Government unveils proposals for a fairer workplace

In its long-awaited Fairness at work white paper published in May 1998, the UK's Labour Government has put forward a package of proposals for new individual, collective and "family-friendly" employment rights. We review the key elements of the white paper and its reception by employers and trade unions.

On 21 May 1998, the Government published a white paper entitled Fairness at work setting out its legislative agenda in the area of industrial relations. As well as giving details of the Government's proposed statutory trade union recognition procedure, the white paper outlines a range of other employment law reforms in areas such as protection against unfair dismissal, dismissals during disputes, representation during grievance and disciplinary procedures, maternity rights, and parental and family leave.

The dominant themes of the white paper are presented by ministers as the fair treatment of employees within a flexible and efficient labour market, and the promotion of a new culture of partnership in the workplace. The Government describes its proposals for a framework of individual, collective and "family-friendly" employment rights as "a balanced approach consistent with enabling employers to find ways of ensuring that their companies are competitive". In a foreword to the white paper, the Prime Minister, Tony Blair, writes that: "Even after the changes we propose, Britain will have the most lightly regulated labour market of any leading economy in the world."

He also makes it clear that, with the exception of the introduction of a national minimum wage (UK9712190N) and measures to implement EU Directives, the Government does not envisage further legislation: the white paper "seeks to draw a line under the issue of industrial relations law", and sets out the Government's proposals for "an industrial relations settlement for this Parliament". Legislation based on the white paper is expected to be introduced in the next session of Parliament beginning in October and is likely to come into force over the summer and autumn of 1999.

Trade union recognition

The white paper sets out proposals for legislation to provide for trade union recognition where this is favoured by a majority of an appropriate group of employees, arguing that: "If employees believe that their interests are best served through a trade union voice, the Government believes that the business will gain by accommodating this wish. Businesses and other organisations are unlikely to establish a successful partnership for change and competitiveness while overriding the wishes of a substantial group of employees." The proposals draw on the joint statement on recognition agreed between the Confederation of British Industry (CBI) and the Trades Union Congress (TUC) in December 1997 (UK9801194F).

There will be a statutory procedure under which, in the absence of voluntary agreement with an employer, unions holding a certificate of independence may refer claims for recognition to a revamped Central Arbitration Committee (CAC). Prima facie evidence of reasonable support among the employees concerned will be a condition for the CAC proceeding with the application. In the event of continuing disagreement between employer and union over the appropriateness of the bargaining unit proposed by the union, the CAC will determine its scope. Where the employer then accepts that the union enjoys the support of a majority of the bargaining unit, or the union can demonstrate that it has more than 50% of the bargaining unit in membership, the CAC will issue a declaration that the union is to be recognised. Otherwise, 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 a majority of those voting and at least 40% of those eligible to vote have supported recognition. The statutory procedure will not apply to firms with 20 or fewer employees.

Where a union achieves recognition via the statutory procedure, the employer and the union must try to reach a procedure agreement setting out how they will conduct collective bargaining. If no such agreement is reached within three months of the employer's agreement to recognition or the CAC's declaration, the union may apply to the CAC for a default procedure agreement to be applied. This will be legally binding on both parties, will be based on a model laid down in legislation and will provide for collective bargaining to cover pay, hours and holidays as a minimum. (The Government is seeking views as to whether training should also be included in the list of mandatory bargaining issues.) As the procedure will be legally binding, either party will be able to initiate legal action if it believes the other is in breach of the procedure. A court could make an order for specific performance, and failure to comply with such an order could be a contempt of court. The white paper envisages that the default procedure should also be available to employers or unions which consider that the other party is not honouring the terms of an existing recognition agreement which is not legally binding. There will also be provision for the CAC to determine changes to the bargaining unit following business restructuring, mergers between unions, etc.

The white paper says that a broadly similar procedure should apply where employers seek to derecognise a union because they believe the majority of the bargaining unit no longer supports recognition. The Government is seeking views on exactly how this should work. Such a step would not be possible until three years after a recognition declaration. Similarly, there will be a three-year moratorium on renewed requests for recognition or derecognition following an unsuccessful application.

Other key points of the white paper

The Government also proposes to:

  • reduce the qualifying period for protection against unfair dismissal from two years to one year and abolish the maximum limits on awards for unfair dismissal;
  • enable employees dismissed for taking part in lawfully-organised official industrial action to take cases of unfair dismissal to a tribunal;
  • make it unlawful to discriminate by omission on grounds of trade union membership, non-membership or activities;
  • prohibit "blacklisting" of trade unionists;
  • lift the requirement on unions to give employers the names of members to be balloted on industrial action;
  • give employees the statutory right to be accompanied by a fellow employee or trade union representative of their choice during grievance and disciplinary procedures;
  • abolish the Commissioner for the Rights of Trade Union Members and the Commissioner for Protection against Unlawful Industrial Action, and give the Certification Officer new powers to hear complaints by union members against their union on certain issues;
  • make funds available to contribute to the training of managers and employee representatives in order to assist and develop partnerships at work;
  • implement the EU parental leave Directive (TN9801201S) by introducing three months' parental leave for men and women when they have a baby or adopt a child and reasonable time off for urgent family emergencies, with protection against detriment or dismissal for exercising this right;
  • extend statutory maternity leave to 18 weeks, to align it with maternity pay; and
  • introduce a qualifying period of one year for extended maternity leave (currently two years) and for parental leave.

