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The statutory recognition procedure
[ch 5: pages 150-155]TULRCA provides a mechanism for unions to gain statutory recognition even where the employer is implacably opposed (Part V1, Schedule A1: Collective bargaining, Recognition, TULRCA).
There are many limitations to the statutory recognition procedure, which is generally regarded by unions as not fit for purpose.
The legislation covers “workers” (including zero hours contract workers), not just employees.
“Worker” includes those who have been misclassified as self-employed, as this European Court of Justice (ECJ) ruling makes clear:
A collective agreement on pay rates for “substitute musicians” was reached in the Netherlands but the Dutch competition authority struck it down as illegal price fixing between independent “undertakings” (i.e. self-employed businesses). The case was referred to the ECJ and the court ruled that since competition law cannot be used to prevent collective agreements that are aimed at improving the working conditions of “workers”, the key question in this case was whether the musicians were workers, as opposed to self-employed undertakings.
A person will be a worker, ruled the ECJ, if they are under the employer’s direction as regards, for example, when, where and how they perform tasks, if they do not share in commercial risks or profit, and if during the relationship, they are integrated into the employer’s undertaking. In other words, they will be a "worker" if they satisfy the "worker" tests set out in Chapter 2.
FNV Kunsten Informatie en Media v The Netherlands [2014] Case C/413/13
http://curia.europa.eu/juris/celex.jsf?celex=62013CJ0413&lang1=en&type=TXT&
In December 2016, the Independent Workers Union of Great Britain (IWGB) applied to the Central Arbitration Committee (CAC) for formal recognition on behalf of courier riders for online delivery business Deliveroo. These workers have been classified by Deliveroo as self-employed contractors, To decide whether the courier riders can benefit from statutory recognition, the CAC will first have to decide whether they are "workers" (see also Chapter 2, page 33).
Small employers — those with 21 or fewer workers — are excluded from the scope of the statutory recognition procedure.
To apply for recognition using the statutory procedure, a union must begin by submitting a request in writing to the employer. If it cannot negotiate a recognition agreement, the next step is a formal written application to the CAC.
When making the application, the union must identify the bargaining unit for which it is seeking recognition. This is the group of workers it wants to represent. It is important to choose the bargaining unit carefully, especially as the outcome of any eventual ballot can hang on who is, or is not, included in the unit. The law says that the CAC must examine whether a bargaining unit is “compatible with effective management” (Part V1, Schedule A1 section 19B(1), TULRCA).
A union’s bargaining unit can usually only be successfully challenged where the employer can show that it is not compatible with effective management. It does not have to be the most effective unit of organisation, as long as it is not an ineffective one. If the employer successfully challenges the union’s preferred bargaining unit, the CAC can impose a different one. At this stage the union may choose to withdraw the application.
GMB victory after challenge to Lidl bargaining unit
In 2016, 223 warehouse operatives at the Lidl distribution centre in Bridgend, backed by the GMB union, successfully argued that they should be recognised as a single bargaining unit. The supermarket chain had tried to persuade the CAC that the move would undermine the “one-Lidl culture” of standardised terms across its entire workforce and lead to “unworkable” “fragmentation”, with small groups of workers at its eight distribution centres around the country “competing” for the best terms and conditions. A proliferation of small bargaining units across the company was not compatible with “efficient management”, it argued. The CAC disagreed, ruling in favour of the union. Lidl’s concerns about workforce fragmentation were “not well founded”, and the 223-member bargaining unit was “appropriate”, it ruled.
The GMB was waiting for the outcome of an appeal by Lidl as Law at Work went to press.
Employers must provide the union and the CAC with an up-to-date list of workers in the bargaining unit (Part 1, section 3, Employment Relations Act 2004 (ERA 04)). The law allows the CAC to intervene if the employer engages in “unfair practices” to influence the result of a recognition ballot, including offering inducements, or making threats of disciplinary action with a view to influencing the ballot (section 10, ERA 04).
For the application to proceed, the CAC must accept it as valid. It will only do this if the union can show that at least 10% of the bargaining unit is in membership, and that a majority of workers in the unit would be likely to favour recognition. The union must produce evidence to support these two requirements, usually consisting of its own membership records and letters, petitions and other evidence from the workforce, showing that majority support is likely. CAC guidance says that if the union wants information kept confidential from the employer, this must be agreed with the CAC in advance. Confidentiality is normally achieved through an agreement with the parties that the CAC case worker will verify each side's information without sharing it with the other party.
In Unite v Cinram Operations UK Limited TUR1/940/ [2015], an employer tried unsuccessfully to persuade the CAC to delay the application for recognition on the basis that impending redundancies meant that many of the workers in the bargaining unit supporting recognition would shortly no longer be employed. The CAC refused. The union had met the statutory test for a valid application.
Normally, only one union can apply for recognition for the bargaining unit at a time. Where more than one union wants recognition, they must apply together and show they can co-operate. If they cannot do this, both applications are invalid.
A union cannot apply for statutory recognition where there is already a recognised union, even if the recognised union is not supported by the majority of the workers in the bargaining unit. An employer can decide to recognise another union at any time up until the CAC accepts the union’s application for statutory recognition as valid. The employer’s decision would then block the second union from making a statutory claim. This is one of the biggest weaknesses in the legislation, as it allows employers to get around the procedure through use of a sweetheart union (see the Boots litigation, discussed in the box below).
The Boots litigation – Why the statutory recognition procedure is “unfit for purpose”
Just how much scope there is for a recalcitrant employer to resist an application for statutory recognition is illustrated by litigation involving pharmacists at high street chemist Boots. Boots went to extraordinary lengths to avoid recognising an independent union — the Pharmacists Defence Association Union (PDAU) — who want to collectively bargain wages and other terms and conditions for Boots pharmacists.
Once Boots became aware that PDAU intended to apply for statutory recognition, the company took immediate steps to stop this, by exploiting loopholes in the recognition procedure. Boots secretly signed a “sweetheart deal” with an organisation known as the Boots Pharmacists Association (BPA). The BPA was refused a certificate of independence by the Certification Officer who described it as open to being “dominated or controlled” by Boots, but this did not stop it being lawfully recognised by the company.
Under its written recognition agreement, the BPA was recognised for collective bargaining, but only over “union facilities and the bargaining machinery”. On all other issues, including the core elements of any collective bargaining agenda — pay, holidays and hours — Boots’ only obligation was to “consult” with the BPA.
In a ruling describing Boots’ behaviour as “disingenuous” and “deliberately misleading”, the CAC relied on the decision of Demir v Turkey (see page 145) to rule that the right to bargain collectively must include at least pay, hours and holidays. Mere recognition over union facilities was not good enough. The recognition procedure breached Article 11 of the European Convention on Human Rights, said the CAC, insofar as it allowed an employer to defeat an application for statutory recognition by an independent union because of a pre-existing agreement that did not permit collective bargaining on these key elements (PDAU v Boots Management Services (TURI/823/2012).
Boots launched a judicial review challenge to the CAC’s ruling. The Administrative Court judge hearing the judicial review was initially sympathetic to PDAU’s case, inviting the union to apply for a declaration of incompatibility with the Convention (R (on the application of Boots Management Services Limited v CAC and the PDAU [2014] EWHC 65 (Admin)).
However, following a direct intervention by the secretary of state, the judge changed his mind and refused the declaration, ruling that he was now satisfied that the statutory recognition procedure did not infringe Article 11.
The basis for this change of heart was that under Part VI, Schedule A1, TULRCA, (Paragraphs 134-137 (Derecognition where union not independent), an independent union can gain recognition when a non-independent union has been recognised by the employer if it can persuade just one worker in the bargaining unit of the sweetheart union to launch statutory derecognition procedures. Given the availability of this course of action, the judge ruled out a declaration of incompatibility with human rights law.
The judge conceded that in reality, only a brave employee would be willing to take this step, given fears of possible reprisal. However, he pointed to statutory rights to protection from detriment or dismissal in connection with union recognition (TULRCA, Part V1 of Schedule 1A, paras 156 – 161) and concluded that given this statutory protection, the procedure did not infringe Article 11.
An appeal to the Court of Appeal was dismissed in February 2017. The Court of Appeal agreed with the court below and refused to accept that the statutory recognition procedure breached Article 11, because an individual worker has the right to challenge the sweetheart union, even though a union cannot do this in their own right.
PDAU v Boots Management Services Limited and Secretary of State for Business, Innovation and Skills [2017] EWCA Civ 66
If the existing recognised union does not hold a certificate of independence and the recognition agreement is at least three years old, that recognition agreement cannot stop an application by an independent union (TULRCA, Schedule 1A: Collective Bargaining: Recognition, Para 35(1) (4)).
Code of Practice – Access and Unfair Practices during recognition and derecognition ballots (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/245547/05-1463-code-of-practice-recognition-derecognition-ballots.pdf)
CAC Guide to the Parties – Statutory Recognition, updated in October 2016 (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/611989/Part_I_Guide_for_the_Parties__April_2017_.pdf)