This is the final instalment of our eight-part series of newsletters giving an overview of regulatory requirements governing the conduct of mass compulsory redundancies. The series focuses on key EU jurisdictions and provides detailed practical guidance to Japanese companies operating in those countries.
In this newsletter we will outline recent developments in relation to industrial action in the UK, setting out practical guidance to follow both to prevent a strike and to minimise disruption to business once a strike has commenced.
In Parts I through VII, we presented an overview of the regulatory position affecting mass compulsory redundancies in the UK (Part I), Germany (Part II), France (Part III), the Netherlands (Part IV), Belgium (Part V), Spain (Part VI) and Italy (Part VII). Each of these briefings provided a quick reference guide in relation to the most important provisions in each jurisdiction to enable Japanese companies to address the most significant timing and cost issues faced in that territory.
The information contained in this series is necessarily of a general nature. If any of these issues affect your company, please contact us for assistance regarding your particular circumstances.
When mass compulsory redundancies are imminent, employers may be threatened with strike action. Strikes can have a devastating impact on businesses, especially where profitability is already under pressure. It is essential for employers to manage industrial action carefully in order to minimise the likelihood of strikes and the length and impact of any strikes which do occur.
We set out below a number of recent developments on which Japanese companies operating in the UK may be able to capitalise to maintain profitability despite the threat of industrial action.
Three recent cases have highlighted the importance of carefully examining trade unions' conduct of strike ballots.1 UK courts appear willing to grant injunctions against strikes where there are irregularities in the trade union's conduct of the ballot.
Metrobus Ltd. v UNITE2
A trade union must send the employer ballot and strike notices which include a list of the categories and workplaces of striking employees, the total number in each category and workplace and an explanation of how those figures were arrived at.3 A trade union is also required to take steps to inform the employer of the result of a ballot as soon as reasonably practicable after it takes place.
UNITE, the UK's largest trade union, delayed notifying Metrobus, the employer, of the result of its ballot by 20 hours, and did not include the required explanation of the figures when it did so. The Court of Appeal granted an injunction against the strike, dismissing UNITE's arguments that the statutory ballot and notice requirements are so onerous and disproportionate as to be incompatible with the workers' right to freedom of assembly and association (under article 11 of the European Convention on Human Rights).
EDF Energy Powerlink v RMT4
A trade union is required to take reasonable steps to ensure that a ballot notice contains a list of the categories of employee which are entitled to vote in the ballot. The ballot notice prepared by RMT, the National Union of Rail, Maritime and Transport Workers, specified the relevant employees as "engineer/technician", whereas EDF, the employer, characterised its workforce as "fitters, jointers, test room inspectors, day testers, shift testers or OLBI fitters".
The court granted an injunction against the strike on the basis that an employer is entitled to be told which trades are being balloted and might subsequently strike.5
The High Court also followed Metrobus in rejecting arguments based on Article 11 of the European Convention. On 24 May 2010, RMT announced that it was applying to the European Court of Human Rights to challenge this ruling.
British Airways Plc v UNITE6
Only those employees whom it is reasonable for the trade union to believe at the time of the ballot will be induced to take part in industrial action should be allowed to vote. UNITE had included on the ballot a number of employees who had already accepted voluntary redundancy and therefore would no longer be employed by British Airways at the time of the proposed strike.
The court granted an injunction against the strike, stating that UNITE should have checked whether employees had already accepted voluntary redundancy and should have instructed its members not to vote if they would no longer be employed at the time of the strike.
UNITE then organised a second ballot. The employer again sought an injunction, this time on the basis that UNITE's notice of the outcome of the ballot was deficient. A trade union is required to take reasonable steps to ensure that the employer and everyone entitled to vote is informed of the result of the ballot. UNITE had posted the required information on workplace notice boards, handed out flyers containing the information and put it on their website. However, initial text messages and emails sent to trade union members did not contain full information.7
British Airways argued that the statutory requirement was to actively give all the information to trade union members, rather than merely tell them where to find it, and that UNITE had failed to take all reasonable steps to achieve this given that it could have included full information in the text messages and emails.
This argument succeeded at first instance, but the judgment was overturned by the Court of Appeal, which ruled that personal communication of all of the information is not always required. The case suggests that a more lenient approach may be taken to the requirements to notify the result of a ballot than to the requirements concerning the conduct of the ballot itself.
