Home      Privacy Policy      Disclaimer

Trade Union Issues in a Recession


Awakening the Giant: Trade Union Issues in a Recession

In prosperous times, employers have less cause to be concerned about trade union activity and industrial action.  With secure jobs, frequent pay rises and other monetary incentives, there is little reason for employees to seek trade union support.  However, in a recession, employees have nothing to loose in joining a trade union. Indeed many may feel they have no option but to look to unions for protection against redundancies, pay cuts, site closures etc.

In this article, Ciara Dooris, Director in Tughans’ Employment Department examines the underlying causes of industrial action, provides advice as to what steps employers should take to minimise the risk of industrial action and looks at legal options for employers, for whom the threat of industrial action is becoming reality.

Causes of Industrial Action

There are a number of factors which may lead to industrial action.  However, the primary cause in the majority of cases will be a breakdown in communication between the employer, employees and the union. 

These are difficult times for businesses and difficult decisions must be taken. Employees are aware of the unfolding economic crisis and understand that changes may need to be made. However, if decisions are simply imposed upon them and are not communicated properly, they may not understand the reasons for the decisions and may feel aggrieved by the decisions and alienated from management. As a result they may feel that they have no option but to seek support from the union. 

Employers can be unnecessarily wary of communicating with employees. There are, of course, mandatory communication processes which must be used in transfers of business and in collective redundancies. Depending on the size of the business, employers may also be obliged to establish information and consultation processes. However, many businesses find that establishing non-mandatory communication processes such as employee forums or staff associations work well as a mechanism for communication.  Alternatively, in smaller organisations more direct communication, such as fortnightly/monthly meetings, may be more appropriate.  No matter what mechanism is chosen, the key is to communicate, as the more informed and involved employees feel in the decision making process, the less likely the situation is to disintegrate into industrial action.

If internal communication processes are not working, an employer should consider asking the Labour Relations Agency for assistance in resolving the matter.

However, sometimes, it will not be possible to reach agreement, particularly where, because of economic conditions, there are few or no viable alternatives to the course being proposed by the employer.  If the matter escalates and the threat of a strike or other industrial action emerges, there are a number of ways in which employers can respond.  These are considered below:

1.   Challenge whether Statutory Immunity Applies

There is no right to strike, per se. Workers who strike or take other forms of industrial action usually breach their contracts of employment.  Furthermore, they may also be interfering with the ability of the employer and of other parties to fulfil commercial contracts.  However, the Trade Union and Labour Relations (Northern Ireland) Order 1995 provides trade unions and individuals with immunity from proceedings if the industrial action is taken in accordance with the rules laid down in legislation. 

Therefore, it is always important for an employer to assess whether statutory immunity applies in a particular case.  In summary, statutory immunity will apply where:

  • There is a trade dispute (a dispute between workers and their own employers which is wholly or mainly about employment related matters such as their pay and conditions) and the action is caused wholly or mainly in contemplation or furtherance of that dispute.
  • A trade union which calls for, or otherwise organises, the action has first held a properly conducted secret ballot.
  • A trade union which calls for, or otherwise organises, the action has provided the required notice of official industrial action to employers likely to be affected following the ballot.
  • The action is not a secondary action.
  • The action is not intended to promote union closed shop practices or to prevent employers using non-union firms as suppliers.
  • The action is not in support of any employee dismissed whilst taking unofficial industrial action.
  • The action does not involve unlawful picketing.

Unless these principles are satisfied, the action will not be immune from proceedings.  Where there has been a breach in these requirements, the employer may bring civil proceedings to prove that an unlawful act has been done or threatened, that he is a party to a contract which will be, or has been, broken or interfered with by the unlawful act and that he has suffered or is likely to suffer loss as a result. In addition, a third party deprived of goods or services because of unlawful industrial action can bring proceedings to stop this happening.

The proceedings will normally be taken against the trade union or individuals organising the industrial action.  However, in the case of unlawful picketing, it may be possible to sue the individual picketers who are inducing interference with the performance of contracts, as well as the organisers of the unlawful picketing. 

The principal remedy which an employer may seek in respect of unlawful industrial action is an injunction.  The injunction will restrain the commencement of, or continuation of, unlawful industrial action on an interim basis, pending the full hearing of the case.  If an injunction is not obeyed, those who breach it may be declared in contempt of Court and may face heavy fines or other penalties as the Court considers appropriate.  It is also possible, subject to limitations, to claim damages for losses suffered when claiming breach or interference with the performance of contracts.

Other Unlawful Acts

It should be noted that trade unions do not benefit from statutory immunity in respect of other civil wrongs or criminal offences, for example, unlawful trespass or intentional damage to property. 

2.   Dismissing Participants

It may be open to an employer to dismiss employees, depending on whether the industrial action in question is official or unofficial.  If the industrial action is unofficial, the employer has immunity from unfair dismissal claims brought by any employee it dismisses who is still participating in the action at the time of dismissal.

However, employees taking part in official industrial action have considerable protection against dismissal.  If participating employees are dismissed within the first 12 weeks of official industrial action, their dismissals will be automatically unfair. This protected period can be extended where the employer has failed to take reasonable procedural steps to resolve the dispute, for example, by not using its dispute procedure with the union or unreasonably refusing conciliation mediation or negotiation.

Once the 12 week period has passed and the employer has taken all reasonable procedural steps to resolve the dispute, the employer will have immunity from unfair dismissal claims, unless it has been selective in dismissing participants or has offered re-engagement within 3 months of the dismissal to some participants who were dismissed but not all.

The immunity from unfair dismissal claims will not apply where the reason for dismissal relates to matters such as flexible working or health and safety. 

The dismissal option is the nuclear option.  Dismissals could create support for the dispute and widen the industrial action to non-striking colleagues, who subsequently take industrial action in protest over the dismissals.  Therefore, it is not an option that should be lightly invoked by employers.

3.   Lock-Outs

An employer might decide that, rather than dismissing the employees, he will lock them out.  However, for a lock-out to be lawful, the participating employees must be in material breach of their employment contracts by taking industrial action.  If an employee is ready and willing to work then the employer has no general right to refuse to pay the employees, even if they are locked out.  If they are not in material breach, employees can claim for lost wages as well as resigning and claiming constructive dismissal.  This could trigger the automatically unfair dismissal provisions outlined above.

4.   Stop in Pay

At common law, employees must be ready and willing to perform all parts of their employment contract in full in order to be paid.  If an employee refuses to perform a particular duty his employer can either suspend him without pay until he agrees to perform his duties in full or can accept the partial performance and pay him for those duties which he performs. In practice, operational considerations will normally determine the choice.  The decision to stop all pay may well bring the dispute to a head.

Conclusion

Employers should be aware that in a recession the risk of union recruitment and industrial action increases. The principal difference between those businesses which will be able to implement difficult decisions without industrial unrest and those that will not, is likely to be in how the decision making process operates, and in how decisions are communicated to employees. The more informed employees feel in the decision making process, the less likely the situation is to disintegrate into industrial action.

If internal communication processes are not working, employers should consider asking the Labour Relations Agency for assistance in resolving the matter. However, if it is not possible to reach agreement, particularly where, because of economic conditions, there are few viable alternatives to the course being proposed by the employer and the matter escalates to threatened or actual industrial action, there are a number of ways in which employers can respond. If this is the case, employers should seek legal advice on their options.

If anyone wishes to contact Ciara Dooris from the employment law team at Tughans Solicitors for specific legal advice on this or similar issues, the number to call is 028 90 553300. Ciara’s email address is ciara.dooris@tughans.com