Law and trade disputes

It is essential, therefore, that local authorities have a clear understanding of the law and the effect of industrial action on the contractual relationship between the employer and the employee.

In this section we look at the law on industrial action and the liability of trade unions. We then consider the requirements that industrial action must meet to be considered a 'trade dispute' and thereby attract immunity. Finally, we look at the legal action that can be taken by employers if they believe the industrial action does not attract immunity.

Trade Union Liability and Immunity

Industrial action is likely to be unlawful at common law because the people that organise the action will almost invariably commit at least one tort (a breach of legal duty, other than under a contract). For instance, they are likely to commit the tort of inducement when encouraging individuals to breach their contract of employment, and the tort of intimidation when they threaten industrial action that will lead to a breach of contract.

Trade unions would, therefore, be exposed to claims for damages from employers and others that have suffered a loss as a result of the unlawful action and to an application for an interim injunction to halt the action. There is an additional statutory right for individuals to seek an order to halt industrial action, irrespective of whether they have suffered a loss. However, in recognising the legitimate role of industrial action in collective bargaining, Parliament has introduced measures that provide a degree of protection from liability for trade unions, subject to a series of complicated and often contentious qualifications.

The protection takes the form of statutory immunities from legal proceedings under which (where a trade union qualifies for such immunity) the industrial action will be regarded as lawful. However, if the trade union fails to meet any of the qualification criteria, the action will be unlawful. The criteria for qualifying for immunity are discussed below.

Official and Unofficial

A trade union will only be liable in law for official industrial action. It follows, therefore, that statutory immunities only apply to official industrial action. Where unofficial action occurs, the individuals organising the action will be liable for damages and the individual employees will be outside the scope of most of the statutory employment rights if disciplined or dismissed.

In order for industrial action to be considered 'official', it must be authorised or endorsed by the trade union. In practice, official endorsement can be given by any official employed by the union, and by lay officers and members of union committees (including ad hoc strike committees) that are elected in accordance with the union's rules, irrespective of whether the union's rules allow them to endorse the action.

Repudiation

However, there is a mechanism by which the trade union's principal executive committee, president or general secretary can repudiate action endorsed by a union committee or official. This has the effect of making the action unofficial and removing the trade union's liability. It should be noted, however, that the union cannot repudiate action endorsed by a person authorised to do so in the union's own rules.

In order to repudiate the endorsement, the union must supply the committee or official who gave the 'authorisation' with written notice of the repudiation without delay and, as far as possible, to every member believed to be taking part in the action. In addition, the union must also inform the employer(s) of every member involved in the action. The notice to members must contain the following statement:

"Your union has repudiated the call (or calls) for industrial action to which this notice relates and will give no support to unofficial action taken in response to it (or them). If you are dismissed while taking unofficial industrial action, you will have no right to claim unfair dismissal." (S.21(3) TULR(C)A 1992)

The repudiation must clearly disown the acts of the officer or committee that called or endorsed the industrial action and amount to more than a 'conditional and half-hearted reprimand.' (Express and Star Ltd v NGA [1985] IRLR 455)

Although the statutory wording must be followed to the letter, there is nothing to prevent the trade union including additional messages provided that this does not contradict the terms of the prescribed statement or make its meaning ambiguous. In addition, once the action has been repudiated, the trade union must continue to act in a manner that is consistent with the repudiation. A failure to do so will render the repudiation invalid and the union may become liable for the action.

Where proper repudiation is given, the action becomes unofficial at the end of the next working day after the repudiation takes place. This gives those taking the action a day to decide whether or not to continue. Participants who decide to continue with the industrial action will have no right to claim unfair dismissal if their employer selectively dismisses them.

Statutory Immunities

Section 219 of TULR(C)A protects trade unions from legal liability provided that the industrial action is taken in contemplation or furtherance of a trade dispute and the liability arises from actions which:

• Induce another person to break a contract, or interfere or induce another person to interfere with its performance; or,
• Consist of a person threatening that a contract (whether one to which he is a party or not) will be broken or its performance interfered with, or that such a person will induce another person to break a contract or interfere with its performance.

In effect, there is statutory immunity for the torts of inducing a breach of contract, simple conspiracy and intimidation (where it is based upon the threat to break a contract).

This will cover the vast majority of industrial action cases. However, trade unions may still be liable under common law for other torts that are not covered in the legislation. For instance, a trade union can be liable for a tortious act of nuisance that can occur during a picket or a demonstration in support of the industrial action (News Group Newspapers v SOGAT 82 (No 2) [1986] IRLR 337 QBD).

