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John Bowers QC on Employment Law: June Blog

The following commentary is the latest in a series of Employment Law blog posts by John Bowers QC.

Strikes and trade union membership

As we complete our third edition of our work on strikes, it is instructive to look at the latest statistics on industrial action. There were 276,000 working days lost due to labour disputes in 2017, which was the sixth lowest annual total since records began in 1891. The transport and storage sector accounted for 68% of all working days lost due to labour disputes; the strikes within this sector occurred mainly within public transport.

At the same time the statistics about trade union membership were released. These show that around 6.2 million employees in the UK were trade union members in 2017. This was a slight increase by some 19,000. Current membership levels are however well below the peak of over 13 million in 1979. Interestingly the proportion of female employees who were in a trade union was around 25.6% in 2017, compared with 20.9% for male employees. Similarly older workers account for a larger proportion of union members than younger workers. About 39.8% of trade union member employees were aged over 50 in 2017, but 28.8% of employees are in this age group.

Precarious workers

The fate of precarious workers continues to cause concern and is the focus of a new book by one of my colleagues in the Oxford Law Faculty, Prof Jeremias Prassl, Humans as a Service OUP. This contains some fascinating examples of how work is going in the so called gig economy. I was struck by a comment quoted in the book by Sarah O Connor writing in the FT said “If there is one phrase that makes me wince more than the sharing economy it is the collaborative economy…What is exactly being shared here? Who is collaborating with whom?”

Jeremias himself says in p52 “In consequence, for a large number of workers, the reality of life as a Tasker, Driver-Partner, or Turker is more reminiscent of Victorian labourers’ daily grind than the glamour of Silicon Valley; long hours for low wages, constant insecurity and little legal protection-with no chance of a future upside”.

In terms of precariousness in another direction, I was also struck by an article in The Sunday Times that each robot working in Britain’s factories has cost the equivalent of 3.6 jobs, according to the first study of the impact of modern automation on employment. The research implies that the 18,500 robots deployed in vehicle manufacturing and other industries have already displaced about 66,000 posts.

Union responsibility for its officers

It is not often that the courts consider the position of union officers so that the case of Unite the Union v Nailard [2018] EWCA Civ 1203 repays attention. The Claimant was a regional officer in respect of Heathrow Airports Ltd. The Union’s rule book naturally makes provision for local branches, generally based upon a workplace.  Mr Saini and Mr Coxhill were workplace representatives who, as the ET found, treated the Claimant in a bullying and offensive manner which amounted to harassment related to her sex within the meaning of section 26 of the Equality Act 2010. One question for the Court of Appeal was whether the union was responsible for the actions of these two officials.

Section 109 of the 2010 Act provides

(2) Anything done by an agent for a principal, with the authority of the principal, must be treated as also done by the principal.

The Court of Appeal paid attention to the confirmation in Kemeh v Ministry of Defence [2014] ICR 625 that section 109 (2) is rooted in “the legal concept of agency”. Elias LJ at para. 11 of his judgment in Kemeh said that the effect of the predecessor of s109 (2) is that “the principal will be liable wherever the agent discriminates in the course of carrying out the functions he is authorised to do”.

In the ET, it was argued that Mr Saini and Mr Coxhill (1) were not carrying out activities assigned to them by the Respondent; (2) were not under the control of the Respondent, which could not direct what they did; (3) were not in a fiduciary position; (4) did not have any express or implicit authorisation from Respondent to act as they did. 

In the Court of Appeal Counsel for the Union accepted that, as the EAT held, the acts complained of were indeed done by Mr Saini and Mr Coxhill in the course of functions which they were authorised by the Union to perform. The difference between the parties was summed up in this pithy question

“Does A act as P’s agent, with the legal authority of P:

(i)   (Claimant’s case) whenever A does something in that role/job, regardless if it is one of the Authorised Acts – so that P is liable to all persons, not just those third parties, for any act done by A in that role ? or

(ii)   (Union’s case) only when A does an Authorised Act in respect of one of those third parties?”

