Industrial action - how can employers prepare?

Many sectors are facing the threat of industrial action. We set out key points for employers including options for contingency planning

13 July 2022

Rising energy prices, worker shortages and the impact of both Brexit and the pandemic have all contributed to the steep rise in the UK inflation rate. To help their members better manage the rising cost of living, we are seeing an increasing number of trade unions pushing hard to secure significant pay rises. However, the increased costs businesses themselves are facing, together with calls that employers should resist making large pay awards, is creating a real tension and we are seeing industrial action threatened or undertaken across numerous sectors.

So what, as an employer, can you do on a practical basis to prepare – both in terms of avoiding any industrial action in the first place and minimising the impact on your business if industrial action is taken?

Working towards a successful negotiation

Of course the best chance you have of avoiding industrial action is to keep negotiations with your trade unions measured and conciliatory and to be as transparent as you can be without damaging your negotiating position. In the vast majority of cases it will be in both the employer’s and the trade union’s interests (not to mention that of their members’) for a resolution to be found. Remembering that, ultimately, both parties have a common goal will be helpful.

However, whilst wanting to keep communications with your unions conciliatory, it is important that you control the narrative in terms of what information is given to your workforce so that they understand why the business is taking the position that it is. Explaining to your workers, in an accessible way, how increases in costs, or downturns in sales, have affected revenues (or whatever your particular circumstances are) may help to defuse a potentially difficult situation. Whilst your aim is to win over hearts and minds; using neutral, non-emotive language and backing up statements with objective examples and illustrations where possible is likely to be most effective.

Most workers will be reluctant to strike - not least as going out on strike has become relatively unusual over the past few decades and many will be unaware of the implications. With this in mind you may want to explain to employees the practical consequences of going on strike, including in relation to pay. Again, these communications need to be drafted objectively. Be careful not to be seen as pressurising or bullying and avoid the use of emotionally charged language. This will help in terms of credibility and setting the right tone.

If, despite your best efforts, you believe your negotiations with the union are failing to progress, you may be tempted to try and do a deal with your employees by making an offer to them directly. Whilst this may ultimately be an available route, you need to be very careful before doing so because jumping the gun on this before the collective bargaining process has been exhausted can have very costly implications. This is because when negotiating with trade unions over terms and conditions, employers will need to keep in mind section 145B Trade Union & Labour Relations (Consolidation) Act 1992. Broadly speaking this section is designed to penalise employers who seek to change their employees’ terms of employment outside of an agreed collective bargaining process, by making offers directly to employees, and in doing so bypassing the trade union.

With the recent decisions of Kostal UK Ltd v Dunkley and Others and Ineos Infrastructure Grangemouth Ltd v Jones and Others, employers will need to ensure they have exhausted any collective bargaining procedure before making an “offer” (which has been interpreted widely to include unilateral pay increases) directly to employees. A failure to do so can leave the employer open to very costly class actions in the Employment Tribunal (with potential awards currently set at £4,554 per worker). It is not always straightforward to assess whether the collective bargaining process has been exhausted so you may want to take legal advice on this, particularly given the potentially significant financial consequences of getting this wrong.

Contingency planning

Whilst it is sensible to approach negotiations with an open mind, employers will still want to make sure that they have a contingency plan in place in the event industrial action should arise. Some suggestions to consider are below:

Contingency staffing plans to cover any period of disruption: Regulations are currently in place that prevent employment agencies from providing agency workers to cover the duties of members of staff who are on strike. However, on 23 June 2022 the government announced its intention to bring in new legislation to enable employment agencies to supply temporary workers to fill the workforce gaps that arise as a result of industrial action (provided the workers have the required skills and qualifications). This change requires Parliamentary approval so the date on which the change will take effect (if approved) is not yet known. Additionally, given the current workforce shortages in many sectors together with the potential reluctance of some agency workers to provide strike cover, it is unknown how effective this change in the law will be.

In any event, employers may also want to consider

  • re-allocating or seconding non-striking workers (subject to ensuring appropriate contractual terms are in place);
  • deploying (where appropriate) sub-contractors or temporary staff;
  • directly engaging temporary cover; and/or
  • temporarily outsourcing affected business functions to third party contractors (being careful to consider any wider ramifications of this type of move).

Policy amendments: Employers may also wish to change their application of certain policies. These changes may not be popular but they may help alleviate the impact of any industrial action (and indeed may also deter people from taking strike action).

