Statutory Regulation and Employment Relations

The Impact of Statutory Trade Union Recognition

S. Moore, S. McKay, S. Veale

• Publisher: Palgrave Macmillan
• Year: 2013
• ISBN:
  9781137023803
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

A comprehensive socio-legal evaluation of the 2000 statutory recognition procedure over ten years of its operation. Whilst exploring its implications for the so-called UK 'voluntarist' approach to regulating industrial relations, the authors argue that the effectiveness of the procedure was constrained by its design.

1

Locating the 2000 Statutory Recognition Procedure

The employer controls the organisation, the hierarchy, the supervision; and the employer can always put his arguments across. (McCarthy, 2000)

Until 2000, save for a very brief period in the 1970s (discussed below), there was no statutory system of trade union recognition. Trade unions had rights to represent their members only in so far as an employer was prepared to concede it. This notion of an employer veto over rights to representation is very different from that which applies in most of the Member States of the European Union.¹ In these states the legitimacy of trade unions is acknowledged; either because it is enshrined in the state’s constitution or is embedded in primary legislation which recognises trade unions as key social actors and which therefore grants an automatic right to recognition. The idea that an employer in Italy, Germany or France would have the power to veto the rights of trade unions to represent their members in the workplace is unthinkable, and social dialogue is conducted through the recognised social partners – the trade unions and their counterpart employer organisations. In these countries the employer has no say over the right of a union to represent its members and workers more generally. This apparent weakness in the UK model seems to be at odds with the power and the position which trade unions in the UK have traditionally been viewed as exercising; at least until relatively recently a majority of workers were union members or as a minimum worked under terms and conditions that had been negotiated by a trade union with their employer. At the highpoint of trade union membership in 1975, 58 per cent of all employees were trade union members and more than 70 per cent of all workers were covered by collective bargaining (Machin, 2002). By 2012, despite more than ten years of the operation of a law, which was supposed to enforce trade union rights to represent their members, union density rates had fallen dramatically, to just 27 per cent of the labour force in 2010. Furthermore, in the private sector, just 17 per cent of workers were covered by collective agreements (Achur, 2011). This chapter seeks to explain how a UK model based on voluntarism (the principle of non-interference by the state in the actions of employers and trade unions, save in cases where collective representation does not deliver industrial justice or stability) was found lacking and how legislation introduced to redress this has also been found wanting.

The right to union recognition

It is important to stress at the outset that unions seek recognition not only because it allows them to negotiate the terms and conditions of work of their members, consequently ensuring better terms and conditions than would otherwise prevail (Blanchflower and Bryson, 2010), but also because unions that are not recognised, and thus their members, do not have access to a wide range of legal rights, both individual and collective. Without recognition union members cannot claim the right to take time off to participate in union activities; union local representatives do not have rights to take time off to attend to their duties or to take part in training; they have no right to information necessary for the purposes of collective bargaining; and no automatic right to consultation in redundancy situations. Union recognition therefore not only gives trade unions a consciousness of their legitimacy in the workplace, but it also confers valuable rights which are essential to the proper exercise of the functions of trade unions and their representatives.

The Employment Relations Act 1999 granted to trade unions a statutory right to recognition, although in contrast to the earlier attempts at legislation (see below) the Act does not seek to promote the extension of collective bargaining. Instead it adopts a position of ‘neutrality’, merely providing a procedure for awarding recognition in the absence of voluntary agreement, provided that specific conditions are met, in relation to size of the employer, evidence of union membership and support and, in most cases, through a ballot. The relevant provisions are contained in Schedule A1 of the Trade Union and Labour Relations (Consolidation) Act 1992 (as amended). However, although the legislation introduced a process that can lead to statutory recognition, its primary aim has remained one of encouraging voluntary recognition though agreements reached between the parties. The aim of the law is that the UK model should continue to be based on voluntary agreement and that the law should only be utilised where the union can demonstrate substantial support for recognition, but where the employer remains opposed to it. The statutory scheme has therefore been promoted as a ‘fall-back’ in circumstances where the parties have failed to reach an agreement. It is not intended to introduce a separate primary channel to recognition, as this remains the voluntary one. As Prime Minister Tony Blair stated in the introduction to the Fairness at work White Paper

So the new culture we want to nurture and spread is one of voluntary understanding and co-operation because it has been recognised that the prosperity of each is bound up in the prosperity of all. Against such a background the law is there to give shape and support to these new understandings and as a last resort to help resolve differences and disputes if they should arise.²

This statement reflected a more general approach of both the Labour government and the trade unions to ‘partnership’, which for Labour represented the new ‘third way’ for UK industrial relations,³ while for the TUC

