Union recognition under new statutory procedure examined

In June 2000, a new statutory procedure came into effect in the UK, whereby trade unions can seek recognition from employers for collective bargaining over pay, hours and holidays. This feature explores the use made of the procedure in the first 18 months and examines how the Central Arbitration Committee, the determining body under the procedure, has operated the statutory provisions.

In December 2001, the Central Arbitration Committee (CAC) declared that the Amalgamated Engineering and Electrical Union (AEEU) should be recognised by the automotive company Honda to conduct collective bargaining in respect of its production workforce. The declaration was made following a workplace ballot ordered by the CAC. Honda now joins the two other large Japanese car manufacturers in Britain (Toyota and Nissan) in recognising trade unions but, unlike them, has done so as a result of the statutory procedure introduced under the Employment Relations Act 1999 (UK0007183F). This procedure enables trade unions to seek recognition from employers for collective bargaining over pay, hours and holidays.

The application by the AEEU for recognition at Honda was one of 151 such applications made by unions to the CAC by the end of December 2001. With over 4,000 workers in the bargaining unit at Honda, the CAC declaration almost doubled the number of workers to whom it has extended collective bargaining since the new statutory procedure started operating in June 2000.

Use of the procedure

Early cases taken to the CAC under the recognition procedure involved relatively small organisations and small groups of employees. In its first annual report, the CAC noted that 60% of the companies concerned in applications in the first year had fewer than 200 employees. Over half (54%) of applications were for bargaining units of fewer than 100 workers and only 9% of applications involved over 500 workers. The smallest group of workers to whom collective bargaining has been extended by the CAC is 16 at BSW Timber. This case was also an application from the AEEU, but the Transport and General Workers' Union has made the most applications - 49 of the 151 received by the end of 2001. This total overstates the total number of claims as, in a few cases, the original application was withdrawn prior to acceptance and a revised one submitted in respect of the same employer. In two cases, an application was brought by two unions acting jointly but the vast majority are single union applications. Over 50 cases are still 'live'.

After a cautious start, 21 different unions have made applications under the statutory procedure. Not surprisingly, given the current distribution of union recognition in the UK, applications arise predominantly in the private sector. Many applications have come from unions seeking recognition in respect of workers in manufacturing, print and transport, but other sectors are also represented, including airlines, mining and international banking. The few public sector applications have been in education.

Some applications to the CAC, particularly from unions in the newspaper and print industries, come from unions which have sustained or rebuilt membership support in organisations which de-recognised them in the 1980s, when whether or not to engage in collective bargaining was a matter of employer choice. Others come from unions which have been actively organising both within and outside their traditional areas. Among them is the ISTC, whose traditional areas of operation (iron and steel trades) have declined but which has sought (and gained) recognition in such areas as computer and automotive component manufacture.

Operating the procedure

The complex statutory procedure includes various tests unions need to meet in order to have an application accepted and a number of statutory hurdles which unions need to surmount in order to achieve a declaration of recognition (UK0007183F).

Workforce size

Firms with fewer than 21 workers are excluded. This excludes about a fifth of the UK's private sector workforce. One application was not accepted by the CAC because the average number of workers over the 13-week reference period in the firm concerned fell just below 21.

Existing agreements

An application will not be accepted where there is already a recognition agreement applying to workers in the proposed bargaining unit, even if this agreement is with a union which is not independent of the employer or does not cover pay. Applications relating to the privatised prison service have failed on this ground.

Membership and support

A union needs a threshold membership of 10% among the workers for whom it wishes to bargain (its proposed bargaining unit), plus a majority of workers likely to support recognition, in order to have its application accepted by the CAC. The CAC has taken a variety of factors into account in reaching its view as to whether a majority is likely to support recognition of the application. In most applications so far, actual membership has exceeded 40% and in all these cases the application has been accepted.

Unions have sometimes submitted petitions of support from non-members and evidence about the upward trajectory of membership or difficult organising conditions, particularly where their membership is below 40%. Employers have at times countered with letters from employees opposed to union recognition, and arguments that union membership may not equate with support for collective bargaining. Employers have suggested that where the union has offered free or reduced-rate membership such members should not be counted or their membership not taken as support for collective bargaining. The CAC has tended to count such membership if the arrangements are normal under the union's rules. Each case is decided on its merits: one application was accepted on the basis of 36% membership and no supporting petition, another rejected with 38% membership.

If the union fails to demonstrate the necessary support once an application has been accepted by the CAC, or if it withdraws the application, it cannot reapply in respect of the same bargaining unit for three years. There is a disincentive therefore for unions artificially to inflate membership numbers at the application stage. In many cases where membership numbers are in dispute, the CAC has asked the parties to agree to it undertaking a confidential membership check, comparing a list of employees provided by the employer with union membership records.

Bargaining units

The CAC is required to determine the appropriate bargaining unit, where this is not agreed between the employer and union. Where the parties do not agree on the appropriate bargaining unit, unions have tended to define bargaining units smaller than those proposed by employers, which are likely to argue that all workers in a single-site company or all plants in a multi-plant company should be included.

