LEGISLATING FOR SOCIAL PARTNERSHIP - 1997

This discussion document is by Steve Cavalier, who specialises in employment law for Thompsons Solicitors. Thompsons work only for trade unions and their members. Steve has addressed several Unions 21 fringe meetings.

The advent of a Labour Government and developments at European level point towards a further development of social partnership in the legal framework of industrial relations. Labour's major primary legislation on trade union and employment rights is not expected until the Autumn of 1998, but proposals already announced and commitments in the manifesto point the way towards significant developments in the field of Labour law.

Building prosperity

Before the election, Labour published, as part of the manifesto programme "Building Prosperity" - this was subtitled "Flexibility, efficiency and fairness at work". The document focused on the "ethos of democratic participation and citizenship" and on partnership between employers and employees.

The three principles underpinning the document were that every person at work should have basic minimum standards of fairness, properly enforced; that flexibility should be promoted and rigidity in labour market relations should be avoided; and that there should be a highly educated and skilled workforce.

These standards are to be based on individual rights, but increasingly the influence of European law will mean that standards will be set and rights enforced through a collective framework. There is scope for a positive framework of laws which recognises the importance of the trade union role and promotes the regulation of labour standards through agreements between employers and unions. This will, in turn, provide encouragement for employers to recognise unions and assist with increasing the participation of individual employees in trade union activities.

Membership rights

A major first step was the restoration of trade union rights at GCHQ. This commitment is so long-standing it is easy to overlook its importance but no-one should diminish its significance, both symbolic and substantive, and the considerable victory which it represents for the individuals and trade unions involved and the trade union movement as a whole.

There are wider issues concerning trade union membership rights. Labour is committed to employees having the choice whether or not to join a trade union and, if they choose to do so, they will have a right not to be discriminated against. This will require amendment to Section 148(3) of the Trade Union and Labour Relations (Consolidation) Act 1992, which embodies the amendment made by the Conservatives following the victory in the Court of Appeal in the Wilson and Palmer cases against the Daily Mail and British Ports. The amendment allows employers to offer inducements for employees to give up collective bargaining rights. The House of Lords decision in the Wilson and Palmer cases greatly restricted the scope of legislation intended to protect individuals against "action short of dismissal" on grounds of union membership or activities.

There is a need for legislation which explicitly protects individuals against discrimination for conduct either by them or their union, for taking part in any union activities or for enjoying the benefits of union membership. A precedent can be found in the provisions providing protection for health and safety representatives, who are protected against suffering any detriment on the grounds their role. This is a simpler and fairer test than that which currently applies to trade union membership and activities.

Labour has acted to protect the rights of members to have union subscriptions deducted at source by the employer. Labour proposes secondary legislation to make the necessary change to "end the unnecessary burden on business" of repeat authorisation for check-off. This is welcomed by employers as well as unions. Margaret Beckett has announced the repeal of the legislation using the Deregulation and Contracting Out Act.

The Social Chapter

Labour is committed to signing up to the Social Chapter. The manifesto documents correctly describe the Chapter as "a set of principles under which measures can be agreed". Once the Social Chapter is in force in the UK (in roughly two years time), the immediate implications will be that the Works Council and Parental Leave Directives will apply, as should the recent agreement which will form the new Part-time Workers Directive.

The adoption of the Social Chapter provides the prospect of further legislation in the employment and social field. The procedures in the Social Protocol and Agreement allow the European Union to adopt measures in a number of areas by a "qualified majority vote". The significance of this is that two large member states can be out voted under the qualified majority system, removing the effective veto which is inherent in a requirement for unanimity. Qualified majority voting covers issues on the working environment, information and consultation; equality between women and men; and integration of those excluded from the labour market. Unanimity is still required on measures regarding social security and social protection; dismissals; representation, collective defence and co-determination; conditions of employment for third country nationals and financial contributions for promotion of employment.

It is important to remember the limits of the Social Chapter mechanisms. They do not permit legislation to be brought forward covering issues of pay, right of association, strike or lock out. There is unlikely to be an extension of the areas covered by qualified majority voting, nor are the excluded issues likely to be brought within the scope of the chapter.

One of the most significant aspects of the Social Chapter procedure is the role of trade unions and employers organisations in formulating legislation and setting labour standards. Both the Parental Leave Directive and the forthcoming Part-timers Directive are the result of collective agreements reached at European level between the ETUC and European employers organisations. These are then given the binding force of law by decision of the Council of Ministers and adopted in the form of directives. This is social partnership operating on a grand scale to set labour standards which will apply throughout Europe, but which can be operated flexibly in the member states concerned.

Representation, information and consultation

These issues lie at the heart of the European approach to labour law. Labour's Building Prosperity document recognises that "social partnership is at the heart of a successful company of the future" and the proper information and adequate consultation are fundamental to a positive partnership between employers and employees.

Labour is committed to review the existing legislation. The Conservatives introduced regulations in 1995 concerning procedures for information and consultation on redundancies and transfers of undertaking. The Conservative legislation allowed employers to by-pass recognised unions and consult instead with representatives who were elected through a process which had no safeguards and no guarantees of independence. Employers were allowed to avoid the obligation to inform or consult if fewer than 20 people were made redundant at any one establishment.

