Trade Union Act 2016: Impact on Unions and Employers

Introduction

On 4 May 2016, the controversial Trade Union Act 2016 received royal assent, changing the way in which unions can operate and curtailing many of their powers — a move that has been argued as significantly reducing union influence (Ewing and Hendy, 2016). The bill, first introduced in 2015, was watered down from the original, more aggressive proposals contained in earlier discussion papers (Liberty, 2016). Items excluded from the final bill included enhanced requirements on picketing — such as obligations for unions to notify police and employers of picket plans two weeks ahead of any action — restrictions on social media use by unions, and the introduction of a new criminal offence of intimidation at pickets (Liberty, 2016).

However, the act still has a significant impact on employers and trade unions. Liberty (2015) stated that the act created:

"a significant, unnecessary and unjustified intrusion by the State into the freedom of association and assembly of trade union members, undermine the right to private and family life, and jeopardise the UK's important history of supporting peaceful protest" (p. 3).

This indicates that the legislation produces a profound effect. This paper examines that impact on both employers and employees.

Brodies (2016) identifies numerous substantive changes contained within the act. These include changes to the way in which balloting takes place and votes are counted; the notice required for industrial action; the timescale within which industrial action may take place; changes to the check-off system, which connects union subscriptions directly to payroll; changes to donations to political funds; facility time; increased statutory powers attached to the picketing code of conduct; and changes regarding the use of agency workers during industrial action. Each of these elements is considered individually below.

Changes to Balloting

The changes made by the act have a direct impact on the way balloting takes place. They increase the requirements placed on unions and make it harder to obtain a vote in favour of taking action. Before a vote takes place, ballots must be prepared with information that includes a clear description of the dispute itself, as well as details of the industrial action planned (Moss, 2016; Trade Union Act 2016).

In the past, unions were only required to ask members whether they wished to take action and to specify whether that action should be strike action or action short of a strike, without being prescriptive. The government argues that the new requirements increase transparency, allowing workers to know precisely what they are voting for, though the changes do increase the administrative burden on unions (Liberty, 2015).

There are also changes to the threshold required for a vote to be actionable. Prior to the act, the bar was straightforward: a majority of those voting had to vote in favour of action. Now, at least 50% of those entitled to vote must have participated, and a majority of those participating must vote for action (Trade Union Act 2016).

This may be seen as raising the bar considerably, since many unions have eligible members who may not participate in any given ballot. Where the dispute concerns employees "normally engaged" in "important public services" — for example, education, fire services, health, and transport — the threshold is raised further still: at least 40% of those eligible to vote must vote in favour of action (Brodies, 2016; Trade Union Act 2016).

This latter requirement may also be characterised as a double standard, given that the government itself may be regarded as an essential public service. Under an equivalent threshold, the Conservative Party would not have gained power in the most recent general election. Moreover, since the end of the Second World War there has been only one election in which the winning party obtained 40% of the popular vote — the 1951 election, which was won by the Labour Party (Warwick, 2015). In the last election, 274 of the 330 Conservative MPs elected did not manage to secure the support of 40% of their electorate (Warwick, 2015). Similarly, when Boris Johnson stood as Mayor of London, he failed to obtain 40% of the total eligible electorate (Warwick, 2015). It may therefore be argued that this requirement was incorporated specifically to minimise the potential for employees to vote successfully for industrial action. For trade unions, this means organisations will need to encourage increased participation in ballots, with abstention effectively functioning as a vote against action.

The implication is a greater need for unions to reach out to and communicate with all eligible voting members, potentially mounting marketing campaigns to encourage participation before even engaging with the substantive issues in dispute. Theoretically, a 100% vote in favour of action by those participating in a ballot may still be non-actionable if the participants do not constitute 50% of the eligible electorate. This change clearly benefits employers, as they are less likely to face a legally valid vote for industrial action.

