Trade unions are less influential than they were, but remain a critical conduit for justice. Eduardo Reyes reports.
If your daily commute is reliant on the Southern trains franchise run by Govia Thameslink, then trade unions will be front of mind. A high-profile dispute focused on the introduction of driver-only trains has no end in sight. The dispute’s players – the Aslef and RMT unions, Govia Thameslink and the Department for Transport – are entrenched to such a degree that it would take a humiliating capitulation to break the deadlock.
The courts generally get involved in disputes like this. Richard Arthur, head of trade union law strategy at Thompsons Solicitors, notes: ‘Over the last few years we have noticed a lot of enquiries about industrial action. This reflects workers’ dissatisfaction in the way the economy is being handled by this government.’
Finding a way
Whatever the rights and wrongs of the case – argued through megaphone, the media and the courts – the Southern rail dispute seems a very traditional test of raw strength between union and employer. Such disputes provided part of the impetus for legislation that raises the threshold required for a strike mandate, contained in the Trade Union Act 2016 (see box).
Feelings run high on both sides at mention of the act. But away from this particular contest, trade union legal teams and their advisers continue to take cases forward which, if won in court or through settlement, bring about dramatic change. Consider that there has been a 70% drop in employment cases brought since the introduction of Employment Tribunal fees in July 2013. In many instances, trade union-backed cases are not just important – at times they are the only game in town.
Ensuring that cases can be brought is not straightforward. The GMB’s legal director Maria Ludkin explains the union’s solution to the rising cost of employment cases. ‘We have UnionLine in Sheffield – our own law firm,’ she says. UnionLine, one of the early ABSs to gain a licence, enables joint owners the GMB and the CWU to cover some of the legal needs of around one million members and their families.
Making employment cases affordable was the main motivation for setting up UnionLine, Ludkin adds. It achieves this by handling members’ personal injury cases – cases where the unions recover costs. Now three years old, the firm is in profit and makes enough to fund employment matters. ‘It is unique,’ she notes, though UnionLine may soon start to take clients via other, smaller unions that want to ‘white label’ legal support to members.
Most ‘routine’ employment cases are taken by UnionLine. Larger strategic cases are handled by Ludkin and her colleagues working closely with a law firm, often high-profile claimant firm Leigh Day.
The union’s ‘gig economy’ cases are a good example. The very nature of employment is changing across swathes of the economy, Ludkin observes. Businesses such as Uber and logistics operations such as Deliveroo have grown quickly using models where services are provided by workers who are classed as ‘self-employed’.
This is, Ludkin says, part of a ‘massive shift’ to what she terms ‘bogus self-employment’. The gig-economy cases typify the approach taken by the GMB on strategic cases. Working in partnership with Leigh Day, the union marries a legal strategy with communications and industrial strategies.
Strategic cases are far from symbolic gestures. The ‘blacklisting’ case against construction companies was ‘high cost’, but those costs were recovered (see box). ‘We’re not a big striking union,’ Ludkin observes. ‘We’d much rather sit down and do the business behind closed doors. Employers know we are an engaging union.’ But where such engagement is not working, she warns: ‘We can upset your brand’s value.’
The right to strike is another preoccupation. Arthur says that Thompsons has ‘represented trade unions in all major recent industrial action cases, including in the Court of Appeal for Aslef against Southern Trains’.
From that standpoint, he sees a clear trend: a marked increase in advice sought on the Trade Union Act 2016, and an expectation that strike action will be challenged through the courts.
TRADE UNION ACT 2016
The headline claim of the Trade Union Act 2016 is that it ‘will ensure industrial action only ever goes ahead when there has been a ballot turnout of at least 50%’.
In certain public services, including health, education, transport, border security and fire sectors, an additional threshold of 40% support of the relevant workforce to take industrial action from all eligible members must be met for action to be legal.
In a concession as the bill went through parliament, the government agreed to commission an independent review into electronic balloting within six months.
Through its main provisions, as described by the government, the act:
- Sets a six-month time limit (which can be increased to nine months if the union and employer agree) for industrial action ‘so that mandates are always recent’;
- Requires a ‘clearer description’ of the trade dispute and the planned industrial action on the ballot paper, ‘so that all union members are clear what they are voting for’;
- Creates ‘a transparent process’ for trade union subscriptions that allows new members to make an active choice of paying into political funds;
- Gives more powers to the certification officer ‘to ensure new and existing rules are always followed by unions’;
- Ensures that payroll deductions for trade union subscriptions are only administered ‘where the cost is not funded by the public’.
