Trade union recognition and the Employment Relations Bill

The statutory trade union recognition provisions of the Employment Relations Bill, published in late January 1999 and now under consideration in parliament, are already prompting some employers to reach pre-emptive voluntary agreements with unions. This feature looks at likely impact of the legislation once it is introduced.

Arguably the most controversial element of the Labour government's Employment Relations Bill, published on 28 January 1999 and now under parliamentary consideration, is the statutory procedure through which trade unions will be able to seek recognition from employers for collective bargaining purposes. The prospect of statutory intervention already appears to be influencing employer attitudes. A Trades Union Congress (TUC) survey published in February 1999 suggests that companies are increasingly ready to reach voluntary recognition deals to pre-empt the legislation (UK9902183N). The most recent example, reported in early March, is a recognition agreement between the GMB general workers' union and curry manufacturing company Noons, giving some 300 workers the right to be represented by the union. Government ministers too have stressed that their preference is for the voluntary settlement of union recognition issues. The statutory procedure is intended to be used as a last resort and even once it is invoked it would allow for agreed solutions to be reached between the parties at every stage.

The Bill's recognition provisions in outline

Details of the Bill's union recognition provisions are provided in UK9902180F. Briefly, however, the proposed legislation will enable trade unions to apply to the Central Arbitration Committee (CAC) for recognition from employers with more than 20 employees. Disputes between employer and union on scope of the proposed bargaining unit will be determined by the CAC, taking account of the overriding need for the unit to be "compatible with effective management". Recognition will be awarded by the CAC if a majority of the bargaining unit and at least 40% of those eligible to vote support the union in a ballot. "Automatic" recognition may be granted without a ballot if the union shows that over 50% of the bargaining unit are members of the union, though even here the CAC may insist on a ballot "in the interests of good industrial relations" or if it there are suggestions that union members may not support recognition.

Where recognition is awarded but is the union and the employer are unable to agree on a bargaining procedure the CAC will specify the method by which they will conduct collective bargaining. This will have effect as if it were a legally binding contract between the parties and will be enforceable via the courts.

The Bill also makes provision for the derecognition of unions recognised under the statutory procedure but only after a period of three years. This may occur where the employer no longer employs more than 20 workers or where the majority of the bargaining unit supports derecognition in an employer- or employee-initiated ballot.

The experience of previous statutory intervention in the UK

The recognition of trade unions by employers for collective bargaining purposes has traditionally been a voluntary matter for employers and previous statutory recognition procedures in the UK - under the Industrial Relations Act 1971 and the Employment Protection Act 1975 - were in both cases controversial and short-lived.

In particular, the recognition provisions of the Employment Protection Act 1975, which operated from February 1976 until their repeal in August 1980, encountered a range of intractable operational difficulties. Recognition claims were handled by the Advisory, Conciliation and Arbitration Service (ACAS) but its tripartite Council was unable to agree clear criteria on key issues such as the level of employee support needed for recognition and the appropriateness of the claimed bargaining unit. There was considerable scope for inter-union competition, both between TUC affiliates and between TUC and non-TUC organisations, for disruptive litigation by both employers and competing unions, and for time-wasting, obstruction and non-cooperation by some employers particularly resistant to union organisation. Such factors frequently resulted in lengthy delays in processing unions' recognition claims, during which convincing levels of membership and support proved difficult for unions to sustain. In addition, the 1975 Act's enforcement procedure (unilateral recourse to arbitration on a union claim for improved terms and conditions of employment) proved ineffective in inducing hostile employers to bargain once a recognition recommendation had been made.

Statistically, the direct impact of the 1975 Act's recognition provisions was fairly marginal. ACAS figures show that, during the lifetime of the statutory procedure, recognition was accorded on behalf of about 65,000 employees as the direct outcome of statutory recognition references. Of these, about 16,000 were covered by ACAS recognition recommendations, and the rest were the subject of references settled at an earlier stage in the procedure. By comparison, some form of recognition was established for about 77,000 employees as a direct result of cases dealt with under ACAS's voluntary conciliation machinery, while overall trade union membership grew over the same period by well over 1 million. However, the indirect impact of the statutory procedure in terms of encouraging voluntary recognition by employers was thought to have been significant.

The potential impact of the new recognition procedure

The 1999 Employment Relations Bill's provisions differ significantly from those of the 1975 Act, notably by specifying majority support (or membership) as the prerequisite for a recognition award, including time limits for the various stages of the procedure, and enabling the imposition of a legally binding bargaining procedure following a recognition award. In the case of competing union applications, the CAC is empowered to decide not to proceed with one or more of the applications. Joint applications by unions are allowed provided they can show that they will cooperate effectively and are prepared, if the employer wishes, to engage in single-table bargaining. More generally, the proposed statutory provisions set out in a 26-page schedule to the Bill are considerably more detailed than the six short sections which constituted the 1975 Act's procedure. These features may help avoid some of the pitfalls encountered by the earlier legislation, although the potential for litigation, including scope for judicial review of the way in which the CAC reaches its decisions (eg over the scope of the bargaining unit), must remain high.

The first findings of the 1998 Workplace Employee Relations Survey (WERS) offer some indication of the potential scale of union recognition claims once the new legislation is in place (UK9811159F). Union recognition was reported in 45% of workplaces with 25 or more employees. Unions had members but no recognition in 8% of workplaces (including majority union membership without recognition in 1% of workplaces), but no members at all in 47% of workplaces. A Confederation of British Industry (CBI) attitude survey in 1998 suggested that around one in 10 companies expected a recognition claim. Research published by the TUC reports that unions are currently campaigning for recognition in 106 companies covering 55,000 workers (UK9902183N). In 50 of these cases, union membership is said to be over 50% - a level which, under the Employment Relations Bill's procedures, could result in "automatic" recognition.

Commentary

The extent to which unions will be able successfully to exploit the new procedure remains uncertain. Although there are a number of companies where unions have already recruited at least half the workforce, these cases represent only a small minority of workplaces without recognition. Elsewhere, unions may find that the majority membership or support necessary for a recognition award will frequently be very difficult to achieve - especially where there is entrenched employer opposition. Employer attitudes are certainly likely to be influential: the preliminary 1998 WERS findings highlight strong associations between supportive employer policies and union recognition and suggest that "anti-union sentiments on the part of employers provide a considerable hurdle to overcome if unions are to win members and recognition". While many employers may be prepared to respond pragmatically and negotiate "voluntary" recognition agreements with unions (in much the same way as UK-based companies responded to the EU European Works Council Directive), there are already indications that some others will resort to union-avoidance strategies to minimise the perceived threat of statutory trade union recognition. (Mark Hall, IRRU)