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Sarah Booth

Shoosmiths LLP

Solicitor

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Industrial relations lessons following the Ineos dispute

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Many employers have good working relationships with their recognised trade unions, but for others a union presence is a source of conflict and frustration which can all too easily tip into outright dispute.

In an ideal world employers would be able to maintain harmonious industrial relations through effective collective bargaining. However, where this fails, the most potent weapon a union has in its negotiation arsenal is industrial action.

The recent dispute between Ineos and UNITE at Grangemouth was only resolved when the employer announced it was closing the site and the Government hurriedly intervened. While the employer's ‘nuclear’ option appeared to work, bringing the workforce and union to its senses in this case, few would wish to be pushed into such extreme action.

So how should employers react if they find themselves threatened with industrial action, which is likely to be costly, both financially and in terms of business reputation?

In this article, we consider how an organisation might seek to avoid industrial action and suggest some other approaches should this not prove possible.

Industrial action: the legal position

Industrial action encompasses strikes, ‘work to rule’, overtime bans and ‘go-slows’. Employees who participate in industrial action will normally be breaching their contracts of employment. 

In backing industrial action, the union will be inducing the employees to breach their contracts of employment, which gives rise to tortious liabilities for the union. However, the union will have immunity against any claims for damages by the employer provided that the industrial action undertaken is in accordance with the law.

Challenging industrial action

The law in this area is extremely complex with plenty of potential ‘elephant traps’ for both sides.

The main mechanism for stopping industrial action is to apply to the High Court for an interim injunction against the trade union. However it will only be possible to do so where unlawful industrial action is threatened. 

Industrial action is unlawful if:

  • It is not taken ‘in contemplation of a furtherance of a trade dispute’
  • It is taken for a prohibited purpose (such as involvement in unlawful picketing or secondary action)
  • It is not supported by a properly organised ballot of the union’s members; and the union has failed to comply with notification requirements

An employer seeking to challenge the lawfulness of industrial action should consider whether:

  • There is a trade dispute and whether the industrial actions is being taken for a prohibited purpose
  • The ballot notice was provided at least 7 days prior to a ballot and complies with the legal requirements
  • A sample ballot paper has been provided three days before the ballot and complies with the legal requirements
  • There are any flaws in the ballot process
  • Notice of the outcome of the ballot was received as soon as reasonably practicable after the ballot closed; and notice of any industrial action was provided at least seven days before commencement and complies with the necessary legal requirements
  • Legal action should be a last resort as obtaining an injunction will be expensive and there is no guarantee a court will grant such remedy – non-material failings in process are unlikely be sufficient to justify an injunction

Preparing for industrial action

Where there is no route to challenge the legality of the industrial action or negotiations falter, employers will need to have contingency plans in place:

  • Notify customers and suppliers of potential strike action and consider if the business can service customers’ needs existing employees or temporary labour
  • There is little legal restriction on an employer moving staff or taking on new staff directly during any industrial action. However, an employer will be unable to use agency workers for the purpose of undertaking work normally performed by a striking worker or undertaking duties normally performed by any other worker who has been assigned to cover the striking worker
  • Notify non-participating employees of any potential strike action and give them assurance that they will be protected from any unlawful picketing or other detriment by the trade union for not participating in the strike
  • Try to persuade employees in measured and non-confrontational communications not to participate by informing them of the consequences of striking both for the business (financial and reputational damage) and for the employees (loss of wages for any strike days
  • Where possible, continue to negotiate with the unions directly and push for third party assistance such as from ACAS. Even if agreement seems unlikely, a demonstrably positive attitude to mediation by the employer may help persuade a Court to grant an injunction
  • On strike day, monitor picket lines for unacceptable behaviour – if they become intimidating then the union can lose its protection for claims for damages caused to the business
  • Ensure payroll is notified of the strike and makes appropriate deductions the strike day(s) from their monthly pay accordingly.

Work to rule

If a ‘work to rule’, ‘go slow’ or overtime ban does not breach the employees’ contracts of employment then the employer will not be able to make deductions from the employees’ wages.

However, if such action would be a breach of contract, the employer can either require the employees to perform their contractual obligations in full or stay at home and not be paid (a ‘lockout’), or accept partial performance. Whilst a useful negotiating tactic, this can inflame relations between the union and the employer.

Additionally, the laws regarding lockouts and part performance are complex; employers should therefore obtain legal advice on part performance when industrial action is threatened.

Communication, communication, communication

Relationships are largely down to the personalities involved, understanding their particular motivation and building and maintaining trust.

If an employer handles the relationship poorly, unions can become a serious block on the business. To avoid this:  

  • Keep communications calm: employers should adopt and maintain a calm and reasonable attitude avoiding incendiary statements and actions
  • Be transparent: if an employer is proposing a change in terms and conditions or is unable to agree to a pay rise then it is imperative that the reasons for this are fully and convincingly explained. This may involve sharing sensitive information (subject to the trade union officials receiving the information signing up to confidentiality agreements). However, doing so may help to build up trust and demonstrate that the employer's reasons are genuine  
  • Keep information flowing: trade unions are likely to become suspicious if they feel that the employer is not telling them the whole story; a regular flow of information between the parties is likely to assist in building trust. Remember that the union does not have a monopoly on communication with the workforce; employer is entitled to and should communicate directly with its whole workforce to keep them informed about the industrial relations situation

Relationships depend on communication; getting this right – while not always easy – is the key to building a harmonious working environment in which both the employer and union can co-exist.

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Sarah Booth

Solicitor

Read more from Sarah Booth
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