Lewis Silkin – Unions’ financial responsibility has increased and government is moving to repeal ban on agency workers
This article examines the implications for employers of these latest developments.
Increase in the financial responsibility of unions
Trade unions enjoy special protection to induce their members to perform certain illegal acts. In particular, section 219 of the Trade Unions and Employment Relations (Consolidation) Act 1992 allows them to induce workers to break their contract of employment by taking industrial action, for example by going on strike. However, for this special protection to apply, a union must act in anticipation of or in support of a trade dispute, such as a wage dispute. It must also ensure that it acts only after having ensured the adhesion of its members by a vote duly carried out among them.
If a union were to call on its members to take industrial action without the protection of section 219, it faces potential legal action for any loss it causes, for example to the employer or employers. affected by a strike. However, since 1982 its liability has been capped at a maximum of £250,000 (for unions with 100,000 or more members).
With effect from 21 July 2022, the government has decided to quadruple this cap to £1,000,000, with corresponding increases in the caps for small unions of £40,000 for unions with up to 5,000 members, £200,000 for those with between 5,000 and 25,000 members, and £500,000 for those with between 25,000 and 100,000 members.
Implications for employers
In practice, it is rare for employers to take legal action against unions to recover their losses for illegal industrial action (as opposed to taking legal action to obtain an injunction to stop it from continuing). Thus, the practical implications of this change may be minimal. It is nevertheless welcome because of its indirect implications. These are that due to their increased financial risk, unions will now be even more likely to repudiate unprotected acts by their officers or leaders, which should help prevent their actions from leading to an illegal strike.
Repeal of the ban on supplying agency workers during strikes
All personnel suppliers (including recruitment agencies and other suppliers of contingent workers) are subject to a statutory compliance regime which is primarily set out in the Conduct of Employment Agencies and Placement Businesses Regulations 2003. These regulations are designed to protect both agency workers and companies. seeking to engage them (i.e. employers).
Personnel contractors are currently prohibited from supplying agency workers in the context of formal industrial action to perform tasks which are either: (a) normally performed by a worker taking part in a strike or other industrial action; or (b) normally performed by any other worker who has been appointed by the employer to perform the duties of a worker taking part in a strike or other industrial action. Violation of this regulation is a criminal offence.
The Government has now tabled legislation in Parliament which will repeal the ban on contractors supplying agency workers in formal industrial action. Importantly, and despite the context of this legislation being the ongoing rail strikes affecting the country, the ban will be repealed in its entirety, and not just in the context of important public services, such as transport services.
Implications for employers
The relevant legislation has not yet been approved by Parliament and, even if approved, it will be of no assistance to employers facing current or impending strikes. However, it is questionable whether this reform will ever be useful to striking employers. Indeed, the use of agency workers to replace strikers risks exacerbating the underlying social conflict and may well be challenged by strikers on human rights grounds. In addition, many personnel suppliers also express significant concerns about whether they would be willing to supply labor as part of an industrial action, given how incendiary this could be for the situation and how it could put their own workers at risk. There is also the challenge of finding qualified temporary workers.
It would be more important, at least in the current context of ongoing rail strikes, for the government to finally implement its 2019 Conservative Party manifesto commitment to introduce minimum service levels during transport strikes. However, such a reform, if ever proposed, would almost certainly be as controversial as the repeal of the ban on personnel contractors and would also be challenged on human rights grounds.