Annex 2 to chapter 1
annex 2
Response to Fairness at Work White Paper
Contents
The TUC generally welcomes the publication of the Fairness at Work White Paper. The proposals will restore some much needed balance in employment legislation, though, as the Prime Minister acknowledges in his foreword to the White Paper, it will still leave us with the most lightly regulated labour market of any leading economy in the world and incidentally one of the most regulated trade union Movements in the European Union.
There is a clear need for legislation to ensure minimum standards of fair treatment for people at work. The TUC has highlighted cases of exploitation at work which make a powerful case for new legal rights. Establishing a floor of basic entitlements below which no-one can fall is crucial to building a successful economy. Guaranteed legal rights will prevent the good employer being undercut by the bad.
We endorse the White Paper=s emphasis on the importance of building partnerships at work. All the evidence shows that business succeeds when employers and unions work together. We welcome the proposal to make funds available for training aimed at spreading good practice on partnerships at work.
On the specific proposals in the White Paper, there are some areas where we would like to see improvements:
the 40 per cent threshold for recognition ballots;
the exclusion of small firms from the statutory recognition procedure; and
the qualifying periods for employment protection rights.
There are other proposals in the White Paper which we particularly welcome, including:
the abolition of the upper limit on awards for unfair dismissal;
the automatic right to recognition where there is majority membership; and
the right to representation by a union official.
Our detailed comments on the White Paper are set out below.
Trade union officers advise and represent their members on individual rights, both in the workplace and at Employment Tribunals. The TUC very much welcomes the proposals in Chapter 3 of the White Paper, which will mean that millions of workers who had previously been denied basic employment protection are to get important new rights.
One of the inconsistencies in employment law is the variety of levels of compensation available for various breaches. For discrimination claims, compensation is tort based, allowing for assessment of the damages suffered, with no upper limit. For unfair dismissal, there is an upper limit, which is now ,12,000 for the compensatory element and ,220 on a week=s pay for the basic award, with a maximum award of ,6,600. The average award for unfair dismissal in 1995/6, however, was only ,2,499. This is generally wholly inadequate as a form of compensation and no longer any use as a deterrent to bad employers. It is not clear from paragraph 3.6 of the White Paper whether the Government proposes to retain limits on the amount of >a week=s pay=. The TUC opposes any such limits. The cap on a week=s pay has fallen so low as to be relevant only to low paid workers. To achieve fairness, the basic award should relate to what the applicant was actually being paid. If limits are to be retained, they should be uprated to bring them in line with Average Earnings and then uprated annually in line with the Average Earnings Index.
The White Paper is clear about removing the limit on the compensatory award; the TUC supports this proposal. Where the Employment Tribunal assesses the damage done by the dismissal as being significant, they should be free to order a compensatory award which reflects that damage. The current restriction on compensatory awards in unfair dismissal cases may be unlawful where unfair dismissal rights derive from EC law, for example, the Acquired Rights Directive, and there is currently not a remedy which is >effective, proportionate and dissuasive=, as required by the ECJ in Von Colson (1984). By analogy with the case of Marshall (number 2 - ICR 893) a remedy which is subject to a ceiling less than actual losses suffered and which does not provide for interest on losses is not an adequate implementation of EC law requirements. The TUC therefore greatly welcomes the proposal to remove the maximum limit on unfair dismissal awards, applying to both the basic award and to the compensatory award. The Employment Tribunals should be able to establish guidance on the compensatory element of the award, as they have in the case of awards for discrimination. Union representatives will be able to assess their claims for compensation on the basis of the amount lost by the applicant, in particular taking into account any loss of pension. For the reasons given above, the current limit of ,25,000 for breach of contract claims should also be removed.
The Government is also considering introducing aggravated damages for special awards, for health and safety, public interest disclosure and other limited types of dismissal. The TUC urges the Government to proceed with this measure, which will, in effect, remove the existing cap and again, allow the award to reflect the damage done to the employee.
The TUC welcomes the proposal to index link the remaining limits, subject to a maximum rate. This would principally affect redundancy payments, but also guarantee pay and insolvency rights. The TUC believes that all compensation for breaches of employment law should be uncapped, allowing the specialist Employment Tribunals to determine the appropriate level in each case. Nonetheless, index linking will at least ensure that the limits do not fall below inflation or average earnings, depending on which index is used. The TUC proposes that the index used should be the Average Earnings Index, as the award is supposed, in part, to reflect loss of earnings. Steps should first be taken to uprate the present levels to an adequate standard, as they have fallen far below the average over recent years, because of the failure of the previous Government to uprate the awards at all for successive years during the 1980s.