Employers faced with industrial action may wish to consider dismissing the strikers. However, the rules governing dismissal of strikers are complex, and it is always recommended to seek expert advice when proposing to dismiss striking employees. A brief summary of the position is set out below.
When can an employer dismiss strikers?
An employer can dismiss an employee participating in a strike without risk of an unfair dismissal claim if the dismissal is not automatically unfair8, and either:
- the employee is participating in an unofficial strike at the time of dismissal; or
- the employer has dismissed all participants in official strike action at the same establishment and has not offered to re-engage any of them on a selective basis within three months of the dismissals.
An employee can bring an unfair dismissal claim if dismissed after the strike has finished on grounds of his/her participation in the strike. This will be a dismissal for misconduct and may be fair depending on the circumstances. In the recent case of Sehmi v Gate Gourmet9 the court found that it was "fair" to dismiss employees for having participated in an unofficial strike for only a few days, based on the likely serious damage to the employer's business.
A dismissal for which the reason, or principal reason, is the employee's participation in a protected official strike is automatically unfair if:
- the dismissal occurs during the first 12 weeks beginning with the day the employee began participating (the "protected period");
- the dismissal occurs after the protected period where there was no participation by the employee after that period; or
- the dismissal occurs while the employee continues to participate after the protected period, but the employer has not yet taken reasonable procedural steps to resolve the industrial dispute.
A dismissal is also automatically unfair if the reason for dismissal is one of a list of prohibited reasons such as being a whistleblower.
Official vs. unofficial strikes
An employee is treated as participating in an official strike where:
- he/she is a member of a trade union and the strike is authorised or endorsed by that trade union;
- he/she is not a member of a trade union, but some striking employees are members of a trade union which has authorised or endorsed the strike; or
- neither he/she nor any of the other strikers are trade union members.
Protected vs. unprotected strikes
A protected strike is a strike which is lawfully organised by a trade union (i.e. it concerns a valid trade dispute and the trade union has complied with the statutory balloting and notification requirements).
Dismissals will generally require no notice or payment in lieu of notice since the employee's participation10 in the strike will likely constitute a repudiatory breach of his/her employment contract.
Although the new British Government has not publicly announced any plans to reform industrial relations law at the moment, it has been suggested that changes under discussion include a proposal11 that to be lawful strikes should have the support of 40% of balloted members in addition to the current requirement for a majority of votes. It has also been reported that the Government is under pressure to change the rules on replacing striking workers with agency employees, to shorten the protected period, and to make trade unions legally liable for the consequences of strikes. There is also a movement to amend the law so that minor technical errors in a ballot process cannot be used to prevent industrial action.
A season of acrimonious and disruptive public sector strikes may firm up the Government's view on these suggestions, but any such plans will inevitably meet strong resistance.
Practical steps to take when a strike is threatened
Preventing a strike
- Keep communications with employees and trade unions open.
- Understand management's position on contentious issues and communicate this clearly to the employees and trade unions.
- Monitor employee dissatisfaction, for example by checking online employee blogs.
- Entertain trade union requests to negotiate or mediate.
- Point out to employees the downsides of striking, including:
- not being paid for the period of the strike;
- days spent on strike not counting towards the length of their service (which will impact on contractual rights such as pensions and statutory rights such as redundancy pay);
- not being entitled to claim benefits whilst on strike; and
- putting their jobs at risk.12
- Take action against the trade union or seek an injunction against the strike if the trade union has failed to comply with balloting requirements.13
Minimising business disruption during a strike
- Consider alternative staffing arrangements.
- Employ temporary employees directly on fixed term contracts. Do not use workers employed and supplied by an employment agency specifically to replace striking workers.14 Striking agency workers can be replaced with other agency workers provided the replacement does the same work as the predecessor.
- If employment contracts permit, redeploy employees from one part of the business to another.
- Continue constructive dialogue with the trade union where possible to attempt to resolve issues as quickly as possible.
- Ensure the non-striking workers are not intimidated by striking workers or trade unions.
- Call the police and request them to take appropriate measures if pickets15:
- use threatening or abusive words or behave in a threatening manner to other employees, suppliers or customers in close proximity to the picket line;
- deliberately obstruct people or vehicles attempting to enter or exit the premises;
- possess offensive weapons; or
- cause damage to property.