Dealing with Industrial Action

It was reported on 14 November 2011 that senior civil servants have voted 4-1 in favour of industrial action over the Government's pension reforms, increasing the likelihood of a strike taking place at the end of this month. If your workforce is likely to be involved, you need to be clear as to the action that you can lawfully take (or threaten to take) against employees in response to their participation in this industrial action. Solicitors Tom Stenner-Evans and Bethan Jones from our Employment team have compiled the following summary to assist employers in navigating this potentially tricky situation.

Is it legal for employees to strike?

Going on strike will usually amount to a breach of contract by the employee, since it involves a unilateral withdrawal of labour.  However, the legal remedies available to employers whose employees take industrial action are limited, and the Courts cannot simply order an employee to return to work.  These remedies are discussed in greater detail below. 

What is industrial action?

As a general guide, any concerted action which is taken in order to put pressure on an employer may constitute industrial action. There are two basic types of industrial action: a strike and action short of a strike, such as an overtime ban or 'work to rule'. An employee is treated as having begun to participate in specific industrial action once they inform their employer that they intend to do so.  That said a threat to take industrial action at some unspecified date in the future is not treated as participation.

Is the action 'official' or 'unofficial'?

It is extremely important to ascertain whether the action is 'official' or 'unofficial' as this will impact greatly on the options available to the employer, particularly when it comes to dismissing participating employees.  Industrial action will be 'official' in relation to a particular employee if:

1. the employee is a member of a union and their union has authorised or endorsed the action, or
2. the employee is not a member of a union but the industrial action involves employees who are members of a union which has authorised or endorsed the action.

Interestingly, where none of the participants is a member of a trade union, a strike will not be regarded as unofficial. It will only be unofficial if at least one of the participants is a union member and the action has not been authorised or endorsed by that union.

If members of more than one trade union are participating in a strike, each of their unions must have authorised the strike or they will be involved in unofficial action.  It is therefore possible for some employees to be participating in official action (where their union has authorised or endorsed the action), whilst others (whose union has not taken such steps) will be deemed to be participating in unofficial action.
It is also possible for action which starts off as official to become unofficial if the union subsequently withdraws its endorsement of it. In addition, the union can take certain steps to protect official action (such as comply with balloting and notification requirements) which provides greater protection to employees.  This is discussed in greater deal below.

Is the action protected?

In summary, industrial action is 'protected' where the union has complied with all of the procedural requirements set out in the Trade Union and Labour Relations (Consolidation) Act 1992 ("TULR(C)A"), including the complicated balloting and notice provision, and where immunity has not been lost for any reason.

The balloting and notice requirements are beyond the scope of this article, but employers are advised to take expert advice if they are in doubt as to whether the action in question is protected.

When is an employer entitled to dismiss?

Depending on the circumstances of the strike and the employee's involvement, an employer may be entitled to dismiss some or all of the participating employees, with or without notice.

If employees are participating in unofficial industrial action, the employer is entitled to dismiss them (provided dismissal is not for one of the automatically unfair reasons) and will be immune from any unfair dismissal claims. In addition, an employer can be selective as to whom it dismisses during unofficial industrial action, which may enable the employer to effectively remove the ringleaders.

In contrast, dismissal of an employee for taking part in official industrial action (but which is not protected) will only be fair where all employees taking part in the action are dismissed. Selective dismissals, or 'cherry picking' will render the dismissals automatically unfair, as will the subsequent re-engagement of only some of the employees.

Finally, any dismissal of an employee brought about as a result of that employee taking part in protected industrial action will be automatically unfair and the usual 12 month qualifying period for unfair dismissal will not apply. There is also a 'protected period' of 12 weeks beginning with the day the employee started participating in the industrial action, during which any dismissal will still be unfair, even after the industrial action has ended.

When can an employer withhold pay?

In most cases, an employee will be breaching their employment contract if they go on strike and, as such, the employer may legitimately withhold their pay. Specifically, employers need not pay employees for the periods during which they are not working. Where an employment contract specifies normal working hours and pay is by the hour, the deduction will be determined by reference to the number of hours lost. If an employee is paid a salary, this is deemed to accrue from day to day and daily deductions can be made as appropriate.

One practical issue for employers is to ensure that they clearly identify employees who are participating in a strike as opposed to those who are absent for other legitimate reasons, such as sick leave or holiday. Employers will want to avoid a situation where an employee brings a claim for unlawful deduction of wages on the grounds that they were not actually participating in the strike.

An employee who was participating in the strike cannot bring a tribunal claim for unlawful deduction of wages if their participation in the industrial action was the reason for the deduction.
How will industrial action affect an employee's continuity of service?
Any period during which an employee is taking part in a strike will not count for the purposes of calculating their period of continuous employment. Continuity is not broken, but the clock effectively stops when a strike commences and restarts once the employee returns to work. 

What contingency plans can an employer put in place to enable work to continue?

Although hiring replacement workers may serve to inflame the existing dispute, there is relatively little legal restriction on employers moving staff or taking on new staff during industrial action.  It is recognised that many employers, particularly in the public sector, will need to take steps to ensure that the service they provide is able to continue efficiently.

However, there is legislation which prevents 'employment businesses' (temporary staff agencies) from providing employers with agency workers to perform duties normally performed by a striking worker. Breach of this restriction will constitute a criminal offence on the part of the agency. Whilst the restriction is specifically imposed on the agency rather than the employer, employers may still be liable for aiding and abetting the offence.

Nonetheless, there are a number of ways around this restriction and the following are all acceptable methods of keeping a business operational during a strike:

• use existing employees from other parts of the business or existing casual or bank workers (provided that you do not engage agency workers to cover their usual work for the duration of the strike);
• engage temporary workers directly without using an agency or employment business;
• use an employment agency to assist in finding employees to be employed directly on a short-term basis; or
• temporarily out-source affected business functions to a third-party contractor.

If you are in any doubt as to whether your proposed course of action will breach the restriction, or if you need any specific advice on dealing with striking employees in preparation for the industrial action on 30 November 2011, please contact tom.stenner-evans@michelmores.com or bethan.jones@michelmores.com or telephone on 01392 687609 and 01392 687438 respectively.