It is not clear from the White Paper whether it is proposed to remove the cap on the award made where re-instatement is ordered but not complied with. The TUC would support the removal of this cap, which is currently no deterrent to an employer who is determined not to comply with an Employment Tribunal order. The TUC welcomes the current review of the enforcement of civil court orders, which is being conducted by the Lord ChancellorÕs department and hopes that the review will produce tougher measures for dealing with recalcitrant employers.
The White Paper does not make any comment on the present ú30,000 tax free limit on employment termination settlements. This limit is not index linked and continues to reduce in real terms. The TUC would like to see this limit linked in future to the Average Earnings Index.
The TUC believes that employment rights should apply from the first day of employment. Employees pay tax and National Insurance and are expected to comply with their contractual obligations from day one. It is only fair that they should consequently be fully protected from day one. Any qualifying period is subject to abuse by employers, because they can use short term contracts, of shorter duration than the qualifying period, to avoid their obligations.
The argument put forward by employers, that they need a long qualifying period to allow for mistakes made in recruitment, is spurious on two grounds. Firstly, if the fault lies with the employer=s recruitment methods it is hardly fair to blame the employee; secondly, as long as the dismissal is carried out fairly and for good reason, it will be legal for the employer to dismiss someone under these circumstances. The term >unfair dismissal= applies to the dismissal procedures followed as much as to the competence or capability of the employee. It is always open to an employer to dismiss somebody fairly, using proper procedures; the standard defence for the employer in the tribunal is >capability= or >conduct= of the employee.
While we welcome the proposal to reduce the qualifying period for unfair dismissal to one year as an important step forward, it will still be open to abuse from unscrupulous employers for the reasons set out above and we hope the Government will move to make further reductions. As well as reducing the qualifying period for unfair dismissal, the TUC would urge the Government also to reduce the qualifying period for redundancy payments and for a written statement of reasons for dismissal. The latter, in particular, is clearly linked to the qualifying period for unfair dismissal and should be changed at the same time. The two month qualifying period for a written statement of employment particulars should also be abolished. When employees start work and receive payment, mutual obligations exist, whether or not they are written down. It makes sense for both parties if these and other employment particulars are set out in writing and available to both from the outset of employment.
In addition, the TUC believes that the recent ruling in the ECJ in the case of Landschaftsverand Westfalen-Lippe and Ors may mean that the previous Government did not implement the EC Proof of Employment Directive sufficiently. The Government therefore should be looking at s.1(4)(f) of the Employment Rights Act 1996, which provides that employers must provide their employees with Athe title of the job which the employee is employed to do or a brief description of the work for which he is employed@.
A number of unions have reported growing problems for their members with the use by employers of waiver clauses in fixed term contracts. The recent decision in BBC v Kelly Phillips has made the situation worse, by allowing for such clauses to be included in renewed fixed term contracts which are for less than one year=s duration. There is now considerable legal confusion about waiver clauses, which apply differently to unfair dismissal and redundancy. As a result of the obiter in BBC v Kelly Phillips, it could be argued that waiver clauses for unfair dismissal could be included in initial contracts which are for less than one year=s duration.
Waiving the basic right to claim unfair dismissal or redundancy is never going to be to the advantage of an employee but employees feel obliged to agree to such waiver clauses in order to secure a contract. The Government offers three possible solutions: encourage employers to limit the use of waiver clauses; restrict their use to redundancy payments; or complete prohibition. The Government favours the second option.
The TUC agrees with the Government that employers cannot be prevented from using waiver clauses by exhortation to limit their use. Employers use them to prevent employees from acquiring employment protection. Some employers, for example in the education sector, routinely use waiver clauses in fixed term contracts regardless of the individual merits of the case. A review of pay and conditions in higher education, being conducted for the Government by Sir Michael Bett, is looking into the use of waiver clauses in higher education because of growing concern about excessive use. On the Government=s preferred option, which is to restrict the use of waiver clauses to redundancy payments, we do not believe that allowing waiver clauses for avoidance of redundancy obligations is necessary to provide flexibility for >genuine= employers. As redundancy is based on length of service it is unlikely that the employee would be entitled to much. If their contracts had been continually renewed to the point where they had acquired significant redundancy pay, the TUC would argue that they were, in effect, permanent employees and entitled to redundancy pay.
The law currently only allows waiver clauses for redundancy in fixed term contracts of at least two years duration. As it stands, the qualifying period for statutory redundancy pay allows employers two years freedom from redundancy obligations for all employees when they start work, not just those on fixed term contracts. The only point in the existence of waiver clauses for redundancy is so that the employer can use short term contracts which are longer than two years, or continuous short term contracts lasting more than two years and still have no obligations to pay redundancy.