In many cases partnership is the most effective approach to improve the working lives of trade union members and an essential element in any strategy to improve organisational performance. Partnership is rooted in the notion that mutual gains are possible even though unions and employers will inevitably have differences of interest from time to time.⁴

This approach is integral to the direction taken by the legislation which makes it clear that, before an application under the statutory procedure can be lodged, the union must have attempted to obtain a voluntary recognition agreement from the employer. It is only in those relatively rare occasions where the employer does not accept the request to conduct collective bargaining and at the same time the union has sufficient, demonstrable support in the workplace that it may apply under the statutory scheme. This promotion of voluntarism reflected the then views of the UK social partners: the main employer organisations never favoured a statutory scheme while, at the time of the introduction of the 1999 law, the trade unions continued to support the voluntary method as the main route to recognition, a position which confirmed their wariness in using the law as a way to settle disputes arising from industrial relations, as Sarah Veale highlights in Chapter 2.

This caution was born out of the experiences of the trade unions in the prior attempts to regulate union recognition, together with their general support for what had been described by Otto Khan-Freund (1943) as ‘collective laissez-faire’, a presumption that the parties (employers and trade unions) would regulate their own relationships with little direct support from the state, other than with what Bogg (2009) describes as ‘indirect auxiliary props’. However, as Bogg asserts, this did not mean that Kahn-Freund was suggesting that the absence of legal regulation was the foundation for the UK legal system, but rather that there was ‘a voluntary system which carried alongside it the possibility of legal intervention, in the form of fair wages and wages boards, for example, where collective bargaining was not accepted’ (Bogg, 2009: 5). Legislation was therefore intended to fill the parts that collective bargaining could not reach; it was not an alternative to such bargaining.

Thus a key element of the new law was seen as its potential ‘shadow’ effect in encouraging employers to agree to the voluntary recognition of trade unions. The evidence indicates that this was the case, particularly in the years immediately preceding the introduction of the legislation and in the first years of its operation. Gall (2010) points to the rise in the number of new voluntary recognition agreements from around 100 a year in the mid to late 1990s to over 350 in 1999, nearly 550 in 2000 and just over 650 in 2001. At the same time there were also a substantial number of ‘semi-voluntary’ recognition agreements within the procedure – achieved following the submission of applications to the CAC. However, the available evidence suggests a substantial fall in the number of voluntary recognition agreements after 2004 (Gall, 2010).

The Central Arbitration Committee

The Central Arbitration Committee (CAC) is a permanent independent body with statutory powers, with its origins in the Industrial Court set up in 1919 and renamed the Industrial Arbitration Board in 1971. Its current status is laid down in the Trade Union and Labour Relations (Consolidation) Act 1992 and, until its functions were extended under the Employment Relations Act 1999, its main role was in relation to the arbitration and adjudication of equal pay claims. The 1999 Act added to its functions the adjudication of applications relating to statutory recognition and derecognition ‘where such recognition or derecognition cannot be agreed voluntarily’ (CAC website). The CAC consists of a Chair,⁵ nine Deputy Chairs, 23 members representing employers and 19 members representing workers. Members of the CAC are appointed by the Secretary of State for Business, Innovation and Skills (BIS) after consulting the Advisory, Conciliation and Arbitration Service (Acas). The CAC works on the basis of determinations made by panels of three committee members appointed by the CAC Chair, consisting of either the Chair or a Deputy, one member whose experience is as a representative of employers, and one member whose experience is as a representative of workers. A Case Manager,⁶ a member of the CAC secretariat, is the main point of contact with the parties while the case is in procedure and in cases where the application goes to ballot, the procedure states that the CAC Panel will appoint a ‘qualified independent person’ (QIP) to conduct the ballot.

There has generally been satisfaction with the way that the CAC has administered the legal procedure. In the 2010 survey of unions three quarters (75%) had a positive or very positive assessment of the CAC as the body charged with handling trade union recognition claims; only two unions (10%) had a negative view (15% had neither a positive nor negative assessment). The CAC users’ survey in 2011–12 reported that 83 per cent of users regarded the administration and conduct of the case and/or the procedural guidance provided to them as good or very good; the helpfulness of staff and quality of written information and the CAC’s awareness of the need to encourage the parties to resolve disputed issues voluntarily were all rated highly (CAC Annual Report 2011–12).

The history of statutory intervention

The two earlier attempts to regulate for union recognition prior to 1999 had their roots in a Royal Commission under Lord Donovan in 1965, established by the then Wilson Labour government, with a mandate:

To consider relations between managements and employees and the role of trade unions and employers’ associations in promoting the interests of their members and in accelerating the social and economic advance of the nation, with particular reference to the law affecting the activities of these bodies (Donovan Commission, 1968: 1).

