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UK labor law update - September 2021

  • United Kingdom
  • Employment law



Welcome to our September UK labor law quarterly update. This edition contains the following content:

News round-up

Recent labor case law

Eversheds Sutherland labor law publications, events and training

News round-up

COVID-19 health and safety risks and the role of trade unions

September is being heralded as the month when we are likely to see a return to the workplace (albeit on a hybrid basis for many) of those employees who have been working from home previously. In readiness for that return to “normality”, the working safely during coronavirus guidance published by the UK and devolved governments has been updated, many staff are now “double-jabbed” and there have been changes made to the self-isolation rules which were causing difficulties for employers in some sectors.

Perhaps one of the few positive consequences of living through this pandemic has been that, in responding to a universal risk, greater interaction took place between employers and workplace health and safety representatives (H&S reps). Not only has this led to enhanced relationships between management and H&S reps, but has also helped to raise the profile of trade unions in some workplaces. However, positive outcomes have not been witnessed in all workplaces. For example, the TUC’s 2020/21 survey of more than 2100 H&S reps (published in March 2021) makes for troubling reading, suggesting that some employers were failing to follow COVID-secure rules to keep workers safe.

The Health and Safety at Work Act 1974 and the Safety Representatives and Safety Committees Regulations 1977 require employers to consult with recognised trade union H&S reps on health, safety and welfare matters. H&S committees must also be set up where two or more H&S reps request it. Workforce H&S reps in non-unionised workplaces have fewer rights, but may also make representations under the Health and Safety (Consultation with Employees) Regulations 1996. Most unions have produced specific pandemic guidance for H&S reps, ranging from the conduct of COVID-19 risk assessments to specialist advice on the hazards facing specific sectors and collaboration with supply chains.

The working safely guidance produced by the various governments is non-statutory, albeit providing good evidence of what is reasonably practicable. It does not supersede any pre-existing legal obligations relating to health and safety, employment or equalities. Employers cannot afford to become complacent and those who do not update their risk assessments, in the light of new COVID variants and greater knowledge about how COVID is transmitted, may leave themselves open to challenge. Currently, the only known industrial action relating to COVID safety is the long-running dispute between PCS and DVLA. However, it is not inconceivable that other disputes will arise once greater numbers of staff are faced with the reality of returning to the workplace.     

TUC calls for permanent short-time working scheme

The Coronavirus Job Retention Scheme (CJRS) was implemented in March 2020 to support employers in paying their employees during the pandemic. There is little doubt that the CJRS played a significant role in preserving roles and reducing redundancy levels. (As at 1 September, HMRC data suggested that a cumulative total of 11.6 million jobs had been supported by the CJRS at various times). However, with the CJRS due to expire at the end of September, the TUC has published a paper contending that the UK should build on the success of the CJRS by establishing a permanent short-time working scheme to deal with future periods of economic turbulence – a so-called “daughter of furlough”. In support of this it notes that 23 OECD countries already had such schemes in place before the pandemic, including Germany, Japan and many US states. An unprecedented degree of collaborative work by the Government, business representatives such as the CBI and trade unions was involved in the implementation of the CJRS. The TUC envisages that a similar tri-partite approach could be followed for the design and governance of any permanent short-time working scheme. Of course, whether the Government can be persuaded that such a scheme should form part of its “Build Back Better” plans, remains to be seen.    

Unite 2021 general secretary election

Sharon Graham will succeed Len McCluskey as the first female general secretary of Unite. Her CV includes developing the union's Organising and Leverage department. Unite’s leverage strategy has included the targeting of an employer’s customers, investors, suppliers and individual employees to build pressure on an employer to give way during a dispute. The strategy has been used since 2012, attracting widespread commentary, including a report by Bruce Carr QC in 2014 reviewing how the law applied to industrial disputes.

Against this background, Sharon Graham’s message that the union needs to return its focus to fighting for workers’ rights, rather than getting involved in Labour Party politics, should be borne in mind by employers.

CAC annual report 2020/21

The latest annual report of the Central Arbitration Committee (CAC), covering the period from 1 April 2020 to 31 March 2021, was published in July. As might be expected, the enforced closure of many businesses during the pandemic meant that the CAC’s caseload decreased compared to the previous year, with applications for trade union recognition falling from 69 to 50. A continued decline is also noted in the proportion of applications received from the manufacturing, transport and communications sectors. In 2020/21 they accounted for 26% of the applications received, which compares with 36% in 2019/20 and 48% in 2018/19.

