Industrial action — a beginner’s briefing for employers

Industrial action has hit the headlines in recent weeks, due to widespread, high-profile disruption caused by national rail strikes.

The threat of strike action has also reared its head in unexpected places, with GPs voting for industrial action over proposed contract changes that would require practices to offer face to face appointments at weekends and in the evenings.

As the ‘cost of living crisis’ puts pressure on employee purse-strings, and employers in all sectors struggle to ‘do more with less’ it is possible that industrial disputes will start to arise more frequently, in areas traditionally seldom affected by collective action. Consequences can range from moderate inconvenience to severe disruption and serious financial impact.

Make sure your organisation is prepared with our ‘beginners guide’ to the key issues.

Types of industrial action

There are many different forms of industrial action, but the defining characteristic is collective action, taken by some or all of the workforce to bring pressure on employers, in the course of a dispute between employers and employees. Typically, this will relate to the employees’ terms and conditions of employment but might relate to wider collective issues.

Common types of industrial action include:

• Strikes
• Overtime bans
• ‘Go slows’, where employees deliberately reduce their productivity
• ‘Working to rule’, when employees do no more than the absolute minimum required in their contract of employment

The legal framework

Any strike necessarily involves a breach of contract by the employees and has the potential to prevent the employer from fulfilling its obligations to its customers and suppliers. A complex web of law has developed over the last 130 years protecting employees and unions from the potential legal consequences of their action and to protect the employer from being subject to industrial action without prescribed procedures being followed.

When does a breach of contract occur?

This is obvious when the industrial action involves a strike or overtime ban, as employees are clearly refusing to perform the duties required by the contract of employment. But does a ‘work to rule’ involve a breach of contract?

On the face of it a ‘work to rule’ involves a rigid adherence to contractual terms. However, even this has been considered to be a breach of contract. In The Secretary of State v Aslef (1972) the railway union applied a ‘work to rule’ in relation to rest day working. Without co-operation from employees on the rest day working arrangements the railway was effectively paralysed. The Court of Appeal ruled that there was an implied term in contracts of employment that employees would not operate a contract’s terms with the intention and result of frustrating their employer’s business.

In addition to the breach of contract by the employee, any union calling for industrial action will commit a tort (a civil claim) of ‘inducing a breach of contract’.

A ‘right to strike’?

Despite the provisions of the EU Charter of Fundamental Rights and the European Convention of Human Rights, which guarantee the right to join a trade union and to participate in industrial action, there is no UK law giving an express right to take part in industrial action. However, there is legislation protecting employees and trade unions from the consequences of taking industrial action if this has been entered into in compliance with the appropriate legal framework.

This protection does not mean that the industrial action is no longer a breach of contract, but it prevents an employer from suing the trade union for damages and restricts the employer’s ability to dismiss employees taking part.

Official and unofficial industrial action

An employee is only taking part in official industrial action if:

• He is a member of a trade union, and the union endorses or authorises the industrial action
• He is not a member of a trade union but others who are taking part are members of a union that has authorised or endorsed the industrial action

Strangely, if none of those taking part in the industrial action are members of a union, the action is not regarded as unofficial, putting employees on the same footing (for unfair dismissal purposes) as those taking part in official action. However, importantly, the action is unlikely to be ‘protected’ (see below) as proper procedures are unlikely to have been followed if no trade union is involved.

Where more than one union is involved in the industrial action and the employee who takes part in the action is a member of a union that has not endorsed the action, he will be taking part in unofficial industrial action.

Official and unofficial industrial action

Employees who are dismissed for taking part in unofficial industrial action cannot bring a claim for unfair dismissal.

Employees taking part in official industrial action can claim that they have been unfairly dismissed, provided that the action has been protected by a properly constituted ballot.

Protected industrial action is industrial action that has been lawfully organised by a trade union. It must relate to a valid trade dispute, and the union must have balloted properly and fulfilled its obligations in relation to notifying the employer.

Industrial action will usually relate to a ‘valid trade dispute’ if it involves issues integral to the employment relationship such as changes to terms and conditions, pay, working hours or health and safety. Action may not be protected if it is purely politically motivated, and no specific contractual or work-related dispute with the employer can be objectively identified.

The rules around conducting a ballot, and around notifying an employer of proposed industrial action, are complicated and set out in detailed legislation.