Such exploitation is incompatible with the concept of fairness at work. There should be no provision in UK employment law which allows an employee to sign away their statutory employment rights in order to secure a job. Unscrupulous employers will always make use of such devices. The TUC also believes that fixed term contracts should be limited in their use to where the job concerned is genuinely short term. There has been a 25 per cent increase in the number of employees on fixed term contracts between 1991 and 1996. Currently many employers keep staff permanently employed on renewable fixed term contracts in order to ensure that they do not accrue employment protection. The TUC is currently participating in discussions between the social partners at EC level on a Directive on fixed term contracts which we hope will result in limitations in their use.
The TUC shares the concern of the Government about the abuse of workers through misuse of zero hours contracts and welcomes the Government=s commitment to look into this. The TUC is working on the assumption that the Government is referring to contracts by which the worker is required to be available for work, or to attend the employer=s premises even when there is no work available, without any remuneration. The TUC accepts that it may be reasonable not to specify hours of work, by genuine mutual agreement. However, the TUC believes that there is a case for arguing that where hours are not specified in a contract there should be an upper and a lower limit, for example, no less than 5 hours, no more than 20, so that the employee is at least guaranteed core hours with a certain income but not compelled to work over a certain number of hours. There should also be provision for agreement about times when the employee would not be expected to work. This is particularly important for those with other responsibilities, for example, carers. The employee should not be obliged to be on the employer=s premises when not working and should be able to claim benefit as appropriate for the hours when they are not working. If they are obliged to remain on the employer=s premises, they should be paid at the normal rate for that time which must, of course, comply with minimum wage obligations.
There may be legal problems for employees when they work no hours during a set period, where it is deemed that the employment contract and/or the employment relationship continues even when there is no work; there are advantages to this in that the employee can build up continuity of service for the purposes of employment protection. On the other hand, they may not be free to take on other work. The matter of employment status more generally is another of the key legal issues which must be explored before any form of regulation is introduced.
Many >on call= workers do not have contracts at all but are taken on a casual basis. Whereas such an arrangement does give them the freedom to take on other jobs, it leaves them unprotected. Other problems will arise when the Working Time Directive is implemented, particularly with regard to the proposed entitlement to paid annual leave. Reference periods will be difficult to compute where there are significant and unpredictable variations from week to week.
There are many variations on the type of contract used and the category of worker being employed in this way. Terms used include >reservist=, >on call=, >as and when=, >regular casuals=, >key time= workers and >min-max=, >nil= and >zero= hours contracts. Occupations covered range from teachers and college lecturers to bank and shop staff, NHS employees and builders. Little is known about the extent of such working and the nature of the contractual arrangements. The only reported study has been that carried out by Katherine E. Cave (Zero Hours Contracts. A report into the Incidence and Implications of Such Contracts. University of Huddersfield, 1997). The limited data available indicates that women are more likely to be working under zero hours contracts than men. Many agency workers operate under such contracts. Many are denied access to the contractual benefits offered to regular employees in the same organisation. One particularly significant fact emerged: the majority of employers surveyed used zero hours contracts primarily to deal with fluctuations in demand, not in order to exclude employees from statutory protection. This might indicate that if regulations were to be introduced to protect such employees, employers= flexibility concerns would not necessarily be affected.
The TUC believes that the Government should regulate the use of zero hours contracts. Options, such as those suggested above, should be explored as part of the review of employment status more generally (see below). Because of the paucity of reliable information about workers employed under zero hour contracts, the Government should commission research before drawing up regulations.
The TUC welcomes the commitment of the Government to consult on the important issue of the coverage of existing employment rights. The definition of an employee in the Employment Rights Act 1996 is far too narrow, excluding casual workers, many agency workers, offshore workers, anomalous groups such as members of the clergy and staff in registry offices and so called >self employed= workers who are, in reality, working for someone other than themselves. Case law in this area is now confused and inconclusive, with judgements that seem to benefit the worker existing alongside others which do not. There are also discrepancies between definitions used by the Inland Revenue, the Department of Social Security and existing employment protection legislation. All those who work for another person should be covered by all statutory employment protection. This is already the case in discrimination legislation and it is anomalous and unfair to exclude a significant proportion of the workforce from basic protection. It may also be necessary to review the term >employer= so that it is clear who the respondent is, in, for example, a redundancy claim. This is particularly important where there is a third party, usually an agency, involved.
The TUC urges the Government to proceed speedily with this consultation exercise, to include the issue of zero hours contracts and to tie it in with the current consultation on the operation of employment agencies.
The TUC welcomes the Government=s commitment to introduce a statutory right to trade union recognition for collective bargaining purposes. We endorse the White Paper=s view that new legislation is needed to guarantee people the right to a voice at work and to promote a partnership approach to industrial relations. As the White Paper points out, the vast majority of successful companies already recognise trade unions and we believe that a statutory recognition procedure will spread that good practice to other companies. New legal rights will help to resolve disputes in those cases where the wishes of the workforce are being ignored.
