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News round-up

• The Employment Rights Bill and trade unions: the government announces further significant changes 

UK labor case law

• Industrial action: employee detriments

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• The Labor Exchange podcast: in our latest podcast, we summarise recent developments in the Employment Rights Bill which apply to trade union legislation and we explore the impact of the Morais decision in relation to withdrawing staff benefits during industrial action and the scope of Blacklisting Regulations. 
  
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News round-up

The Employment Rights Bill and trade unions: the government announces further significant changes

As the Employment Rights Bill (“Bill”) progresses through Parliament, attention has centred on day one unfair dismissal rights in particular. However, the Bill’s changes to collective employment law, including trade union and employer rights and duties, are also significant – for both unionised and non-unionised employers (read our tracker to keep abreast of developments across the Bill and timescales for implementation).

The government has now published its response to its recent consultations, including on “creating a modern framework for industrial relations” and increasing penalties for non-compliance with collective redundancy consultation, together with associated amendments to the Bill. It is possible that the information set out below will change again, should the government bring forward, or accept, further amendments before Royal Assent. However, as of now, the government’s changes include the following:

Industrial action amendments

The recent amendments have changed many of the Bill’s provisions on industrial action (IA) law and added some new measures. Taken together, in relation to IA, the Bill will:

• repeal the 2023 minimum service levels (MSL) legislation
• repeal the 50% turnout threshold and 40% support in important public services requirement in ballots. It will revert to simple majority voting. However, two different commencement dates will apply. The 40% support requirement will be repealed two months after the Bill receives Royal Assent whereas the 50% threshold will be removed once electronic balloting is made available to trade unions. The government has committed to making e-balloting an option in 2025 or 2026
• repeal the 2016 picketing supervision provisions
• reduce the information a union must include on the ballot notice and sample voting paper. Specifically, the ballot notice will no longer need to contain: the number of employees in each category being balloted and at each workplace concerned. The requirement to explain how the figures were calculated will also go. The following will no longer be required in the voting paper: a summary of the matter in dispute; the type of action short of a strike (where appropriate); and the period or periods within which industrial action is expected to take place
• reduce the information provided by the union to members with the ballot result: the number of individuals who were entitled to vote in the ballot will no longer be listed. Separately to the Bill, the government will recommend the use of email, over first class post, to inform employers and members of the ballot outcome (the Code of Practice will be updated)
• reduce advance notice of industrial action from 14 to 10 days (originally proposed to be 7 days). The information contained in the notice will also reduce, with the requirement that it contains the number of affected employees in each category listed being removed
• extend the expiry of the ballot mandate for industrial action from 6 to 12 months
• introduce protection against detriment for taking part in industrial action (addressing the “gap” in protection identified in the recent Mercer case law) and strengthen the rules on automatic unfair dismissals for protected industrial action (employees will no longer only be protected during a 12 week protected period)

In terms of timing, the MSL repeal will take effect upon the Bill becoming an Act (expected summer 2025) with some other IA repeals outlined above following two months later. The government must act through regulations to implement the remaining IA provisions in the Bill (expected 2026).

Practical implications

In summary, the procedural IA changes will make it easier and cheaper for unions to organise strikes. The changes will also reduce union risks when they do so: there will be a reduced responsibility for the action of pickets, and, by simplifying the ballot and notification rules, the government has a stated aim of narrowing the scope of employer litigation challenges.

The changes will present employers with increased operational challenges and legal risks. For example, reducing the information provided in the ballot notice and results, on the voting paper and the IA notice, together with reducing advance notice of IA to 10 days, will affect employer contingency planning.

As the Bill proceeds towards Royal Assent, employers should audit IR strategy and dispute resolution procedures to ensure that they are fit for purpose, and review existing relationships with a view to building an effective and strong IR framework in readiness for these changes.

Collective redundancy consultation amendments

The government has changed its thinking on widening the duty to collectively consult on redundancies (and dismissal and re-engagement, as appropriate). The trigger for consultation will be either:

• 20 or more employees at one establishment, or
• in a case where employees are being made redundant at more than one establishment, a higher number (that number to be determined in regulations)

The HR1 notification trigger will also be similarly amended. Another amendment provides that, although consultation must be carried out with all appropriate representatives, it need not be carried out with all appropriate representatives together or with a view to reaching the same agreement with all appropriate representatives. Employer penalties for a failure to consult collectively will also increase, with the maximum protective award rising from 90 days’ to 180 days’ pay.

