Industrial action: Summer strike disruption – understand what’s lawful

Some readers will be old enough to remember the winter of discontent of 1978/79 when a spate of strikes in both the private and public sector brought Jim Callaghan’s Labour government to its knees in a no confidence vote. This ushered in Margaret Thatcher’s Tory government and widescale reform of industrial relations law.

That reform made striking and other forms of industrial action much more challenging for trade unions and workers. The legislative framework moved through various iterations, from the Employment Act of 1980 to the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) and, tweaked by successive governments, this still forms the basis of current industrial relations law. A comparatively rule-free regime with approval for strike action given by a show of hands in a car park has been replaced by a complex system with pitfalls for employers, trade unions and workers alike.

As a result of those changes and a much changed economic and social landscape, strikes have become much less common and we are less familiar with the law on trade unions and industrial action.

As in 1978, we face tumultuous financial and political times and have already seen three days of strike action on the railways and walkouts by criminal barristers. The media are also reporting the potential for strike action from teachers, doctors, nurses, civil servants, local government staff, postal workers, BT engineers and traffic wardens.

To be unaware of the law in this area is risky for employers and that risk has been further complicated by the proposed introduction of new legislation by the government in what appears to be a direct and political response to the threatened industrial action.

The government has laid the following legislation before Parliament.

The Liability of Trade Unions in Proceedings in Tort (Increase of Limits on Damages) Order 2022 (SI 2022/699)

This will amend s22(2) of TULRCA by increasing the limits on the maximum damages award which may be made against a trade union if industrial action is found to be unlawful (see below). From 21 July 2022, the limits will be increased as follows:

• fewer than 5,000 union members: £40,000 (currently £10,000);
• 5,000 to 24,999 members: £200,000 (currently £50,000);
• 25,000 to 99,999 members: £500,000 (currently £125,000); and
• 100,000 members or more: £1,000,000 (currently £250,000).

The new limits will not apply to any proceedings which relate to industrial action before 21 July 2022. However, any action occurring after that date which is found to be unlawful will subject a trade union to massively increased exposure to damages.

The draft Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022

These regulations, if approved, will revoke regulation 7 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003. These currently prevent agencies from supplying an employer with temporary workers to perform duties normally performed by a worker who is on strike or taking industrial action, or the duties normally performed by a worker who has been assigned to cover a striking worker. Currently, employers are restricted to engaging temporary workers directly when industrial action is taking place rather than using agencies.

Unlike the increases in trade union liability, these regulations are subject to affirmation and require the approval of both Houses of Parliament. If approved, they have the potential to make ‘strike breaking’ much easier. Although this may seem attractive to employers, it remains to be seen whether, despite an increasingly flexible workforce, there is a wealth of alternative workers (with the possible exception of enthusiastic amateur train drivers) to fill the breach.

Additionally, training and health and safety requirements will have a significant impact on the practicability of quickly mobilising an alternative workforce – as seen with the delays encountered by P&O in restarting operations after its own admitted unlawful dismissal of its workforce.

Current law

Whatever the impact of the hastily introduced legislation, it is important to understand the rights of workers taking part in or affected by industrial action, whether that action is lawful or unlawful and the protections for employers if the unions have not complied with the complicated rules.

Employees

Section 237 of TULRCA provides that:

An employee has no right to complain of unfair dismissal if at the time of dismissal, he was taking part in an unofficial strike or other unofficial industrial action.

Whether action was official or unofficial (lawful or unlawful) is discussed below but an employer will thus have immunity from unfair dismissal claims when the action is unofficial.

However, s238A of TULRCA provides that the dismissal of an employee will be automatically unfair if the reason for the dismissal is that the employee took part in official industrial action. To be official, the action must have been called by a trade union, which must have complied with all the balloting and notification rules, as described below. The protection applies to union and non-union members.

