Report in which the committee requests to be kept informed of development - Report No 309, March 1998

1. 308. The Committee already examined the substance of this case at its meeting in May-June 1996, when it presented an interim report to the Governing Body (see 304th Report, paras. 474-498, approved by the Governing Body at its 266th Session (June 1996)).
2. 309. The Government sent additional observations on this case in a communication dated 4 March and 18 December 1997.
3. 310. The United Kingdom has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), and the Workers' Representatives Convention, 1971 (No. 135).

A. Previous examination of the case

1. 311. The Trades Union Congress (TUC) alleged that British law and practice continued to be incompatible with the obligations arising from the ratification of Convention No. 98, notably in respect of the lack of protection against discrimination at the time of recruitment and against anti-union discrimination in employment short of dismissal. In particular, the TUC referred to the alleged intimidation of trade union members at the Co-Steel plant in Sheerness, England, intended to bring about the derecognition of the TUC-affiliated trade unions, the Iron and Steel Trades Confederation (ISTC) (which was the majority union) and the Amalgamated Engineering and Electrical Union and the absence of any remedy in law.
2. 312. The Government for its part stated that its general employment law was entirely consistent with the requirements of Convention No. 98 and, referring to section 146 of the Trade Union and Labour Relations (Consolidation) Act (TULRA), 1992, recalled that United Kingdom legislation provided wide-ranging and effective protection against discrimination in employment on grounds of union membership, and indicated that the amendment made by section 13 of the Trade Union Reform and Employment Rights Act (TURER), 1993, was intended to ensure that the law could not be used against employers who take reasonable action to further a change in their negotiating arrangements.
3. 313. At its June 1996 Session, in the light of the Committee's interim conclusions, the Governing Body approved the following recommendations:
   • (a) The Committee calls again on the Government to take steps to amend section 13 of the Trade Union Reform and Employment Rights Act so that it ensures workers' organizations adequate protection from acts of interference on the part of the employer and so that it does not result in fact in the discouragement of collective bargaining. The Government is requested to keep the Committee informed in this regard.
   • (b) As concerns the specific allegations of anti-union tactics taken by the management of Co-Steel, the Committee requests the Government to take the necessary measures immediately to begin an inquiry into these allegations and to furnish the Committee with the findings so that it may have available the information necessary for its examination of the case. Furthermore, if the findings of the inquiry demonstrate that the company has carried out acts of anti-union discrimination, the Committee requests the Government to take suitable measures to remedy the effects of any such acts.

B. The Government's additional observations

• Reply of 4 March 1997 (former Government)
  314. 314 In reply to the Committee's interim recommendations, the Government underlined its belief that neither Convention No. 87 nor Convention No. 98 required a State to take powers to investigate the internal industrial relations arrangements of companies, or to call them to account for breaches of its laws ensuring compliance with those Conventions. The Government attached to its reply, however, a letter which Co-Steel had voluntarily supplied to the Confederation of British Industry (CBI) on the points raised by the TUC. The Government reaffirms that United Kingdom law provides trade union members with effective protection against discrimination. People who believe they have been discriminated against on grounds of their trade union membership or activities can seek redress by complaining to an industrial tribunal. The Government states that it is not aware of any such complaints being made about Co-Steel.
  315. 315 The Government points out that States cannot force employers not to breach the civil law rights which secure compliance with the Conventions or force employees to seek legal redress when those rights are broken. The Government firmly believes that it complies with the Conventions by providing a framework of legal rights protecting the right of employees not to be discriminated against on trade union grounds, and making adequate remedies available to employees when those rights are broken. If the allegation of discrimination on the grounds of union membership made in this complaint are true, although the Government points out that Co-Steel rejects them, the employees concerned would have had good grounds for complaining to an industrial tribunal. The Government publicizes the civil law rights of employees by issuing guidance leaflets which are widely available from employment service offices throughout the country. The Government therefore strongly submits that it could in no sense be held responsible for the fact that the employees have chosen not to make use of the legal remedies available to them.