We believe that the role of the law is to provide a statutory fall-back where a voluntary agreement has not been possible. We have emphasised our preference for voluntary agreements and we endorse the proposals in the White Paper aimed at seeking agreement on recognition arrangements. There is already evidence from the TUC=s surveys of affiliated trade unions that the prospect of legislation is having a positive impact on the industrial relations climate, with more employers being willing to negotiate about recognition arrangements. We believe that relatively few cases will go through all the stages of the statutory recognition procedure, but where they do it is important that the procedure provides an effective means of resolving the issue.
The TUC put forward detailed proposals for legal rights to trade union recognition in its 1995 report Your Voice at Work. Our discussions with the CBI identified a number of areas of agreement about how a statutory recognition scheme should operate. We want to see a clear and workable procedure which will improve industrial relations, and it is against those criteria that we have assessed the proposals in the White Paper.
There are two key issues where we believe the proposed scheme should be improved: the 40 per cent threshold for ballots; and the exclusion of firms with 20 or fewer employees. There was no mention in the Labour PartyÕs Manifesto commitment on union recognition of special rules on ballots or an exemption for small firms.
The requirement for a 40 per cent >Yes= vote is too stiff a test to promote collective bargaining. Trade unions will accept the result of a fair procedure, but one that erects unreasonable hurdles will not help to resolve disputes. We continue to prefer a simple majority test, but have acknowledged that there could be a case for specifying a minimum >Yes= vote in order to ensure that there is the basis for sustainable collective bargaining. We will continue to make the case for a more reasonable and workable test. A 40 per cent threshold is both arbitrary and set at a level higher than the Government and most MPs obtained at the General Election. However, we note the White Paper=s commitment to review this figure.
Trade unions will want to encourage maximum participation in a ballot on union recognition in order to demonstrate the legitimacy of their claim. Since repeat applications cannot be made for a period of three years, trade unions will only submit applications where there is significant support for bargaining rights. We therefore believe it extremely unlikely that there will be a low turnout in a ballot, though a number of factors will affect the level of participation. The type of ballot can have an impact on participation. Evidence shows that workplace ballots have a higher turnout than postal ballots and we favour workplace ballots as the norm with protections against improper employer interference in the ballot. A postal ballot should only be used in exceptional circumstances. The timing of a workplace ballot must ensure that every employee in the bargaining unit has an opportunity to vote, including shift workers and part-time workers.
Other factors which could influence participation levels in a ballot include:
the distribution of information on the issues at stake;
rights of access to the workplace for union officials; and
the provision of facilities for the ballot.
We welcome the proposal for a Code of Practice on the question of union access and the proposed protections against discrimination or dismissal for campaigning for recognition. However, it is important that the right of access and protections for workers apply at all times and not just for the period of a ballot.
On small firms, we cannot support a proposal that would deny recognition rights to over five million workers. The cut-off at 20 employees is clearly better than the 50 originally advocated by the CBI, but it will still exclude more than a quarter of the private sector workforce. It is also anomalous in that recognition rights would be awarded in a firm of 21 employees on the basis of a 9-8 vote in a ballot, but in a firm of 20 employees there would be no right to union recognition even if all 20 were union members. The introduction of the 20 employees threshold could destabilise existing bargaining arrangements and have a negative impact upon industrial relations in industries such as printing, construction, electrical contracting, agriculture, road haulage and the voluntary sector where considerable numbers of small firms are covered by national agreements. In agriculture, for example, 90 per cent of employees work in units with fewer than 20 employees. Without access to the statutory scheme, there is a risk that the only way a union can pursue its recognition claim is by taking industrial action. That would be entirely contrary to the spirit and aims of the White Paper.
The TUC has worked with organisations representing small businesses to promote minimum standards at work. We do not accept that small firms should be exempt from complying with legislation. Indeed, legislation that establishes a floor of rights will help small firms by promoting best practice and preventing the good employer being undercut by the bad. The TUC believes that everyone should have the right to be covered by union bargaining arrangements if that is what they want. This right should not depend on the size of the firm for which they work. Of course, the nature of the bargaining will be different in small firms but there is no justification for preventing people from using the statutory recognition scheme to obtain bargaining rights. Workers in small firms should not be treated as second class citizens.
