Employment Relations Bill published

In late January 1999, the UK government published an Employment Relations Bill to give effect to its proposals on "fairness at work". The Bill is expected to complete the legislative process by late summer. This feature outlines its provisions.

The long-awaited Employment Relations Bill was published on 28 January 1999 and has begun its passage through Parliament. The Bill will implement the package of individual, collective and "family-friendly" employment rights set out in the Labour government'sFairness at work white paper issued in May 1998 (UK9806129F). The outcome of consultations on the white paper was announced by the government in December 1998 (UK9901173F).

According to trade and industry secretary Stephen Byers, the legislation will "promote the best of modern employment relationships in all our companies, encouraging a culture of fairness and trust in the workplace which is so important to the competitiveness of our economy".

The Bill was hailed by the Trades Union Congress (TUC) as "the most significant advance in employee rights for a generation". The Confederation of British Industry (CBI) said that key aspects of the legislation, including the provisions concerning trade union recognition, are "workable if not wholly welcome", but that there are still some areas, such as family-friendly employment policies, on which further consultation was needed to ensure clarity and flexibility.

The Employment Relations Bill was given its "second reading" by the House of Commons on 9 February, and is now undergoing its "committee stage" during which it receives detailed, line-by-line scrutiny from a committee of Members of Parliament. After further consideration by the full House of Commons, the Bill will proceed to the House of Lords. The legislation is expected to complete all stages of the legislative process by the summer.

Trade union recognition

For trade unions, the key element of the Employment Relations Bill is a statutory procedure through which independent unions will be able to seek recognition for collective bargaining from employers with more than 20 employees. (Under existing legislation, an independent trade union is one which is not under employer domination or control, nor liable to interference tending towards such control, and which holds a certificate of independence awarded by the Certification Officer.) Unless otherwise agreed, collective bargaining means negotiations relating to the issues listed in section 178(2) of the Trade Union and Labour Relations (Consolidation) Act 1992, ie terms and conditions of employment, hiring and firing, allocation of work, disciplinary matters, union membership or non-membership, facilities for trade union officials and negotiation and consultation machinery.

Under the provisions of the Bill, in the absence of voluntary agreement with an employer, unions may refer claims for recognition on behalf of a specified group of employees (the bargaining unit) to the Central Arbitration Committee (CAC). Before proceeding with an application, the CAC must be satisfied that at least 10% of the proposed bargaining unit are members of the union and that there is prima facieevidence that a majority of the workers in bargaining unit would be likely to favour recognition. If no agreement is reached between employer and union on the bargaining unit, the CAC will determine its scope, taking account of the need for the unit to be "compatible with effective management" and a range of other (subsidiary) factors (eg existing national and local bargaining arrangements).

Where the union shows that a majority of the workers constituting the bargaining unit are members of the union, the CAC will issue a declaration of recognition without a ballot unless it is satisfied that a ballot would be "in the interests of good industrial relations" or there are indications that a significant number of union members within the bargaining unit do not want the union to conduct collective bargaining on their behalf. In such circumstances, or if the union cannot show majority membership, the CAC will arrange for a secret ballot of the bargaining unit to be conducted, and will issue a declaration that the union is to be recognised if this is supported by a majority of those voting and at least 40% of those eligible to vote. The Bill makes a range of detailed provisions relating to the ballot, including placing a duty of cooperation on the employer and specifying that the cost of the ballot should be shared equally by the union and the employer.

Where the union is declared recognised but is unable to agree on a bargaining procedure with the employer, either party can ask the CAC for assistance. If this still fails to result in an agreement, the CAC will specify the bargaining procedure which will have effect as if it were a legally binding contract between the parties. This will mean that either party will be able to apply to the courts for an order for specific performance if it believes the other is in breach of the procedure. The parties will be able to vary the procedure by agreement. (The Bill also provides that either party to an existing voluntary recognition agreement may apply to the CAC to specify a collective bargaining procedure where such a procedure has not been agreed or has not been carried out.)

Where a union is recognised under the statutory procedure and the CAC has specified the method of collective bargaining, the employer must consult union representatives every six months about the employer's training policy, plans and activities.

