New rights at work? HR Management

This final part of the chapter examines the emergence of new rights at work codified within the 1999 Employment Relations Act and briefly discusses the probable emergence of further new rights, several of which are currently at the consultation stage.

  • The Employment Relations Act 1999 (ERA)

The ERA established many new rights, both collective and individual, that represent a significant improvement in workplace rights, bringing many into line with those found in other European Union states. The ERA complements other measures that aim to improve fairness at work, such as the Working Time Directive and the national minimum wage. The legislation aims to achieve decent minimum standards at work that will underpin a flexible labour market and facilitate good industrial relations in the workplace, via trade unions and collective bargaining where desired by employees.

The provisions of the ERA divide into four categories: new and improved individual rights for all employees, new collective rights for all employees, maternity and paternity rights, and rights to representation in the workplace. These areas are briefly reviewed below and where necessary are already incorporated into relevant parts of this chapter, in particular parts two and four.

  • New rights for all workers

Improved protection against unfair dismissal

This protection is now available after one year’s service rather than two years. Estimates suggest that up to 270 000 workers with between one and two years’ employment service are dismissed each year. Some of these employees are ‘fairly’ unfairly dismissed, hence many will directly benefit from this new right. Moreover, the ERA increased top-level payments in cases of unfair dismissal from £12 000 to £50 000, a figure that has recently been increased further to £53 000.

In addition to these improvements, the ERA makes it automatically unfair to dismiss an employee taking part in lawfully organised industrial action for eight weeks. After two months, dismissal will be fair only if the employer can establish that they have taken all reasonable procedural steps to try to resolve the dispute.

Blacklisting

Blacklisting of individual employees for trade union membership or activity is prohibited. This provision relates to blacklists compiled by an employer or by any organization such as the Economic League or the Freedom Association.

Unpaid parental leave

The ERA established the right of employees with one year’s employment service to parental leave (if named as a parent on a birth certificate) for any child born after December 1999 up to the age of 5 years or an adopted child below 18 born after the same date. A parent is entitled to 13 weeks for each eligible child, and this extends to multiple births. The employee remains ‘employed’ during the leave and on return the employee is entitled to their old job or – if this is unreasonable or impossible – a better job or one of the same standard in terms and conditions. Some employees had paid or unpaid parental leave clauses in their contracts of employment before the provisions of the ERA became effective.

These arrangements, many of them arrived at through the process of collective bargaining, remain operative. On return from leave an employee must not have any seniority or pension rights denied as a result of taking leave. If a job is made redundant while an employee is on leave, they must be treated as if they are working normally. In January 2000 the TUC, after taking legal advice, declared an intention to undertake a legal challenge to the December 1999 cut-off date.

The TUC was advised that the directive should be retrospective in covering all children under the age of 5 at the date of its implementation, and after the threat and instigation of legal action the government amended the UK’s regulations and subsequently introduced paid paternity leave for fathers.

Personal contracts

The ERA makes it unlawful for an employer to dismiss, omit or otherwise act detrimentally towards an employee who refuses to sign a personal contract that excludes the employee from collectively negotiated terms and conditions of employment. This right was recently further strengthened by a ruling in the European court that established that such measures breached the human rights of individual employees.

This case concerned a Daily Mail journalist and dates from 1989. The journalist was denied a pay increase after he refused to give up the right to have terms and conditions of employment determined through the process of collective bargaining. The Court of Appeal found in favour of the journalist but his employer appealed to Law Lords who held that collective bargaining over terms and conditions of employment fails to represent a defining characteristic of trade union membership.

Thus, in this case the use of financial incentives to end collective bargaining and personal contracts that may result in less or more favourable treatment for individual employees does not represent a breach of human rights. However, the European Court of Human Rights held that a state is responsible for ensuring that union members are not restrained from using a union to represent them.

As a result of this decision it is now clear that individuals and trade unions can enforce the right to collective representation. Equally, laws that permit British employers to discriminate against, i.e. treat less favourably, workers who seek to retain collective bargaining and collective representation is a breach of human rights.

Prohibition of waiver clauses for unfair dismissal rights in fixed-term contracts

Under the provisions of the ERA it is no longer possible for employers to ask or compel employees on fixed-term contracts to waive the right to complain of unfair dismissal if the contract is not renewed. Waiver clauses in operation before the provisions of the ERA became effective can continue. Equally, the provisions within the ERA make no mention of redundancy rights waivers in fixed-term contracts: hence these waivers remain lawful.

