One of the most prominent items that has been on the news recently is the 'wildcat' strikes that are taking place across the country. The news appears to be striking a chord with the current feeling of anxiety in the country as the recession bites. The strikes at the Lindsey oil refinery have been a catalyst for debate surrounding a number of issues, including free movement of workers in the EU, protectionism and xenophobia but to name a few.
As so many factors feed into the situation and it has become so newsworthy it is useful to take a step back, consider what has actually happened and what the resulting legal implications are for employers.
What are 'wildcat' strikes'?
Industrial action can be 'official' or 'unofficial'. 'Official' industrial action is that which is supported by the relevant recognised trade union because the action has received the support of the majority of the union's members voting in a properly conducted ballot. 'Unofficial' industrial action is where such no such pre-industrial action ballots have taken place and the union have therefore not authorised or supported it. A 'wildcat' strike is the colloquial term for unofficial industrial action.
Wildcat strikes are a serious step for employees to take. This is because employees who are dismissed while taking part in wildcat strikes cannot normally claim unfair dismissal (which is different from those taking part in official industrial action). Whether employers will take the opportunity to dismiss such employees though is often a practical consideration which is determined by operational requirements. A factor which is no doubt weighed up by those more sensible employees before they take part in wildcat strikes. From a union's perspective, unofficial industrial action will not render it liable for one of the 'industrial torts', such as inducing or procuring a breach of contract (as long as they continue to be seen not to support the employees' action).
What does the Posted Workers Directive mean?
'Posted workers' are those sent from one EU Member State to work in another. The EC Posted Workers Directive (PWD) operates to protect such workers from being given detrimental employment rights in the host country. The PWD aims to create a level playing field for posted workers so that they are entitled to the same rates of pay, holiday pay and working hours stated by the national law of the host state. However, in what might be seen to be a quirk of the PWD (although it is not meant to be), in most cases the terms of local collective agreements do not need to be observed by the posting employer. Therefore, this leaves the playing field open to posting employers when procuring work to 'undercut' the local workforce who are bound to be paid at an enhanced rate in line with a local collective agreement. Bluntly put, as the posted foreign workers do not need to be paid at the local enhanced collective agreement rate, they can get the job done cheaper. This has been particularly the case in the construction sector recently where the number of migrant workers employed or engaged is substantial. Of course the rules apply equally to those UK employees who are posted to another EU member state – and as the pound disintegrates this might occur more often.
The future...?
As referred to above, the way in which the PWD is drafted is no quirk of the law. There have been recent European Court of Justice judgements backing the content of the PWD and suggesting that industrial action and legislation enacted with a view to ensuring protection over and above the minimum standard set out in the PWD is not permitted. The rationale behind this is simply the free movement of workers between member states. However, this rationale fetters the extent to which unions and Governments can seek a fair playing field with regard to terms and conditions for local and foreign workers.
Despite all of the political posturing, it is unlikely that the law will be changed any time soon. Indeed, the Business Secretary Lord Mandelson recently warned against further controls being imposed on overseas companies operating in the UK, stating that "protectionism would certainly turn this recession into a depression".
ACAS Involvement
As the dispute was so topical the Government parachuted the conciliatory body ACAS into the proceedings to attempt to resolve matters. ACAS' role in general is being substantially widened at the present time as mediation, one of the services ACAS offers, is becoming more and more 'hip'. Currently, mediation is a voluntary and confidential process and where possible, aims to restore and maintain the employment relationship. In many circumstances it is considered to be one of the more cost-effective ways of resolving disputes. It was reported last week that a deal has been reached as a result of mediation whereby over 100 new jobs have been opened up to local workers in addition to the jobs being filled by the foreign workers.
How do employers handle such a situation?
- Employers should consider what type of action the employees are taking. Remember, industrial action is not only characterised by employees picketing outside the workplace. In the case of Abbas and Others v Gate Gourmet London Ltd the tribunal held that employees who were dismissed for refusing to work and gathering in a canteen were taking part in unofficial industrial action.
- What type of industrial action is it, official or unofficial? This will affect the tactics that employers use to deal with the situation.
- If the action is unofficial industrial action keep a close eye on what the unions are doing – they may legitimise an unofficial strike at a later date by their actions.
- Check the collective agreement that you have with the relevant unions. Although unlikely, there may be a 'no-strike' clause in the agreement – these are legal but rare.
- Consider the practical issues of taking action against those who are participating in unofficial industrial action.
- Keep an open dialogue with trade unions wherever possible.
- However, consider taking interim Court action to protect the business (by the way of injunctions/interdicts) if the relevant union is supporting the action. In the Gate Gourmet case referred to above the T&G was held to have authorised or endorsed the picketing that took place at Heathrow (in 2005), since there were union officials present and participating in the picket line. As the union had not repudiated the action and there had been no ballot the union was liable in tort and was made subject to an interim injunction.
- If you have procured work consider the terms of the contract you have with those you are supplying services to. There may be a "relevant event" clause which states that in the event of a strike you, as the employer of those on strike, become liable for the costs arising.
- Consider whether mediation would assist to resolve the dispute.
Andrew McConnell
Dundas & Wilson LLP
Andrew.mcconnell@dundas-wilson.com
David Walker
Dundas & Wilson LLP
David.walker@dundas-wilson.com
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances