March 2006

Trade Union Freedom Bill

The Fairness at Work Composite Resolution adopted at Congress 2005 called on the General Council to support a Trade Union Freedom Bill. The Bill marks the centenary of the Trade Disputes Act 1906 which first introduced the UK system for immunities from tortious liability for unions when organising industrial action.

While it is recognised that a Trade Union Freedom Bill cannot seek to implement established TUC policy on industrial action in full, the Bill will seek to make incremental changes to the law on industrial action which will reduce the regulatory burdens which frustrate unions' ability to organise industrial action and provide improved protection those exercising their basic rights to take industrial action. The Bill also prioritises policy proposals which will make a very substantial and practical difference to unions when seeking to organise industrial action to ensure that members' democratic wishes are effectively expressed.

This briefing sets out proposals for legal reform. The proposals include:

• Improved protection from dismissal and more effective remedies for workers taking part in official industrial action;
• Simplification of the complex regulations on notices and ballots which restrict the ability of unions to organise industrial action where a clear majority of members have voted in support; and
• Modernisation of what constitutes a trade dispute, enabling limited forms of supportive action, thereby ensuring that UK industrial action laws reflect changes in UK labour market, including increased contracting out and enabling unions to respond where employers take steps to outsource work during the course of a dispute with a view to breaking a strike.

The TUC is also preparing campaign materials and further briefings on the Bill which will be circulated to unions in coming weeks.

SUMMARY OF PROPOSALS

It is proposed that a Trade Union Freedom Bill should cover the following issues:

Protection for individuals involved in lawful industrial action

• Dismissals in anticipation of, during or after lawful industrial action should be void and ineffective, unless the employer can show that the reason for the dismissal was not connected to the industrial action.
• It should also be automatically unfair for an employer to dismiss an employee once he or she returns to work following lawful industrial action. This will act as a powerful disincentive to employers from employing replacement staff and making strikers redundant.
• Interim relief should be available in all unfair dismissal claims relating to lawful industrial action and employees who have been unfairly dismissed should be entitled to automatic reinstatement if they request it.
• All workers should be protected from suffering detriment or for being sued for damage as a result of their taking part in industrial action other than appropriate deductions from wages for work not done due to industrial action.

Industrial action notices

• A trade union should only be obliged to give a minimum of 7 days notice to the employer of the proposed commencement of industrial action.
• The nature of the information which must be included in the notice should be substantially simplified. Unions should be required only to inform the employer of the category of workers, of the nature of industrial action, and when action will commence.
• A trade union should also not lose its immunity for taking industrial action where it accidentally includes an insignificant amount of inaccurate information in a notice to the employer.
• An employer should be under a duty to co-operate when requested by the union by supplying relevant information needed to enable the union to comply with notice and balloting requirements. Where the employer refuses to supply the necessary information, a subsequent application for an interim injunction to prevent industrial action should fail.

Industrial action ballots

• A trade union should not lose its protection from taking industrial action where it accidentally fails to comply with balloting rules but the mistake would have no material impact on the outcome of the ballot.
• The current bar on industrial action where there has been a prior call should be removed.

Industrial action injunctions

• The law on interim injunctions should be revised to provide that an interim injunction shall not be granted unless it can be shown that the employer is more likely to succeed than the union at trial. A similar requirement in relation to interim injunctions to restrain media publication is found in s12(3) of the Human Rights Act 1998.

Trade disputes and supportive action

• The definition of a trade dispute should be amended to include disputes concerning a future employer and future terms and conditions of employment, in the context of a transfer of part of a business.
• The definition of a trade dispute should be amended to include disputes between workers and their employer and any associated employer.
• S upportive action should be permitted against a company to which work or production has been transferred in connection with a trade dispute.
• Supportive action should be permitted where a union reasonably believes that an intervention by a principal supplier or customer has caused or substantially contributed to the proposal or decision which is the subject of a primary trade dispute.
• - In this second category of supportive action the primary trade dispute which would be about a proposal or decision of the employer, which has been rejected by workers, for example to:
• - make a detrimental change to terms and conditions of employment;
• - discipline,
• - dismiss workers,
• - make workers redundant; or
• - to hire replacement labour to do the work which would otherwise have been undertaken by workers who are taking industrial action or who it is anticipated will be taking industrial action
• A union would be required to hold a ballot and give notice before taking any form of supportive action.
• In addition, the remaining bar on industrial action by prison officers should be removed by the repeal of section 127 of the Criminal Justice and Public Order Act 1994.