Practical implications

Depending on how the new multi-establishment trigger is defined in regulations, it is expected to result in more collective consultation, involving workplace representatives and trade unions. Employers should consider how they will pro-actively monitor the new trigger point and manage any such increase. Increasing the maximum protective award will introduce significant new risks for a failure to comply with collective consultation. These risks include the maximum 25% uplift in compensation for failing to comply with the Code of Practice on Dismissal and Re-engagement, potentially increasing the potential 180 day protective award by up to the equivalent of another 45 days’ pay, compared to the current 22.5 days.

Other trade union-related Bill amendments

In addition to IA and collective redundancy changes outlined above, the government’s recent announcements introduce further changes to the new trade union right to access workplaces and to the rules relating to statutory recognition. For a guide to the government’s plans for both, read our update.

It has amended, or further developed, its plans as follows:

• right of access: the new legal process for trade unions to apply to access workplaces will include physical entry and/or communication with workers by other means (e.g. by using digital tools). Further detail on what virtual access entails will follow in regulations. The process will be enforced by the Central Arbitration Committee (CAC), with penalty fines to be determined, and there will be a “fast track” route in certain circumstances, reflecting government concerns over the potential length of the application process. The statutory purposes for workplace access agreements have been expanded and now include: meeting, supporting, representing, recruiting, communicating with or organising workers. The government has stated that communication is by any means and includes the provision of information to workers. It gives the example of an access agreement requiring an employer to provide information to their workers on behalf of union officials within an all-staff email

• statutory recognition: the main focus of the recent changes relate to the access arrangements and the “unfair practices” rules. Unfair practice protections are extended so that they apply at an earlier point (when the CAC accepts the application), the test for determining unfair practices will be lowered and the time limit which applies for making a complaint will be extended. Other changes to statutory recognition include: assessing the number of workers in a bargaining unit at the point at which the CAC receives the application - that number may go down subsequently, but not up (only those workers would be entitled to vote in any ballot), changing procedural timescales for agreeing access agreements, and permitting recognition applications from an independent union where an employer has voluntarily recognised a non-independent union, following receipt of a formal request for voluntary recognition by the independent union

UK labor case law

Industrial action: employee detriments

In the case of Morais & Others v Ryanair DAC, the employer withdrew discretionary travel benefits from pilots after they participated in industrial action. The pilots argued that compiling the list, to facilitate the withdrawal of the benefits, amounted to a prohibited blacklist under the Blacklisting Regulations (“regulations”).

In broad terms, the regulations prohibit lists which contain details of union members, or those taking part “in the activities of trade unions”, that are compiled with a view to being used for discriminatory purposes by employers (or employment agencies). The employment tribunal and EAT held that in taking strike action the pilots were taking part in trade union activities for the purposes of the regulations.

The Court of Appeal dismissed the employer’s appeal, confirming that taking strike action constitutes "activities of trade unions" which should be given its ordinary meaning. This includes action organised or endorsed by a trade union, whether or not the union has complied with the legislative balloting and notification requirements. As such, the production of a list by the employer to identify the individuals who had taken strike action, in order to withdraw travel benefits, amounted to blacklisting under the regulations.

The decision interprets the regulations widely and employers should exercise caution when compiling lists of striking workers and consider if they are being compiled for a discriminatory purpose. Where a claim is upheld, the minimum award of compensation is £5,000 (which may be subject to adjustments). The employer has applied for permission to appeal to the Supreme Court.

The pilots second complaint, of an unlawful detriment under trade union legislation, had been unsuccessful reflecting the Mercer case law (read our update). Ryanair’s argument that a consistent approach should be taken, between the legislation in Mercer and in this case, was rejected by the Court of Appeal which took the view that Mercer could be distinguished. Note that the government has acted by including measures in the Employment Rights Bill to extend detriment protection to include workers taking part in protected industrial action (see above).

Employment law is a devolved matter in Northern Ireland and the issues set out above may not all apply in NI. For NI specific advice contact our Belfast office.