Family emergencies

The ERA provides the right for employees to have reasonable time off work to deal with family emergencies such as accidents or illness to family members, bereavements and severe damage to property. These new rights aim to provide workers with a more effective voice mechanism in the workplace where it was previously restricted or where they had none. Where employers are obstructive over access to new or extended individual employment rights the law will work in favour of employees in imposing trade union recognition where employees desire this.

Maternity and parental leave

on day one rights and length of service rights established that all employees are entitled to basic maternity leave, whereas those with at least one year’s length of service are entitled to extended maternity leave. The ERA increased the period of paid basic maternity leave from 14 to 18 weeks subsequently increased further to 26 weeks and reduced the qualification period for extended maternity leave from two years to one year.

The ERA also introduced the provision for parental leave that is discussed above under new individual employment rights.

The right to representation

The ERA establishes that whether a trade union is recognised or not, individual union members and non-union members alike have the right to be accompanied by a trade union official in disciplinary and grievance hearings. If the employer obstructs or denies this, there is a compensatory penalty of up to two weeks’ pay. A lasting effect of the ERA centres on the enforcement of employee rights in the workplace.

Trade union recognition and the emergence of collective bargaining in the workplace is one mechanism to monitor the introduction of new employment rights. By negotiating with an employer and seeking partnership in the implementation of new rights, trade unions can ensure that an employer meets their legal obligations. In addition, collective representation may create a workplace ‘voice mechanism’ that can prevent the emergence of issues that might otherwise lead to conflict, dispute and eventually application to an employment tribunal.

In addition to the contractual and statutory rights examined and the collective and individual employment rights associated with the ERA, the following measures either offer new employment rights or will establish them in the near future.

  • Collective employment rights: trade union recognition

ERA establishes that a claim for trade union recognition can be made with 10 per cent membership and majority support. To demonstrate support for trade union recognition a union can call upon the findings of a survey or petition. Where a trade union already has over 50 per cent membership within the proposed bargaining group, recognition will be automatic except on two grounds: first, where an employer appeals to the central arbitration committee for a secret ballot on the grounds that a ballot will be good for workplace industrial relations; second, where despite a high level of union membership a significant number of employees express a desire not be union members or to be represented by the union in collective bargaining, or where the central arbitration committee concludes either situation to be the case.

The evidence concerning the impact of the legislation leads to two conclusions. First, where there is a majority of union members in a non-unionised workplace employers are likely to offer guarded support for a recognition claim. Second, before the ERA became effective some employers anticipated its provisions and negotiated voluntary recognition before the legislation became operative.

Further, where a majority of union members is very high the evidence suggests that employers wish to avoid negative media coverage and so negotiate voluntary recognition agreements. For example, erstwhile anti-union employers such as Dixon’s Electrical Stores and Noon’s Foods, both of which have very high union membership, have recently negotiated voluntary recognition deals with the AEEU and GMB unions respectively. In addition to this, survey evidence covering the period 1994–98 found that cases of trade union de-recognition fell significantly.

In contrast, recognition agreements held constant at an annual level. This evidence demonstrates 44 cases of de-recognition involving 5000 workers and 157 cases of recognition involving 45 000 workers for the years 1997 and 1998 (Gall and McKay, 1999). Further survey evidence for 1999 found 74 recognition agreements covering 21 000 workers. Of more significance, almost 50 per cent of the trade unions in the survey said that recognition deals resulted from an employer approach (TUC, 2000). Equally, in the year to March 2001 trade union membership rose by 46 000 to 7.9 million, the second annual rise in succession after a sustained fall in union membership since the early 1980s (Labour Market Trends, 2001).

The data in this report indicate that the period of large-scale decline in union member-ship has ended and that membership has begun to stabilise since 1997. This suggests that employers are likely to view the issue of trade union recognition more favourably than they did during the 1980s and 1990s when more assertive programmes of trade union de-recognition in the workplace were supported by government policy (see Clark, 1996 and Claydon, 1996). For example, HSBC, formerly Midland Bank, has recently restored union representation for 12 500 junior and middle managers four years after withdrawing recognition for this group of workers.