Equally, to block a vote in favour of action, employers no longer need to persuade employees to vote against action; they can simply encourage abstention. The law now creates a structural bias whereby staying away from the ballot is effectively a vote against strike action (Ewing and Hendy, 2016).

The requirements regarding the conduct of industrial action have also changed. Prior to the act, unions were obliged to give employers seven days' notice of action. This has now increased to a default of 14 days, with a seven-day notice period remaining available only where the employer agrees that this is sufficient (Trade Union Act 2016).

Under the old statutes, once a ballot had taken place, industrial action had to commence within four weeks — or eight weeks with the employer's permission — but could then continue indefinitely based on the ballot result, as long as the dispute was ongoing. This is no longer the case. Under the new act, the mandate expires after six months (or up to nine months where the employer agrees), after which the union must seek a fresh ballot (Trade Union Act 2016). The expiry of ballots means unions are unable to rely on historic mandates, effectively limiting the potential period of any given dispute.

For trade unions, this curtailment of their ability to use past mandates may be a significant constraint. There are arguments on both sides: historic ballots in favour of action may not always reflect the current views of members, and there is potential for abuse of old mandates. It is also known that where action is undertaken a significant period after the initial ballot, there may be less commitment from employees, as the initial impetus may have subsided (Wrigley, 2012). Whatever view is taken, the expiry of mandates increases pressure on trade unions and creates additional barriers, since new ballots always entail financial costs.

The act also mandates that the government commission an independent review to consider the potential for electronic balloting (Trade Union Act 2016). There has long been pressure to implement electronic balloting as a means of increasing participation and reducing barriers for eligible members. Given the requirement for at least 50% of eligible members to participate — and 40% to vote in favour in essential public service organisations — the ability to restrict or place barriers in the way of members voting benefits the employer. It is therefore notable that, while the act commits to commissioning an independent report, it provides no commitment to implement electronic balloting. This, once again, appears to favour employers over trade unions.

Payment of Subscriptions and Deductions

Check-off is a process through which trade union membership fees are paid via a deduction administered by a company's payroll (Bowers, Duggan and Reade, 2011). Under the new act, employers in the public sector, or in the private sector providing some public services, may only deduct union subscriptions from wages if two criteria are satisfied: that union members are offered an option to pay their subscriptions by another method (for example, direct debit), and that the union itself contributes towards the cost of administering the payroll deduction system (Trade Union Act 2016; Brodies, 2016). Payments by the union to cover payroll costs must be "reasonable" — equal to the amount of public funds that would otherwise be spent administering those deductions (Trade Union Act 2016).

This increases the cost to trade unions of collecting fees and effectively forces them to establish alternative payment arrangements. There is a greater potential for members who pay by direct debit to default on their membership, since a direct debit is more likely to lapse than a payroll deduction (Booth, 1995). Reduced union membership in turn reduces union power (Laybourn, 1997).

Many unions have traditionally supported the Labour Party. The new act requires a more transparent approach to the way unions contribute to political funds (Taylor-Gooby, 2016). New members must be given greater access to information about political funds, and information about how to opt out of political fund donations must be provided on an annual basis (Trade Union Act 2016).

This increases unions' administrative obligations and creates a new bureaucratic process to be undertaken annually, incurring costs and potentially reducing political donations. On the surface, this may appear to be a reasonable measure to empower union members and allow individualised decision-making. However, the political context should be considered. The majority of unions support the Labour Party, and the act was introduced by a Conservative government. The measures can therefore be interpreted as the Conservative Party indirectly hindering the Labour Party by restricting unions' access to funds — funds which have traditionally supported a party committed to protecting union rights. The move may thus be seen as further undermining trade union power.

In addition to providing increased opportunities for individuals to opt out of political contributions, the act also created a default position requiring proactive permission: any agreement by a union member to make political donations lapses after five years. This places a continuing obligation on members and may further reduce funds received by the Labour Party from unions. As is well documented across many domains where contributions are collected, opt-in schemes generate fewer contributions than opt-out schemes (Booth, 1995).

Works Cited

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