A short history

An employer has a contract with its employees. It pays them to perform duties. Trade unions are there to act as a collective negotiator for the employees in relation to the terms and conditions of their employment, health and safety etc.

A union can call its members out on strike. By doing so it induces them to act in breach of their contracts of employment. It is only the statutory protection for the union, called "immunity from suit" that stops the employer from having a legal claim for any losses and damage that it suffers as a result of the strike.

In the 1980s the Thatcher Government introduced prescriptive legislation which set many hurdles for a union to jump through if it wanted to maintain its immunity from claims. This was designed to slow down the process, to ensure that the employer has adequate time to negotiate to avoid the strike action, or to prepare. It also ensures that a strike can only happen when there is a proper democratic secret ballot of all eligible members. To do this, the union must give prescribed notices to the employer at various stages and within strict time limits.

This produced a lot of litigation concerning:

  • Who is the employer?
  • Who are 'eligible employees'?
  • Were the notices served on the right people?
  • Were they all given the right to vote?
  • Were the employees asked the right questions?
  • Could the employer tell who was involved?
  • What happens if six people out of 5000 didn't get the right piece of paper?

What has not changed is that there has to be a legitimate trade dispute. Parliament says that this must be:

"a dispute between workers and their employer which relates wholly or mainly to one or more   of the following:

(a) terms and conditions of employment..."

That brings us to the heart of whether the current ballot proposal is going to give the union any protection at all.

A trade dispute

A call for action or a ballot without a trade dispute is a bit of an orphan: unloved and at risk.

The Government's preference to reduce pension costs would clearly be an issue about terms and conditions. A strike called after a proper ballot ("protected action") would not be a problem for the union if it was the Government, rather than the NHS or a specific local authority or contractor, who employed all of the people now being asked to ballot. But the Government does not employ all these people.

The ballot papers have now come out to all sorts of employers in the public and, more recently, the private sector to spread the pain of industrial action and create a groundswell of support against the proposed changes. It appears to be a political campaign.  A political strike. 

But, are the unions on safe ground? Could individual public and private sector employers facing considerable business interruption, use the legal process to protect themselves and get the ballot process, and even the strikes themselves, called off? Does anyone want the fight?

The unions' analysis

The unions' analysis of the situation must be that:

The employees have no direct dispute with the local council or their housing association employer over the pensions changes, which means the vital link of "a dispute between workers and their employer" is missing. However, the position is safe because of a little known provision in the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A). Section 244(2) says that there is a trade dispute where:

"a dispute between a Minister of the Crown and any workers if the dispute relates to:

(a) matters which have been referred for consideration by a joint body on which, by virtue of provision made by or under any enactment, he is represented; or

(b) matters which cannot be settled without him exercising a power conferred on him by or under an enactment."

But is this right?

To date there appears to have been no challenge to the industrial action already called in the public sector. Is that because the law is clear and unequivocal, or is it because no-one wants to escalate the argument?

The migration of the strike action to the private sector has started with ballot notices being sent out on 29 and 30 September to a wide range of private sector employers with local government pension schemes members on their payrolls.

Could employers fight the ballot and any strike action if they wanted?

To do that employers could challenge the applicability of Section 244(2) on the basis that:

  • there is no "joint body" on which the relevant Minister is represented; and/or
  • no decision has yet been made or implemented – the argument is about a future change; and/or
  • this is not a dispute or issue where it requires a Minster to exercise a power conferred by or under an enactment.

In other words, the unions do not like the proposals; it is a prospective change to the pension.

Although, when changes come, there will have to be some new statutory instruments to bring the changes into effect, it is not clear cut. One leading employment QC has expressed the view that a really determined employer could succeed if it wanted to take the risk.

Some action points for employers to consider now.