In short
Employers who are faced with industrial action will generally want to minimise participation in that action. In some cases, they have tried to do this by threatening to withhold discretionary benefits such as travel concessions and bonuses from employees who participate in industrial action.
In April 2024, we wrote about the Supreme Court’s decision in Mercer, which confirmed that employees in the private-sector will not have a claim for unlawful detriment (short of dismissal) in response to such action. Two recent cases have further considered the implications of that case, confirming that offering inducements to not take part in industrial action is also not currently unlawful for private sector employers, but that in operating such practices, employers could fall foul of the prohibition on blacklisting. Therefore, employers need to proceed with caution. Further changes will be made by the Employment Rights Bill and potentially from legal appeals and therefore employers need to keep their industrial relations strategy under review.
The law
Let’s start with a quick reminder of the relevant legal principles underpinning these cases:
- Under section 146 Trade Union and Labour Relations Consolidation Act 1992 (TULRCA), a worker has the right not to be subjected to any detriment by the employer if the sole or main purpose of the employer’s action is (amongst other things) to prevent or deter the worker from taking part in the activities of an independent trade union at an appropriate time, or penalising the worker for doing so (protection against detriment). Separate protections apply in relation to dismissal.
- Under section 145A TULRCA, a worker has the right not to have an offer made to him by his employer for the sole or main purpose of inducing the worker not to take part, in the activities of an independent trade union at an appropriate time (protection against unlawful inducements). The worker has a claim even if the offer does not ultimately lead to the employee suffering a detriment.
- Under Regulation 3 of the Employee Relations Act 1999 (Blacklists) Regulations 2010, it is unlawful to compile, use, sell or supply a prohibited list – that being a list which contains details of persons who are or have been members of trade unions or persons who are taking part in activities of trade unions, where the list is compiled with a view to discriminating against workers (prohibition of blacklisting).
Mercer – Detriment
Last year, the Supreme Court held that the “activities of an independent trade union” under section 146 TULRCA did not include participating in industrial action. This means that a worker in the private sector is not currently protected from detriments (short of dismissal) due to taking part in industrial action. However, the Supreme Court also found that the failure of section 146 TULRCA to provide any protection from detriment short of dismissal to workers engaged in industrial action put the UK in breach of Article 11 ECHR (freedom of association). They held that it might be compatible with Article 11 to permit some types of detriment for participating in industrial action and it was for Parliament, rather than the courts to decide where to draw the line. However, they made a declaration of incompatibility.
This decision did not directly consider the position of workers offered unlawful inducements under section 145A TULRCA. This is where the Royal Mail decision comes in.
Royal Mail – Inducements
Burgess & others v Royal Mail Group Limited is a claim in the Employment Tribunal brought by more than 1,800 Royal Mail workers who alleged that their employer offered them unlawful inducements (in the form of incentive schemes) to deter them from taking part in a strike, organised by the Communication Workers Union over the 2022 Christmas period. Royal Mail denied that this was the purpose of the incentive schemes.
In the light of the Supreme Court’s decision in Mercer, Royal Mail applied for the claims to be struck out as having no reasonable prospect of success. Royal Mail’s argument was that an unlawful inducement claim under section 145A TULRCA requires the worker to have taken part in “activities of an independent trade union” at an appropriate time. This is the same definition as contained within section 146 TULRCA which the Supreme Court held did not include industrial action. The postal workers did not oppose the application and accepted that the claims could not succeed in the light of the Supreme Court decision in Mercer.
The Employment Tribunal accordingly struck out the claim but recorded that the workers were considering an application against the UK government to the European Court of Human Rights. We may therefore see a future ruling on whether section 145A (as well as section 146) is incompatible with the European Convention.
Morais – Blacklisting
However, a cautionary note for employers is sounded in the case of Morais v Ryanair DAC which has, for the last few years, run alongside the Mercer litigation. The proceedings were initiated by a group of airline pilots employed by Ryanair. Their union, the British Air Line Pilots’ Association (BALPA), issued Ryanair with a notice of strike action on a number of dates. Ryanair ultimately circulated a memo warning that pilots who engaged in further strike action would have their concessionary travel benefits withdrawn for 12 months. The pilots had successfully argued in the employment tribunal that Ryanair had unlawfully subjected them to detriment under section 146 TULRCA and that Ryanair had unlawfully produced a prohibited list for the purposes of deciding which pilots to withdraw travel benefits from (i.e. blacklisting).
By the time the case reached the Court of Appeal’s view, the parties agreed, as in Royal Mail, that the detriment claim could not succeed following Mercer and that part of the claim should be dismissed.
However, the Court of Appeal decided that the phrase “activities of a trade union” in the Blacklisting Regulations does include organising and taking part in industrial action. Indeed, the Court held that it includes industrial action endorsed by a trade union even where the union has not complied with the balloting and notification requirements in TULRCA. Therefore, compiling a list of employees who have participated in official industrial action for the purpose of treating them less favourably (e.g. by removing discretionary benefits) on the ground that they took part in the industrial action is a breach of the Blacklisting Regulations.
Analysis
For the time being, private sector employers will not be liable for an unlawful detriment or unlawful inducement claim if the detriment or inducement in question is done in connection with industrial action. This leaves it open for employers to continue to offer incentives or threaten detriments (short of dismissal) to deter participation in industrial action – although there will obviously be industrial relations implications in doing so.
However, if employers compile a list of employees participating in industrial action for the purposes of administering a detriment (including withholding an inducement) they will fall foul of the Blacklisting Regulations. Therefore, employers will need to proceed with caution.
The position is also continuing to develop:
- In the light of the decision in Morais, employers need to give careful consideration to the Blacklisting Regulations in considering their contingency planning for industrial action. However, Ryanair have lodged an application to appeal the decision to the Supreme Court so the position may yet change.
- The Government is addressing the Mercer decision in the Employment Rights Bill. The Bill will introduce a new prohibition on subjecting workers to “detriments of a prescribed description” for the sole or main purpose of deterring the worker from taking part in protected industrial action or penalising the worker for doing so. As currently drafted, this will not protect employees from detriment for taking part in official industrial action which is not protected (and so is narrower than the scope of the Blacklisting Regulations). The government has said it will consult over which types of detriment will be prohibited, which will then be set out in secondary legislation. It has left open the possibility that it will prescribe all forms of detriment.
- The Employment Rights Bill does not propose any extension to the scope of protection against unlawful inducements. Therefore, it seems it will remain lawful to offer inducements not to take part in industrial action. However, the effect of this is limited because withholding an inducement from an employee who participates in industrial action will generally amount to a detriment.
Employers will therefore need to keep their industrial relations strategy under review as the ERB and case law progresses.
The position of public sector employers is different, because they may have direct obligations under the Human Rights Act.