  316. 316 As concerns the protection of workers against prejudicial acts on grounds of union membership, the Government indicates that under section 146 of the TULRA a threat to dismiss employees unless they give up their union membership is action short of dismissal taken for the purpose of preventing or deterring them from being trade union members. The amendments made to section 148 by section 13 of the 1993 Act cannot apply because it is clear that the only possible purpose of requiring employees to enter into contracts prohibiting membership, and threatening dismissal if they do not, is to deter union membership. Nor do there appear to be any allegations of inducements being offered to their employees as was the case in the Wilson and Palmer cases.
  317. 317 Under section 149 of the TULRA the compensation which may be awarded to a person who succeeds on a complaint of breach of section 146 is not limited to the financial loss sustained and there is no upper limit on the amount of compensation that may be awarded. While indicating that no civil remedy can guarantee that the right to which the remedy relates will never be broken, the Government considers this remedy to be adequate to dissuade employers not to infringe the rights given to employees by section 146.
  318. 318 The combined effect of sections 146 and 152 of the TULRA is that any term in a contract prohibiting union membership is, in practice, unenforceable and ineffective. Section 152 makes it automatically unfair to dismiss an employee for being or becoming a member of a trade union. This means that if an employee of Co-Steel subject to a term prohibiting union membership joins or rejoins the ISTC or any other union, and is dismissed or suffers action short of dismissal as a result, he or she will be able to make a complaint to an industrial tribunal which would almost certainly succeed. The compensation awarded on such a complaint is likely to be substantial. Sections 146 and 152 also protect against dismissal and action short of dismissal for taking part in trade union activities at an "appropriate time". In the case of an unrecognized union such as the ISTC, the term "appropriate time" covers, as a minimum, all time outside working hours and off the employer's premises.
  319. 319 The Government concludes that if Co-Steel employees have been threatened with dismissal or other penalties for taking part in union meetings in their own time or attending union rallies such as mentioned in the allegations, then the employees threatened or dismissed would be able to make a complaint to a tribunal which would almost certainly succeed.
  320. 320 As regards section 13 of the TURER, the Government states that it now considers the provisions of that section to be irrelevant to the allegations made in this case. The legal right to join a trade union does not imply an additional right to have that union bargain with employers over such matters as terms and conditions. The law on action short of dismissal has always been intended to deal with individual rights of employees, not collective bargaining issues. The Government introduced section 13 to ensure that a provision which protects individuals against discrimination on grounds of trade union membership does not have the unintended side effect of preventing employers from changing their arrangements for collective representation (emphasis is the Government's). Action taken by an employer to change negotiating arrangements with a trade union does not amount per se to action taken to deter workers from becoming, or prejudice them from being, union members.
  321. 321 The Government asserts that it has evolved sophisticated voluntarist methods of pay determination which continue to include a significant amount of collective bargaining. However, since industrial relations in the United Kingdom are based on voluntarism, backed up by statutory employment rights for individuals, it would be inappropriate for the Government to interfere by forcing employers to retain systems of collective bargaining which they feel are no longer suited to their needs. Employers are therefore free to decide for themselves, in the light of their circumstances and the needs of their businesses, whether to recognize, or continue to recognize a trade union, for collective bargaining purposes. Derecognition of trade unions does occur, though not particularly frequently. Co-Steel's decision to derecognize cannot be regarded as fundamentally inconsistent with industrial relations practices and traditions in the United Kingdom, nor is it contrary to United Kingdom law.
  322. 322 As regards the Committee's assertion that section 13 "is likely to result in a situation wherein collective bargaining is easily and effectively discouraged instead of being encouraged", the Government once again emphasizes that section 13 has a neutral effect (emphasis is the Government's), permitting employers to encourage (or discourage) the spread of collective bargaining. Collective bargaining continues to be an option available to employers and to organizations of employers and of workers, who freely wish to establish terms and conditions of employment by means of agreements reached through such negotiation. Nearly 50 per cent of the workforce have their pay and conditions determined, at least in part, by collective bargaining.