Removal of Immunity

Although TULR(C)A contains the statutory immunities, trade unions are not simply given blanket immunity from legal proceedings. Even if a trade union qualifies for immunity under the provisions discussed above, the trade union may still be acting unlawfully if the:

• action amounts to unlawful picketing
• purpose of the action is to enforce trade union membership
• action is in support of members dismissed while taking part in unofficial industrial action
• action amounts to unlawful secondary action
• purpose of the action is to try and force an employer to incorporate a union recognition or union only policy into a contract for goods or services (or to pursue a non-union policy)
• statutory balloting requirements have not been met

In addition, the trade union will lose its immunity if it fails to provide the affected employer with specified pre-ballot information, notify it of the results or give the proper notice before the industrial action begins.

Is there a Trade Dispute?

In order for the industrial action to be lawful it must be taken 'in contemplation or furtherance of a trade dispute'. A trade dispute is defined as 'a dispute between workers and their employer which relates wholly or mainly' to one or more of a number of specified matters (TULR(C)A s244(1)).

In the following sections we consider the requirements that a dispute must meet to qualify for statutory immunity.

Between workers and their employer

The dispute must be between workers and their employer. Under this definition, 'workers' may be party to a lawful trade dispute and not merely 'employees'. This may mean, for instance, that staff considered as 'casuals' will be covered. In addition, in this context, the term 'worker' has an extended meaning to cover both current workers and any former workers whose employment was terminated in connection with the dispute or where the termination was one of the factors giving rise to the dispute.

However, notwithstanding the right of workers to take part in a lawful dispute, only 'employees' are protected against unfair dismissal. This may mean, therefore, that although a 'casual' can take part in a lawful dispute, they have no protection against unfair dismissal as a consequence.

A notable exception to this general rule is provided by s244 of TULR(C)A and is particularly relevant to the education sector. Under this provision a dispute arising from matters referred to a Minister of the Crown are treated as a trade dispute, notwithstanding that the Minister is not the employer. In education, for instance, this would apply to a dispute arising from a decision of the Pay Review Body.

Current employer

The dispute must be with the current (or former) employer and does not extend to action taken against a potential future employer. This may be particularly relevant when considering staff transfers from the public to the private sector. In University College London NHS Trust v Unison [1999] IRLR 31 CA , the Court of Appeal held that a dispute that was attempting to secure no less favourable terms after a transfer was outside the scope of the immunities.

Secondary action

With the exception of lawful picketing, secondary industrial action is unlawful. Therefore, unions cannot lawfully call or threaten a strike, or other industrial action, by workers of an employer not directly involved in the dispute.

Lawful picketing is the only form of secondary action that is lawful. In order to attract immunity, however, the strict provisions on lawful picketing must be observed. Essentially the pickets must be picketing in contemplation or furtherance of a trade dispute, at or near their own workplace and must be employees of the employer involved in the dispute.

Picketing must be limited to peacefully obtaining or communicating information, or peacefully persuading any person to work or abstain from working.

Therefore, it will be lawful to induce a supplier's lorry driver to break his contract of employment by not crossing a picket line. It will not, however, be lawful to use force to prevent a lorry crossing the picket line, to mount a picket at the supplier's premises or use 'flying pickets' (people not employed by the employer involved in the dispute at the workplace where the picketing is taking place).

For a more detailed discussion on the law regarding picketing, including the requirements in respect of the picket supervisor, see chapter 6 of this guide.

Intermediary employer

The immunity does not extend to cover industrial action taken by workers employed through an intermediary employer. The courts have not, to date, looked beyond the immediate employment relationship in the context of industrial action to consider the identity of the 'actual' employer who may be taking the decisions that cause the dispute. Therefore, if the workers concerned are 'employees' of an employment agency, immunity will be lost if the dispute is with the local authority.

Related wholly or mainly to a list of specified matters

The dispute must be 'wholly or mainly' related to one or more of the specified matters discussed below. Although this may appear to be a relatively straightforward requirement, it is not always easy to judge whether the industrial action does relate wholly or mainly to one of the specified areas.

This is particularly the case in the public sector where the distinction between a political protest and a genuine trade dispute can be difficult to draw. This is because political decisions may directly affect the terms and conditions of employment (or one of the other factors specified). Where such confusion exists, it will be up to the trade union to establish that the action is about their members' terms and conditions of employment. Where this can be established, the fact that the action also has a political dimension will be irrelevant.

The Courts have adopted a common sense approach to this potentially troublesome question. For instance, in Westminster City Council v UNISON [2001] IRLR 524 CA, the Court of Appeal held that a dispute about the transfer of staff to another employer was wholly or mainly about their terms and conditions of employment because it changes who they would be employed by. The Council had unsuccessfully argued that the dispute amounted to nothing more than a political protest by the union against Government policy.

