The Employment Relations Act 2004 and the 'Partnership' Agenda: The Scope of Changes to the Recognition Procedures

The Employment Relations Act 2004 and the 'Partnership' Agenda: The Scope of Changes to the Recognition Procedures Tonia Novitz, University of Bristol Introduction From the outset, the Government envisaged only limited reform to the statutory recognition procedures introduced by the Employment Relations Act 1999 and set out in Schedule A1 to the Trade Union and Labour Relations (Consolidation) Act 1992. Public Consultation Paper, Review of the Employment Relations Act 1999, April 2002: 'The review has found that the Act is working well. It therefore concludes that there is no case for making wholesale changes to the legislation.' Government Response to the Public Consultation, December 2003, p.5: 'A large majority of those commenting agreed with the government's assessment that the statutory procedure had on the whole worked well, although most' What is the reason for the Government's reluctance to change the procedure, despite an extensive lobby for change? Lord Sainsbury of Turville, HL Hansard, 29.4.4 vol. 660, col. 902: 'We have worked with our key stakeholders to foster and support a better climate of employment relations based on partnership between employers and employees in the workplace. Over the past seven years we have seen a move towards more dialogue, and more productive workplaces. A new trend is being established on which we want to build.' This paper considers what can be understood by the Government's partnership agenda and how it has been reflected in those reforms made (and not made) to the statutory recognition procedures. The Pros and Cons of 'Partnership'? The notion of partnership in the workplace is not peculiar to New Labour or the UK. It first emerged as a strategy advocated in the US as a means by which to reverse decline in trade union membership and collective bargaining. The idea was that unions should seek to play a less adversarial role, promoting better relations with management in a variety of contexts, such as facilitating corporate management and worker representation in grievance and disciplinary matters. The TUC also decided to utilise this strategy when lobbying for changes to the legislative framework for UK industrial relations. The New Labour vision of partnership in the workplace has, however, taken a significantly different form. The Pros: - It suggests that there is scope for a co-operative framework for the settlement of disputes in the workplace. In this way, it builds on the past successes of trade unions within various workplaces. - Partnership rhetoric avoids demonization of trade unions, which gained currency under Conservative Governments and a neo-liberal agenda. It suggests that workers and their organisations have a legitimate voice within the workplace and are deserving of equal respect. - It paints a picture of the Government's role, not as interventionist but as facilitative, recognising the scope for autonomy in industrial relations. It draws on the best of the British tradition of collective laissez faire and modern trends towards reflexive law - law which is procedural in its orientation, rather than coercive. The Cons: - the question of who are the partners? It seems that New Labour's conception of 'partnership' is more individualistic in its orientation than the TUC might have hoped. In the 1998 White Paper, it emerged that the Government was not convinced that partnership in the workplace necessitated the involvement of trade unions. Instead, such a partnership was stated as being between an individual employer and their workers. This came through again in the Government's consultation document in 2002, and was picked up on by the CBI Response to the Review of Employment Relations Act 1999, which stated that: business also shares the view expressed in the Consultation Document that the best recipe for a lasting partnership is usually 'a relationship developed between employers and workers without any outside assistance'. - and linked to this is the issue of freedom of choice - The Government's view seems to be that within a workplace 'partnership', the rights of both employer and worker are to be acknowledged, and their choices respected. The voluntary aspect of their relations is stressed. The notion that the circumstances of workers may limit their freedom of choice does not receive much consideration. Instead, we were presented with the idealised picture of the worker who makes their own decision as to whether to become a member of a trade union, to utilise its services, or to opt out of a collective agreement. One result is an almost absurd parity of treatment between workers and employers, exemplified by the statutory recognition and derecognition procedures which mirror each other. Another is that forms of representation other than those offered by trade unions are presented as viable means of achieving partnership. The suggestion is that employers and workers will both prefer and volunteer to enter into other representative arrangements. The Government's role will then be to facilitate these voluntary arrangements, rather than insist on forms of representation through trade unions which would give