UK labour law quarterly update – September 2017


27 September 2017

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

UK labour law news

 

UK labour case law update

 

UK labour law news

 

Union threatens illegal strikes

Len McCluskey of Unite has reportedly told the Trade Union Congress conference that he will back Unite members in defying the 50% strike ballot turnout threshold. Whether, in practice, the union and its members would strike in breach of the law remains to be seen: given the risk of employer injunctions, including damages claims, against Unite and that workers involved would not have the usual protection from dismissal. Meanwhile, the Labour Party reaffirmed its commitment to repeal the Trade Union Act (which introduced the new ballot thresholds, amongst other changes) if elected.

 

Strategic trade union litigation is causing workplace change

Unite, GMB, Unison and IWGB have all been involved in significant recent employment litigation which has precipitated widespread workplace change. For example, Unite is behind the recent EAT decision that voluntary overtime normally worked should be included in holiday pay and Unison led the fight against ET fees resulting in their abolition this summer.

Two unions (GMB and, increasingly, IWGB) have played a major role in the recent ‘worker’ status cases in the gig economy, including the CitySprint, Addison Lee and Uber employment tribunal judgments in their favour. IWGB are, unusually, also pursuing trade union recognition applications before the Central Arbitration Committee (CAC) involving gig workers at Deliveroo and the Doctors Laboratory.

Following the Uber decision, Unite established its Strategic Case Unit which focuses on litigating so-called ‘bogus’ self-employment cases to set new legal authorities. For example, one case supported by the Unit involves the alleged exploitative use of umbrella companies in construction and another potential transport case involves the alleged evasion of agency worker rights by the hiring of delivery drivers through limited companies.

Employers should be aware that unions are litigating strategically, with the aim of changing sector practices or employment law more generally. By courting media publicity at the same time, unions seek to apply reputational pressure on the employers involved and shine a critical spotlight on their employment models. As such, recognising a strategic legal campaign for what it is from the outset is an important step in determining the right response.

In addition, strategic litigation demonstrates that trade unions are increasingly ready and able to organise those working flexibly, casually or on a self-employed basis – even if a key motivator for some is protecting their existing members’ pay and conditions from being undercut. This desire to stop the potential hollowing-out of full-time, permanent jobs by the growth in casual and flexible working also goes towards explaining why unions reacted critically to the Taylor Review in July, with many saying it ducked key issues. It is also notable that some trade unions are seeking to grow their presence amongst the self-employed, with Community aiming to sign up 100,000 self-employed workers over the next five years with its new online platform and collaboration with Indycube (which provides office space). Finally, the recent strike at McDonalds, involving a tiny minority of staff but attracting widespread media interest, is another example of new union organising in sectors (here, fast food) experiencing previously low union activity.

 

Pharmacists apply to de-recognise Boots’ in-house trade union

The Pharmacist’s Defence Association Union has been seeking recognition at Boots, the high street pharmacy, for a number of years culminating in litigation in the Court of Appeal. The Court held that the employer’s limited recognition agreement with a non-independent in-house union prevented the PDAU’s recognition request from proceeding. However, the Court noted that a worker could apply at any time for the in-house union to be de-recognised (subject to the necessary worker support), following which the PDAU would be able to apply for recognition.

At the end of July, a group of pharmacists with the backing of the PDA Union applied to the Central Arbitration Committee (CAC) to commence the de-recognition process. Given the history of this case, it is expected that the application will result in a ballot. If there is sufficient support in the ballot, the in-house union would be de-recognised and the existing agreement cancelled.

 

Government consults on new trade union levy to fund the Certification Officer

The Government is consulting on how to implement the provision in the Trade Union Act giving the Certification Officer (who primarily regulates trade unions) the power to impose a levy on unions and employers’ associations to recover the cost of its oversight and regulation. It proposes fixing the levy sum based on the CO functions that organisations use and tailoring the cost to the organisation’s annual income to avoid affordability problems. As such, the consultation produces an annual levy for trade unions which ranges from £0 to £22,269, depending on a union’s income and affordability. This is likely to prove contentious and may encounter obstacles, given that it requires the support of Parliament before the levy can be implemented.

 

UK labour case law update

 

Thomas Cook Airlines Ltd v BALPA: High Court interprets the new ballot paper requirement on strike timing

The Trade Union Act introduced a new requirement for a union’s voting paper to include an indication as to the periods within which it ‘expected’ to take industrial action: the main purpose being that a union member should know what he/she is being asked to vote for.

In this case, BALPA’s voting paper stated that they expected to take action within the six month period allowed by the law, less one week. The employer argued that this was insufficiently detailed and that the union had failed to comply with the Act; and moreover that the evidence showed that the union had expected to take strike action in September and so should have stated this on the voting paper.

The court disagreed and held that the Act does not require a trade union to identify specific dates on which industrial action is to be taken, rather than the period within which it is expected to take place. The court noted that the word ‘expected’ in the Act has to be read in the context of all of the uncertainties which are inherent in a trade dispute. This interpretation renders potentially the Act’s requirement of little value to a member, as if it is correct the union could satisfy its requirement by simply stating the six month window for taking action following the ballot. On the other hand, the realities of industrial action may present difficulties if the union gives more detailed information and then circumstances change. Either way, the new provision is proving unhelpful.

 

University of Sunderland v Drossou: increasing a week’s pay – protective awards

A week’s pay, as defined in legislation, is a key part of calculating many workplace remedies such as unfair dismissal compensation. Until recently it was common practice to exclude employer pension contributions from the calculation of a week’s pay on the basis that they were paid into a pension and not to the employee.

However, the EAT in this case decided that this practice is incorrect and that there is no requirement that only sums payable to the worker must be included. The decision will have particular relevance for protective awards where there is a failure to inform and consult in redundancy and TUPE situations. In such cases, a week’s pay is not subject to the statutory cap (currently £489) and therefore employees would receive the full benefit of additional pension contributions being added to their weekly gross pay. In some sectors, pension payments represent a significant additional cost, particularly where a large number of employees are claiming the full 13 week/90 day protective award.

 

For more information please contact Martin Warren, Marc Meryon or Tom Player.

 

Martin Warren, Partner
e: martinwarren@eversheds-sutherland.com
t: +44 207 919 4745
Marc Meryon, Partner
e: marcmeryon@eversheds-sutherland.com
t: +44 207 919 0900
Tom Player, Partner
e: thomasplayer@eversheds-sutherland.com
t: +44 292 047 7574