The Trades Union Congress (TUC) had feared that the statutory requirement that the CAC pay particular regard to the need for a bargaining unit to be 'compatible with effective management' and to avoid fragmentation might mean that the employer's definition of what constituted an appropriate bargaining unit would always prevail over the union's proposed bargaining unit. In a recent submission to the government, however, it notes that 'because of the quality of the CAC panels, to date the majority of bargaining unit determinations have been regarded as fair by unions even where the outcome has differed from the union's proposal.'

If the bargaining unit differs from that originally proposed by the union, the tests have to be reapplied (including whether 10% of the new unit are members and the majority likely to support recognition). In half a dozen cases where the CAC has widened the bargaining unit from that proposed by the union to include other sites where terms and conditions are common, it has been difficult for the union to show sufficient support.

Ballots

The statute provides that the CAC can declare a union recognised if it is satisfied that more than 50% of the workers in the appropriate bargaining unit are members of the union. Where it is not so satisfied it must order a ballot to test support. Even where majority membership is demonstrated, however, a ballot may be ordered: where the CAC feels it would be in the interests of good industrial relations; or where there is evidence that union members within the bargaining unit do not want the union to conduct collective bargaining on their behalf. Generally, where the union has been found to have majority membership in the bargaining unit a ballot has not been ordered; where it was, there was clear majority support in the ballot. Where the CAC orders a ballot, recognition will be granted if a majority of those voting, and at least 40% of the workers in the bargaining unit, vote in favour.

Appeals

There is no appeal against decisions by the CAC but they are open to judicial review by the courts and three applications have been made, two by employers and one by a union. In the only case to be heard (one having been withdrawn, the other still pending), the court upheld the CAC's decision not to order a ballot in a case where the union had 51% membership in the bargaining unit. It confirmed the CAC's status as an expert body entitled to reach its own decision as to what would be in the interests of good industrial relations.

Outcomes of recognition ballots

By the end of 2001, there had been a total of 23 recognition ballots (15 postal ballots, five workplace ballots and three a combination of these two methods). The applicant union succeeded in gaining the requisite levels of support in 15 of them, with levels of support ranging from 28% to 99%. Among the eight cases where the union failed to secure majority support were cases where the CAC had decided that the bargaining unit should be larger than that originally proposed by the union. However, some were lost even where union-proposed bargaining units had been determined to be the appropriate ones; in two cases union members apparently voted against recognition of their union. This kind of outcome, however, is exceptional; support levels generally considerably exceeded levels of current union membership. In the large Honda ballot, the union had 36% of the bargaining unit in membership, while 73% of the bargaining unit voted for recognition.

In no case so far has the union achieved 50% support of those voting but then failed to meet the requirement for these to constitute 40% of the bargaining unit. However, there have been two cases where it has been close, with 40.5% and 41% of the bargaining unit in support.

Following a declaration of recognition, the parties are required to agree a method of bargaining and, if they do not, the CAC will impose a procedure which is legally binding unless the parties agree otherwise. In nearly all cases the parties have agreed a method. In only one case so far has the CAC been asked to decide an issue relating to the method of bargaining, namely whether bargaining over 'pay' should include pensions. The CAC determined that it should. If the parties agree a method but later it is alleged that one party is not complying with it, recourse can be made again to the CAC. The first application of this kind was made in January 2002.

Commentary

Unions approached the new statutory procedure cautiously, bringing forward cases where they felt secure in the level of membership. Generally employers in the early cases were prepared to recognise the union once they realised that this was legally required if the majority of their employees were in favour of it. A number of applications have been withdrawn at different stages of the statutory procedure as voluntary agreements were reached. As time passes, applications in more problematic cases are likely, with lower membership levels at the time of application and employers more hostile to collective bargaining in principle. Such hostility is likely to affect employees' support for it.

It is too early to assess the direct impact of the statutory procedure in terms of union growth or renewal but experience of previous statutory recognition procedures in the UK (UK9903189F) suggests that it is prudent not to expect too much in terms of overall extension of collective bargaining. Nonetheless the enactment of the statutory procedure serves to reinforce the social and political legitimacy of trade unions, and the symbolic and indirect effects of the procedure may be more substantial than those gained by its actual use.

Once it became clear that the new Labour Party government would enact a statutory procedure, new recognition agreements started outnumbering instances of de-recognition. TUC surveys reveal that voluntary agreements continue to be reached in the shadow of law now that the procedure is in operation. The Advisory, Conciliation and Arbitration Service (ACAS) reported a considerable increase in voluntary requests for assistance over recognition in the first year of the statutory procedure and noted that three in five cases led to full recognition of the union (ACAS annual report 2000-1). This activity is a measure of the success of the procedure which the social partners saw as a last resort, with primacy accorded to the achievement of voluntary agreements (UK9801194F). (Linda Dickens, IRRU)