Non-replacement of those taking lawful industrial action

• In addition to employment agencies being barred from supplying agency workers to carry out work being carried out by an individual taking lawful industrial action, a correlative duty should be placed on employers to inform any agency that industrial action is taking place. It should also be unlawful for employers to hire agency workers to carry out work normally done by workers involved. In lawful industrial action.

Background discussion

a) Protection for those taking part in official industrial action

It has been long-established TUC policy that the law should be revised to provide effective protection from dismissal for striking workers. The ILO, UN and Council of Europe's supervisory agencies have repeatedly found that UK law is in breach of international human rights standards by failing to provide effective dismissal protection for individual strikers. They have consistently recommended that the contract of employment should be suspended during the course of industrial action.

The TUC supports the suspension of the contract of employment during industrial action. However it is recognised that implementing this proposal would entail wide-ranging and highly complex changes to existing legislation, including the rewriting of legislation on statutory immunities from tortious liability. It is therefore proposed that, as an initial step, the law should be amended to provide that any dismissal, in anticipation of industrial action, during or after official industrial action should be void and ineffective, unless the employer can demonstrate that the dismissal was unrelated to the industrial action. This provision should apply regardless of the length of the industrial action. It would have a similar effect to the suspension of the contract of employment, meaning that in most cases employers would not be able to sack employees while they were taking lawful industrial action. When employees return to work at the end of industrial action, the employer would be under an on-going contractual duty to provide them with work or to pay them. It would also be important for legislation to provide that it would be automatically unfair for an employer to dismiss an employee when he or she returns to work after industrial action, including redundancy. This would seriously deter employers from hiring replacement labour and making employees redundant when they return to work after industrial action. This would seriously deter employers seeking to lay off the strikers.

There is also a need to strengthen the remedies available in industrial action dismissal cases. Interim relief should be available and employees who are unfairly dismissed for taking part in lawful industrial action should be have the right to be automatically reinstated if they request it.

It is also proposed that workers who take part in industrial action should be protected from suffering detriment or from being sued for damage incurred as a result of taking action. This proposal would ensure that workers who do not legally qualify as employees are protected for taking part in industrial action. In 2004 the Government extended rights for trade union members and activities to all non-employee workers. The Bill will extend this approach to cover protection for taking official industrial action. It would also assist in ensuring that employers only make appropriate deductions from wages for work which is not done due to industrial action.

Proposals:

• Dismissals in anticipation of, during or after lawful industrial action should be void and ineffective, unless the employer can show that the reason for the dismissal was not connected to the industrial action.
• It should also be automatically unfair for an employer to dismiss an employee once he or she returns to work following lawful industrial action. This will act as a powerful disincentive to employers from employing replacement staff and making strikers redundant.
• Interim relief should be available in all unfair dismissal claims relating to lawful industrial action and employees who have been unfairly dismissed should be entitled to automatic reinstatement if they request it.
• All workers should be protected from suffering detriment or for being sued for damage as a result of their taking part in industrial action, other than appropriate deductions from wages for work not done due to industrial action.

b) Industrial action notices

The duties on trade unions to provide employers with notice of ballots and industrial action place onerous, costly and excessively complicated duties on unions. They impose a significant burden on unions to keep meticulous records of their members' addresses, jobs, and workplaces and often expose unions to applications for injunctions by employers to prevent industrial action taking place, even where a clear majority have voted in a ballot to support of the action. The Employment Relations Act 2004 repealed the requirement on unions to supply notices to enable to the employer 'to make plans', thereby removing the statutory rationale for the notices. The 2004 Act also modified the nature of information which must be provided to employers; nevertheless the obligations on trade unions remain onerous, expensive and highly complex.

It is therefore proposed that a trade union should only be obliged to give a minimum of 7 days notice to the employer of the proposed commencement of industrial action. The decision on whether to hold an industrial action ballot or the timing of such a ballot is a matter of internal union democracy and should not involve the employer. As a result the current duty for unions to give notice before balloting members should be removed.

The nature of the information which must be included in the notice should be substantially simplified. Trade unions should only be required to provide information relating to the category of workers being called to take action; the nature of the industrial action, i.e. whether it will be a strike or action short of a strike; and when action will commence and whether it will be continuous or discontinuous.

A trade union should also not lose its immunity for taking industrial action where it accidentally includes an insignificant amount of inaccurate information in a notice to the employer. Section 24 of the Employment Relations Act 2004 provides that a union will not lose its protection from taking industrial action where it accidentally fails to ballot an insignificant number of those it intends to induce to take industrial action. A similar provision should be introduced relating to industrial action notices.