  323. 323 Finally, the Government adds that United Kingdom law provides mechanisms funded by the Government under which collective bargaining machinery can be encouraged and established where the employer and union agree in principle that this is the right way to settle workers' terms and conditions. For example, the Government finances ACAS, the conciliation and arbitration service. The existence of ACAS underpins collective bargaining since the parties know that an impartial and independent service is always available to help should disputes arise. In addition, ACAS can help employers and employees revise or establish collective bargaining machinery where both parties voluntarily wish to pursue this approach.
  324. 324 In conclusion, the Government firmly reiterates its view that it has not breached any of its obligations under Convention No. 87 or Convention No. 98 and again submits that this complaint should be rejected by the Committee.
  325. 325 The letter from Co-Steel to the Confederation of British Industry, explained that in 1992 the management had introduced a new approach to industrial relations which involved establishing an all-staff status company which included derecognizing the trade unions for bargaining purposes. This derecognition took place in accordance with United Kingdom labour law. New employment contracts did not preclude trade union membership to any staff who wished to continue. The company policy, therefore, is that employees are free to join or not to join a trade union.
  326. 326 According to Co-Steel, derecognition took place to facilitate the growing demands of management and employees to participate in a different form of employment relationship. Co-Steel indicated that it had expressed no hostility to trade unions at that time, or currently. The company has never objected to trade union officials handing out "fliers" and newspapers to staff entering or leaving work. Nor has it objected to staff reading union papers at work. Further, the company has never been challenged at an industrial tribunal concerning trade union membership rights.
  327. 327 Co-Steel adds that in the years when the ISTC was recognized there were a number of difficulties. The company maintains that the union lost ground and influence in 1974 when three craft unions broke a single union plant agreement which the ISTC had achieved in 1972. In 1977, and despite using the Advisory Conciliation and Arbitration Service (ACAS), the ISTC failed in ballots to secure recognition for supervisory and administrative staff.
  328. 328 Concerning the specific allegations made by the complainant concerning ISTC, Co-Steel has provided the following information:
  1. (1) There is no requirement in the individual contracts for staff to belong or not to belong to a trade union and the disciplinary and grievance procedures include the opportunity for staff involved to include a staff colleague throughout.
  2. (2) Access to trade union representatives: United Kingdom law does not require companies to permit trade union representatives access to their works. However, employees who may be trade union members have the opportunity of meeting trade union officials off-site.
  3. (3) ISTC ballot in 1992: There is no requirement in United Kingdom law for the company to take note of the ballot and employees in the company ignored the ballot as they voluntarily accepted new contracts of employment.
  4. (4) Failure to accept new contracts: Only one employee declined to accept the new contract for personal reasons unconnected with trade union issues.
  5. (5) Suppliers and trade unionism: There are no contractual matters which specify that a supplier has to either recognize trade unions or operate without trade unions.
  6. (6) Communication with ISTC: The company is not required under United Kingdom law to communicate with the ISTC.
  7. (7) TUC rally: The company did not tell anyone that their attendance would compromise their employment. The company does not support disturbances on public highways and in the community and posted a notice which "suggested that everyone should avoid getting involved". Co-Steel believes that no one attended because they did not consider it appropriate. However, if staff had attended they would certainly not have been disciplined.
  329. 329 As concerns the general environment, Co-Steel, in a search for a new understanding in the field of industrial relations, introduced, by agreement with the in-house Joint Union Representative Committee (but resented and opposed by the ISTC officials external to the company), a completely new approach in 1988. According to Co-Steel, the employees took to the new perspective on industrial relations so well that the trade unions became increasingly marginalized and unnecessary. Increasingly staff expressed no interest in trade unionism, and many staff had left trade unions and very few new staff joined. By 1991 union density across all unions and the whole company had fallen to its lowest recorded level of 61 per cent. As a result the company derecognized all four trade unions in April 1992. Each person was offered new personal contracts and 99.9 per cent of the hourly paid employees accepted these in just 20 days.
  330. 330 Co-Steel concludes that a new direction has been set in the company and opportunities are in place, all designed to produce a high-performing company capable of meeting the ever-increasing competitive environment of the new millennium (all done within the current legal framework on industrial relations in the United Kingdom).