These regulations were challenged in judicial review proceedings by GMB, NASUWT and UNISON. The case was unsuccessful, but the appeal was due to be heard in the Court of Appeal on 2 June 1997. Following a commitment by the Minister to review the legislation, it has been agreed to place the case on hold. When opposing the Conservative legislation, Labour confirmed it was committed to legislation which recognised the role of trade unions in the information and consultation process, guaranteed independence for representatives and removed the 20 employee threshold which excluded 96% of employers from the obligation to consult.

Information and consultation continues to be a major issue at European level. The decision by Renault to close its factory at Vilvoorde sent shock waves through European institutions. Renault made its decision without any information or consultation with its Works Council. The French Courts have said that Renault's irrevocable decision to close meant that any consultation thereafter was inadequate. There must be a critical review of the decision to close. The Court affirmed that information and consultation are a fundamental social right and granted an injunction prohibiting Renault from implementing the closure until it had complied with its obligations to inform or consult.

In the wake of the Renault announcement, the Commission is considering ways of strengthening existing Directives to provide a more effective obligation to inform and consult and to reinforce the sanctions against recalcitrant employers. European law requires that remedies must be effective, proportionate and dissuasive. The European Commissioner Padraig Flynn, has suggested this will involve dismissals being void and ineffective when proper consultation procedures have not been followed.

The Commission is now considering a proposal for information and consultation which would involve setting up Works Councils at National level to complement the European Works Councils set up under the 1994 Directive.

Trade union rights and recognition

Labour has said that where a majority of the relevant workforce votes to be represented by a trade union, there should be a legal obligation on employers to recognise a union. This would cover collective bargaining on issues of pay, hours, holidays and training. The proposal anticipates that the bargaining agenda could be extended to other issues by mutual agreement.

This proposal was subjected to considerable scrutiny during the election campaign. Proposals are not expected until the Autumn of 1997 and can be expected to draw upon the experience of statutory recognition rights in other jurisdictions.

This is a subject which would warrant a separate paper in itself, and is best left for detailed discussion when the proposal is put forward. It is important that a statutory right to recognition is accompanied by statutory rights to access and facilities for unions seeking to recruit and organise, ensuring compliance with ILO Convention 135 which requires representatives to be given such accommodation and other facilities that may be appropriate "to carry out their functions promptly and efficiently".

Minimum wage

The landmark commitment to a national minimum wage will have fundamental social and economic effects. The setting and enforcement of minimum wage raises a number of collective bargaining and legal issues. Specifically, there is the question of enforcement. It should not be left for individual employees to enforce their individual minimum wage in each case. There should be scope for class actions, with unions having the power to bring proceedings to enforce the minimum wage.

Legislation must ensure that the categories of workers to whom the minimum wage applies are widely drawn. It would be wrong to restrict its application to the current definition of "employees", otherwise unscrupulous employers may well establish sham arrangements to avoid workers acquiring employee status.

Works councils and working time

The Working Time Directive is overdue for implementation. The Works Council Directive must be implemented as soon as the accession to the Social Chapter is complete. Both legal instruments have important implications for the trade union role. Many provisions in the Working Time Directive allow for modification of the Directive's application by "collective agreements or agreements between the two sides of industry".

For the most part it is to the advantage of employers to reach collective agreements to achieve flexibility. Legislation should take advantage of this by imposing restrictions on the collective agreements which can validly modify the application of the Directive. They should be agreements which are incorporated into individual terms of employment subject to the employer recognising the union for collective bargaining and affording certain rights to the unions, for example access and facilities.

The UK will be required to determine the method used for election or appointment of the Special Negotiating Body to establish European Works Councils in multi-national companies. It is important that legislation enshrines the rights of unions in the process, enabling unions to ensure proper representation on the Works Council itself.

European convention on human rights

In the Queen's speech, Labour announced legislation to allow people to sue directly for breaches of the European Convention on Human Rights. This could have important implications for individual and collective employment rights. For example, Article 11 provides for freedom of peaceful assembly and freedom of association, including the right to join trade unions for protection of their interests. The individual nature of the European Convention is emphasised by the fact that this provision was construed to include an individual right not to join a trade union.

Once the Convention becomes directly enforceable, new and existing legislation must be judged against its standards. One should be wary of excessive optimism based on international standards. For example, mandatory strike powers, mandatory elections for executive committees and periodic reviews of political objects have been held not to violate ILO Convention 87 on "full freedom of workers' organisations to draw up their constitutions and rules".

Industrial action

Labour has made it clear the key element of trade union legislation 1980 will stay and what were described in the election campaign as the "toughest industrial action laws" will remain. The obligation to ballot will remain, but sacked strikers will have a right to present a claim for unfair dismissal where the industrial action has been lawful.

The new agenda

The fact that the major single piece of legislation on trade union employment rights is not expected until late 1998 does not mean an absence of significant changes in the intervening period. Legislative proposals and European commitments mean that we can expect a number of developments which should enhance the role of unions in setting and enforcing labour standards and may play an important part in moulding the shape of union and recognition rights in the legislation yet to come.

It remains the case that the law cannot, and should not, be the solution to issues which arise in the industrial relations context, but granting substantive legal rights to recognition, developed in parallel with social partnership and the consultation inherent in the European Legislation, provides the capacity for a framework which promotes the role of unions and enables collective bargaining to set fair and enforceable employment standards.