In addition, the white paper identifies a range of issues on which the Government invites views, including:

  • whether further action should be taken to address the potential abuse of "zero hours" contracts;
  • how to simplify the law and code of practice on industrial action ballots and notice; and
  • the options for framing UK legislation to comply with the EU parental leave Directive and the possibility of special provision for small firms.

Reaction from the social partners

Commenting on the white paper, the CBI's director-general Adair Turner said that: "Within the limits of their manifesto commitments, the Government has listened to key business concerns, and the approach to statutory trade union recognition, while not welcome, should be workable." One other aspect of the white paper of particular concern to the CBI is the proposed right of employees to be represented by a union official over grievances or disciplinary matters. According to the CBI, this "could create substantial burdens, particularly for small firms. We will be seeking to identify with Government ways to minimise unnecessary burdens, for instance by limiting this procedure to serious cases."

Trade unions appear happier with the contents of the white paper than they had once feared. TUC general secretary John Monks said that the white paper would "inject much-needed balance into the UK labour market". Union campaigning had "chalked up some notable successes", but the white paper "[would] still leave people at work in Britain some way behind their colleagues in the rest of Europe". An initial assessment of the white paper drawn up by the TUC general council and considered by a special TUC conference on 24 June welcomes most of its contents, but reiterates TUC opposition to two key elements of the Government's recognition proposals - the 40% "yes" vote threshold in recognition ballots and the exemption from the recognition procedure of firms with fewer than 20 employees - and commits the TUC to further campaigning on these issues.

Both organisations can now be expected to continue to lobby hard to influence the details of the eventual legislation. In addition, the TUC document stresses the need for a longer-term strategy to ensure that affiliated unions are ready to exploit the package of new workplace rights in their recruitment and organising campaigns. Unions are already reported to be stepping up pressure on a number of target companies to concede recognition before the statutory procedure comes into force.

Commentary

The Blair Government came into office (UK9704125F) with a carefully balanced package of industrial relations proposals, defined as much, if not more so, by the need to reassure the business community and to distance new Labour in the voters' minds from the "bad old days" of industrial relations in the 1960s and 1970s, as by the need to respond to at least some elements of the trade unions' agenda. Labour's June 1996 "Road to the manifesto" document, Building prosperity - flexibility, efficiency and fairness at work, made it clear that the party leadership's underlying analysis of the importance of labour market flexibility did not differ fundamentally from that of the previous Conservative Government, and that the key elements of the 1980s industrial relations legislation would be kept in place. The document essentially encapsulated new Labour's approach as continuing the emphasis on labour market flexibility, but underpinned by minimum standards of fairness at work plus opting into the EU "social chapter".

The overall approach of the white paper is remarkably consistent with the agenda set out in Building prosperity. Arguably its real political significance lies in the details of the recognition proposals - and the muted reaction from employers. After months of lobbying and counter-lobbying by the TUC and CBI (UK9803113N) and within the Government by "old" and "new" Labour, the recognition proposals appear ultimately to have been shaped by the overriding priority given within Downing Street to maintaining the Labour Government's business-friendly credentials. On the headline issues, the white paper's formula - including a 40% "yes" vote threshold and an exemption for small firms - is rather closer to the CBI's negotiating position than to the TUC's. But other aspects, such as the absence of a specific threshold of employee support for recognition applications and the approach to be taken on defining the bargaining unit, are more welcome to the TUC.

It remains to be seen whether the proposed new recognition procedure can avoid the intractable operational difficulties encountered by the recognition provisions of the Employment Protection Act 1975, and whether it will enable unions to achieve major breakthroughs in currently unorganised areas, especially where there is entrenched employer opposition. A key test will be whether, once a union has secured a declaration that it is to be recognised, the new statutory provisions can successfully induce a reluctant employer to bargain in good faith. On this point, the enforcement mechanism envisaged by the Government - the imposition of a legally binding procedure agreement which will provide the basis for subsequent legal action involving court orders and possible sanctions for contempt of court - is a good deal stronger than the ineffective unilateral arbitration approach tried by the 1975 Act. Of the white paper's other proposals, it is the introduction of statutory parental and family leave provision, driven by the EU Directive on this issue, that is likely to have the most profound impact on workplace culture, given the relatively small proportion of UK companies that already provide such arrangements for their employees. (Mark Hall, IRRU)

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