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UK labour law quarterly update - September 2019

  • United Kingdom
  • Employment law


Welcome to our September UK labour law quarterly update. This edition contains the following content:

News round-up

Recent labour case law

Eversheds Sutherland labour law publications, events and training

News round-up

Labour Party announcements on new collective workplace rights, if elected

With a general election before the end of the year a possibility, the Labour Party made a number of announcements last week on collective workplace rights, some more aspirational than others. For example, John McDonnell confirmed that Labour would look at reducing working hours if elected, following a report advocating a reduction in the public sector to a 35 hour week over a decade.

More detailed proposals include:

  • introducing sectoral collective bargaining by establishing councils of worker and employer representatives that “negotiate collective agreements with minimum terms, conditions and standards for the whole of the sector and guarantee a legal minimum for every employer in the sector to adhere to on a core set of issues, including pay, working hours and recruitment and grievance processes”
  • establishing a new Ministry of Employment Rights which would be responsible for the roll-out of the above collective bargaining across the economy
  • repealing the 2016 Trade Union Act. The Act introduced new industrial action ballot thresholds, tightened the supervision of picketing, provided for longer advance notice of strikes and the re-balloting of ongoing disputes
  • introducing electronic and workplace ballots
  • giving trade unions the right of entry to workplaces to organise members and to meet and represent their members
  • banning “anti-union practice” and strengthening the protection of trade union representatives against unfair dismissal
  • creating a Workers Protection Agency with extensive powers to enforce workplace rights
  • putting workers on boards

More broadly, the Labour Party has also committed to: a living wage of at least £10 per hour for all workers from the age of 16, action on the gender pay gap, equal rights for all workers from day one, the end of zero-hour contracts and giving the workforce a 10% stake in large companies.

Recent labour case law

Egbayelo v Ocado: Is a collectively agreed term incorporated into a contract of employment?

The EAT upheld a Tribunal decision to the effect that Egbayelo’s (“E”) contract of employment had been varied after Ocado (“O”) entered into a recognition agreement with USDAW.

E commenced employment in 2010 and O recognised USDAW in 2011. It told staff, including E who was not an USDAW member, that terms relating to pay, hours and holiday would now be subject to collective bargaining. E had not expressed any objection and had accepted collectively agreed pay rises until a disagreement over a change to holiday entitlement in 2017. Whilst accepting the annual pay rise, E rejected a reduction in her holidays, contending that this new term was not part of her contract.

The EAT confirmed that E had accepted the 2011 change to her contract by her conduct because, having been notified of the collective bargaining provision, she accepted the pay rises that followed. Alternately, the change had been incorporated by custom and practice. It also agreed with the Tribunal that it was not open to E to cherry pick one aspect of the collective bargaining arrangements (the pay increase) and decline the rest. By accepting the benefit, E could be taken to have agreed to the entirety of the package including the holiday change. Such cases are by their nature fact specific, however, this is a useful reminder of the issues to be applied by a Tribunal.

Hinrichs v Oracle Corporation: Must an employer wait for an EWC opinion before making redundancies?

An EWC had been established at Oracle (“O”) under the subsidiary, or default, requirements of the EWC legislation. In 2018, the Central Arbitration Committee (“CAC”) rejected a complaint, brought by the EWC, that national action to dismiss employees should not have been taken by O before the EWC had given an opinion on the proposed action. The EAT upheld the CAC’s decision. According to the EAT, provided an employer has given an EWC the necessary information on its proposals and engaged in consultation, it is not required to wait for an opinion from the EWC before taking and implementing its decision. However, it should be noted that this decision does not remove the requirement for the employer to inform and consult the EWC in such a way to facilitate the latter to give an opinion in a timely fashion. As the EAT notes, a failure to engage in consultation in good faith might amount to a failure to consult.

Hewlett Packard Enterprise SNB v Hewlett Packard Ltd: Can an employer unilaterally move an EWC’s jurisdiction from the UK to Ireland?

In 2015, Hewlett Packard (“HP”) Ltd in the UK was appointed by the US based HP Enterprise Company to be its representative agent when setting up a new EWC - the first step being to establish a body of employee reps (the “SNB”) to conduct the EWC negotiations.

However, after the 2016 EU referendum, the US parent appointed HP Ireland as its representative agent in place of HP UK and a dispute arose with the SNB as to whether UK or Irish law applied to the EWC. Both parties to the dispute agreed that UK and EU legislation are silent on whether it is possible for a multinational such as the US HP to re-designate its representative agent and move jurisdiction from one state to another in this way.

The Central Arbitration Committee (CAC) decided that this change of appointment was valid and the effect was to apply Irish law in place of UK law. It accepted that the company had changed to Ireland to mitigate the legal uncertainties arising from the Brexit vote. It noted that moving to a less onerous EWC jurisdiction may also be valid according to EU principles of freedom of establishment. However, it stated that re-designation is not wholly unfettered; if done in bad faith, such as repeatedly or mischievously, it may be invalid. Here, there was no evidence of bad faith, the EU law rights of the affected employees had been preserved and obligations on the HP Group to inform and consult had been maintained.