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UK labour law quarterly update - June 2019

  • United Kingdom
  • Employment law

20-06-2019

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

News round-up

Recent labour case law

Eversheds Sutherland labour law publications, events and training

News round-up

Good Work Plan changes: information and consultation arrangements

Further to the Government’s Good Work Plan and recent legislation (for further information on the Good Work Plan, read our update), from 6 April 2020 the threshold to trigger employee information and consultation arrangements (e.g. staff councils) will be reduced from 10% to 2% of employees, subject to a minimum of 15. Employers should review their existing staff engagement arrangements, including how this change may impact on the tactics deployed by a trade union seeking recognition.

Employers respond to corporate governance employee engagement reforms

All companies with a premium listing must explain how they apply the principles of the Corporate Governance Code 2018, which applies to financial years beginning on or after 1 January 2019. This includes reporting on the adoption of one of three employee engagement mechanisms: a designated non-executive director (NED); a formal employee advisory council; or a workforce director.

The media has criticised how FTSE 100 companies are responding so far, in particular, that none have to date appointed a workforce director. Most have designated a NED and over ten have set up employee advisory councils. Meanwhile, FTSE 250 company, Capita, has appointed two employees to the board and FirstGroup has had an employee director for many years. Reports suggest that other companies are reluctant to put an employee on the board due to concerns over conflicts of interest, creating a distraction and delayed decision making.

However, adverse media commentary is expected to continue as employers come under mounting internal and external pressures to increase the quality and effectiveness of employee engagement channels, from whistleblowing systems on the one hand to broader employee participation on the other. Devising a coherent and holistic employee relations strategy, taking account of any existing staff forums or trade union recognition, should sit at the heart of an employer’s response to such pressures – thereby avoiding the risk of piecemeal action which may prove costly, ineffective or worse. For more information, please contact thomasplayer@eversheds-sutherland.com and marcmeryon@eversheds-sutherland.com.

2018 strike and union membership statistics are published

The ONS has published its annual analysis of industrial action statistics, recording the sixth-lowest annual total since records began in 1891 (273,000 working days lost). The education sector accounted for 66% of all working days lost, due mainly to disputes involving employees of universities. The number of working days lost in the public sector was the lowest since records began in 1996. Read the ONS report here.

The Government has also published its annual review of trade union membership statistics. It reported the second successive annual increase in employee union membership levels, following the low point in 2016, with the proportion of employees who were trade union members rising slightly 23.4% (from 23.3% in 2017). Public sector membership rose to 52.5% (from 51.9% in 2017) and fell to 13.2% in the private sector. Read the statistics here.

Updated public sector facility time guidance

The Government has published updated guidance to support public sector organisations to meet the requirement to publish information relating to trade union facility time. On 3 June 2019 the Government launched a new online recording system as part of the Facility Time Publication Service, enabling all public sector organisations to centrally submit facility time data by the deadline of the 31 July 2019.

Recent labour case law

Kostal v Dunkley: significant turnaround in Court of Appeal collective bargaining judgment

K, the employer, has succeeded in overturning the EAT's decision on trade union legislation – section 145B TULRCA - which had restricted an employer’s ability to change employment terms in a unionised workplace without collective agreement.

The employer argued that the EAT’s decision (further information here) effectively gave a veto to a union where the collective bargaining process had been followed. The Court of Appeal accepted this argument and held that this is not what Parliament had intended. The Court held that provided an employer does not ask its employees to relinquish collective bargaining, it can make them an offer to change one or more of their terms of employment without breaching section 145B. The union has stated that it will seek to appeal this decision, as it leaves open the possibility of employers making repeated offers direct to their staff whilst ostensibly continuing collective bargaining. Read our update on the Court of Appeal decision.

Lozaique v Tesco Stores: whether a collective agreement term is incorporated into a contract of employment

L claimed unpaid overtime on the basis that his 2005 contractual terms entitled him to a premium rate. T, the employer, resisted on the grounds that a 2016/17 collective agreement with USDAW included a reduction in overtime rates in return for a lump sum support payment.

The EAT had to address the interaction between the various terms and conditions and collective agreements over the period of L’s employment – an exercise which may be familiar to employers with assorted agreements, old and new. In this case, a 2005 letter sent from a manager setting out a right to a premium for guaranteed overtime was upheld, despite a finding that the later collective agreement was incorporated into L’s contract. The EAT found that the terms on overtime premiums in that agreement were not apt for incorporation to displace the provisions in the manager’s letter. A reminder, therefore, that deciding that a collective agreement is incorporated is not enough – a tribunal must ask whether each of its terms is apt for incorporation.

IWGB seeks to appeal joint employment recognition challenge

In 2018, the IWGB union unsuccessfully applied for joint employment union recognition with two employers for one set of workers: a facilities management provider, its workers and the organisation where its services are performed. The union argued that the latter controlled the terms and conditions provided by the former. The CAC rejected the application, deciding that that the law provides for workers to collectively bargain with their direct employer only. The union lost its judicial appeal application in March this year and has since submitted an appeal application to the Court of Appeal.

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