What’s new in labour relations law?

The high-profile issue in labour law over the past few months has been the dispute between Gate Gourmet and the Transport & General Workers’ Union (T&G). Initially, 600 workers were dismissed and there was a serious knock-on effect on the service British Airways was providing out of its UK hub.

With this dispute now settled, the headlines have moved on, but it is a good time to consider significant changes to labour relations law since the introduction of the Employment Relations Act 2004.

One area of change which is likely to occupy tribunals’ time once the Act has fully settled in is the restrictions that have been placed on personal contracts where a trade union is recognised for collective bargaining purposes or is seeking recognition.

The restrictions were mainly implemented due to the decision in Wilson v UK in 2002 when the European Court of Human Rights held that “by permitting employers to use financial incentives to induce employees to surrender important union rights, the Respondent State [the UK] failed in its positive obligations to secure the enjoyment of rights under Article 11 of the convention [of human rights – the right to a freedom of association… including the right to form or join trade unions]”.

In response to the judgment, amendments were made to the Trade Union and Labour Relations (Consolidation) Act 1992 (through the Employment Relations Act 2004) with the insertion of the section 145B, which took effect from 1 October 2004. Essentially, section 145B gives the right to a worker who is a member of an ‘independent’ trade union that is either ‘recognised or seeking recognition’, not to have an offer made to them by their employer, if the ‘sole or main purpose’ of it is that the worker’s terms of employment will not – or no longer – be determined by a collective agreement.
If there is a breach of section 145B a worker, or former worker, is entitled to complain to a tribunal on the ground that their employer made them an offer which contravened the legislation.

The time limit for bringing a complaint is three months, although this can be extended if the worker can show that it was not reasonably practicable for the complaint to be presented within this time limit.

If a tribunal upholds the complaint then it can make a declaration to that effect and make an award to the worker of 2,500.

If a worker accepts the offer put forward by an employer, which results in them agreeing to vary their terms of employment ‘at some later time’, the employer will not be able to enforce the agreement, as this reflects the common law position that such an agreement should be deemed unenforceable. However, if, by accepting the offer, the worker’s terms of employment are ‘actually varied’, there is nothing in section 145B (or other related provisions) that would make such variations unenforceable, by either party.

Therefore, notwithstanding the implementation of section 145B, it is possible for terms of employment that have been determined by a collective agreement to be varied by direct agreement between an employer and the worker. This direct agreement will override any collective agreement in place with a recognised trade union. This is still the case even if a worker brings a successful complaint in a tribunal. In this situation, the employer would be liable for an award of 2,500 (payable to the worker), but there is no other remedy against the employer. It therefore appears that employers can ‘buy’ their way out of the terms and conditions negotiated with the union in the collective agreement.

It will be interesting to see how tribunals interpret section 145B (and other related legislation). The most likely scenario for an issue to arise is where a company is faced with an approach for recognition or deciding to de-recognise a union already in situ. Given the recent TUC calls for greater trade union rights, including a Trade Union Freedom Bill, this is an area that will evolve.

Jason French-Williams is an assistant solicitor and Martin Warren a partner at Eversheds

Practical considerations

In light of the implementation of section 145B the following issues need to be considered:

  • The ‘individual’ nature of the right. A union has no remedy against an employer who it may believe is seeking to devalue or override a collective agreement. The union must rely on an individual to bring a claim in a tribunal, but even then, the remedy is limited
  • You can withdraw voluntary recognition and make alternative offers to workers as section 145B arguably only applies where the worker is a member of an independent union recognised or seeking recognition via the statutory process
  • Section 145B is subject to a ‘sole’ or ‘main purpose’ test (ie, if a complaint is made in relation to an offer, it will be for the employer to show what the sole or main purpose was in making the offer). This is likely to be a significant hurdle for a worker where an employer will try to show a variety of motives. However, the onus is on the employer to demonstrate the sole or main purpose in making the offer. Whether an employer would be able to defend a section 145B claim by arguing, for example, that the purpose behind the offer was to encourage ‘greater flexibility’ is something which can only be tested in the future.

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