Examples include:

  • implementing a temporary ban on holiday (but be careful in doing so not to breach the Working Time Regulations and/ or the contract of employment);
  • issuing cancellation notices for any pre-booked holiday during the relevant period (subject to considering whether to offer compensation for cancellation charges and subject to certain minimum notice periods specified by statute or agreement); and/ or
  • adjusting sickness reporting requirements (for example requiring medical certification for one day's absence to help combat the risk of some employees calling in sick as a mechanism of being absent from work whilst avoiding actually taking part in industrial action and losing pay. Be aware, however, that there are complexities to this type of arrangement which would require specific legal advice).

Such measures should be introduced with caution and any changes in policy must be communicated to all employees in advance of the strike day. Again we would suggest seeking specific legal advice before introducing these changes.

Preparing guidance for managers: Managing employees who are taking industrial action will be challenging for even the most experienced of line managers. It is worth preparing guidance for managers on how you will be preparing for the industrial action, any steps you will be taking to minimise the impact of any industrial action, together with a set of FAQs so that messaging is consistent and your managers feel supported in what will be a challenging situation. Guidance and training should be prepared and introduced in good time. 

On receiving a notice of industrial action

Most employers and trade unions are likely to want to avoid reaching the point at which the union instigates industrial action. It is, however, worth having an awareness of the process that can be triggered once an official notice of industrial action has been received.

If an employer receives notice of industrial action, this does not necessarily mean the industrial action will go ahead. Negotiations with the trade union can continue in the time following the issuing of the notice and the intended start date of the industrial action, with a view to agreeing the disputed terms and conditions and calling off the industrial action. Equally, negotiations can take place after the industrial action has started with industrial action being brought to an early end if a compromise position can be agreed between all parties.

Whilst negotiation remains the most important preventative measure in that situation, there are also other steps employers should consider when faced with a notice of industrial action. The main step for the employer (with the help of their legal advisers) is to consider whether or not the intended industrial action is lawful. There are a number of prescriptive requirements for trade unions to follow for the industrial action to be lawful. Unless it can show that the industrial action and the process followed meets those prescriptive requirements, the potential consequences for a trade union that authorises or endorses industrial action can be significant - it could be liable for inducing a breach of an employee’s contract, for example, which can have expensive consequences for the union.

The full detail of those prescriptive requirements is beyond the scope of this note. Perhaps the three key requirements to be aware of are:

a) the action must be in contemplation or furtherance of “a trade dispute”. A dispute between an employer and its workers relating to terms and conditions of employment will satisfy the requirement to be a trade dispute and there are also a number of other types of dispute that may be covered;

b) the action must have the support of the majority in a valid ballot of union members – a valid ballot needs to have an adequate turnout (usually at least 50% of those entitled to vote) and the union should only ballot all members who it is reasonable for it to believe will be induced to take part in the action. (There are additional, more onerous requirements regarding the level of support required in ballots of workers engaged in certain important public services); and

c) the union must have complied with a series of specific notification requirements. These requirements cover notification of the ballot, notification of the ballot result and notification of industrial action and include specific requirements relating to the content and the timing of those notices.

With these complex requirements in mind, after receiving each of those notices, the employer should analyse the paperwork provided and consider whether there are any potential areas of non-compliance. If there are, there may be grounds for applying to court for an injunction to prevent the industrial action going ahead, but such an application should only take place after engaging in pre-action correspondence with the trade union regarding the alleged breaches.

Before entering into this type of correspondence and potentially seeking an injunction, an employer will want to carefully consider the costs and time-intensive nature of the application, the potential risks and the impact it could have on industrial relations. There are lots of factors to consider and weigh up, whilst also continuing negotiations with the trade union to seek a potential resolution to the discussions over terms and conditions. In addition, the deadlines for taking legal action are extremely tight so it is important to get legal advice at the earliest opportunity and discuss the various options that may be available at that stage.

We have considerable experience of advising employers who are facing a threat of industrial action, including in relation to seeking injunctions. If your organisation is facing threatened industrial action and you would like advice and/or want to know more about minimising the impact of such action, please contact Adrian Martin or another member of our Employment team.

 

Disclaimer

This briefing gives general information only and is not intended to be an exhaustive statement of the law. Although we have taken care over the information, you should not rely on it as legal advice. We do not accept any liability to anyone who does rely on its content.

Key contact

Headshot of Adrian Martin

Adrian Martin Partner

  • Head of Employment
  • TUPE: Business Transfers and Outsourcing
  • Restructuring and Redundancy

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