive [11] , which came into effect in the rest of the EC on 22nd September 1996 and then in the UK, as a direct result of the change in Government, in January 2000. The Directive requires workers of large organisations in the European Economic Area to be informed and consulted using European Works Councils or other appropriate means. In fact, many large UK firms had already adopted this approach, simply because they were caught by the application of the Directive in the other member states where they employed workers and then found it convenient to extend the same arrangements to their UK operations. The EWC Directive concerns European level subject matter. 

The UK has until March 2005 to implement the General Framework Directive [12] for informing and consulting employees on more local issues. Initially it will apply to businesses with 150 or more employees, by 2008 it will apply to businesses of 50 or more employees. Section 32 of the Employment Relations Act 2004 provides for the domestic enactment of the Directive.

There is a developing aspect of the legislative framework affecting employment law, including trade union law. It is now typically the practice for features of primary legislation to be deferred for enactment by subsequent subordinate legislation or action whether by Statutory Instrument or ministerial order, hence aspects of the Employment Act 2002 were not brought into law until October 2004 and similarly, exemptions for small businesses employing fewer than 15 people were not brought within the ambit of the 1995 Disability Discrimination Act until October 1st 2004. It is also confusing, as illustrated above, to have retrospective (but happily not retroactive) amendment of statute dated for example 1992, in the case of TULRA(C)A, by later statutes e.g. the Employment Relations Act 2004. Large areas of employment law are introduced onto the statute book but then deferred by later enabling measures. This means that important entitlements can be introduced or withdrawn at short notice and with minimal Parliamentary scrutiny rather than having them “enshrined” in primary legislation.

The theme which runs through the modern history of trade union law over the past 35 years is the shift from a largely laissez faire approach based on collectivism and self-regulation, where the notion of legally binding agreements was often expressly excluded, to a core now of common law overlaid by a complex statutory code of regulation. The principal recent legislation inherited by the incoming Labour Government in 1997 was the Trade Union and Labour Relation (Consolidation) Act 1992 and the Employment Relations Act 1999. 

The Employment Rights Act of 1996 was largely a codification of previous disparate legislation by incorporating the Wages Act and the Employment Protection Consolidation Act 1978, regarding unfair dismissal provisions. One of the headlines in the Labour Manifesto of 1997 was to permit union recognition where the union had the support of the majority of the workers at the undertaking. This found its way into the Governments White Paper “Fairness at Work” [13] and represented a partial return to the closed shop ethos without conferring the same levels of autonomy under the union rulebook of the old regime. Specifically, with regard to trade union law, the White Paper proposed to enable employees to have a trade union recognised by their employer where a majority of the relevant workforce wished it; to change the law so that those dismissed for taking part in lawfully organised industrial action came within unfair dismissal protection; to make it unlawful to discriminate on grounds of trade union membership, non-membership or union-related activities; to prohibit blacklisting of trade unionists; to amend the law on ballots before industrial action to preserve anonymity of employees; to create a legal right to be accompanied by a fellow employee or trade union representative of their choice during grievance and disciplinary procedures; and abolish the Commissioners for the Rights Trade Union Members and for the Protection against Unlawful Industrial Action by transferring some of these responsibilities to the Certification Officer [14] . 

Under Section 29 of the Employment Relations Act 1999, the powers of the Certification Officer have been extended from those under the TULR(C)A 1992 to provide an alternative to the courts for resolving disputes from trade union members regarding alleged breaches of trade union law or rules. The Certification Officer can make legally binding orders and declarations to enforce his decisions.

The Government subsequently diluted its original White Paper proposal that a union should be automatically recognised where it had at least 50% of the membership within a particular bargaining unit. The revised proposal allowed the Central Arbitration Committee (CAC) [15] to conduct a ballot where it was satisfied that this was in the interests of good industrial relations or a significant number of the union members within the bargaining unit did not want the union to bargain on their behalf. This was implemented by the Employment Relations Act 1999. Until its functions were repealed by the 1980 Employment Act, the CAC had jurisdiction over union recognition disputes and the payment of rates agreed for a trade subject to a collective bargain. Section 1 and Schedule 1 of the ERA 1999 created new roles for the CAC to operate the statutory recognition and derecognition scheme and to adjudicate where recognition disputes arise.