In addition employers should be under a duty to co-operate, when requested by the union, by supplying relevant information needed to enable the union to comply with notice and balloting requirements. This duty is similar to current duties in the statutory recognition scheme, where the employer is obliged to supply the CAC or a QIP with the names and home addresses of workers. Where the employers refuse to supply the necessary information, a subsequent application for an interim injunction to prevent industrial action should fail.

Proposals:

• A trade union should only be obliged to give a minimum of 7 days notice to the employer of the proposed commencement of industrial action.
• The nature of the information which must be included in the notice should be substantially simplified. Unions should be required only to inform the employer of the category of workers, of the nature of industrial action, and when action will commence.
• A trade union should also not lose its immunity for taking industrial action where it accidentally includes an insignificant amount of inaccurate information in a notice to the employer.
• An employer should be under a duty to co-operate when requested by the union by supplying relevant information needed to enable the union to comply with notice and balloting requirements. Where the employer refuses to supply the necessary information, a subsequent application for an interim injunction to prevent industrial action should fail.

c) Industrial action ballots

The rules on balloting should be revised to provide that a union does not lose its protection from taking industrial action where the union accidentally fails to comply with balloting rules but the mistake would have no material impact on the outcome of the ballot, for example, where the union accidentally fails to ballot a small proportion of those it intends to induce to take industrial action, but where their votes would not have materially affected the outcome of the ballot. In electoral law, other than in cases of fraud, the outcome of an election cannot be challenged or overturned where a local authority has conducted an election substantially in accordance with the law and an act or omission did not affect the result. The TUC takes the view that the same standards as are applied to public offices should be applied to industrial action ballots so that the views of the majority of workers voting in support of industrial action cannot be frustrated by an employer by raising a technical error which would have no practical impact on the result of the ballot.

In addition, the current bar on industrial action where there has been a prior call should be removed. As the Midlands Mainline case highlighted, a union cannot rectify a prior unofficial call to take industrial action by repudiating the call and then seeking to conduct a proper ballot. This can limit the ability of unions to seek to resolve an on-going trade dispute and to ensure that their members' democratic wishes are given effect.

Proposals:

• A trade union should not lose its protection from taking industrial action where it accidentally fails to comply with balloting rules but the mistake would have no material impact on the outcome of the ballot.
• The current bar on industrial action where there has been a prior call should be removed.

d) Industrial action injunctions

Currently, the law permits employers to gain an injunction against industrial action where they can demonstrate that there is a serious issue to be tried .

Proposal:

• The law on interim injunctions should be revised to provide that an interim injunction shall not be granted unless it can be shown that the employer is more likely to succeed than the union at trial. A similar requirement in relation to interim injunctions to restrain media publication is found in s12(3) of the Human Rights Act 1998.

e) Trade disputes and supportive action

The other main restrictions on the freedom to take industrial action in the UK relates to the narrow definition of a trade dispute and the comprehensive prohibition on all forms of supportive action. The extent of these restrictions is virtually unprecedented in the EU. The ILO, UN, and the Council of Europe's Committee of Independent Experts on the European Social Charter have repeatedly found that these restrictions are in breach of international human rights standards.

In 1982 the definition of a 'trade dispute' was narrowed to provide that in order to qualify as a 'trade dispute', the dispute must be between workers and 'their employer' and must relate wholly or mainly to one or more of the matters listed in TULRCA, s 244. This narrower definition has caused difficulties in a number of cases where unions have sought to take industrial action against privatisation or the restructuring or contracting out of workforces as demonstrated in University College Hospital NHS Trust v UNISON [1999] ICR 204 which related to the building of a new hospital under PFI. The hospital was to be built and run by a consortium to which some Trust employees would be transferred. UNISON sought an agreement from the Trust that for a period of 30 years the staff transferred to the consortium (and all future staff) would be employed under terms and conditions which were equivalent to those employees who were not transferred. When negotiations failed to yield an agreement, industrial action was organised by the union and a ballot was held. But in this case the action was restrained by an injunction on the ground that there was no trade dispute, a decision which was upheld by the Court of Appeal.