Unfair dismissal claims

Employees taking part in protected industrial action can bring a claim for unfair dismissal if the termination of employment takes place during a protected period of 12 weeks beginning with the first day the employee participated in the industrial action. A dismissal will be automatically unfair if the dismissal:

• Is during the protected period
• Is after the protected period and the employee did not take part in industrial action after the end of the protected period
• Is after the end of the protected period and the employee has continued to take part in industrial action, but the employer has failed to take such procedural steps as would have been reasonable to resolve the dispute

In practice this means that an employee has the right to take part in an industrial dispute for 12 weeks without fear of dismissal and for a longer period if the employer has not taken reasonable steps to resolve the dispute.

Reasonable steps

Reasonable steps for an employer to take to resolve an industrial dispute would usually include:

• Following established dispute resolution procedures
• Offering to continue or reconvene negotiations after industrial action has started
• Seeking conciliation or mediation
• Co-operating fully during conciliation or mediation

Can we choose to dismiss ‘trouble-makers’ only?

Generally, no. Dismissals during official action, whether protected or not, cannot be selective and must involve all employees involved in the dispute. If re-engagement is offered to some, but not all employees after a dismissal, this will likely result in a finding that the dismissal is unfair.

An employer is free to be selective in who he chooses to dismiss during unofficial industrial action and may be tempted to use this as a mechanism for getting rid of ‘ring-leaders’. However, any employer should think carefully before dismissing individual employees in these circumstances because of the potential adverse impact on industrial relations generally.

Must we pay employees taking part on industrial action?

No. Since strikes and other forms of industrial action are usually a breach of contract, the employer will be able to avoid paying all or part of the salary. If the employees are on strike (that is refusing to work at all) the employer need not pay them for the periods in which they are not working. If the contract specifies normal working hours and pay is calculated by the hour, then the deduction will be determined by reference to the hours lost. On the other hand, if the employees are paid a salary, then this is deemed to accrue from day to day, and a formula must be applied to work out the amount referable to the time lost to the strike. An employee cannot bring an unlawful deduction from wages claim if the reason for the deduction is that they have taken part in industrial action. However, a claim may potentially be made if the employer deducts too much.

Can we engage agency workers to provide emergency cover?

For many years, the answer to this question has been ‘no’. Employment agencies have long been prohibited from supplying employers with temporary workers to perform the duties normally performed by a striking worker who is taking part in official industrial action, or the duties normally performed by any other worker who has been assigned to cover for such a worker. The only option open to employers has been to hire temporary workers directly, which is time-consuming and usually impractical.

However, the government has recently announced that this prohibition on the use of agency workers to cover for striking employees, is repealed with effect from 21 July 2022, to enable employers to mitigate the impact of industrial action more easily. At the time of writing, the legislation necessary to make this change has not yet been published in its final form, so it is difficult to consider any nuances. This may be because the changes have been introduced with very little prior notice; this government press release explains that the relevant departments have ‘moved at speed to repeal these burdensome, 1970s-style restrictions’. While the primary aim is to reduce disruption to ‘vital public services’, the change in the law will ‘apply across all sectors’. It is stressed that the employers are required to carefully consider health and safety, and are responsible for making sure that any agency workers engaged have the correct skills and/or qualifications to meet the obligations of the role.

What remedies are available to employers?

There are two main remedies available against unions responsible for unlawful industrial action: injunction and/or damages. Of these an injunction is the more effective as this is a mechanism for preventing the industrial action from taking place. Note that if industrial action has been carried out lawfully in accordance with all the relevant legislation, there are no employer remedies available.

If a breach of contract has already taken place because the employer was unable or too late to obtain an injunction, the employer may obtain damages against a union, subject to a statutory cap, which varies according to union size.

Previously the maximum a court could award against a Union was £250,000 (for the largest unions with 100,000 or more members). However, along with the changes to the law to permit agency cover (see above), the government has raised this ceiling to £1million with effect from 21 July 2022.

It is important to bear in mind though that, in practice, the actual cost to a company of industrial action may exceed maximum figures, and any excess will not be recoverable.

Injunctions

The main weapon for employers is the injunction. This is obtained by applying to the High Court. An interim injunction is a remedy that is sought at the early stage of civil proceedings that will remain in force until the trial. The aim of injunctions is to prevent one party suffering losses pending a trial which might take months or even years to be heard. In employment disputes the injunction often becomes an end in itself, as it prevents the strike action taking place and the case never comes to a full trial.

In response to an injunction the union may be able to remedy a defect in its arrangements for the industrial action or it may start the process again with a fresh ballot, but usually in these circumstances the cause will have lost momentum and the injunction will prevent the strike action from taking place.

However, injunctions must still be approached with caution as they may lead to entrenched animosity between the employer and the employees which can have repercussions at a later stage.