Recent case law has demonstrated the importance of ensuring that both individual and collective rights are applied in such a way that there is no indirect discrimination against women. The TUC believes that the proposal for a threshold of 20 employees for recognition rights is likely to have a discriminatory impact on the high proportion of women working in small workplaces. The statistics show that while 32 per cent of women workers work in establishments with fewer than 20 employees, only 24 per cent of men are in this category (Labour Force Survey, Autumn 1997). Young people would also suffer from an exemption for small firms. The figures show that 40 per cent of 16-19 year-olds work in establishments with fewer than 20 employees. A disproportionate number of Pakistani-Bangladeshi workers are employed in small workplaces. Those working in small workplaces are more likely to be from the most vulnerable groups in the workforce where the White Paper could have the greatest impact. It is important that the legislation promotes fairness at work for all workers.
A small firms threshold is open to abuse by employers seeking to deny trade union rights to their workforce. Some employers might try to reorganise their business structures in order to create units below the threshold. There could be legal uncertainty in companies where the workforce total fluctuates around the threshold figure. We are also concerned that the impact of the threshold will be particularly serious in some sectors of the economy where there is a concentration of small firms.
There are currently very few exemptions on employment rights for small firms. There is a threshold of 20 in the disability discrimination legislation, though the Government is currently consulting on its abolition. Consultation rights on redundancies currently apply only where there are 20 or more redundancies over a 90 day period, but the Government is proposing to abolish the threshold and reinstate the previous position whereby employers were obliged to inform and consult regardless of the number of redundancies. The Government has also opposed the idea of a threshold for consultation rights on transfers. The minimum wage legislation will apply to all firms regardless of the number of workers. Given the Government=s position on thresholds for these rights, it would be inconsistent to introduce a threshold for rights to union recognition.
The evidence suggests that small firms would benefit from union recognition. A study of the 1990 WIRS data (Unions, Safety Committees and Workplace Injuries, Reilly, Paci and Holl, British Journal of Industrial Relations, June 1995) concluded that Ajoint consultative committees, with all employee representatives appointed by unions, significantly reduce workplace injuries relative to those establishments where the management alone determine health and safety arrangements@. Only recognised trade unions have rights to appoint health and safety representatives. Excluding union involvement in small firms would prevent them from contributing to cutting workplace accidents.
Employment Tribunal statistics show that a disproportionate number of claims are from employees in small firms. The previous Government=s Green Paper Resolving Employment Rights Disputes: Options for Reform (December 1994) stated that AEither through ignorance, or disregard of the law, employers in some small firms appear to conduct their employee relations in such a way as to lay themselves open to tribunal claims. This increases the burdens on the tribunal system and almost certainly has harmful consequences for the businesses concerned@. It is no coincidence that many of these firms do not have a recognised trade union. The presence of a recognised trade union would help improve employee relations and ensure that employers kept to their statutory obligations on staffing issues.
Small firms also have a worse record on training according to DfEE analysis in Skill Needs in Britain (1997). Small firms are much less likely to have obtained Investors in People recognition. The evidence shows that employees in unionised firms are twice as likely to receive training compared with those in firms without a recognised union (IPPR).
The TUC believes that excluding small firms from the recognition procedure would send the wrong message to these employers. The Government is trying to foster a new approach to industrial relations. We welcome the emphasis on partnership, and we believe it is just as relevant for small firms as for large organisations. Small firms are an important and growing part of the economy. High employment standards should operate in this sector as much as in any other. People are being told that, in today=s flexible labour market, they must expect several job changes during their working lives. They should also expect, and deserve, to have the same rights whatever the size of the firm for which they work.
The TUC has pointed out that the option of obtaining recognition by showing majority membership provides a particularly appropriate procedure for small firms. We have acknowledged that a ballot on union recognition may not be appropriate in the smallest firms
Although we are disappointed with the proposed ballot threshold and the exclusion of small firms, we do welcome other aspects of the proposal on union recognition. The absence of any formal threshold of support or membership before applications for recognition can be submitted is very welcome. The CBI had proposed that a union should have to demonstrate support from 30 per cent of the relevant workforce before it could seek recognition. Subsequently, the CBI suggested that the trigger should be 30 per cent membership, rather than support. The TUC welcomes the White Paper=s proposal that the CAC should have discretion not to proceed with applications which it judged to have little support. We note that the Government will be consulting further on the question of how reasonable support should be defined. One point which we would wish to emphasise at this stage is that the names of union members should remain confidential to the CAC.
The White Paper=s formulation on the definition of the bargaining unit is also very welcome and reflects the position argued by the TUC. The CBI=s proposal that the employer should have a veto over the definition of the bargaining unit would have been a recipe for conflict. Where there is not agreement, it makes sense for there to be an independent determination based on clear criteria. The TUC has argued that there should be a Code of Practice setting out guidance on the determination of the bargaining unit. We believe that the wishes of the workforce concerned should be added to the factors listed in the Annex for inclusion in such a Code of Practice.