workers a more effective voice. So, for example, Pizza Express was given a grant from the Partnership Fund established by the Employment Relations Act 1999 to establish an 'Employee Forum' rather than build relations with a trade union; while Scott Bader provided for representation of employees through a 'Community Council'. - the tendency towards unitarism A third aspect of New Labour's conception of partnership at work is the emphasis placed on the notion that employers and workers have common interests. This is more a unitary than a pluralist perspective on industrial relations and has implications for the role that trade unions might play in workplace partnership, if at all. It emerged from Fairness at Work that unions could be included in that partnership, but only insofar as they could demonstrate their value to both employers and workers. It was envisaged that they could do so by performing a communicative role, such as explaining the company's circumstances to workers when an economic crisis arose, or assisting in the resolution of disputes arising in grievance or disciplinary proceedings. The fact that they could play a constructive confrontational role seemed to be overlooked. Partnership in Practice: Part I of the Employment Relations Act 2004 Part I, ERelA 2004: Union Recognition. Note the Government's view expressed by Lord Sainsbury, HL Hansard 29.4.4 vol. 660, at col. 903, that: 'the statutory recognition procedure has been a resounding success. We wanted it to encourage parties to resolve issues voluntarily. That is exactly what has occurred.' Partial successes? i. Union communications with workers after acceptance of application: s.5 ERelA 2004, amending para. 19 of Schedule A1 of TULRCA 1992 and inserting paras. 19A-19F. This change has its limitations. It does not provide for access prior to an application being made, making it difficult for the union to meet the threshold requirements of 10% membership and evidence that a majority would favour recognition. Moreover, such communication as is offered is only via a suitable independent person. However, it at least remains an improvement on previous provisions which permitted communication only in the balloting period. ii. additional duties on employers informed of ballots: s.9 ERelA 2004, amending para. 26 of Schedule A1 of TULRCA 1992 and making consequential amendments to paras. 27, 118 and 119. Two further duties are placed on employers: Para. 26(4A): a duty to refrain from making any offer to any or all of the workers constituting the bargaining unit which: (a) has or is likely to have the effect of inducing any or all of them not to attend any relevant meeting between the union and workers, and (b) is not reasonable in the circumstances. Para. 26(4B): a duty to refrain from taking or threatening to take any action against a worker solely or mainly on the grounds that he: (a) attended or took part in any relevant meeting, or (b) indicated his intention to attend or take part in such a meeting. Moreover, there is elaboration on what it means to fail to comply with the employer's duty to provide access in para. 26(4D). Parallel provisions apply as regards ballots on derecognition under para. 118. These provisions do seem beneficial 'at least for improving a worker's freedom of choice in recognition ballots (in line with the more positive connotations of New Labour's partnership agenda) iii. unfair practices: s.10 ERelA 2004, inserting paras 27A- 27F into Schedule A1 of TULRCA 1992. The TUC, in its response to the Review of the 1999 Act, asked for specific measures to be taken in respect of unfair practices, which limited workers' freedom of choice and thereby distorted the outcome of ballots. The Government initially rejected such action and there were no such measures in the first draft of the 2003 Employment Relations Bill. However, the measures now found in s. 10 ERelA 2004 were eventually introduced in Standing Committee. These I regard as only a partial success for the trade union movement, because they are set up to apply to both employers and unions as if there were in an identical position and have been defended by Government ministers in terms of their balanced treatment of both parties. In this respect, we seem to be witnessing once again, the formal parity of treatment displayed in the Employment Relations Act 1999. I note that the TUC itself is far from satisfied with the outcome noting that 'the legislation is based on an ill-founded premise that a level playing field operates in the workplace and that unions can exert equivalent pressure on workers to that of an employer'. The effect of these provisions is likely to be tempered by future application and interpretation of the Code of Practice: Access and Unfair Practices during Recognition and Derecognition Ballots 2005. But without going into detail on the substance of the Code, otherwise we will be out of time, I do not see much there which takes us beyond the formal parity of treatment and artificial construction of equality that we find in the Government's partnership agenda. Lost Challenges? One of the first and most obvious of the lost challenges is that identified by Jeremy Dear: the failure to change the statutory recognition procedure to prevent