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June UK labour law quarterly update

  • United Kingdom
  • Employment law


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

UK labour law news

UK labour case law update

UK labour law news

Which way now for labour law after the General Election?

With a hung parliament and an uncertain future for Theresa May, labour law is in the balance. On the one hand, if the minority Conservative Government survives, its focus is expected to be on Brexit and combating terrorism - not the introduction of new labour law. Those measures in last year’s Trade Union Act (‘Act’) yet to be implemented could therefore stall. They are:

  • Check-off: the Act provides that public sector employers may only make check-off deductions if the worker can pay subscriptions by other means (such as direct debit) and the union makes reasonable payments towards the employer’s costs for the deductions. Draft regulations defining affected public authority employers anticipated an implementation date of 10 March 2018. However, the regulations must be approved by both the Lords and Commons which may be difficult in the circumstances
  • Certification Officer (CO): the Act introduces new powers for the CO to investigate, require the disclosure of documents and take enforcement action, including a new power to impose a financial penalty, against trade unions for breaches of their statutory duties. With the exception of powers to enforce new annual return requirements, these changes have not been implemented as yet (a consultation on the new CO financial penalty closed in May 2017 – read more here and here). Again, regulations fixing the amount of the financial penalty must be approved by both Houses.

In addition, Conservative plans to boost employee voice in listed companies, alongside other corporate governance reforms (read more in our briefing), may not progress in the current climate and the fate of the independent review of electronic balloting in relation to industrial action, which concludes in December 2017, is uncertain.

On the other hand, if the minority Government fell and a second election called, interest would turn back to the extensive labour law changes proposed in Labour’s original 2017 manifesto (see our briefing for Labour’s employment manifesto promises), given their current poll ratings. With over 20 employment promises, including repealing ET fees, banning zero hour contracts and raising the minimum wage to £10 by 2020, the manifesto set out the following labour law pledges:

  • repeal the Trade Union Act
  • review union recognition law
  • work with trade unions and industry to reintroduce sectoral collective bargaining
  • no company to win a public contract unless they recognise trade unions
  • guarantee unions a right to access workplaces

Official figures record lowest rate of trade union membership

The Government has published the 2016 trade union membership figures which show that overall membership decreased by 275,000 over the year, the largest annual fall recorded since the series began in 1995. The proportion of employees who were trade union members fell from 24.7% to 23.5% in 2016 - this is the lowest rate of trade union membership recorded since 1995. Most of the reduction was experienced in the public sector, with membership falling from 54.9% to 52.7%. In the private sector, it fell from 13.9% to 13.4%, following five consecutive years of growth.

Read the BEIS statistics

NHS strikes dominate the latest annual industrial action statistics

The number of working days lost due to labour disputes in 2016 was 322,000, which was more than in 2015 (170,000) and the eighth lowest annual total since records began in 1891. The 2016 increase was partly attributable to the NHS junior doctor dispute in England, which accounted for around 40% of total working days lost. The private sector saw more stoppages in 2016, but the public sector had more working days lost than the private sector. Over recent years, pay has been the main cause of disputes; the exception being the 2009/10 economic downturn when redundancies fuelled industrial action.

Read the ONS statistics

UK labour case law update

R on the application of Lidl UK v CAC & GMB

In a significant development for employers, particularly those without recognised trade unions and those with dispersed business units such as shops, distribution centres and other regional locations, the Court of Appeal has upheld a Central Arbitration Committee (CAC) decision on the ‘appropriate bargaining unit’ in a statutory recognition application.

The Court decided that the CAC acted correctly when it rejected Lidl’s concerns about the adverse impact of recognition for a small number of employees, based at a single site (described as ‘a small island of union recognition in a sea of non-recognition’). The Court confirmed that it is reluctant to interfere with the decision of a specialist labour body like the CAC. This underlines the importance of thorough preparation when appearing before the CAC, given the poor chances of successfully challenging its decisions.

For more information, read our briefing.

Hartley v King Edward VI College

When an employee takes part in lawful strike action, the employer does not have to pay them for the periods when they are on strike. This is usually done by deducting an appropriate sum from their salary. Deciding how much to deduct arose in this case and went all the way to the Supreme Court.

H’s salary was paid according to an agreed annual number of days and hours of teaching duties which were supplemented by such additional hours (evenings, weekends and holidays) needed to perform his role. In the absence of an express term in H’s contract to the contrary, the Court decided that 1/365 of annual salary was the correct deduction for a one day strike. The alternative 1/260 formulation put forward by the employer, based on H working 5 days a week and 52 weeks of the year, was rejected on the facts; in particular, because of the expectation that H worked the hours needed to do his job. In other words, his pay was not limited to just 5 working days in the week.

It is important to note that this case was fact specific and reflected H’s contract of employment. However, the Court provided new and authoritative guidance and employers should take advice when deciding the correct deductions to make, in the event of future strike action, and whether to amend their contracts of employment.