We note that one factor which the CAC will take into account is the Adesirability as a general rule of avoiding small, fragmented bargaining units within an undertaking@, but we trust this will not prevent specialist unions seeking bargaining rights for the particular occupations or grades they represent. The general exemption for small firms should not prevent a union proposing a bargaining unit of 20 or fewer employees within a larger workforce.
We are concerned with the provision in the Annex relating to existing bargaining arrangements. It is stated that the CAC will not entertain an application if it has evidence that another trade union is already recognised in respect of some or all of the employees concerned. It is important that this provision comes into effect only where the union concerned is independent. The first paragraph of the Annex rightly makes the point that only independent trade unions can use the statutory procedure to seek recognition rights. Non-independent organisations cannot be allowed to prevent an application from a union with a certificate of independence.
Another very welcome and important proposal in the White Paper is that recognition will be automatic where a union has majority membership amongst the relevant workforce. The TUC argued strongly that a separate test of opinion in a ballot should not be necessary in that situation. A membership test provides a simple and speedy way to resolve disputes about recognition where a union has majority membership. It is particularly appropriate in smaller firms.
The TUC=s proposals in Your Voice at Work envisaged a new Representation Agency to administer the recognition procedure. We welcome the White Paper=s acceptance of the view that it is not an appropriate task for ACAS and we note that the function will be given to a revamped CAC. The composition and role of the CAC will be crucial to the success of the recognition scheme. It is vital that the CAC has the necessary powers and resources to fulfill its task of ensuring that union recognition is granted and enforced where there is the support required.
The White Paper makes important points about time limits for the various stages of the procedure. It is in the interests of good industrial relations that disputes about recognition are resolved as quickly as possible. Setting clear time limits will prevent the delays that were a feature of some claims under the previous statutory recognition scheme. We welcome the opportunity to explore the scope for a voluntary agreement on recognition, but we doubt whether the CAC should set aside a second period of 28 days for discussions if the parties have already negotiated, but failed to reach agreement, during an initial period of 28 days.
The White Paper invites views on whether union recognition should also cover training. Labour=s Road to the Manifesto document Building Prosperity - Flexibility, Efficiency and Fairness at Work contained a commitment to include training. The General Council believe it is essential that this commitment is maintained. The Government=s goal is to achieve a high skill, high wage economy. The Skill Needs in Britain Survey (1997) found that one in five employers had not provided any off-the-job training in the previous twelve months. The survey also showed that only 41 per cent of employees had received any off-the-job training during the same period. Involving unions in training helps to gain the commitment of employers and the workforce to raising skills levels, and will help the Government to meet its objectives for competitiveness and lifelong learning.
The success of the TUC Bargaining for Skills projects - partnership projects between TECs and the TUC which help union representatives work with employers on learning initiatives - shows that involving unions in discussion and negotiation on education and training can help firms develop effective training strategies and individuals to have access to more opportunities for learning. Trade unions are essential for:
creating the bottom up pressure from the workforce which encourages employers to invest in training;
generating the trust and commitment of the workforce for management initiatives;
guaranteeing the success of training by making sure it its based on business as well as employee objectives for learning.
Recent research shows that union involvement in training adds value to quality and quantity. One study (Trade Unions and Training Practices in British Workplaces by Francis Green, Stephen Machin and David Wilkinson, Centre for Economic Performance, LSE. May 1996) found that unionised firms were 17 per cent more likely to provide training for manual workers; and 8 per cent more likely to provide training for non-manual workers. The same study also found that unionised workplaces were 17 per cent more likely to have a training centre, and 11 per cent more likely to have a training plan.
Many trade unions are already using a collective bargaining framework to work with employers to improve training. Priorities may differ but there is a common agenda. Employers want to gain a more highly skilled and motivated workforce. Unions want their members to acquire skills and qualifications which enhance their employability. Bargaining provides a framework for discussion and is a flexible process for reaching a range of agreements about the best way forward.
The TUC, through its Learning Services Task Group, has developed a number of highly innovative proposals for a high profile role for trade unions as providers and brokers of education and training. Trade unions will have a key role in implementing learning in the workplace and will make an important contribution to the Government=s plans for lifelong learning, including the University for Industry, Individual Learning Accounts, Investing in Young People and a Right to Study. One important proposal focuses on the development of union >learning= representatives - similar to health and safety representatives Ð who would have a key role in generating demand for learning, giving advice to members and negotiating learning agreements with employers.
Including training in legislation on union recognition will enable best practice to be extended to more workplaces, and will establish a legal framework to allow union representatives to carry out their responsibilities for training.