The Court of Appeal decided that the requirement that the agent be standing in the principal’s shoes as regards third parties was necessary to establish the agency relationship in the first place; but it did not follow that the act complained of had to be done to such a third party. 

In the Court of Appeal the argument boiled down to the suggestion that “The ET and the EAT had ignored the essential distinction between the lay officials’ dealings with HAL [the employer] and their dealings with the Claimant”.

Underhill LJ put it graphically “An agent may stand in the shoes of the principal in dealing with A, but if while wearing them he treads on B’s toes I see no good reason why he should not be liable to B just as much as if it had been A’s toes that were crushed: in both cases the wrong is done in the course of performing the authorised functions” (para 43).  He said that the proposition based on Bowstead and Reynolds on Agency that it is inherent in the principal/agent relationship that the agent be in a position to affect the principal’s legal relationship with third parties “is fine as far as it goes, but it misses the point that we are not here considering whether an agency relationship exists at all but with liability in tort for acts done in the course of it.” 

The Judges recognised that it is an apparent anomaly that the reasonable steps defence is not available to principals as regards the acts of their agents when it is available to employers as regards the acts of their employees

It is a significant effect of the judgment that s109 liability may extend the scope of the liability beyond what would apply at common law.

A tricky area in recognition

The decision on trade union recognition revolves around the bargaining unit chosen by the Central Arbitration Committee. The statute calls on the CAC to consider the desirability of avoiding small, fragmented bargaining units within the undertaking but what precisely does this mean?

The proposed bargaining unit may itself create a small unit for recognition purposes which fragments the workers from a consistent bargaining unit with a wider workforce. Conversely, the proposed bargaining unit may leave a small, group of workers who are not within the scope of the bargaining unit. An example of this occurring is in Amicus, GMB and Alan Worswick (TUR1/157/02). The union’s proposed bargaining unit excluded six workers by comparison with that of the employer who wished them to be included in the bargaining unit. One of the factors influencing the CAC panel in its conclusion that the unit proposed by the union was not appropriate was that this small, fragmented bargaining unit would be left. The CAC therefore determined its own bargaining unit, which was different from that of the employer, embracing five of the six workers within the new definition. The position of the sixth which it considered to be different to that of the other five in that the worker performed a different job, as a cleaner.

The meaning of fragmentation was considered in some detail by Collins J in R (Cable &Wireless Services UK Ltd) v CAC [2008] EWAC 115 (Admin.), [2008] IRLR 425, where the employer unsuccessfully sought to judicially review the decision of the CAC on the proposed bargaining unit. The Judge appears to suggest that fragmentation is a question focused at the proposed bargaining unit itself, rather than on the effect on the remainder of the employer’s business, a conclusion which would be inconsistent with such cases as Alan Worswick. This may be perceived as an obiter remark and in any event the overarching consideration of the CAC to ensure that the proposed bargaining unit is compatible with effective management enables it to conclude that this is not the case in such situations as Alan Worswick without the need to rely upon a narrow interpretation of this consideration.

That interpretation of Collins J’s Judgment cannot however now stand in the light of the judgment of the Court of Appeal in Lidl Ltd and CAC v GMB [2017] ICR 1145 which has made clear that this criteria does not relate to size alone, the provision is concerned with whether the proposed bargaining unit may lead to a proliferation of bargaining arrangements.

For example, in Unite v Cranberry Foods (TUR1/708/10) the CAC panel concluded that the union’s proposed unit was appropriate because it appeared to be self-contained and the characteristics of the workers, including their terms and conditions, of the wider bargaining unit which the employer proposed were distinct. Sometimes the employer’s proposed unit will lead to greater fragmentation. In BALPA v (TUR1/ 726/10), where the employer proposed bargaining units for each of the separate sites from which pilots operated, the union’s bargaining unit embracing all the sites was held to be appropriate.

Memorable quote

It is worth pondering that all US states save Montana default expectation that employees are engaged at will. Churchill said “Americans can be relied upon to do the right thing; once they have exhausted the alternatives”.

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