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UK labour law update - June 2016

  • United Kingdom
  • Employment law


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

UK labour law news

UK labour case law update

UK labour law news

Brexit: implications for labour law, including European Works Councils?

The UK has voted to leave the EU. However, up until such time as the UK actually leaves the EU, nothing changes from a legal perspective. The UK remains an EU Member State and EU rules and obligations continue to apply to, and in, the UK. Visit our Brexit hub for further information.

At this early stage, it is unclear what the UK’s future relationship with the EU will look like. However, it is possible that, as a result of Brexit, there will be a review of labour laws resulting in some changes. Our suggestion is that these changes may be limited in number, in the labour law sphere, due to the restricted application of EU law in some trade union and collective issues. For example:

  • Domestic strike law (set out in TULRCA) sits outside EU legislative competence and has been little altered by our membership of the EU. However, the Viking line of EU case law (relevant to industrial action which restricts EU cross-border trade and services) may no longer apply in the future, depending on the terms of the UK and EU relationship going forwards
  • Trade union recognition, collective agreements and members’ rights and protections have also been little affected by the EU (although they have had to change as a result of the separate European Convention on Human Rights).
  • However, the EWC and national information and consultation of employees legislation (TICE and ICE regulations) are derived from EU laws and are therefore subject to uncertainty following Brexit. Similarly, worker representation rights during collective redundancies and TUPE.

We are receiving a number of queries in relation to European Works Councils, both where an EWC is being negotiated under UK jurisdiction and for existing UK based EWCs. There is a concern that EWCs subject to UK law may have to move to another EU country where the central management or representative agent is in in the UK. While this is an evolving situation, it is important to bear in mind that if the UK were to negotiate a post-exit arrangement which allows it to have continued and full access to the Single Market that would entail the UK continuing to apply all EU laws which relate to the Single Market, including those relating to EWCs. Whatever the future relationship with the EU, we anticipate a period of notice allowing employers to decide their EWC strategy.

In practice, some multinationals with large UK workforces might decide to retain UK representation on their EWCs, in the event of Brexit. Those currently negotiating a new UK based EWC may come under pressure to relocate to another country’s jurisdiction. Given the uncertainty, changing now could be premature because the exit arrangements are very uncertain and at this stage (and, it is expected, for the next two years) we remain an EU member. However, employers should evaluate alternative jurisdictions, as part of contingency planning, given that EU states vary in terms of EWC enforcement, sanctions and the approach of the courts. Please contact our EWC specialist, Tom Player to discuss your EWC Brexit queries.

The Trade Union Act – impact on employers

The Trade Union Act makes significant changes to the law on industrial action, as well as affecting how public sector employers manage union facility time and check-off arrangements. It also expands the role and power of the Certification Officer. A phased implementation is commencing during 2016 with some changes, such as to check-off, being delayed until 2017.

The Act is anticipated to result in more focused, and possibly fewer, strike ballots and may lead to alternative forms of protest where a minority harbour strong grievances. Employers relying on the Act, such as to seek an injunction to stop an unlawful strike, should be aware that unions may challenge some of the changes on human rights grounds. Read about the Act’s changes and employer implications here.

Trade union membership in private sector drops below 14% for the first time

The proportion of private sector employees who are trade union members has dropped to 13.9% - the lowest on record. In the public sector, latest figures published by BIS show that union membership levels increased by 29,000, with a rise in membership density from 54.3% to 54.8%.

Another union to merge with Unite

UCATT, the construction union, has voted for a merger or transfer of engagements to Unite. Over recent years, the union has suffered a rapid decline in membership and its annual returns have suggested financial challenges.

UK labour case law update

Govia Thameslink Railway Ltd v ASLEF: two injunctions - before and after strike ballot

First injunction

This an injunction before the union had initiated a ballot for industrial action. As such, it is relatively unusual and a reminder that injunctions (typically, sought by employers to stop unlawful industrial action) are not restricted to breaches of the balloting procedures under the TULRCA legislation.

The circumstances were as follows: GTR issued an instruction to its train drivers; ASLEF told its members that there was no agreement with the employer to obey the instruction; there was evidence that one member interpreted this as a reason to disobey GTR; GTR sought an injunction preventing ASLEF from instructing, inducing or encouraging its members to breach their contracts. The Judge considered whether GTR had the contractual right to issue the instruction. If yes, whether ASLEF had unlawfully persuaded their members to break their contracts by refusing to obey. The Judge found in GTR’s favour and decided that, in such a heavily unionised environment, ASLEF’s message to its members could be interpreted as inducing its members to break their contracts.

