Government announces refinements to Fairness at work proposals

In December 1998, the UK Government published details of its forthcoming "Fairness at work" employment rights legislation following consultations on its earlier white paper. The refinements announced were widely seen as signalling a successful outcome for lobbying by employers' groups.

Since the publication of the Government's Fairness at work white paper in May 1998 (UK9806129F) employers and trade unions have engaged in the intensive lobbying of ministers in an effort to influence the detailed provisions of the Fairness at work legislation scheduled for the current session of Parliament. The white paper put forward a package of proposals for new individual, collective and "family-friendly" employment rights, the centre-piece of which is to be a statutory procedure through which trade unions can seek recognition from employers for collective bargaining purposes.

On 17 December 1998, the then trade and industry secretary, Peter Mandelson, revealed the results of the consultative process by outlining the details of the forthcoming legislation. The bill itself was expected to be introduced in the House of Commons around the end of January 1999 and to reach the statute book by the summer.

Trade union recognition

The white paper proposed to enable trade unions to apply to the Central Arbitration Committee (CAC) for recognition in organisations with more than 20 employees. The "refinements" announced in December include the following.

• Unions must show that they have 10% of the bargaining unit in membership, and are more likely than not to win a ballot, if the CAC is to proceed with an application.

• The white paper proposed automatic recognition - without a ballot - where over 50% of the employees in the bargaining unit are union members, but the CAC is now to have discretion, subject to guidance issued by trade and industry secretary, to hold a ballot in such circumstances "in the interests of good industrial relations" or if the CAC believes a significant number of union members do not want the union to bargain for them.

• The legally-binding procedure agreement which the CAC may impose in the absence of a voluntary agreement between the parties will not require bargaining on training. There will be a separate duty on employers to inform and consult recognised unions about training matters.

• The bill will allow employers and employees to reach individual contracts even when a union is recognised for the bargaining unit in which the employees work, but protect employees from being forced to do so.

• The government also said that it was giving further consideration to how best to deal with situations in which the bargaining unit changes.

Other key issues

New details were also announced on other key aspects of the white paper.

• The proposed ban on dismissing employees taking part in lawfully organised industrial action will last eight weeks. Thereafter dismissal will be fair if the employer has taken all reasonable procedural steps to try to resolve the dispute.

• The proposed right of employees to be accompanied by a fellow employee or a trade union official in company disciplinary and grievance hearings will be restricted to "serious issues". There will be a code of practice giving guidance to employers and employees on how the right should be applied.

• The 28-day period allowed by law between an industrial action ballot and the start of industrial action will be able to be extended by agreement between employer and union.

• Compensation awards in unfair dismissal cases will be capped at GBP 50,000 (as opposed to GBP 12,000 at present) and index-linked. The white paper initially proposed to abolish the limit entirely but the government now believes that this would benefit only a very few high earners while making it more difficult to reach "out of court" settlements.

• The government has decided against proposing new measures to regulate the use of "zero hours" contracts.

Employer and union reaction

The Confederation of British Industry (CBI) said that the government's "improvements" to the Fairness at work proposals "go some way to meeting business concerns". CBI director-general Adair Turner commented that: "We have worked hard to make this legislation as workable as possible, and believe that we have made considerable progress, although there are some important issues that still concern us. The real impact on business will depend on the precise terms of the bill, and how it is implemented."

The reaction of the Trades Union Congress (TUC) to the Government's announcement was one of disappointment: "It is not all that we wanted - or expected - from the white paper". John Monks, general secretary of the TUC said that: "Our concern is that in some areas the government is to add new complexities which can only blunt the sharp clarity of the new rights for people at work which were promised in the white paper."

The TUC has identified three areas of particular concern: the individual's right to representation over grievances, the recognition procedure and the dismissal of employees taking industrial action: "We will be continuing discussions with the Government on these points to seek to ensure that the principles of the white paper are not undermined."

Commentary

The emerging details of the Fairness at work legislation represent a further move by ministers towards meeting employer concerns about the implications of the Government's proposals, and union leaders are known to be unhappy at the perceived dilution of key elements of the white paper. Despite this, the forthcoming bill will still constitute a major step forward for trade union and employee rights in UK workplaces after the deregulatory policies pursued by Conservative governments over the 1980s and 1990s. The replacement as trade and industry secretary of Peter Mandelson by Stephen Byers just before Christmas is not thought likely to result in any significant change in the government's approach - both politicians are seen as quintessentially "new Labour". But the arrival of the Labour Government's third trade and industry secretary in 20 months will inevitably have triggered a further bout of lobbying as both employers and trade unions compete to influence the final shape of the Fairness at work legislation. (Mark Hall, IRRU)