The Pharmacists’ Defence Association Union v Boots Management Services Ltd and Secretary of State for Business Innovation and Skills [2017] EWCA Civ 66

While some employers choose to reach voluntary arrangements with unions, the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) sets out the following statutory scheme for union recognition:

  • The trade union has the right to apply to the Central Arbitration Committee (CAC) for collective bargaining rights on behalf of a particular group of workers (not necessarily the entire company: for example, a bargaining unit might be a particular type of worker, or at a particular location).
  • If recognised, the employer will have to conduct collective bargaining with the union on behalf of the bargaining unit in respect of certain arrangements listed in including pay, hours of work, and holidays.
  • However, in order for an application to proceed, the CAC must be satisfied there is no other “collective agreement” in force under which another trade union is already recognised to collectively bargain on behalf of any of the workers in the bargaining unit.

The definition of collective agreement is broad: “any agreement or arrangement made by or on behalf of one or more trade unions and one or more employers or employers’ associations relating to one or more of the matters specified”. Those matters include, for example, terms and conditions of employment, disciplinary matters, facilities for trade union officials, and the machinery of negotiation and consultation.

In this case, the Court of Appeal had to consider whether the existing collective agreement with a non-independent trade union (otherwise known as a “sweetheart union”) could prevent an independent one from applying for statutory recognition.

The case

Boots had a long-standing relationship (although codified only in March 2012) with a listed trade union, the Boots Pharmacists Association (BPA) in respect of pharmacists working for Boots (the relevant bargaining unit). Boots recognised the BPA for collective bargaining on facilities for officials and machinery for consultation, but the company did not recognise the BPA for collective bargaining on pay, hours or holidays – and did not intend to do so.

In January 2012, the Pharmacists’ Defence Association Union (PDAU) applied to the CAC seeking recognition for collective bargaining purposes by Boots on behalf of the pharmacists. Boots argued that it already had an established relationship with the BPA, but the CAC held that although the agreement with the BPA was a collective agreement, the statutory recognition scheme should be construed to give effect to Article 11 of the European Convention on Human Rights (which gives a general right to freedom of assembly and association, including the right to join a trade union). ECJ case law had previously held that the right to bargain collectively was one of the essential elements of the right to form and join trade unions under Article 11. A ban on an independent union seeking statutory recognition where no other union had collective bargaining rights would, said the CAC, therefore be a breach of Article 11. Since the Human Rights Act required that domestic legislation must, as far as possible, be interpreted to be compatible with the ECHR, additional wording should be read into the legislation so that that the application could proceed.

Boots’ application for judicial review of the CAC’s decision was successful, the High Court holding that negotiations relating to pay, hours and holidays were not expressly required for an arrangement to amount to “collective bargaining”. The statutory recognition scheme was rendered compatible with Article 11 by the right for a worker to apply for the BPA to be de-recognised. If that took place, then the PDAU would be free to then apply for recognition.

The Court of Appeal (Underhill LJ giving the lead judgment) dismissed the PDAU’s appeal. The right to bargain collectively is an essential element of the rights in Article 11, but it does not follow that Article 11 confers a universal right on any trade union to be recognised in all circumstances. To the extent that any rules of a recognition scheme constrain access to collective bargaining for a particular union (or its members) the constraints will have to be justified by “relevant and sufficient reasons” and should “strike a fair balance between the competing interests at stake”. In asserting any such justification, the state should be afforded a wide margin of appreciation.

The Court of Appeal agreed with the High Court that that the right of a worker to apply for de-recognition, followed by an application for recognition by another union, was a “reasonably practicable route” to allowing the PDAU to be formally recognised if the majority of the workers in the bargaining unit so desired. Therefore, it was compatible with Article 11.

The Court of Appeal also dismissed the PDAU’s argument that the method of recognition was unacceptable because only a worker, and not a union, could make the application. The Court of Appeal did not agree that the statutory recognition scheme should place ““all the levers in the hands of a union for which recognition is sought rather than in the hands of those who wish to be represented by it”. The ultimate purpose of recognition is to benefit the workers, and although a union had to make the application for recognition, there was no reason why that also applied to requests for de-recognition.

Finally, the PDAU claimed that there was substantial disincentives for any worker who made an application for de-recognition of BPA, not least the perceived (if not actual) threat that this would prejudice his or her relationship with Boots and colleagues in the BPA. The Court of Appeal disagreed, agreeing with the High Court that the requirement to find a pharmacist to make the application was not a substantial obstacle to de-recognition of the BPA.

What to take away

The PDAU’s argument that it could not be right that an employer’s decision to recognise a sweetheart union in respect of only marginal matters (not including the key issues of pay, holiday and hours) stymies an otherwise valid application by another trade union for recognition for bargaining over these terms was rejected.

As the saying goes, “you can’t please all of the people all of the time.” The decision notes that it is not easy to balance the interests of workers, employers and a trade union or competing unions. Therefore, ECHR member states are given a wide margin of appreciation to do so. A statutory recognition scheme must involve many detailed choices about both substantive and procedural matters. In the view of the Court of Appeal, the UK’s scheme reaches a fair balance between the competing rights of the parties involved.

As the Court of Appeal observed in its conclusion, victory for Boots may be short-term given the means identified of challenging the recognition of the BPA. It remains to be seen whether that will happen.