  331. 331 Co-Steel indicates its willingness to receive members of the ILO for a visit if needed.
• Reply of 18 December 1997 (new Government)
  332. 332 In its communication dated 18 December 1997, the Government has indicated that the Minister of State at the Department of Trade and Industry has met with the General Secretary of the Iron and Steel Trades Confederation to listen to the union's views about this case. At this meeting, the ISTC told the Minister that their members continue to encounter serious problems in exercising their trade union rights. The Minister expressed the Government's commitment to ensure that individuals are free to join, or not to join, a trade union and that a union should be recognized for collective bargaining purposes, where a majority of the relevant workforce voted in favour of recognition in a ballot.
  333. 333 It was further indicated that the Department of Trade and Industry was preparing a White Paper on fairness at work for publication in the first part of 1998. The White Paper will contain proposals to establish decent standards at work, while maintaining an adaptable labour market and improving competitiveness and is to focus on union recognition. In the drafting of the White Paper, inputs were received from the social partners and the ISTC also agreed to provide information on their members' experiences at Co-Steel. Once the paper is published, the Government has indicated that the ISTC will have another opportunity to provide its views before legislation is drafted.
  334. 334 Finally, the Government also transmitted additional information provided by Co-Steel which reiterates the information already noted above.

C. The Committee's conclusions

1. 335. Firstly, while noting with interest the steps taken by the Minister of State at the Department of Trade and Industry to meet with the leaders of the Iron and Steel Trades Confederation (ISTC) and listen to their views concerning the situation at Co-Steel Sheerness, the Committee notes with regret that no steps have been taken to undertake a full inquiry into the specific allegations of anti-union tactics as was requested in the recommendations in this case when it was first examined (see 304th Report, paragraph. 498(b)). The absence of a full inquiry into this case is particularly problematic in light of the fact that the positions presented by the complainant and by Co-Steel are quite often contradictory. The Committee must therefore recall that, where cases of alleged anti-union discrimination are involved, the competent authorities dealing with labour issues should begin an inquiry immediately and take suitable measures to remedy any effects of anti-union discrimination brought to their attention. (See Digest of decisions and principles of the Freedom of Association Committee, 4th edition, 1996, para. 754.)
2. 336. Where Co-Steel has admitted to the facts as presented by the TUC, however, the Committee considers that it may proceed with an examination of the substance of the complaint on these points. The Committee recalls the complainant's allegations that, in response to efforts on the part of the management to put forward new contracts in 1992 which, according to the complainant, included requirements to give up trade union membership, the ISTC had called branch meetings to determine whether Co-Steel employees wanted their pay and conditions to continue to be determined by collective bargaining and whether they wanted the ISTC to represent them in this respect. The complainant indicated that, of the 442 people eligible to vote, 348 (78.74 per cent) opted for collective bargaining and to be represented by the ISTC. Co-Steel indicates in its letter to the CBI that there is no requirement in United Kingdom law for the company to take note of the ballot and that, following a fall in 1991 of union density across all unions and the entire company to 61 per cent, the company had simply decided to derecognize the ISTC and the other three unions. Co-Steel has not however refuted the results of the 1992 ballot as indicated in the allegations.
3. 337. While bearing in mind that collective bargaining, if it is to be effective, must assume a voluntary character and not entail recourse to measures of compulsion which would alter the voluntary nature of such bargaining, the Committee has considered that the competent authorities should, in all cases, have the power to proceed to an objective verification of any claim by a union that it represents the majority of workers in an undertaking, provided that such a claim appears to be plausible and that if the union concerned is found to be the majority union, the authorities should take appropriate conciliatory measures to obtain the employer's recognition of that union for collective bargaining purposes (see Digest, op. cit., paras. 845 and 824). While noting from the Government's observations that collective bargaining is still an option for the employer, the Committee concludes that, given the facts available in this particular case, Co-Steel has by-passed the representative organization and entered into direct individual negotiation with its employees, in a manner contrary to the principle that collective negotiation between employers and organizations of workers should be encouraged and promoted. The Committee notes with interest the Government's indication that a White Paper on fairness at work, with a focus on union recognition, is being prepared. The Committee hopes that any resulting legislation will have as an effect the encouragement of employer recognition of representative workers' organizations and requests the Government to keep it informed of the progress made in this regard.