The first minor reforms of the Labour government were the Employment Rights (Disputes Resolution) Act, which was passed on 8th April 1998. The main effect of this Act was that industrial tribunals were restyled as employment tribunals and union officials or members of an independent trade union were included amongst the categories of person allowed to advise formally in relations to agreements for contracting out of statutory rights (compromise agreements – now incorporate into s 203 (3A) of the Employment Rights Act 1996). One observer [16] expressed himself at a loss to understand the need for change in the title of the tribunal, although it can be argued that it had become outmoded and was largely an accidental legacy, inherited from its unfortunate predecessor, the ill-fated Industrial Relation Court of the early 1970’s. As to the second provision, its impact has been underwhelming because of the policy of most unions of not wishing to risk the liabilities incumbent upon proffering such advice. The act also promoted a new voluntary arbitrations scheme, developed by ACAS [17] to settle unfair dismissal claims. 

The second reform was contained in the Employment Rights (Increase of Limits) Order 1998 [18] , which was passed on 1 April 1998. Following this the Government implemented the White Paper proposal to reform the law relating to “check off” arrangements under S1 of the Deregulation and Contracting Out Act 1994, by passing the (Deduction from Pay of Union Subscriptions) order 1998. This provision removed the need for workers who are union members to have to confirm every three years that union-related deductions can still be made from their salaries. It also removed the need for employees to notify such workers one month in advance that an increase in deductions is to be made.

The major legislation which followed; up to the 2004 Employment Relations Act (which was designed to make a number of changes to the statutory union recognition procedures, and make amendments to the law relating to industrial action, trade union membership and other rights of workers and employees), included the National Minimum Wage Act 1988 which set up the Low Pay Commission (under the chairmanship of Sir Peter Davis [19] ) and set out the procedures for ensuring and enforcing the national minimum wage for all workers. Although not strictly trade union legislation, it fulfilled a major, conspicuous and controversial commitment to the trade union movement, contained in the election manifesto. Its controversy was in its social reengineering which the Conservatives and others believed was anti-competitive and was guaranteed to increase unemployment, as well being perceived by many as having an inflationary impact upon the maintenance of pay differentials. This is dwelt upon here only as a reminder of the difficult gestation period, which preceded this piece of legislation, to be followed in contrast, by an unremarkable birth and infancy, and the disappearance as a result of another ideological division between the main political parties. 

The Employment Relations Act 1999 followed. This made a number of changes in the law relating to trade unions as well as some other provisions mentioned here. A new statutory framework for collective bargaining was introduced, union balloting procedures were modified, and increased protections were given for trade union members particularly when taking part in official industrial action. Other union sponsored reforms were introduced, which although not directly concerned with the reform of unions themselves, were relevant to the unions’ future role. The service qualification for unfair dismissal and other claims was reduced to one year [20] . Maternity provisions were simplified and the concept of parental leave was introduced as well as statutory provision for time off to deal with domestic emergencies and to care for dependants. A statutory right was created to be accompanied at an internal disciplinary or grievance hearing. One of the biggest impacts was the raising of the threshold of compensation for unfair dismissal from £11,700 to £50,000. 

Although the full amount before or since was rarely awarded by tribunals, the effect has been for employers to take more seriously the requirements of the unfair dismissal provisions of the Employment Rights Act 1996 [21] (a notable example of the full award being received was the recent case of Dunnachie v Kingston upon Hull City Council, where the damages accumulated by the applicant considerably exceeded the maximum award limit, thus the tribunal allowed the maximum to be paid [22] ). It should be remembered in dismissal cases involving discrimination or harassment the maximum award can be enhanced by further awards. Sarah Vince Cain was awarded £112,000 against the Georgio Armarni Group for being sacked after taking two periods of maternity leave. [23] The maximum award now exceeds £53,000. Statutory protection from unfair dismissal is a major plank of the trade union movement’s stance on industrial democracy and one that was eroded by the derisory awards available prior to the 1999 Act. The position regarding unfair dismissal or selection for redundancy related to trade union membership or activities was more generous by virtue of the Employment Act 1982 which permitted the payment of a special award in addition to the basic and any compensatory award. The need for this was eroded by the raising of the compensation award limit to £50,000. The position has since been simplified by s 33 of the Employment relations Act 1999 by replacing the special award with an additional award.

