Industrial unrest - what to do when it's not official

EAT rules on dismissals in dispute

In Sandhu and others v Gate Gourmet London Ltd, the Employment Appeal Tribunal considered whether six employees dismissed in various circumstances were taking part in unofficial action and if they had been fairly dismissed.

Employees who stopped work in protest at their employer’s use of seasonal labour, and gathered for a mass meeting and refused to return to work, were taking part in unofficial industrial action.

A union official who was asked to go into work on his day off in light of the emerging industrial dispute was participating in the unofficial industrial action at the time of his dismissal later that day. By then, he was no longer acting in his capacity as a union shop steward, and nothing distinguished him from other employees who had stopped work. Accordingly, the tribunal had no jurisdiction to hear his unfair dismissal complaint.

The employer’s dismissal of employees who were absent without authorisation during the industrial action was reasonable in all the circumstances.

An employee who was not participating in the industrial action on the date that his letter of dismissal was sent was barred from complaining of unfair dismissal because, at the time of dismissal when he received the letter, he was taking part.

For the full XpertHR case report on Gate Gourmet go to personneltoday.com/xperthr5

Unofficial industrial action has risen this year as employees become increasingly prepared to take more robust steps to seek to influence employers, particularly regarding redundancy decisions. Even if redundancies cannot be reduced, it might be felt that enhanced redundancy payments could be secured through direct protest and implemented often more quickly than official action might otherwise permit. Employees and trade unions may use potential media interest in the unofficial action to engender public sympathy for the affected employees at the expense of the employer’s reputation.

Unofficial industrial action can include strike action, sit-ins, work to rule and refusal to work overtime. There are several key factors that employers should consider when faced with such prospects.

Recent action

In January 2009, work at Lindsey oil refinery was sub-contracted to an Italian firm. Some 300 staff took unofficial strike action over the perceived loss of local employment opportunities. A deal was brokered which involved the creation of 102 local jobs. However, unofficial strike action broke out again during June 2009 when a sub-contractor made 51 employees redundant. Staff claimed an agreement not to reduce jobs further was breached. About 650 staff walked out in an unofficial strike on 11 June. All were dismissed but were invited to reapply for their jobs. A deal was eventually brokered which involved the reinstatement of the 650 dismissed workers.

When Vestas wind systems’ employees were told of the proposed loss of about 600 jobs in July, some employees began an occupation of a company site on the Isle of Wight. To try to bring an end to the unofficial industrial action, Vestas dismissed 11 employees that the company was able to identify clearly as being involved in the occupation. The protest ended when Vestas was granted a possession order by the civil court and bailiffs evicted the protestors. Some employees secured alternative employment with Vestas and other staff were paid in excess of statutory minimum redundancy payments.

Whether industrial action is official or protected will be crucial to identifying possible legal remedies. Industrial action is unofficial if the union has not authorised it in a prescribed manner under the relevant collective disputes legislation. Action is protected if there is a trade dispute – which has to relate to certain prescribed statutory grounds – and the action has the backing of a secret postal ballot. Otherwise it is unprotected.

Responses to unofficial action

Dismissal of those involved in unofficial action is not an inevitable response but it is likely to be assessed as a fall-back position and its availability might influence the deployment of less draconian options.

If the industrial action is unprotected, then employers are protected from unfair dismissal claims.

Dismissal of an employee who is participating in protected action may well be automatically unfair.

If employees are participating in official action then the employer can still be protected from an unfair dismissal claim but only if it is not selective when dismissing.

The Acas Code of Practice in Disciplinary and Grievance Procedures does not apply to dismissal for unofficial industrial action.

Circumstances will determine whether a threat of dismissal will deter or end unofficial action. However employers may wish to steer clear of such draconian action when bridges may still need to be built with remaining employees and trade unions.

There are other options available. An employer is not required to pay employees for periods during which they do not work. Legal protections which normally exist in respect of unauthorised deductions from their wages do not apply while employees are on strike.

Employers can also instigate a lock-out. There is no restriction on using substitute labour during a strike or lock-out, although employers will assess carefully whether this may inflame the dispute.

Another option is obtaining a court order to remove employees during a sit-in. Unless property is being damaged, if employees are occupying premises as part of a sit-in then this would not usually be a criminal matter for the police. However, the employer may be able to remove employees by taking a civil property action.

Employees should also be made aware that if they choose to use the premises for purposes for which they were not designed, they do so at their own risk. The employer may also wish to check its relevant insurance policies (such as employer liability insurance and occupier liability insurance) to determine whether adequate cover is provided, and to ensure it complies with the terms of its policies during a sit-in.

If the industrial action is not protected, an injunction may be sought to prevent the union inducing employees to breach their contracts of employment. Once again, broader and longer-term relationships have to be assessed before invoking this option.

It is also possible to sue, or threaten to sue, the union for an industrial tort. If the industrial action is not protected, and the union has induced the employees to breach their contracts of employment, then the union could be sued for an industrial tort. Such actions are very unusual and damages are also capped. The potential amount recoverable from the union increases on a sliding scale depending on union membership. The scale begins with £10,000 being recoverable if there are fewer than 5,000 members, and ends with £250,000 being recoverable if there are 100,000 or more members.

Another option is to negotiate for a mutually acceptable resolution. This may feel counter-intuitive if employees and/or their union are demonstrably in breach. But the needs of the business and longer-term relationship considerations may mean that this approach, probably with the assistance of Acas and perhaps coupled with a decision to withhold pay, is a better strategy to secure prompt resolution and minimise losses to the business.

If the employees and their union are given time to negotiate an agreed end to the protest, then the employer should be clear that it is still reserving its right to take legal action to enforce remedies. It is worth noting that in the Lindsey’s oil refinery dispute, a perceived breach of the agreed end to the first round of industrial action was a trigger for further industrial action.

Gemma Herbertson, associate, Dundas & Wilson

What should employers do in the event that unofficial industrial action breaks out?

Do not concentrate solely on a legal strategy. Key priorities for the business have to be established from the outset, including the scope for longer-term harm to a broader group through fraught union relations which stem from localised unofficial action. The right legal response is an important element but is just part of these broader considerations.
An effective strategy for managing external interest in the action and the business plan to ensure operational continuity will be important. There has to be co-ordination across business, HR and legal teams. Lines of communication with the staff taking unofficial action and/or the union will be needed and assessment of the scope for early involvement of Acas is clearly important.
Employers should assess which remedy or remedies may be appropriate on the facts of the particular case. It may be that different remedies are appropriate at different stages during the dispute. Dismissal, although potentially available, may prove to be counterproductive if invoked too readily.
Employers should ensure that if employees have taken occupation of premises that relevant insurance policies (such as employer liability insurance and occupier liability insurance) provide adequate cover as employers will still be liable for any reasonably foreseen risks.