Recent labor case law

Time limits for unlawful inducements: Scottish Borders Housing Association v Caldwell

Trade union legislation (section 145B TULRCA) restricts an employer’s ability to change employment terms in a unionised workplace without collective agreement. In broad terms, 145B prohibits an employer from making an offer to members of a recognised union which results in either all or any of their terms no longer being determined by collective agreement, where that outcome is the employer’s sole or main purpose. Claimants have three months, from the date of the offer, to complain to a tribunal (section 145C TULRCA).

This case considers when the three month time limit commences. In summary, the employer had been attempting to negotiate with the trade union over amended terms for over two years, without success. In September 2019, employer wrote to employees directly giving them the opportunity to agree to the new terms. Although the majority of employees did so, some did not. The employer then wrote to the dissenters in December 2019, stating that the new terms would come into effect in January 2020 and providing them with information about their new pay structure and salary details. The affected employees advised the employer that they did not accept the proposed variation to their contracts and submitted claims asserting a breach of section 145B.

A preliminary issue arose as to whether these claims had been brought within the three month time limit. The parties accepted that if the letters sent in December could not be said to be offers, the claims were out of time. The employment tribunal concluded that, despite its unilateral appearance, the contents of the December letter should be treated as the latest in a series of offers since the change proposed could still be accepted or rejected. As such, the claims had been brought in time.

On appeal, however, the Employment Appeal Tribunal accepted the employer's submission that the December letter did not amount to an offer, but instead constituted an anticipatory breach of contract, “an employer that intimates its determination to unilaterally impose new terms cannot be said to offer new terms under s. 145B”. In other words, that letter set out the changes the employer had decided to make irrespective of the employees’ consent.  As such, it held that the s145B claims were time-barred.

Scope of trade union freedom right under Article 11 ECHR: IWGB v RooFoods Ltd (t/a Deliveroo)

The Court of Appeal has unanimously held that Deliveroo riders did not fall within the scope of Article 11 of the European Convention on Human Rights (freedom of association) because they were not "in an employment relationship" with Deliveroo. In construing Article 11, the Court considered International Labour Organisation Recommendation 198, which itself suggests that personal service is an important indicator and firmly rejected IWGB’s contention that “everyone” is in scope. Permission to appeal to the Supreme Court was refused.

The IWGB had previously applied to the Central Arbitration Committee (CAC), on behalf of a group of riders, to be recognised by Deliveroo for collective bargaining purposes. To be eligible, the riders needed to be “workers” within the meaning of section 296 of TULRCA. The CAC decided they were not finding, on the facts, that there was a genuine and effective right of substitution, so the requirement of personal service was not satisfied. The IWGB pursued a judicial review of this decision, contending that Article 11 ECHR requires a more expansive interpretation of the definition of worker in TULRCA, but the High Court, and now the Court of Appeal, rejected this argument.

HSBC EWC v HSBC Europe: CAC confirms EWC’s move to Ireland following Brexit

In 2015 H’s management entered into an EWC agreement with employee representatives. The agreement stated that central management was situated in the UK and UK law applied. It provided for amendments to the agreement by mutual consent and for disputes to be resolved in accordance with the UK law on EWCs.

In November 2020, before the end of the Brexit transition period, H relocated its EWC’s central management from the UK to Ireland from 1 January 2021, writing a letter to its Irish operation confirming that it would act as its representative agent. In December 2020, H informed the EWC of this change, providing an updated agreement which also confirmed the application of Irish governing law.

The EWC complained unsuccessfully to the Central Arbitration Committee (CAC) that amending the representative agent and governing law in the agreement, without EWC members’ consent, breached the agreement.

The CAC decided that H was required by EU law to designate a representative agent within an EU Member State for the purposes of the Directive, reflecting the end of the Brexit transition period. Recording the change from a UK to an Irish representative agent in the agreement was a necessary consequence of that change: “it would be anomalous for the text of the Agreement not to reflect the new reality” according to the CAC. It did not require mutual consent because, under the agreement, consent was required for changes proposed at the will of the parties, not changes required by law.

Furthermore, the EWC argued that both Irish and UK law applied to the EWC. Relying on the terms of the agreement, this was rejected by the CAC. The agreement’s wording linked central management’s location directly to the governing law; when management moved to Ireland, so did the governing law. As such, the CAC had no jurisdiction to hear disputes arising out of the agreement.

It should be noted that an appeal (to the Employment Appeal Tribunal) is pending on the impact of Brexit on the CAC’s jurisdiction in the context of an EWC governed by the subsidiary requirements and where the employer believed that the EWC ceased to exist at the end of the transition period.