Government in this circumstance is not just content to fight – or see employers fight – actions through the court, but has prioritised law reform that seems designed to frustrate both union-backed claims and the use of industrial action.
Gerard Stilliard, Thompsons’ head of personal injury, adds: ‘The government is considering policy on small claims that could see workers [lose] access to free legal representation. This means they’ll have to fight their cases on their own, in their own time, against well-funded insurers or employers.’ This, he says, is ‘billed as “whiplash reform” – but actually covers all injuries on the road and at work. The proposals completely undermine the established legal principle that “the polluter pays”’.
In the public eye
The seven-lawyer team at public service union Unison sends the bulk of its members’ regular cases to external law firms, retaining ‘strategic’ employment cases and appeals in-house.
Those strategic cases have wide application and great significance, Unison senior solicitor Shantha David notes. So the union’s team can expect to take a case to the Court of Appeal, Supreme Court and sometimes the ECJ.
Alemo-Herron v Parkwood Ltd, for example, occupied Unison’s in-house lawyers between 2007 and 2013. Centring on the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) legislation, the case is central to the interpretation of employees’ rights when their jobs transfer to an organisation with a different owner – common in a world where private providers perform public functions. By a term of their contract, Mr Alemo-Herron and his colleagues were expressly entitled to the benefit of pay increases that were collectively agreed from time to time by the National Joint Council (NJC). The question was whether, following a transfer, they continued to benefit from this ‘dynamic’ term, when their new employer was not a member of the NJC.
‘We lost in the Employment Tribunal,’ David recalls, ‘won in the Employment Appeals Tribunal, and lost in the Court of Appeal.’ On further appeal, the Supreme Court agreed with Unison but decided to refer the matter to the ECJ as it was unclear whether the Acquired Rights Directive prevented national courts from giving a ‘dynamic’ interpretation, and so a more favourable interpretation of TUPE. The ECJ, in effect, said it could not.
‘Collective agreements tend to be incorporated into individual contracts in the UK, unlike in say France and Germany where they sit outside the contract of employment,’ David observes. ‘I’m not sure we were completely understood.’
TUPE remains a regular flashpoint. Pattinson & Brewer partner Elizabeth Stephenson says: ‘We have had an increase in requests for advice on failures to inform and consult in TUPE transfer situations, and a lot of experience of employers doing particularly badly in complying with their obligations towards low-paid workers.’
Commonly, Stephenson adds, ‘their pay date and method suddenly changes without warning. The role of unions in dealing with these matters and pursuing breaches is so important, because it is highly unlikely that individually affected employees would be in a position to challenge these events themselves – either prior to the transfer or legally after the event.’
Stephenson says many cases she handles relate to ‘outsourcing of services from the public to the private sector’, which ‘frequently involve huge problems relating to pay, working arrangements and, in some cases, the suitability of the contractor to provide important public services’.
Decades after the Equal Pay Act came into force, equal pay remains an issue. The Unison team enjoyed success in North & Others v Dumfries and Galloway Council, where it won in the Supreme Court. Scottish councils were found to have paid discriminatory bonuses to men that were not available to women – 2,000 Unison members at Scottish councils shared an estimated £12m in lost pay.
Other successes include the ECJ, ET, EAT and recently the Court of Appeal’s 2016 decision in British Gas Trading Ltd v Mr J Lock & Ors & Secretary of State for Business, Innovation and Skills, which determined that commissions should be taken into account when calculating holiday pay. ‘Half of Mr Lock’s pay was commission,’ David says (a typical pay arrangement in the sector).
More difficult to prove, Stephenson notes, are cases involving race discrimination: ‘It can be difficult, in the absence of specific race-related comments (which of course are rare), to shift the burden of proof on to the employer to provide a non-discriminatory explanation for the employee’s treatment.’ The law here is developing, though, she adds.
Stephenson represented the employee in a landmark race discrimination claim in the EAT. When considering whether the burden of proof had shifted to the employer to give a non-discriminatory explanation for its conduct in demoting an employee or denying him the opportunity to qualify for different work, it was decided that the Employment Tribunal was entitled to take into account the fact that the employer had given inconsistent explanations about its conduct. ‘This is a very useful case for claimants,’ she notes.
Even with the resources a union brings to claims it backs, the more hostile environment created for claims – through changes to costs rules, civil procedure and the introduction of court and tribunal fees – presents an economic challenge.
At the GMB, Ludkin is confident that the UnionLine delivery model can survive, but says: ‘PI [reforms] mean a changed model.’ Significant time is also spent on ‘detailed cash forecasts’, she adds.