Concern has also been expressed that as the definition of a trade dispute also now refers only to disputes between workers and their employer, unions are prevented from organising lawful industrial action where groups of workers are employed by associated employers. Consequently, groups of employees who work in the same workplace, with the same employer and the same management structure are prevented from taking supportive action because they are technically employed by different legal entities. As a result, it makes it impossible for unions to take effective action in situations where the 'real' employer with whom they were in dispute was able to take refuge behind one or more subsidiary companies who were technically the 'employer' of the workers concerned, but who lacked the capacity to take decisions which are capable of satisfactorily resolving the dispute as was demonstrated in Dimbleby & Sons Ltd v NUJ [1984] 1 WLR 427.

In recent years, the UK labour market has changed in nature, with the outsourcing and restructuring becoming widespread. Industrial action law has, however, failed to keep abreast of these changes and is in need of modernisation. While the TUC policy supports the reinstatement of the wider formulation of a trade dispute 'connected with' one or more of the listed items, for the purposes of the Bill, more limited amendments should be introduced. It is proposed that the definition of a trade dispute should be amended to include disputes, in the context of a TUPE transfer, concerning a future employer and future terms and conditions of employment. It is also proposed that the definition of a trade dispute should be amended to include disputes between workers and their employer and any associated employer.

Finally it is argued that the current comprehensive ban on all forms of supportive action needs to be revised and that the law should allow limited supportive action, following a ballot, in specific circumstances.

It is proposed that supportive action should be permitted in two limited circumstances. Firstly, supportive action should be permitted against a company to which work or production has been transferred during industrial action, with a view to breaking a strike . In such cases, supportive action could be taken by the employees of the employer to whom the work or production has been contracted out. This proposal is similar to provisions in the USA where an exception is made to the general prohibition on supportive or solidarity action where work has been transferred to another employer.

Secondly, a union should be able to organise supportive action in cases like Gate Gourmet where the union has a reasonable belief that at least part of the fault for the dispute with an employer lies with a principal supplier/customer. The right to take supportive action, under this second category, should apply where the union has already had to organise industrial action against the first employer to defend its members from cuts in pay or other terms and conditions, or because the employer has threatened to discipline or sack staff, or to hire staff to replace workers who are considering taking industrial action. One of the reasons why the employer is threatening such action could be because the dominant supplier or customer is seeking to squeeze the budget for a contract or asking the employer to cut costs.

In all cases of supportive action unions would be required to comply with statutory notice and balloting requirements.

In addition, the remaining bar on industrial action by prison officers should be removed by the repeal of section 127 of the Criminal Justice and Public Order Act 1994.

Proposals:

• The definition of a trade dispute should be amended to include disputes concerning a future employer and future terms and conditions of employment, in the context of a TUPE transfer.
• The definition of a trade dispute should be amended to include disputes between workers and their employer and any associated employer.
• S upportive action should be permitted against a company to which work or production has been transferred in connection with a trade dispute.
• Supportive action should be permitted where a union reasonably believes that an intervention by a principal supplier or customer has caused or substantially contributed to the proposal or decision which is the subject of a primary trade dispute.
• - In this second category of supportive action the primary trade dispute which would be about a proposal or decision of the employer, which has been rejected by workers, for example to:
• - make a detrimental change to terms and conditions of employment;
• - discipline,
• - dismiss workers,
• - make workers redundant; or
• - to hire replacement labour to do the work which would otherwise have been undertaken by workers who are taking industrial action or who it is anticipated will be taking industrial action
• A union would be required to hold a ballot and give notice before taking any form of supportive action.
• In addition, the remaining bar on industrial action by prison officers should be removed by the repeal of section 127 of the Criminal Justice and Public Order Act 1994.

f) Non-replacement of those taking lawful industrial action

The Conduct of Employment Agencies and Employment Businesses Regulations currently bars employment agencies from supplying agency workers to carry out duties normally performed by a worker undertaking lawful industrial action or lawful strike action or to replace a worker who has been assigned to do the work normally performed by a worker undertaking lawful industrial action or lawful strike action. However this duty does not apply if the agency does not know or has no reasonable ground for knowing that the first worker is taking industrial action. It is proposed that that the Regulations should be extended to impose an equivalent duty on the potential hirer of agency workers to inform the agency of the industrial action and to make it unlawful for the employer to hire agency workers to carry out work normally done by workers involved. In lawful industrial action.

Proposal:

• In addition to employment agencies being barred from supplying agency workers to carry out work being carried out by an individual taking lawful industrial action, a correlative duty should be placed on employers to inform any agency that industrial action is taking place. It should also be unlawful for employers to hire agency workers to carry out work normally done by workers involved. In lawful industrial action.