The current General Secretary of the Trades Union Congress, Brendan Barber, in a speech on 17th November 2004 [24] , outlined the progress made since the 1970’s and described the shift from collectivism, where rights at work were protected by union strength, to individual employee rights today, whether of a union member or not, enforced by access to the law. He observed, however, that unionised workplaces tended to avoid tribunals for two main reasons. The first was the negotiation of procedures in advance to stop injustices that would otherwise end up in the employment tribunals (this point is nicely reinforced in the Court of Appeal in Roberts v West Coast Trains Ltd [25] where a decision to dismiss was not justiciable if the subsequent operation of the in internal appeals procedure withdrew the decision and substituted it with a lesser sanction all in accordance with the negotiated terms of the individual’s contract of employment). The second, if the first did not work, was a preference to deal with problems without reference to legal procedures and lawyers. 

The great advantage he clamed for this, was not just that it is simpler and less expensive for both sides, but that it could often lead to someone keeping their job rather than ending up with limited compensation but no work. The point here is that unfair dismissal protection, even with its strengthened compensation, when enacted, is rarely a better option economically for the individual that retaining their employment. There is a deterrent effect on employers and a recognition that they face financial and, to a degree, reputational cost for unfairly (and wrongfully at common law) dismissing their employees, but in the end, particularly for the large employer this is merely another heading in their operational risk analysis, whereas for the individual the loss can be devastating by comparison. The other remedies of reinstatement or reemployment are rarely applied, and are often inappropriate and unenforceable by the tribunal which can only award financial compensation for breach. Brendan Barber describes the nature of the relationship between employer and employee as inherently unequal and concedes that if employees cannot call upon the collective power of trade unions (who represent 1 in 3 of the workforce) they will go to the nearest lawyer or advice agency, but will at best receive mere (and meagre) compensation rather than protection or restitution. 

The Employment Act 2002 made further changes in the law relating to maternity leave, and introduced paid paternity and adoption leave. Employment Tribunal procedures were reformed with effect from October 2004 and the Arbitration, conciliation and advisory service (ACAS) was required to operate within fixed periods of conciliation. The effect of the tribunal provisions is a direct attempt to reduce the number of tribunal cases by making them less accessible. This is a major irony since they were set up precisely to provide an accessible and cheap route to legal redress for employees as an alternative to industrial action. There is however logic in requiring internal dispute resolution and disciplinary procedures to have been exhausted before registering a claim with the tribunal and the problem has to be addressed given that there were a total of 100,000 discrimination claims alone brought before the tribunals in 2003 [26]

The solution should not rest however in watering own the remedial opportunities although it is to be hoped that strengthened controls and the escalation of decisions within organisations may improve employers performance as well as relieve the tribunals and employers of nuisance claims and settlements (where it is in the employer’s interest financially to make modest, but cumulatively costly, settlements irrespective of the merits of the case, rather than incur the expense of contesting them). The restriction is balanced by the provisions of the statute which imply into all contracts of employment statutory dismissal, disciplinary and grievance procedures, with sanctions available for those who fail or refuse to follow or introduce those procedures including increasing any compensation by 10% with the discretion to increase this to 50% of any compensatory awards by tribunals where case are brought for lack of or disclose a lack of or failure to follow such procedures. The provisions are essentially an enactment of the existing ACAS code of practice (No 1), which has had the force equivalent to law in providing the gold standard to be used in deciding procedural fairness in dismissal cases. The effect however is to extend the concept of automatically unfair dismissal for if an employer fails to comply with the mandatory procedural steps any dismissal of employees who have passed the minimum service threshold will be automatically unfair. The issue here, however, is the knock on effect for trade union representatives, their availability and their training needs.

Union learning representatives were given the right to have time off with pay to perform their functions under the Employment relations Act 2004 (but by virtue of s168A of TULR(C)A 1992, union members’ entitlement to reasonable time off work for the purpose of having access to a learning representative is without pay.

Given the scale and complexity of trade union reform let alone the upheaval in the wider employment law field, the announcement quoted of the Employment Relations Minister is a bold one. It is difficult to agree that the provisions of the 2004 Act will simply be grafted onto a well-cultivated plant of trade union reform flourishing in the centre of a manicure lawn of employment law development. To take the example of dismissal in connection with industrial action, this is already fiendishly complicated under ss237-239 of TULR(C)A 1999, including the recent addition of s 238A and cannot be regarded as an example of the principle of better regulation. The framework of employment rights and union recognition procedures of previous legislation are a fog of successive amendments and consolidations, there has been too much “building upon” already: replacement is needed with new consolidated primary legislation with less reliance on vague and indeterminate enabling legislation.