A recent TUC report, Focus on Recognition, found that there were 300 recognition deals in the year up to October 2002, the vast majority of which were concluded on a voluntary basis covering firms such as American Airlines, Boots, Meridian TV, the Church of Scotland, Kwik-Fit, Green Peace and Air New Zealand (TUC, 2000). The overwhelming majority of agreements covered pay, hours and holidays and 91 per cent covered representation at grievance and discipline hearings, 62 per cent covered training, over 50 per cent covered equal rights and information and consultation in the workplace.

Lastly, 36 per cent covered pension arrangements. Many of the recognition deals reviewed in the report were concluded in smaller employers, the average size being 260 employees; notwithstanding this, the current Review of the Employment Relations Act excludes any alteration to the rules and procedures on recognition, in particular the exclusion of workplaces employing fewer than 20 workers from the provision of the Act.

In situations where workplace ballots are necessary, a trade union is able to address the workforce directly as well as mail information to employees. When recognition is won, the trade union acquires a legal right to negotiate terms and conditions to include hours, pay, and work allocation and discipline. Equally significant to these collective rights, recognition imposes a duty on the employer to inform and consult about training.

In cases where an employer proves to be obstructive in establishing a bargaining procedure, the ERA allows for one to be imposed upon them. In cases where a trade union is unable to prove 50 per cent membership, the statutory procedure for a recognition award will be triggered where there is majority support in a ballot with at least 40 per cent of those eligible to vote taking part. Recently, the Central Arbitration Committee compelled Saudi Arabian Airways at Heathrow airport to introduce collective bargaining after the employer ignored a successful ballot in favour of recognition.

Staff employed by the airline voted nine to one in favour of recognition by the MSF technicians’ union. Similarly, the Central Arbitration Committee intervened in a dispute between Honda and the AEEU after the firm refused to hold a recognition ballot. As a result of the subsequent ballot the AEEU won recognition for full collective bargaining at Honda’s Swindon plant where 1600 of the 4000 workforce were already union members.

  • EU Information and Consultation Directive

The Information and Consultation Directive will compel employers to establish a democratic and collective mechanism in order to consult with a workforce on substantial changes to the terms and conditions of employment such as changes in work organisation, redundancy and the sale of subsidiaries. British workplaces with more than 150 employees will have to introduce this mechanism by 2004; smaller workplaces may get up to a further five years to meet the conditions laid down in the directive.

Employer groups have voiced concern about the effects of this requirement on the competitiveness of British firms, suggesting that the mechanism will add further ‘red tape’ but no positive business outcomes. However, this is a familiar argument that was voiced previously against the provisions of the national minimum wage, the Working Time Directive and the ERA. None of the projected claims such as growth in unemployment and reduced competitiveness occurred and are unlikely to occur in this case.

The persistence of employer opposition to new employment legislation illustrates that a deeply embedded preference for voluntary and unregulated employer ‘best practice’ remains in the UK. Equally though, the partial failure of voluntary best practice is amply illustrated by the partial enforcement of employment rights and the persistence of discrimination in employment highlighted in earlier parts of this chapter. The information and consultation directive may go some way to improve employee consultation over proposed (as opposed to the current situation of actual) redundancies, which is a major concern of British trade unions.

In January 2003 Alan Johnson, the then employment relations minister, argued that information and consultation committees, when introduced in British firms, would not constitute co-determination or joint decision-making on the continental model and emphasised the consultative nature of the committees (Financial Times, 17 January 2003).

  • European Union Agency Workers Directive

The Agency Workers Directive is more controversial and seeks to establish equality between employment rights for workers employed directly by an employment agency as ‘temps’ and those directly employed in the workplace to which they are assigned by the agency. The directive is likely to have a dramatic impact because the majority of temps employed across the EU work in the UK – over one million workers.

The areas covered by the proposed directive include pay, pensions, holiday entitlement and other benefits such as protection against unfair dismissal. The government estimates that the provisions contained within the directive will lead to a rise of approximately £1000 a year in pay levels for temps. Currently, the British government, after lobbying by employer groups, is seeking a six-week exemption to the equal pay rule, provided that an employer demonstrates that ‘an adequate level of pay is provided from day one’. In September 2002 the draft directive was complete and ready to be considered by the EU social affairs committee (see Financial Times, 3 September 2002).