Second injunction

Following the first injunction, ASLEF successfully balloted its members for industrial action as it remained in dispute with GTR about the instruction. GTR applied for a second injunction. It argued that ASLEF’s messages to its members (that there was no agreement to obey GTR’s instruction) had constituted a call on its members to take part in industrial action before the date of the ballot to which it relates. If ASLEF had made such a ‘prior call’, the subsequent action would be unlawful (s233 TULRCA).

Given the lack of legal guidance on what constitutes a ‘prior call’, the case provides some pointers. In the Judge’s view, a ‘prior call’ would have to involve the tort of inducing a breach of contract. The judgment explores the requirements of an inducement, for example, rejecting ASLEF’s defence that they did not know that they were inducing breach of contract because they genuinely believed that their members were contractually entitled to refuse to obey the instruction. Instead, the Judge decided that ASLEF should have known or were indifferent to the contractual position. As such, the case acts as a reminder to unions to act responsibly before taking industrial action, given that ‘wilful blindness’ to the facts, according to the Judge, will not protect them.

The cases reiterate the need for an employer to make clear to the union why it believes that it is entitled to impose a new working arrangement. This puts the union on notice that inducing their members to refuse to comply would be an unlawful inducement. Please contact Marc Meryon, Head of Industrial Relations, if you wish to discuss these cases.

Cavanagh and ors v Sec of State for Work and Pensions: withdrawing check-off

C, an employee of the Department for Work and Pensions, had opted to have his PCS subscription paid via a check-off arrangement (his employer deducted it from his salary and paid it to PCS). After consultation, his employer ended check-off. C claimed that he had a contractual right to insist that check-off was continued. PCS also claimed that it could enforce check-off arrangements against the employer under the Contracts (Rights of Third Parties) Act 1999, which allows a third party to enforce a contractual term if it ‘purports to confer a benefit' on that person. The High Court agreed with C and PCS, meaning that the employer was obliged to continue with check-off.

The case is an important reminder to employers to review contractual risks if they wish to end check-off. Whether it is a contractual right depends on the facts of each case; here, the Court had to decide the contractual interpretation of words in a salary policy, given its historic context.

Sec of State for Education v NUT: government funding and ‘political’ trade disputes

The National Union of Teachers (NUT) called a one day strike in protest at the Secretary of State’s (SOS) refusal to increase funding of sixth form colleges. This, the NUT alleged, detrimentally effected their members pay and jobs. The dispute was not with the colleges employing the teachers.

The SOS applied for an injunction to stop the strike alleging that the NUT’s action was not a ‘trade dispute’, because its purpose was political (to secure higher funding of sixth form colleges) and therefore unlawful. The Judge disagreed with the SOS, deciding that the union’s aim was to protect its members’ jobs by defending the sixth form college sector – defending the colleges was the means to the end, not the end in itself. It did not matter that the dispute was with the SOS and not the employers given that statute (TULRCA s244(2)(c)) provides that a trade dispute may still exist if it cannot be settled without the SOS exercising a statutory power (here, the funding power). The injunction was refused. It is an useful case for those employers facing the threat of industrial action which has a mix of political and job-related causes with the courts having to decide whether the latter is the predominant purpose.

TCS Services v United Voices of the World: protests - free speech or public disorder?

TCS contracted with managing agents to supply cleaners to a building in the City of London. United Voices of the World is a ‘grassroots, member-led, trade union that campaigns for labour rights in London’. Some of TCS’s cleaners are members of the union. A dispute ensued over redundancies, recognition and wage levels. The union wrote to some of the building’s tenants, stating its intention to stage direct action at the building to draw attention to their dispute with TCS. TCS applied for an injunction to stop the protest.

The Judge considered the tipping point between a demonstration exercising lawful free speech rights and one involving unlawful public disorder, harassment and intimidation, which must be prevented. He concluded that the union had threatened ‘noisy, intimidating, mass protest’ by protesters with no connection with the workers with the objective of harassing TCS and embarrassing it into conceding to the union’s demands. An injunction including a geographical exclusion zone, i.e. restricting protest around the building and nearby streets, was granted. While an unusual case, it demonstrates the limits of lawful protest (sometimes pursued as an alternative to strike action), particularly if it threatens physical confrontation at close quarters between protesters and those seeking to go about their lawful daily activities.

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