Importantly, there is no protection for employees or workers who are subjected to detriment short of dismissal (such as suspension or a disciplinary sanction) because they are proposing to take part in, or have taken part in, industrial action. In Mercer v Alternative Future Group Ltd [2022], the Court of Appeal distinguished industrial action from trade union activity, which does have statutory protection. This was despite both the employment tribunal and the Employment Appeal Tribunal having held that, as a matter of ordinary language, the phrase ‘activities of a trade union’ would include participation in industrial action.

Lawful or unlawful?

In simple terms, a strike involves the unilateral withdrawal of the employee’s labour and amounts to a breach of contract by that employee. If a trade union has endorsed that action, it is potentially liable for inducing that breach of contract, having conducted what is known as an ‘industrial tort’.

The union can avoid such liability if it has lawfully organised the action in furtherance of a trade dispute (which can be over a range of issues but principally terms and conditions of employment and working conditions) between workers and their employer. It is for this reason that trade unions have an overriding interest in ensuring that the organisation of the strike is lawful by complying with a number of conditions, as summarised in the box below.

Requirements for lawful industrial action

The key requirements are as follows:

• a majority of the staff who the union wants to take industrial action must have voted in favour in a properly organised ballot;
• the union must send the employer a notice of the ballot seven days before it takes place and then send a copy of the voting papers three days before the ballot;
• the union must give equal entitlement to vote to all members who at the time of the ballot it reasonably expects will take part in the industrial action;
• the ballot has to be held in accordance with complicated balloting rules and supervised by an independent scrutineer with the union’s co-operation;
• there must be a turnout of at least 50% of the union members who are entitled to vote and:
  • in ordinary ballots, a simple majority of union members who vote must be in favour of the action (for example, if 100 workers are balloted, at least 50 must vote, of whom at least 26 must vote ‘yes’); and
  •  in important public services, at least 40% of those entitled to vote must be in favour (for example, if 100 employees are balloted, 50 must vote, of whom 40 must vote ‘yes’);
•  a notice of industrial action must be served on the employer at least 14 days before the start of the industrial action; and
• the industrial action must take place within six months of the date of the ballot, extendable to nine months if the parties agree.

Remedies for employers

The main legal remedy available to employers who believe a trade union has made mistakes in the way it has organised industrial action is to apply for an injunction to prevent the action. In general, the unions now adhere carefully to the requirements for organising a ballot and a strike, and it is rarer than it was in the past for the courts to grant an injunction. However, given the complexity of the rules and the lack of margin for error, common areas of attack for employers include:

• the union failing to provide adequate information in the notice of a ballot or the notice of industrial action;
• the union failing to comply with the balloting requirements, for example by sending ballot papers to members not entitled to a vote; and
• unlawful picketing (a topic in itself but potentially troublesome for a trade union if it endorses it).

Of course, litigation in this area is complicated and expensive (principally because of the urgency) and some argue that employers use it to build in delay and expense while making contingency plans to cope during the anticipated industrial action.

Moreover, an injunction is only an interim remedy aimed at preserving the status quo pending a full hearing, at which the legality of the process challenged is assessed. An employer must risk failing at first instance, with the prospect of a punitive costs award against it and the attendant boost to the union’s action, or risk succeeding at first instance, only to lose at a full hearing. The employer is currently able to t price these possibilities into its actions (think P&O again) a subject of considerable debate. On the other hand, the fourfold increase in trade unions’ liability for damages imposed by the amendment to s22(2) of TULRCA will certainly cause concern among the unions and sharpen their lawyers’ minds when advising on process and the legality of industrial action.

Storm clouds gathering

The potential for conflict in such febrile economic and political circumstances is huge. It is generally agreed that industrial action is damaging for all stakeholders and, of course, the public at large. What is clear is that there are laws that provide some level of protection for all parties. Those laws are complicated and developing, and a working knowledge is essential in the current environment. It is to be hoped that in revisiting Richard III’s winter of discontent, some effort is made to avoid ‘deadly hate the one against the other’.

So, reversion to 70s cliches (‘union barons’ anyone, or ‘fat cats’?) is best avoided. Let’s hope everyone will talk and listen.

This article was first published in the July issue of Employment Law Journal (www.lawjournals.co.uk)