The Bill also makes provision for the derecognition of unions which are recognised on the basis of a CAC declaration or are party to a CAC-imposed collective bargaining procedure, but only after a period of three years. This may occur on the basis that the employer no longer employs more than 21 or more workers, or where, following a procedure initiated either by the employer or one or more workers, the majority of the bargaining unit supports derecognition in a ballot. Workers will also be able to apply to the CAC for the derecognition of a union which does not have a certificate of independence and which has voluntarily been recognised by an employer. The Bill imposes a three-year moratorium on renewed requests for recognition or derecognition following an unsuccessful application.

The Bill includes provisions designed to protect workers against dismissal or detriment (ie unfavourable treatment) for engaging (or declining to engage) in activities promoting or opposing union recognition.

A more detailed analysis of the Bill's recognition provisions will appear in a future EIRO feature.

Industrial action

Notice relating to ballots and industrial action

Unions are currently required by law to give employers advance warning of ballots concerning industrial action and of any resulting industrial action. Reversing court rulings on this issue, the Bill makes clear that unions are not required to name the employees concerned.

Ballots on industrial action: period of effectiveness

The Bill will enable the four-week period currently allowed by law between an industrial action ballot and the start of lawful industrial action to be extended to up to eight weeks by agreement between employer(s) and union(s). The government's aim is to avoid the four-week deadline having the effect of precipitating industrial action even though a settlement might be achieved by further negotiation.

Unfair dismissal of workers taking industrial action

The Bill will amend existing legislation to enable employees dismissed for taking part in lawfully-organised official industrial action to take cases of unfair dismissal to an employment tribunal where the dismissal occurs within eight weeks of the start of the action. Thereafter, dismissal will be fair provided the employer has followed all appropriate procedural steps to resolve the dispute. The present protection against the selective dismissal of those taking official industrial action continues.

Leave for family and domestic reasons

Maternity leave

The government intends to replace the existing statutory maternity leave provisions with simplified arrangements. The basic framework for these is included in the Bill, together with powers for the trade and industry secretary to make regulations setting out detailed provisions. The Bill provides that all pregnant employees will be entitled to 18 weeks' maternity leave, increased from the current entitlement of 14 weeks. The government intends that the regulations will enable employees with at least one year's service (rather than the two years' service currently required) to take additional leave ending within 29 weeks of the baby's birth.

Parental leave

The Bill requires the trade and industry secretary to make regulations entitling employees to be absent from work for at least three months on (unpaid) parental leave for the purpose of caring for a child. The regulations (together with those on time off for domestic incidents - see below) will implement the EU Council Directive on parental leave (96/34/EC) and are due to take effect in December 1999. Employees' parental leave rights will be enforceable via complaints to employment tribunals. Provisions determined by collective or "workforce" agreements may apply in place of the regulations, provided they are incorporated into employees' contracts of employment.

Time off for domestic incidents

The Bill introduces a statutory right for employees to take a reasonable amount of time off during working hours if necessary to deal with domestic incidents. Detailed provisions will be established by regulations. As with parental leave, enforcement will be via complaints to employment tribunals, and collective or "workforce" agreements may derogate from the regulations, provided they form part of employees' contracts of employment.

Other matters

Detriment related to trade union membership

The Bill makes it unlawful for employers to subject individual employees to any detriment, either by an act or deliberate failure to act, on grounds of trade union membership, non-membership or activities. Currently, employees are protected against discrimination on such grounds where this takes the form of action short of dismissal, but this has been held by the courts not to include cases of omission to act (ie conferring a benefit on non union members but withholding it from union members).


The Bill gives the trade and industry secretary the power to make regulations to prohibit the compilation and use of "blacklists" intended to facilitate discrimination against trade union activists by employers when recruiting.