  • ‘Two-tier working’ in the provision of public services

‘Two-tier’ working refers to the situation where a local government service or aspects of health care previously provided by a local authority or the National Health Service is fully or partially contracted out to a private sector provider. The term describes the situation where public sector workers or those transferred to the private sector have terms and conditions of employment that are different from – better than – those of new employees engaged by the private sector provider but working in the provision of the service.

Trade unions such as UNISON and the GMB argue that all workers should have the same terms and conditions of employment guaranteed by statutory guidance written into contracts between local authorities and private sector contractors. In July 2002 the government promised legislation to provide for comparability of terms and conditions of employment. However, in January 2003 the row over the two-tier workforce was reignited because of disagreement over the proposed wording of the government code of practice, which cites a form of wording preferred by the CBI that calls for the terms and conditions of new recruits to be ‘broadly comparable’ to those of existing employees.

A specific area of disagreement relates to the proposed exclusion of pensions from the broadly comparable formula. Some trade unions have expressed guarded support for this, yet experience with previous measures such as paternity leave, the Working Time Directive and the Equal Pay Act suggest that such terms may be broadly reasonable in application and coverage but subject to different interpretation by employers and employees. Differences of interpretation on this issue may result in future legal challenges in particular situations. The situation is Scotland is somewhat different. The Scottish Finance Minister recently signed a protocol agreement with trade unions that represent workers in the public sector.

The framework contract guarantees that all workers recruited by private sector contractors under public/private partnership deals will receive fair pay, pension, holiday and sick pay entitlements commensurate with those of existing pubic sector workers. The difference between broadly comparable and commensurate could create problems for contractors who operate in both England and Scotland in respect of the EU Equal Treatment Directive. Further, a key difficulty for trade unions who support the formula and those that do not and the government is that the term ‘broadly comparable’ in its present constitution appears to allow for the presence of a two-tier workforce and not its elimination as pledged by the Prime Minister in July 2002.

The government recognised this as problematic and, following a meeting with prominent trade unions in February 2002, announced that the government will insist that private sector firms taking public services contracts must provide employment contracts that are ‘no less favourable’ for future employees than contracts enjoyed by public sector workers. This commitment was given an unexpected fillip when the Cleaning and Support Services Association announced its support for the provision, arguing that it would prevent ‘cowboy’ operators cutting their members out of the market by reducing costs irresponsibly (Financial Times, 17 March 2003).

  • Flexible employment for parents

Since April 2003 all parents of children under six have been entitled to ask their employer to ‘seriously consider’ requests for flexible work arrangements. Up to four million parents will be eligible to submit such requests. Parents must make written requests and meet with the relevant manager within four weeks to discuss the request and a decision must be made in a further two weeks.

Employers are expected to meet the majority of requests and Ministers have included in the guidance an 82 per cent success rate target. If an employer denies a request they must provide the employee with a written explanation of the business reasons for the decision and set out proposals for an internal appeal procedure. In situations where a case remains unresolved, binding mediation and arbitration will be made available.

It is important to make clear that the right to flexible working is limited to serious consideration of the request and that this is not the same as a right to flexible working arrangements. The seriousness of this limitation is brought into sharp focus by the results of a survey conducted by the employment law firm Peninsula. Seventy per cent of small firms in the survey asserted that claims for flexible working hours will damage their competitiveness and more than 80 per cent of the companies surveyed said they would attempt to dodge the rules (Peninsula, 2003).

  • The Human Rights Act, 1998

The Human Rights Act, while wide-ranging in its provisions, fails to create any specific employment rights. To enforce their human rights employees must cite an existing employment right, the infringement of which impacts on their human rights, for example unfair dismissal due to sexual orientation. The latter is not currently covered by the UK’s sex discrimination legislation; but a dismissal on these grounds may be unfair if it infringes rights to privacy.

However, the basis of the human rights legislation is a balancing of (employer and employee) interests and, where those of an employer and employer conflict, an employment tribunal will have to make a judgment on the balance of these interests. The probable emergence of many of the proposed employment rights discussed above reinforces the need for good employer practice to be both operational and strategic. The evidence suggests that in relation to the national minimum wage, the ERA and the Working Time Directive, many employers – large and small – were ‘off the pace’.

Employers with a personnel function staffed by CIPD-qualified practitioners are more likely to be on the pace, as are those who have a trade union presence that works in partnership or structured negotiation with an employer.


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