The issue of tribunal fees was deemed so significant that Unison has made it one of the union’s key cases: Unison v Lord Chancellor, goes before the Supreme Court in March. At issue is the impact fees have had on access to justice – the 70% fall in cases brought has proved to be a sustained drop. ‘In the Court of Appeal, Underhill LJ acknowledged the situation was “troubling” and the drop in claims “dramatic”, but wouldn’t go over the line and declare the changes unlawful,’ David observes.
Judgment days: leading cases backed by trade unions
Employment Tribunal (ET) fees were introduced in July 2013. The fees range from £160 to £1,200 in the Employment Tribunal and up to £1,600 in the Employment Appeal Tribunal.
Public service union Unison was quick to challenge the lawfulness of the new regime on the basis that it would make it ‘virtually impossible, or excessively difficult’ for people of modest means to exercise their right to bring an ET claim and would discriminate against employees with a protected characteristic.
The High Court dismissed the challenge.
Unison also failed in the Court of Appeal, although Underhill LJ described the decline in ET cases as ‘sufficiently startling to merit a very full and careful analysis of its causes’ and expressed a ‘strong suspicion that so large a decline [in claims] is unlikely to be accounted for entirely by cases of “won’t pay” and [that] it must also reflect at least some cases of “can’t pay”’. The case is due in the Supreme Court in March.
In April and May 2016, unions and construction companies reached a settlement over the practice of ‘blacklisting’ construction workers. Workers on such lists included active union members.
The companies denied the allegation of ‘blacklisting’, but accepted that for decades they were involved in a secret vetting system which infringed workers’ rights to confidentiality, privacy, reputation and data protection.
On 29 April, the GMB, Ucatt and law firm CGR settled for £5.4m plus legal costs. On 9 May Unite, advised by trade union firm Thompsons, settled for £10m plus costs.
The case of Alemo-Herron v Parkwood Leisure Ltd, backed by Unison, reached the ECJ. At stake was the interpretation of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). Could there be an automatic ‘updating’ of some terms? Were the minimum terms under TUPE ‘static’ or ‘dynamic’?
The Supreme Court decided for Unison but referred the case to the ECJ as it was unsure of whether European law prevented national courts from giving a dynamic and so a more favourable interpretation of TUPE. The ECJ, in effect, said it could not.
The charge of ‘bogus’ employment arrangements – whereby people who are in effect employees are classed as ‘self-employed’ and so have fewer rights – is identified by trade union lawyers as a growing trend.
The GMB, working with law firm Leigh Day, brought a case against private hire firm Uber.
In October 2016, an employment tribunal found that Uber’s drivers are not self-employed and should be paid the ‘national living wage’. The judges accused Uber of ‘resorting in its documentation to fictions, twisted language and even brand new terminology’.
It said: ‘The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common “platform” is to our minds faintly ridiculous. Drivers do not and cannot negotiate with passengers … They are offered and accept trips strictly on Uber’s terms.’
Uber has said it will appeal.
Underhill found that the evidence presented was ‘sufficiently startling to merit a very full and careful analysis of its causes’, and noted that if the lord chancellor decided, based on the evidence at his disposal, that there are good grounds for concluding that part of the decline in numbers is accounted for by claimants being realistically unable to afford to bring proceedings, ‘the level of fees and/or the remission criteria will need to be revisited’.
Unison lawyers are now taking their fight to the Supreme Court.
The UK vote to leave the EU in last year’s referendum has worried many trade union lawyers. Legislation proposed by the government would transpose all EU law into UK law, to avoid legal chaos at the point of exit. But, inevitably, Brexit will make employment rights vulnerable to change.
Stephenson explains: ‘Given the vital work done by trade unions working together across Europe and the many rights which derive from EU law – such as equality legislation and important rights relating to redundancy, working time and on the transfer of undertakings – I am very concerned that this government will not live up to its rhetoric about “ordinary working people” and see this as an opportunity to further attack workers’ rights.’ As a result, she says: ‘The role of trade unions in ensuring this is not allowed to happen is more important than ever.’
As the UK heads closer to triggering article 50, the mechanism by which it should leave the EU by 2019, this is also front of mind for Stilliard: ‘Leaving the EU has profound consequences for workers in the UK. Many rights at work are underpinned by EU law: equality, health and safety, paid holidays, protection on redundancies and changes of employer.
‘The government must commit to including the trade union and labour movement in discussions on the terms for leaving the EU, and must guarantee that the rights of UK workers will not be diluted. Why should workers in the UK be worse off than everywhere else in Europe?’