Right to be accompanied at disciplinary and grievance hearings

The Bill creates a statutory right for a worker to be accompanied by a fellow worker or trade union official of his or her choice during in-company grievance and disciplinary hearings. A disciplinary hearing is defined as one which could result directly in employers administering a formal warning to the worker concerned or taking other action against them, whereas a grievance hearing concerns the performance of a duty by the employer in relation to the worker. Explanatory notes issued by the government to MPs state that the right to be accompanied is defined in such a way as to ensure that it does not apply to trivial or minor complaints.

Individual contracts

The Bill provides powers for the trade and industry secretary to make regulations to protect workers from detriment and dismissal arising from refusal to enter into an individual contract including terms which differ from those of a collective agreement which would otherwise apply.

Waiving of unfair dismissal rights

The Bill will prohibit unfair dismissal waivers in fixed-term contracts.

Part-time work

The Bill requires the trade and industry secretary to make regulations to ensure that part-time workers are treated no less favourably than full-time workers. These regulations will include provisions to implement the EU-level social partners' agreement and subsequent Council Directive on part-time work (97/81/EC), UK transposition of which is required by April 2000, and deal with related matters. According to the explanatory notes issued to MPs, the government believes that part-time workers should receive equal treatment in terms of pay at the same time as other employment conditions, but that Directives adopted under the terms of the Maastricht Agreement on social policy cannot cover pay issues (the agreement/Directive itself refers to "employment conditions"). The government's view is that the powers to make regulations under the European Communities Act 1972 - which are usually used to implement EU Directives in the UK - "are not sufficiently wide to go beyond the scope of the Directive in this way" so the Bill gives the trade and industry secretary the necessary powers.

The Bill also enables the trade and industry secretary to issue codes of practice relating to part-time work. Among other things, it is expected that this mechanism will be used to implement clause 5 of the EU-level social partners' agreement on part-time work which is intended to promote and facilitate access to part-time work and sets out the principles which employers should seek to adopt.

Coverage of employment rights

The Bill gives the trade and industry secretary the power to make provision by order for the extension of employment rights under existing legislation to other groups of individuals in addition to those specified by the various statutory measures. The government says that it envisages using this new power to rationalise and update the coverage of employment rights legislation with the aim of ensuring that all workers other than the genuinely self-employed are accorded statutory protection and that no-one is excluded simply because of the technicalities relating to the type of contract or other arrangement under which they are engaged.

Employment agencies

The Bill clarifies and extends the existing powers of the trade and industry secretary to regulate the conduct of employment agencies, and the restriction on employment agencies or businesses charging fees to people seeking work except where the trade and industry secretary prescribes otherwise.

Awards and financial limits

The Bill simplifies the existing statutory provisions on awards for unfair dismissal and raises the limit on the compensatory award from GBP 12,000 to GBP 50,000. This and a number of other payments and financial limits under employment legislation which are currently subject to periodic review are to be index-linked instead.

Institutional reform

The Bill abolishes two little-used public bodies - the Commissioner for the Rights of Trade Union Members and the Commissioner for Protection against Unlawful Industrial Action- and modifies and extends the functions of the Certification Officer to hear complaints of alleged breaches of trade union law or trade union rules. The government's aim is to enlarge the Certification Officer's role as an alternative to the courts for dealing with such issues.

Partnerships at work

The Bill authorises the trade and industry secretary to make funding available to encourage and assist employers and employees or their representatives to improve the way they work together. This is intended to cover training and other activities to develop partnership at work and to disseminate examples of good practice.


Attention has focused in recent months on modifications made by ministers to the Fairness at work proposals to meet employer concerns. Yet the 72-page Employment Relations Bill is a major and wide-ranging piece of legislation which makes significant improvements to trade union and employee rights in the UK and has important implications for the personnel and industrial relations policies of employers. Moreover, the enactment of the Bill will not be the end of the story: in many areas, detailed statutory provisions will follow in the form of regulations to be drawn up by the trade and industry secretary. Taken together, recent legislation on working time (UK9810155N) and the national minimum wage (UK9807135F), the Employment Relations Bill and initiatives still in the pipeline (including the reduction in the qualifying period for unfair dismissal complaints) represent a far-reaching agenda of reforms in a policy area widely seen as difficult for new Labour. (Mark Hall, IRRU)

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