pre-emptive recognition of a sweetheart union for collective bargaining purposes. This was initially justified by the Government on the basis that: 'If workers are happy to be represented by a union without a certificate of independence, there is no problem.' This is perhaps another telling legacy of the Government's focus on an individualistic approach to workplace partnership, its emphasis on voluntary negotiations between the parties, and its failure to see workers' choices as limited. There are three further challenges made explicitly in the debates over the Employment Relations Bill in 2003/4, which have also been lost: i. exclusion of small workplaces Submissions made in the consultation side from the union movement, legal practitioners and academics called for a change to the exclusion of small workplaces, that is, the requirement that there be more than twenty workers before an application can be made. Such a reform was strongly resisted by the CBI. However, concerns were raised on the TUC side that this threshold was an effective denial of rights to trade union members who wished to have their union bargain on their behalf, and reference was made on their behalf to information that small firms pay below the average, the workers have less security and poorer conditions of employment. In this context, it seems worth noting the first findings of the Workplace Employee Relations Survey 2004, which indicate that union recognition has actually declined in small workplaces (only 18% of workplaces with 10-24 employees recognised unions in 2004, compared with 28% six years ago). Arguably, the existing threshold for application for statutory recognition has exacerbated existing trends, for if, as the Government tells us, employers have voluntarily recognised unions to avoid applications under the statutory scheme, they are not likely to do so in respect of smaller workplaces. Nevertheless, while Government retains the power to amend or withdraw the small firms exception by order, it is still not inclined to take any action at this point. The reason given in Parliamentary debates was that, while 'recognition in some small firms can work very well', it would be inappropriate to impose recognition as it was likely that 'in small organisations managers and workers will have much more direct contact'. Moreover, it was pointed out that individual workers could still receive union services in the workplace, such as being accompanied by a trade union official at grievance and disciplinary hearings. These responses highlight the emphasis of the Government on voluntary relations within the workplace and strongly suggest that Government conceives of unions as playing a facilitative role outside more confrontational collective bargaining. ii. subject matter of collective bargaining: pensions A second challenge concerned the subject matter of any collective bargaining, which occurs via the statutory process and whether it should cover pensions. In UNIFI v Bank of Nigeria, the CAC established that negotiations on pay following an award of statutory recognition could be expected to include negotiations on the company pension scheme, and this finding was upheld on judicial review. Section 20 of the Employment Relations Act 2004 reverses this decision. There remains the power of the Secretary of State to add pensions to the core topics of bargaining, but there are certainly no immediate plans to exercise this power. When challenged, on the grounds that pensions were a matter of increasing significance to workers, the Government spokesmen justified the amendment with reference to voluntary bargaining. Lord Davies observed that recent research commissioned by the DTI suggested 'that pensions are less likely than the core topics to be specifically included, and more likely to be specifically excluded, as a topic for negotiation'. The Government therefore only intended to exercise their statutory power to make pensions a core topic for collective bargaining under the statutory recognition procedure 'when there is clear evidence that pensions are typically included as an item for negotiation in voluntary agreements'. - relevance of the issue to workers conceded by Government but section 20 of the Employment Relations Act 2004 reverses the finding of the CAC in UNIFI v Bank of Nigeria CAC decision TUR1/16/2000 upheld in [2001] IRLR 712. - note the power to take regulatory action under Schedule A1 TULRCA 1992, para. 171A(1), but indications are that the Government will not do so until 'there is clear evidence that pensions are typically included as an item for negotiation in voluntary agreements' (see Lord Triesman, HL Hansard vol. 663, 8.7.4, col. 928) iii. abolition of the 40% threshold See again, Lord Sainsbury, HL Hansard 29.4.4 vol. 660, at col. 903: 'The most crucial part of the realpolitik is that the 40 per cent threshold was part of the balanced package that was negotiated with unions and employers in 1999. ... We would be inviting others to unpick those parts of the recognition procedure which they did not like if we were to amend the threshold arrangements now. I cannot believe that that would do anything other than to disturb all the elements of the balances that have been struck.' Conclusions