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December UK labour law quarterly update

  • United Kingdom
  • Employment law
  • Labor law and trade union issues

06-12-2018

Welcome to our December UK labour law quarterly update. This edition contains the following content:

UK labour law news

UK labour case law 

UK labour law news

Responding to walkouts by gig workers and contractors

The media reported recently that the GMB withdrew its support for a planned courier walkout at DPD in response to a legal threat from the company. Recent protest action amongst contractors and other self-employed casual workers, such as Deliveroo, suggests that DPD will not be the last company to consider its legal options in such circumstances.

However, this is a complex area of labour law and normal statutory rules around balloting, immunities, dismissal protections and more may not apply depending on the facts of each dispute, including the contractual terms, evidence of any third party (union) organisation and whether those involved are genuine contractors.

For example, the legal position on walkouts is linked to the employment status of the people involved. In general terms, there are different potential legal remedies available to a business when faced with contractor walkouts, as opposed to walkouts by workers or employees (for a recap on the difference between contractors, workers and employees, read our briefing).

This can present a dilemma for some business models that categorize the protesters as genuinely independent contractors and are resisting worker status claims i.e. where the protesters claim that they are not independent contractors, but are workers. Clearly, businesses need to be consistent in their arguments when defending worker status claims and when seeking to use the law to stop walkouts. For example, arguing against worker status in the former and towards worker status in the latter would be unhelpful.

Given this context, what are the typical legal options when contractors threaten walkouts? A breach of contract, allowing the company to terminate contracts and sue the individual contractors involved for damages, may be an option depending on the facts. If others, including a trade union, organise and induce a contractor to walkout and breach their contract, they may also be liable for any losses and may be the subject of an injunction to stop future inducements. Media coverage of the DPD dispute suggests that GMB were at risk of claims that they had interfered with the drivers’ contracts with DPD and decided, as a result, to repudiate their support. For further information or advice on this topic, please contact marcmeryon@eversheds-sutherland.com.

Central Arbitration Committee annual report records drop in recognition applications

The delayed CAC annual report, reflecting a change of Chair during the 2017/18 period covered, has been published. In summary, the number of applications for trade union recognition reduced from 51 to 35, although this may reflect the typical peaks and troughs of the CAC’s workload over the past decade. Applications involving employers of fewer than 200 workers comprised 48% and the average size of the bargaining unit was relatively small at 103 workers. Applications came from a range of sectors and unions. The report also notes the first successful employer application for de-recognition (Union Bank UK plc v Unite).

For employers on the receiving end of a recognition application, it is useful to note that the average time between an application and a declaration of recognition (or non-recognition) was 12 weeks in cases without a ballot, or 33 weeks where a ballot is involved. Read the report

UK labour case law

R(IWGB) v CAC: High Court rejects IWGB’s bid to extend collective bargaining in the gig economy

In 2017, the Central Arbitration Committee (CAC) rejected the IWGB union’s application to be recognised for collective bargaining by Deliveroo on behalf of a group of riders. The status of the riders made this an unusual application: were they independent contractors or ‘workers’? The CAC decided that they are the former, meaning that the application had to be rejected as statutory trade union recognition is available to ‘workers’ but not genuinely self-employed contractors.

In November 2018, the High Court heard IWGB’s judicial review application of the CAC’s decision. The union argued that the CAC erred in failing to address its arguments in respect of Article 11 of the European Convention on Human Rights, specifically, that the requirement for riders to be ‘workers’ providing personal service to Deliveroo should not exclude them from exercising their right to collective bargaining. In other words, that the Article 11 right to collective bargaining is not dependent on worker status. The High Court disagreed, holding that Article 11 did not apply to the riders and rejecting the union’s arguments for extending its scope beyond an employment relationship. In addition, it decided that restricting statutory recognition rights to ‘workers’ providing personal service under UK law was justified and proportionate, striking a balance between freedom of business and contract and rights to compulsory recognition procedures. Employers reliant on casual workforces will welcome the clarification provided by the High Court in this decision.

Talon Engineering Ltd v Smith: Postponing a disciplinary hearing to accommodate union rep availability

A worker attending a disciplinary or grievance hearing may reasonably request to be accompanied by a fellow worker or trade union official. If the chosen companion is not available for the hearing, the worker has the right to propose an alternative time which must be: reasonable and before the end of five working days (beginning with the first working day after the day proposed by the employer).

In this case, the original hearing date was postponed due to illness and leave. The claimant’s chosen companion, a trade union official, could not attend the rescheduled date, or within five working days. The employer refused to postpone again, the claimant refused to attend and was dismissed in her absence. The EAT upheld the ET’s decision that the failure to postpone the disciplinary hearing resulted in an unfair dismissal – the employer could have postponed the hearing for a short period of time. This serves as a warning to employers that simply adhering to the five working day postponement condition may not be sufficient for unfair dismissal purposes. However, it is unsatisfactory in that employers are left unclear as to how much longer they might be expected to wait. Here, the companion would have been available two weeks later.

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