Similarly, in P v National Union of Schoolmasters/Union of Women Teachers [2001] IRLR 532  CA, the Court of Appeal dismissed the claim by the appellant, a disruptive school pupil, that the refusal to teach him was not related to the teacher's terms and conditions of employment. The Court held that the dispute had arisen from an unreasonable instruction given by the Head Teacher and was, therefore, caught by the provisions of TULR(C)A.S.244(1) of TULR(C)A sets out the list of specified matters:

• Terms and conditions of employment, or physical working conditions.
  
  This requirement restricts industrial action to matters that are related to terms and conditions of employment. In this context, 'terms of employment' extends beyond those terms specifically incorporated in the contract of employment and can include terms accepted by both parties through custom and practice.
• Engagement or non-engagement of workers, termination or suspension of employment or duties of one or more workers.
  
  This can include action taken in fear of future redundancies. There is no requirement that dismissal notices have to be issued before action is covered by the immunities. The union will merely have to show that they have reasonable grounds for fearing redundancies.
• Allocation of work or job duties between workers or groups of workers.
  
  This can include demarcation disputes, provided that the same employer employs the groups of workers concerned.
• Disciplinary matters.
• A worker's membership/non-membership of a trade union.
• Trade union facilities.
• Trade union recognition, negotiation and consultation agreements or machinery.

However, a dispute will be excluded if it relates to an attempt to:

• enforce a closed shop
• limit the benefits secured by the union to union members
• secure preferential treatment for union members in the allocation of jobs
• help workers of another employer secure recognition.     

In contemplation or furtherance of a trade dispute

The final requirement is that the action must be in contemplation or furtherance of a trade dispute. The phrase is concerned with how close the action is to the dispute in question. The interpretation of 'in contemplation' is in terms of time, and suggests that the action must be in relation to an existing dispute or one that is relatively imminent. The interpretation of 'furtherance' is in terms of causation, and considers how far the action is motivated by a desire to support a trade dispute rather than say, a personal grudge.

Legal action by Employers and Others

In cases of industrial action, legal proceedings can be brought by:

• The employer of workers taking part in the industrial action.
• A member of the general public where the industrial action has an impact on the supply of goods and services.
• A trade union member where the union has not complied with internal rules or has not held a ballot as required by the law.

Interlocutory injunction

In practice the most common proceedings will be those brought by employers. The most immediate remedy for employers is an interlocutory injunction, whereby they obtain a court order preventing industrial action from starting or continuing. The interlocutory injunction is essentially a holding measure until a full trial can decide whether the industrial action is unlawful. Most cases do not proceed to full trial, so the court's decision at the interlocutory stage is of vital importance to both parties.

A failure to comply with an injunction will leave the union in contempt of court. This is likely to result in a large fine for the union and the possibility of the sequestration of its assets.

Compensatory damages

Employers can also claim damages for losses suffered as a result of unlawful industrial action. The amount of damages awarded will be based on the general principle of restoring the employer to the position they would have been in if the unlawful action had not taken place. The employer must prove the amount claimed is a sum equivalent to the losses arising from the union's wrongful act.

Anticipatory award

It is possible for an employer to claim compensation for expenditure incurred in anticipation of the union taking unlawful industrial action, provided that the action eventually does take place.

Exemplary or aggravated award

The courts may also, in circumstances where the union's conduct warrants it, award exemplary or aggravated damages in addition to compensatory damages.

Limit on damages against a trade union

There are upper limits on the amount of damages that can be awarded against trade unions. The limit depends on the size of the union's membership and the current upper limits with effect from 21 July 2022 are:

The limits can be varied from time to time by the Secretary of State.

However, the above limits do not apply to interest awarded on the damages or fines imposed for contempt of court. A union may also have to pay legal costs in addition to the above.

Wider Industrial Relations and Legal Implications

Authorities may be reluctant to have recourse to the law in industrial disputes because of the detrimental long-term effect it can have on industrial relations generally. It will be necessary for authorities to assess the damage or likely damage of a dispute and weigh it against the consequences of a potentially protracted legal battle with the trade union. In many cases, the request for an interlocutory injunction may be rejected, with the likely outcome that the trade union position becomes both stronger and more entrenched. Even if an injunction is granted the trade union, or individuals, may choose to ignore the order and the authority will have to instigate further proceedings to enforce the order and seek damages.

It is important, therefore, that authorities give careful consideration to the consequences of invoking the law in industrial disputes before taking any final decision to begin proceedings.

However, regardless of whether authorities decide to take legal action against trade unions, there is a range of responses that can be taken against individuals who take part in the action. These responses are detailed in the chapter in this guide on Action Against Individual Employees.