With strike action currently taking place across the UK, and with more planned by workers in a variety of industries, comparisons are already being drawn to the 1978-1979 Winter of Discontent. Factors such as rising inflation and the current ‘cost of living’ crisis, set against a backdrop of a downbeat economic outlook, mean workers are more willing to vote for collective action. However, the industrial relations landscape is fundamentally different to the 1970s. Whether a business recognises a trade union or not, it should consider the possibility of action both from trade unions and other groups which seek to use collective action as a means to effect change.
In this third and final Law-Now of this series, we will consider what employers should be watching out for in an increasingly complex industrial relations landscape, how they can mitigate the risks for their businesses and what recent measures have been introduced by the government in response to the current industrial action.
Trade unions – the current position
Whilst trade union membership in the UK had been falling since 1979, the pace of decline slowed in the late 1990s and has been rising since 2016. Membership is higher among certain groups and industries, with the public sector being a key cornerstone of union support. However, unions such as the United Workers of Great Britain have made inroads with their support for gig-economy workers, both through recognition and by supporting court action. Some unions are also reporting increasing membership applications in recent weeks, based on the current high profile industrial action.
If a union is “recognised” by an employer then it usually means it is acknowledged as entitled to negotiate in relation to employees’ terms and conditions of employment directly with the employer, on behalf of specified groups of employees, known as the “bargaining unit”. This process is called “collective bargaining”.
Although there is a formal legal route for a union to become compulsorily recognised by an employer, many recognition arrangements are ‘voluntary’. This is where an employer chooses to recognise a union and they agree between themselves the terms over which the union can conduct collective bargaining. This is a more flexible arrangement for both employers and unions and the terms can cover matters other than pay, hours and holiday. Such voluntary agreements can be entered into at almost any time, including when a union has already started the formal legal process of statutory recognition.
By its nature, the statutory recognition procedure set out in the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”) (as amended) is a prescriptive process, involving multiple stages (if the employer rejects the initial request from the union to be voluntarily recognised) and sets relatively tight timeframes in which both the employer and union are required to take action. Ultimately, the statutory recognition procedure holds the possibility of both trade union recognition and a method of collective bargaining being imposed on the employer.
Organisations would be well advised to scope out at an early stage to what extent, if any, they are willing to voluntarily agree to union recognition, as well as their red lines, and whether they wish to take any proactive steps to facilitate achieving their goal(s). If an organisation is not willing to voluntarily recognise a union, they risk being drawn into a statutory recognition procedure which can be a time consuming and costly process, and may have longer term implications for employer/employee relations, given that the process usually involves formal campaigning from both sides and an employee ballot process. These considerations should factor into any strategy the organisation adopts in dealing with, and responding to, any formal requests for union recognition.
Once a union is recognised and a method of collective bargaining agreed, the employer is committed to the terms governing that relationship, which usually involve formal negotiation meetings and a requirement for information sharing, as set out in the recognition agreement. Effective industrial relations practice typically involves good communication, meaningful consultation and negotiation involving ‘give and take’ on both sides. Where the employer and the union encounter difficulties reaching agreement during collective bargaining, the parties can request support from the Advisory, Conciliation and Arbitration Service (“ACAS”) which provides conciliation and mediation services.
If negotiations stall, employers must seek to resolve the impasse through any agreed dispute resolution process set out in the recognition agreement. Following the Supreme Court’s recent decision in Kostal UK v Dunkley & Others UKSC 2019/0153, which considered the extent of the statutory rule under section 145B of TULRCA limiting an employer’s ability to induce employees to determine their terms outside of the collective bargaining process, employers can only make direct offers to employees outside of the agreed framework with the union once the collective bargaining process (including any agreed dispute resolution procedure) has been exhausted. Employers should therefore ensure that the recognition agreement clearly determines when the collective bargaining process has been exhausted, to avoid any uncertainty or suggestion that direct offers to employees to change their terms and conditions have unlawfully circumvented the union, risking potential legal action.
Other rights for trade union representatives
Even where an employer does not formally recognise a union, there are circumstances in which they may still need to engage with trade union representatives. In particular, workers have the right to be accompanied by a trade union representative at certain meetings, such as disciplinary hearings and grievance outcome meetings. Many members see this as a valuable benefit of union membership because it allows them to have a knowledgeable companion in the room.
Employees who are a member of a union (even if it isn’t recognised) also have legal protections, for example, they must not be subjected to detriment or dismissal as a result of their membership of a trade union, or as a result of their participation in trade union activities, and must not be offered an unlawful inducement by an employer relating to their trade union membership or activities. There are additional protections that apply during specific stages of the statutory recognition process. Understanding these rights and their limits is important for businesses and staff, including managers, who should be trained to ensure that they understand what is, and importantly what is not, expected of them so that they do not fall foul of these provisions.
Employers should also remember that union membership is “special category” data under the Data Protection Act 2018, so there are very limited circumstances in which collecting and processing it is appropriate. There are also specific provisions preventing the creation of lists of union members, following the blacklisting scandal in the construction industry. Employers should therefore take care to limit the information that is collected about trade union membership. If that information genuinely needs to be collected, for example, to operate check-off (deduction of union membership dues from wages), the employer may wish to limit who has access to that information.
Other avenues of employee representation/support
Outside of the traditional route of trade union recognition, the current industrial relations landscape provides a variety of options for businesses who wish to have employee representatives in place.
Many employers have less formal arrangements such as an employee consultative forum, and some use other legal avenues to set up a formal information and consultation body, such as a works council. In some organisations, these forums co-exist and work alongside unions. Employee representatives may, or may not, be members of trade unions as well. Whichever option an organisation chooses, it should consider what, if any, legal rights these representatives will have (for example, a right to paid time off to carry out their duties), and how that will be managed in practice.
Additionally, and again in contrast to the 1970s, there is now an ever-increasing group of organisations designed to support workers and take collective action against businesses on their behalf. These organisations are often established through online worker-driven networks, with the aim of uncovering wrongdoing or acting as a platform to seek to implement change or reform of workplaces.
While these groups are not regulated in the same way as trade unions, and do not have the same level of legal protections afforded to their members, their activities can be effective in practice. With the increasing level of scrutiny on businesses and the wider ESG agenda, there are significant risks for businesses who do not act, or are not seen to be acting, appropriately. Organisations that listen to and engage with their workforce positively, particularly when concerns are raised, will often better manage the associated risks, including potential reputational damage.
Recent changes to the law in response to industrial action
As we mentioned in our previous article in this series, the government recently introduced draft legislation which intended to repeal the ban on employment businesses from introducing or supplying work-seekers to hirers in order to cover the duties of those workers who are participating in industrial action, or the duties normally performed by any other worker who has been assigned to cover a striking worker. On 21 July 2022, the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022 came into force, meaning that the use of agency staff to fill the gaps left by workers taking industrial action will no longer be prohibited.
Whilst UNISON has already indicated its intention to seek a judicial review of these regulations, currently employers have greater flexibility to cover the disruption arising from industrial action by using agency workers, provided there is a supply of agency staff with the skills available to carry out the roles of striking workers. Employers should carefully consider the competing risks, including the legal, employee relations and reputational consequences associated with taking measures to ensure business continuity.
The current industrial landscape is complex and carries both legal and commercial risks for organisations. If you would like to receive guidance from CMS, please get in touch with your usual contact or one of the authors listed here.