In addition, the TUC would like consideration given to a wider coverage of subjects to be included within the scope of the statutory recognition procedure. An area of particular importance is occupational pensions. Trade unions now have rights to nominate member trustees onto occupational schemes and could have corresponding rights to negotiate on pensions issues. It is now legally established that pensions are pay, and as such it is inconsistent to omit them from pay bargaining arrangements. Another key item is equal opportunities. The importance of family friendly policies is recognised elsewhere in the White Paper and these are appropriate matters for collective bargaining. In unionsÕ experience, individual rights can only be effectively asserted through collective enforcement (this has for example been the case with women=s rights to equal pay under the Equal Pay Act - rights that have depended on union negotiation and litigation where negotiation has failed). Collective agreements should reflect and build on minimum legal rights to equal treatment and family friendly benefits. Consideration should also be given to including other issues on the collective bargaining agenda, including contractual sick pay and other issues referred to in the ACAS Code.
Terms and conditions agreed by collective bargaining should apply to all those in the bargaining unit. The White Paper acknowledges this point but also refers to the possibility of individuals agreeing different terms with their employer. The TUC=s concern is that employers should no longer be permitted to offer financial incentives to encourage individuals to sign personal contracts which involve relinquishing their rights to be covered by union recognition. We return to this point below in our comments on the proposals relating to discrimination on the grounds of trade union activities.
Effective enforcement mechanisms and remedies are vital to the success of any statutory recognition scheme. The TUC has previously proposed that there should be a model procedure agreement in order to facilitate effective collective bargaining. We note that the White Paper builds on that approach by proposing that the CAC would have powers to impose a legally binding default procedure, but we are concerned that the union will have to wait three months from the date of the award of bargaining rights before an application can be made to the CAC. We believe that two months is a more reasonable time within which to expect an employer to have taken steps to comply with an award.
The provision for enforcing a procedure agreement does not deal with the question of how a union can secure improved terms and conditions where there is a failure to agree. We proposed that a union should have the right of unilateral access to arbitration where the employer is failing to negotiate on the unionÕs claim. Further consideration is needed to ensure that there is some remedy available where no meaningful negotiations take place.
We note the proposal in paragraph (x) of the Annex that the default procedure can be imposed where the recognition agreement was negotiated voluntarily, either before or after the statutory recognition procedure came into force. We appreciate that the measure is intended to combat situations where an employer refuses to negotiate seriously with a union even though there is a recognition agreement (whether voluntarily concluded or statutorily imposed). We note that introducing a legal remedy would produce a new feature in employment relations in the UK. We believe that before legal enforcement were to be pursued, attempts should be made to redress the problem through conciliation, for example, with ACAS involvement.
The White Paper invites views on how a procedure for de-recognition should work. However, the TUC believes that it would be against the spirit of the White Paper=s commitment to partnership for there to be a formal de-recognition procedure. The implementation of a statutory procedure for union recognition clearly has implications for the employer=s scope to de-recognise a union. Where there has been an award of bargaining rights under the statutory procedure, the employer cannot be free to de-recognise the union as is the position under the existing law in relation to voluntary agreements.
The TUC believes that any de-recognition procedure should only apply where recognition was awarded under the statutory scheme. Employers should not be able to seek to de-recognise a union within three years of an award of recognition rights under the statutory scheme. This period of time will allow new arrangements to bed in. It also mirrors the proposed gap between repeat applications from unions seeking recognition. Where an employer sought to de-recognise the union after this period of time, the procedure should mirror the requirements that apply to a union seeking recognition. The employer would apply to the CAC and would have to establish that there was reasonable support for the proposed de-recognition. Where a union could show that it had majority membership, the application for de-recognition would fail at that stage. Where, however, the CAC decided to accept the employerÕs application for de-recognition, there would be a ballot on the question of whether employees wanted the union to be de-recognised. The same procedure that the White Paper proposes for unions should apply here: the employer would be required to obtain a majority and 40 per cent of those entitled to vote before being allowed to de-recognise the union. The issue is about changing the status quo, so similar tests of support should apply, notwithstanding the TUC=s views on the 40 per cent threshold in relation to recognition.
Paragraph (xiii) of the Annex outlines a procedure for changing the bargaining unit in certain circumstances. It is in the interests of stable industrial relations that employers should not be permitted to exploit these provisions by deliberately reorganising their company structures in order to undermine the level of support for the union or even to de-recognise the union.
The principle of unfair dismissal rights for taking part in lawful industrial action is welcome. The TUC believes there should be automatic reinstatement or compensation where someone is dismissed for taking part in lawful industrial action. The White Paper invites views on the tests which should be applied to determine whether dismissals are fair. In the TUC=s view, the burden of proof should be on the employer to establish that the reason for the dismissal was something other than taking part in lawful industrial action. Dismissals for that reason should be included in the list of reasons which are automatically unfair, such as trade union membership, pregnancy or race discrimination. This would mean that there would not be any qualifying period for such claims and that special higher awards of compensation would apply.
