New Rules And Pitfalls For Trade Unions And Industrial Action

If you find yourself working with trade unions, it is vital to understand the structure of trade union law and how it works as well as what the new provisions mean.

The podcast covers:

Overview of how the law has evolved to understand the structure of current trade union law. The latest trade union law changes; what they are; why they were introduced and what impact they will have. Transcript

Jonathan Chamberlain: Trade unions now have so few members in the private sector that it's possible to go through an entire career in HR without ever really having to work with them. That's not the case of course in some sectors, such as manufacturing, and it's certainly not the case in the public sector. So, if you find yourself working with trade unions, it's really important that you understand the structure of trade union law and how it works. Because it's very different to anything that you've been working with before and, if you get it wrong, it's not just with one employee that you are going to get it wrong, you're going to get it wrong with thousands. So, I'm here today to talk with my partner Martin Chitty.

Martin Chitty: Hello Jonathan.

Jonathan: About the structure of trade union law. My name is Jonathan Chamberlain and I am a partner in the Employment, Labour & Equalities team in Gowling WLG.

Now, Martin, this podcast is all about the practical perspective, but I find that if you want to understand trade union law, if you want to work with it, then it really helps to know the history. Of course, a huge part of that history is that for most of their existence trade unions have wanted absolutely nothing to do with the Courts. One of the most striking examples of how that still affects things today is the basic agreement between employers and unions, they're not actually contracts, are they? They're not legally binding. How does that work?

Martin: That's a very interesting starting point Jonathan. I think there's two issues, perhaps we just need to unpack a little bit. The first is that we have recognition agreements, we can have voluntary recognition agreements and we can have them done under the statutory system and they have some degree of enforceability. Notice has to be given by the employer if they want to recognise them as a process to go through. In the same way the unions can push for recognition by getting sufficient support from the workforce. But what we're looking at more importantly is what people refer to as collective agreements and by that I mean agreements negotiated between an employer and a union, or a group of employers and a group of unions, which reflect the terms and conditions of employees, issues about process, issues about consultation in large part. Note that those are not, other than with very, very few exceptions, those are not legally enforceable at all. So, prior to the Industrial Relations Act in 1971, collective agreements were assumed not to be enforceable. During the period of the Industrial Relations Act, the legislation provided that they were enforceable but that was repealed for many reasons, principally, that it didn't work particularly well. Since 1974, we've had a position where the starting point, the presumption, as lawyers like to call it, is that collective agreements are not legally enforceable at all. So they're not contract in the proper legal sense; an employer cannot force the union to abide by the collective agreement any more than the union can force the employer to abide by it. They're not contracts from that point of view, they are merely agreements, they are binding in honour only, if you like.

Jonathan: So, how does it work then if the union and the company agree say, a pay rise, and the company doesn't pay? How does the individual get their hands on the money?

Martin: Well, this is one of the peculiarities of English law, if you like. So, the employer and the union agree something collectively and that percolates down from that collective agreement into the individual's terms and conditions. It becomes incorporated into the contract between the employer and the individual and that flow down gives the individual the right to be paid at the new rate, to benefit from whatever increase has been negotiated, and if they are not paid it, to sue accordingly. Although, over time, as you've said, the proportion of the workforce in the private sector which is unionised has gone steadily down, there are large swathes of the economy, particularly the public sector and areas formerly part of the public sector, which are still governed by very wide ranging collective agreements. But it's the percolation down and incorporation of those terms into individual contracts which actually makes them legally binding. It is nothing to do with the enforceability of the agreement between the employers and the unions.

Jonathan: So can an individual sue the employer for anything in a collective agreement, or does it only apply to certain terms?

Martin: Well, there's this test, which the Courts have evolved, that they require the specific term that an individual wants to rely on has to be apt for incorporation, which is rather old fashioned sounding phrase, but it has to be something that would necessarily form part of, and has become part of, the contract between the individual and the employee. There's been a lot of case law on that. Issues...