Included within Donovan’s terms of reference was the issue of trade union recognition and a requirement to consider the extent to which the state should intervene in this area. Donovan published his report in 1968 and included a recommendation that problems of trade union recognition should be dealt with by an Industrial Relations Commission that would, on reference from the Secretary of State, investigate and report on cases and problems arising from the registration of collective agreements, with a specific duty to promote the extension of union recognition. That commission was duly established in March 1969 and although the Labour government subsequently lost the 1970 election, the commission did deal with some recognition cases. Bogg⁷ notes that, while the number was relatively few (13 in all), in ten of the 13 cases the commission did recommend recognition. As is shown in subsequent chapters, this was a much higher proportion of successful recognition awards than has been achieved under the 1999 Act. The problem was that the commission lacked powers of enforcement and Bogg points to the fact that in half of the cases where recognition was recommended, the employer simply refused to comply.⁸ Explicit in the commission’s work was a rejection of the notion of neutrality in relation to collective bargaining, in contrast to the position advanced under the 1999 Act. It was to this duty to promote collective bargaining to which Bogg attributes the high success rate for the unions. Another aspect of the commission’s work was its focus on the potential for union membership in a recognition claim rather than actual union membership. This again is in stark contrast to the current legislation, where actual or voting majorities supporting recognition are essential.

The 1970 election brought in a government whose political agenda was aimed at preventing what it saw as abuses of freedom, specifically trade unions operating without legal regulation. Although it introduced a legal duty on employers to recognise trade unions this was tied to an obligation on trade unions to register under the requirements of the Industrial Relations Act 1971. The 1971 Act determined that a recognition order would be made on the basis of ballots to gauge worker support. Dukes (2008) notes that this was also intended to promote collective bargaining, albeit only for registered unions, and that in contrast the 1999 Act is ‘curiously unbiased in favour of union recognition’. Another feature of the 1971 Act, which differentiates it from the 1999 Act, is in the bargaining unit, which under the earlier legislation was determined by taking into account the duty to promote collective bargaining. Under the 1999 Act legislation the CAC makes a determination on the appropriate bargaining unit by taking account of the need for it to be compatible with ‘effective management’; the views of the employer and the union; existing national and local bargaining arrangements; the desirability of avoiding small bargaining units; as well as the characteristics and location of the workers. The CAC must also take into account the employer’s view as to any alternative bargaining unit. This emphasises again that the 1999 legislation, unlike the two earlier efforts (both the 1971 and the 1975 Acts – see below), is not concerned with the promotion of collective representation and bargaining, but rather with ensuring that any such representation or bargaining does not ‘disrupt’ the preferred working arrangements, as determined by the employer. Following its re-election in 1974, one of the first actions of the Labour government was to repeal the 1971 Act. The refusal of trade unions to register under the Act had largely made its provisions ineffective and it was viewed negatively by them. As part of a social contract between government and the trade unions, the Act was substituted with the Employment Protection Act 1975, a legislative measure which itself broke with the previous tradition of collective laissez-faire, by establishing measures that both promoted the activities of trade unions (such as the right to take time off to take part in trade union activities), but curtailed them where they were not exercised in the context of a recognition agreement. This meant that the legislation had to provide for a way of facilitating recognition. It did this by the establishment of the Advisory, Conciliation and Arbitration Service (Acas) and by giving trade unions the right to apply to Acas for a recognition award, under Schedule 11 of the Act. Importantly Acas had a specific obligation to promote the extension of collective bargaining as a measure aimed at improving industrial relations. While there were a number of successful claims by unions under the Act, the final test of the ability of legislation to deliver union recognition was in the Grunwick case, where a group of largely female Asian workers who had spontaneously taken industrial action, approached a trade union, APEX, with a request for support and representation. With the legislation in place APEX decided, on the advice of the TUC, to take a claim under Section 11. The outcome laid bare the weakness in the 1975 law. Acas was charged with seeking the views of the workforce as to whether or not they wished to be represented, but it was faced with a number of legal challenges from the employer, who sought every possible way to avoid recognition. Eve...

Table of contents

• Cover
• Title Page
• Introduction
• 1   Locating the 2000 Statutory Recognition Procedure
• 2   A Legislative Prompt? The TUC Perspective on the 2000 Recognition Procedure
• 3   Third Time Lucky? – The Operation and Outcomes of the Statutory Recognition Procedure
• 4   Challenging Recognition – The Legitimacy of Employer Behaviour
• 5   Organising for Recognition – Union Strategies
• 6   Be Careful What You Wish for – Unfair Practices and the Law
• 7   The Fragmentation of Representation – ‘Contract-based Recognition’
• The Future for Statutory Recognition
• Notes
• Bibliography
• Index of cases
• Index