Collective bargaining

The Employment Relations Act 1999 established a new statutory trade union
recognition mechanism, which came into effect in June 2000, which could oblige
employers to recognise trade unions. Against that backdrop, the number of
voluntary (and involuntary) agreements for trade union recognition has risen.

In this climate, employers are increasingly asking what their options are.
This is particularly so in cases where they want to persuade individuals within
the bargaining unit to voluntarily give up their right to be bargained for
collectively, and instead negotiate directly with the employer on pay, hours
and holidays.

The legal background

A layman might believe that where a trade union is recognised, it will
always collectively bargain the key employment terms for its members. That is
not the case, however. Individuals within the bargaining unit cannot be forced,
against their wishes, to have their terms and conditions of employment
negotiated collectively for them by a trade union. They can choose to negotiate
directly with their employer, and effectively opt out of collective bargaining
if they choose to do so.

Many will also be surprised to learn that it is currently lawful for an
employer not only to encourage individuals to opt out of collective bargaining,
but for financial incentives to be given to employees for that purpose. In
other words, employers are currently able quite legally to ‘bribe’ employees to
abandon collective bargaining.

Complaints that this is effectively subjecting trade union members to a
detriment, which might potentially be unlawful, have usually failed. This is by
reference to a specific legislative provision (Section 148(3) of TULR (C) A
1992) which provides that such ‘encouragement’ is lawful provided it can be
reasonably shown that the employer’s purpose was to bring about individual
bargaining, and not to cause trade union membership itself to be given up. Many
employers have taken advantage of this liberal regime.

The Wilson decision

A successful challenge has now been mounted, however, to this regime in the
European Court of Human Rights. In giving its decision in the Wilson case, the
Court (whose decisions are not directly binding in English law) held that
offering financial incentives to induce employers to give up collective
bargaining was a breach of Article 11 of the European Convention on Human
Rights. Article 11 provides that no restrictions should be placed on the human
right to join trade unions, other than those that are necessary in a democratic
society for the protection of rights and freedoms of others.

The DTI has now acknowledged that the law in England needs to be tightened
up on this issue.

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