Discrimination against trade union members
The White Paper refers to the Wilson and Palmer cases where the employers paid more to those willing to sign personal contracts and give up rights to be covered by collective bargaining. When the Court of Appeal ruled in 1993 that the employers= action in these cases amounted to discrimination on the grounds of trade union membership, the Tory Government changed the law. Employers can now get out of any claim by arguing that their purpose was not to penalise trade union members but to change their bargaining arrangements. Subsequently, the House of Lords overturned the Court of Appeal decision and ruled that the withholding of a pay increase was an >omission= which was not covered by the law.
The White Paper states that it will be unlawful to discriminate by omission on the grounds of union membership or activities. That is a very welcome change, but the TUC will need to ensure that it is framed in such a way as to deal fully with Wilson/Palmer type cases. In order to deal with the 1993 change to the law, the impact of Subsections (3),(4) and (5) of Section 148 of the Trade Union and Labour Relations (Consolidation) Act 1992 must be reversed. These Subsections allow employers to avoid claims for action short of dismissal on grounds relating to union membership or activities if they can show that their purpose was to Afurther a change in his relationship with all or any class of his employees@. An employer could use this provision to repeat the practice in the Wilson/Palmer cases and offer incentives to try to undermine union recognition.
The question of individual contracts is also covered in paragraph (viii) of the Annex to the White Paper which states that collective agreements set minimum terms and conditions for all employees in the bargaining unit, and that the Government will not change existing law which allows an employer and an employee to agree different terms if they wish. It is important that the law ensures that the terms of agreements resulting from collective bargaining following an award of recognition rights do set a minimum and that any individual arrangements are not less favourable to the employee than the terms of the collective agreement. A similar provision already exists in relation to a CAC award of terms and conditions where an employer has failed to disclose information to a recognised union (Section 185(5) of TULRCA 1992). Equivalent protections are needed in relation to statutory recognition so that individuals are not forced into accepting inferior terms and conditions to those negotiated by the union.
On the issue of discrimination against trade union members at the point of recruitment, the White Paper proposes to prohibit what is referred to as Ablacklisting@. This has long been a concern of the TUC and we welcome the commitment. The ILO has also called for proper protection against this practice.
The White Paper refers to the existing protection against discrimination in recruitment on the basis of trade union membership. We believe that this provision (Section 137 of the Trade Union and Labour Relations (Consolidation) Act 1992) should also cover discrimination on the grounds of previous trade union activity as well as trade union membership. There is an inconsistency in that Sections 146 and 152 of the Act cover union activities and membership, but Section 137 deals only with membership.
After successive laws introduced by the previous Government - about which the TUC was never properly consulted - the law in this area is highly complex and unduly restrictive. Unscrupulous employers have taken advantages in challenging union decisions, interfering in ballots and seeking injunctions. The commitment to simplify the law and the Code of Practice on industrial action ballots and notice is welcome. The removal of any obligation to name those being balloted is particularly welcome. Another concern of unions is the 28-day validity period of the ballot which can cause problems when talks have resumed to try to find a settlement.
The TUC has previously raised detailed objections to the complexity of the Code of Practice. A general objection to the Code of Practice is that it attempts to extend the already onerous obligations on trade unions by deliberately confusing the legal requirements with what is considered to be >good practice=. The aim of a Code of Practice should be to give a practical description and interpretation of the law. It should not be used to propose further duties on those it is intended to assist. Some examples are given below.
Paragraph 11 of the Code states that where more than one union is involved the ballots should be co-ordinated, but there is no legal obligation to do so. Paragraph 20 suggests that the union might wish to send the initial notice of the ballot to the employer earlier than the legal requirement of seven days, and then check that it has been received and that the employer considers the notice to be satisfactory. It is quite unreasonable to expect the union to follow up every communication to the employer in this way. It amounts to an invitation to delay the balloting process and prolong the dispute unnecessarily. Similar suggestions about checking that communications have been received and understood are made in relation to the sample ballot paper (paragraph 24), the ballot result (paragraph 56(d)), and the notice of authorisation of the industrial action (paragraph 64). Other areas of concern include the over-legalistic nature of Section 228 of TULRCA, the unfairness of requiring the union to give seven days notice of a ballot with no corresponding limit within which the employer can raise objections and the six year period within which an employer can take action for a technical breach.
The section on independent scrutiny contains advice which goes beyond the law. Paragraph 16 of the Code states that the appointment of the scrutineer must be the first step in organising a ballot, but this is not essential. Paragraph 17 of the Code suggests other tasks which might be given to the scrutineer, while paragraph 18 refers to scrutiny of ballots involving 50 or fewer members - despite Parliament specifically recognising that it was not appropriate to impose the detailed scrutiny requirements on ballots of this size.
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