In his forward to the 13th Edition of Selwyn’s Law of Employment, the author quotes an employer who asked him how he was expected to run a business and cope with all these new legal rules. His response was to advise the employer to treat his employees as he himself would want to be treated in like circumstances. The legislation too, and it jurisprudential principles, need a little more respect from its ministerial masters.

Bibliography

  • Industrial Law, 8th Edition 2003, Smith & Wood, Butterworths
  • Selwyn’s Law of Employment. 13th Edition 2004. NM Selwyn, Butterworths
  • Cases and Materials on Employment Law, 5th Edition 2004, Richard W. Painter & Anne Holmes, Oxford University press
  • Blackstone’s Statutes on Employment Law 2001 – 2002, 11th edition 2001, Blackstone Press
  • Sweet & Maxwell’s Employment Law Statutes 2003/4, 1st Edition 2003, Malcolm Sargeant, Sweet & Maxwell Ltd
  • Trade Union Law, Nick Humphreys, 1999, Blackstone Press Ltd - January 2005
  1. [1] See Express Newspapers v McShane [1980]
  2. [2] Trade Union and Labour Relations (Consolidation) Act 1992
  3. [3] There were two forms of closed shop; pre-entry, which limited the offer of a job to members only of the union with exclusive negotiating rights and post-entry, which had the same effect upon retaining a job when a union membership agreement was struck with an employer. The effect of the legislation is that the pre-entry and post-entry closed shop is no longer lawful in Great Britain, following the Employment Acts of 1988 and 1990, re-enacted in ss137-143 0f TULR(C)A 1999.
  4. [4] See Young James and Webster v UK [1983]
  5. [5] [2002] All ER 35, [2002] IRLR 566
  6. [6] Len Murray was the General Secretary of the TUC, Hugh Scanlon the leader of the engineering union ASLEF and Jack Jones leader of the Transport and General Workers Union.
  7. [7] Framework Directive for equal treatment in employment and occupation 2000/78/EC, adopted 27th November 2000. Race Directive, 2000/43/EC
  8. [8] Transfer of Undertakings (Protection of Employment Regulations) 1981, which enacted domestically the Acquired Rights Directive of 1977 – 77/7/EEC
  9. [9] the Revised Acquired Rights Directive 98/50/EC
  10. [10] the Maastricht European summit of December 1991, which lead to the Treaty on European Union, which was signed on 7th February 1992.
  11. [11] 94/45/EC
  12. [12] 2002/14/EC
  13. [13] Command 3968 May 1998
  14. [14] the Certification Officer is formally independent of government, although supported by ACAS staff, originally established under the Employment Protection Act 1975. The Certification Officer is, in effect, the independent regulator of trade unions. 
  15. [15] The Central Arbitration Committee (CAC) was established by the Employment Protection Act 1975, replacing the Industrial Arbitration Board.
  16. [16] Professor Ian Smith; Industrial Law 8th Edition, Smith & Wood, Butterworths, page 495 – the change it tile was “for no apparently compelling reason”. 
  17. [17] The Advisory, Conciliation and Arbitration Service (ACAS) was put on a statutory footing by the Employment Protection Act 1975. The constitution of ACAS is contained in ss247-353 and its functions in ss209-214 of TULR(C)A 1992
  18. [18] SI 1998 No 924
  19. [19] the former head of The Prudential Insurance Group and later successively Chief Executive and Chairman of Sainsbury PLC
  20. [20] a political football between Conservative and Labour, continually being kicked into either the two year or one year net, depending on who was in power. In fact the qualifying period in 1979 was 26 weeks and was quadrupled to 2 years in 1985.
  21. [21] Section 95
  22. [22] Employment Appeal Tribunal [2003] ICR 1294 – the case ultimately went to the House of Lords regarding the (inappropriate as it turned out in not applying the dictum of Lord Hoffman in Johnson v Ulyses Ltd [2001] ICR 480 HL(E)) award of damages for non-pecuniary loss in this case. It was held that s 123(1) of the Employment rights act 1996 related only to pecuniary loss. The sum of £10,000 involved did not affect the total of compensation received because the maximum had already been exceeded without it.
  23. [23] Times Law section 28th September 2004 p 6 – hers was one of 1,000 claims by women per year who are sacked for pregnancy reasons
  24. [24] Delivered to the Employment Lawyers Association at the Café Royal, 68 Regents Street London W1 – The Times Law Section 16th November, p8.
  25. [25] Judgement June 16th 2004, published June 25th, 2004 in the Times
  26. [26] Times law section 28th September 2004, p 6

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