4. 338. As concerns the allegation that access to the Co-Steel workplace was denied to the ISTC, the Committee notes from the information made available to it by the previous Government that United Kingdom law does not require companies to permit such access to trade union representatives but that members may meet outside the workplace. In this respect, the Committee must once again recall, as it did in its initial examination of this case, that workers' representatives should enjoy such facilities as may be necessary for the proper exercise of their functions, including access to workplaces (see Digest, op. cit., para. 957). Furthermore, the Committee has held that governments should guarantee access of trade union representatives to workplaces, with due respect for the rights of property and management, so that trade unions can communicate with workers, in order to apprise them of the potential advantages of unionization (see Digest, op. cit., para. 954). The Committee therefore requests the Government to take measures to ensure that the ISTC is afforded reasonable access to Co-Steel both for contact with its members and potential members. It requests the Government to keep it informed in this respect.
5. 339. The Committee also notes that Co-Steel is not required by law to communicate with the ISTC. Particularly in light of the apparent representative nature of the ISTC demonstrated in the 1992 ballot, the Committee wishes once again to recall that the Workers' Representatives Recommendation, 1971 ( No. 143) provides that workers' representatives should be granted without undue delay access to management of the undertaking and to management representatives empowered to take decisions, as may be necessary for the proper exercise of their functions.
6. 340. As concerns the TUC rally held in Sheerness in support of the right to representation within the workplace, the Committee notes from the information provided by the Government that Co-Steel had indicated that it did not tell anyone that their attendance would compromise their employment but that it did post a notice "suggesting that everyone should avoid getting involved". In this respect, the Committee must recall that the right to organize public meetings constitutes an important aspect of trade union rights (see Digest, op. cit., para. 464) and such activity would seem all the more legitimate given that, in the present case, its specific purpose was to address the clearly legitimate trade union issue of the right to representation. The Committee considers that the posting of a notice by the management suggesting that the employees of Co-Steel not get involved in such a rally could be understood as a threat to the workers in question not to exercise their trade union rights in this respect and therefore constitutes undue interference with such rights. It requests the Government to make all efforts to ensure that such interference does not reoccur.
7. 341. Finally, as concerns the previous Government's argument with respect to the relevance of section 13 of the TURER, the Committee can only state that, in the absence of a more detailed reply concerning the facts of this specific case based on a thorough and independent investigation, it is not in a position to judge on the relevance of section 13 to the case in question. It would recall however that it was the Government which had raised the matter of section 13 in its initial reply to this complaint and that the conclusions reached by the Committee were based wholly upon its conclusions in a previous case presented against the United Kingdom Government for alleged infringements of trade union rights (see 294th Report, Case No. 1730) wherein it had invited the Government to reconsider section 13 in consultation with the social partners since it considered that this provision could hardly be said to constitute a measure to encourage and promote the full development and utilization of machinery for voluntary negotiation with a view to the regulation of terms and conditions of employment by means of collective agreements, as provided for in Article 4 of Convention No. 98 (ratified by the United Kingdom). The Committee recalls in this respect that section 13 directs a tribunal, when considering a complaint of action short of dismissal taken by an employer for the purpose of preventing or deterring a worker from being or becoming a member of an independent trade union, to have regard primarily to the employer's purpose to further a change in the relationship with the employees and the Committee had concluded that this section considerably limited the tribunal's competence for determining such action as being in violation of section 146 concerning action short of dismissal (see 294th Report, Case No. 1730, para. 199). The Committee does not consider that the possible effects of section 13 have changed in this respect and it would therefore once again call on the Government to take steps to amend that section so that it ensures workers' organizations adequate protection from acts of interference on the part of the employer and so that it does not result in fact in the discouragement of collective bargaining. It requests the Government to keep it informed in this respect.