Olympic strike threats – are employers being held to ransom?

The past few weeks have seen numerous news reports about the threat of strikes by transport workers, who have demanded bonuses in return for the possibility of working extra hours during the Olympics.

Recently, it was reported that Tube workers had secured an Olympics bonus package worth more than £6,000 in total. This comes after reports that staff at London’s Docklands Light Railway, London Overground and Network Rail had accepted bonus settlements of £900, £600 and £500 respectively.

The latest case involves London bus workers, who are set to vote on strike action after reportedly requesting an additional £500, despite Transport for London explaining that they will already be entitled to overtime during the Olympics.

In most of these cases, the requested bonuses are in addition to previously agreed overtime and rewards for working during the Olympics.

Potential for damage

To the cynic, the premise is simple: pay us extra, say the employees, or we’ll go on strike during the most important few weeks in recent UK cultural history and leave you carrying the can. The potential for brand damage is huge. After all, who wants to be seen as the penny-pinching boss responsible for ruining people’s trips to the Games?

On a slightly different note, the recent “fuel crisis” caused by the vague threat of tanker drivers going on strike represents how the mere prospect of industrial action can cause chaos as far as infrastructure is concerned. If tanker drivers decided to strike during or around the Olympics, a full-scale panic would surely ensue.

This underlines how the infrastructure on which the Olympics depend is so finely balanced and demonstrates the pressure placed on employers across a range of industries to maintain high staffing and output levels at such a crucial time.

This explains why employees and unions perhaps feel they are in such a strong position when it comes to bargaining for Olympics pay deals and bonuses.

But do these recent cases set a precedent for other industries? After all, the smooth running of the Olympics doesn’t just depend on public transport. A wide range of sectors and functions will contribute to the Games’ success.

Businesses in catering and hospitality, utilities, logistics, retail and the service sector – to name just a few – will be required to work to their full ability in the build-up and during the Olympics and Paralympic Games, as the world turns its attention to London and locations across the UK.

Are employers in these sectors vulnerable to bonus demands and strike threats in the same way transport operators have been? And if they find themselves in such a position, what options do they have?

Employee rights

Sam Barnes, associate in the employment practice at employment law firm Freshfields Bruckhaus Deringer, reminds employers that staff generally don’t have the right to demand extra pay to perform their “usual duties” during key events such as the Olympics, and employers are usually able to refuse such requests, provided that employees’ contracts don’t include “express or implied entitlement” to increased pay.

Therefore, Barnes advises: “Generally, if employees refuse to perform their duties – or indicate that they intend to refuse to perform their duties – unless they are given more pay, then there may be grounds to discipline the employee. An employer’s disciplinary policy would be relevant here.”

Barnes adds: “There is no right to strike under English common law. A strike – and almost every other type of industrial action – will generally involve an employee breaching their contract of employment. Striking employees will generally not have a right to pay if they do not perform work as scheduled and so an employer will be entitled to dock their pay for the period of any action.”

Significantly, as far as the Olympics are concerned, Barnes says that employees and unions may be liable if a strike interferes with the employer’s ability to perform other contracts, such as for the supply of goods or the performance of services, unless they have the benefit of legislative protection.

But is this enough to prevent the threat of strikes? The number of cases so far suggests not.

Opportunity to improve relations

Matt Brooks, partner at Better Placed HR, suggests that these sorts of situations offer an opportunity to strengthen relationships with employees, provided that employers act quickly and communicate effectively with staff.

He says: “If you’re asking your employees to do considerably more or suffer some exceptional hardship as a result of something beyond your control such as the Games, then it is perhaps understandable that they might want to be compensated for that.

“The opportunity is for the business to make an offer of ‘something’ additional, whether it is cash, time off in lieu, away days or wine, for example, for those who go through this. Precisely what ‘compensation’ is appropriate depends on the business knowing its people well enough to be able to pitch it correctly,” Brooks adds.

“The vital point is for employers to get in first; to make the offer before the employees come up with a collective decision, by which point they’ve prepared themselves for a fight and the employer starts off on the back foot.”

Brooks says that making an unprompted compensation offer will be perceived not only as more generous than the same value offer were it to have been demanded, but also will have intangible but valuable, positive effects on employers’ “psychological contract” with their workforce.

Finally, he warns: “If you don’t know your workforce well enough to get this right, you probably have more serious problems than you realise, and the effect of the Games may only be to bring them to the surface more quickly and starkly than they would have naturally risen.”

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