has been for people to vote in their workplace, like in
Parliament, to achieve "
a fair day's wage for a fair day's work". This happens through staff organising
unions, using
legal participation rights, and
collectively bargaining. While UK law creates a "charter protecting employees' rights" at work, people need a voice in enterprise management to get
fair wages and standards beyond the minimum. In law, this means the
right to vote for managers, or to vote on important issues such as pensions, and the right to
collective bargaining.
Trade unions are the main way that workers organise their voices. Unions aim to improve their members' lives at work. Unions are founded on
contract, but members must have the right to elect the executive, not be excluded without good reason, and not be discriminated against by employers. Unions' main functions are organising and representing a workforce through statutory participation channels,
collective bargaining, providing mutual assistance, and being a forum for social deliberation and activism.
Collective agreements, which unions make with employers, usually aim to set fair scales of pay and working hours, require pensions, training and workplace facilities, and update standards as the enterprise changes. Trade union
bargaining power rests, in the last resort, on collective action. To balance employer power to change the employment relation's terms, or dismiss staff, an official trade union has been protected by law in its right to strike. Since the
1875, UK law has said collective action, including the
right to strike, is lawful if it is "in contemplation or furtherance of a trade dispute". Since the 1980s, there have also been a number of requirements for balloting the workforce and warning the employer, suppression of sympathy strikes and
picketing. In these respects UK law falls below
international labour standards. There are legal rights to information about workplace changes and consultation on redundancies, business restructuring and management generally. Finally, there are a small number of rights for direct participation in workplace and company affairs, particularly
pension management. In some enterprises, such as universities, staff can vote for representatives on boards that manage the enterprise.
Trade unions In principle, UK law guarantees trade unions and their members
freedom of association. This means people can organise their affairs in the way they choose, a right reflected in the ILO
Right to Organise and Collective Bargaining Convention, 1949 and the
European Convention on Human Rights, article 11. Under the
ECHR article 11, freedom of association can only be restricted by law as is "
necessary in a democratic society". Traditional common law and equity was superficially similar, since unions form through
contract, and the association's property is held on
trust for its members according to the association's rules. However, before
Parliament became democratic, unions were suppressed for allegedly being in "
restraint of trade" and their actions (particularly strikes to improve conditions at work) could be regarded as
criminal conspiracy. Nineteenth century reformers, who recognised that unions were democratic, gradually succeeded in guaranteeing unions' freedom of association. The
Trade Union Act 1871 aimed to keep the courts away from unions' internal affairs, while the
Trade Disputes Act 1906 finally confirmed the right of unions to take collective action, free from liability in
tort, if it was "in contemplation or furtherance of a trade dispute". The basic philosophy of "legal abstention" from union organisation lasted until 1971 when the Conservative government attempted comprehensive regulation. This intervention was reversed by Labour in 1974, but after 1979 unions became heavily regulated. was the
General Secretary of the
Trades Union Congress, which is the umbrella grouping for trade unions in
England and Wales. Today union governance can be configured in any manner, so long as it complies with the compulsory standards set by the
Trade Union and Labour Relations (Consolidation) Act 1992. Before 1979, all unions had systems of elections and were democratic. In most the members elected union executives directly. However, it was thought that indirect elections (e.g. where members voted for delegates, who elected executives in conference) made a minority of unions more "out of touch" and militant than was natural.
Trade Union and Labour Relations (Consolidation) Act 1992, section 46, requires that members have direct voting rights for the executive, which cannot stay in office for more than five years. In addition, rules were passed (though there was little evidence of problems before) saying no candidate may be unreasonably excluded from an election, all voters are equal, and postal ballots must be available. In practice, UK union elections are often competitive, although voter turnouts (without electronic voting) tend to be low. Minor procedural irregularities that would not affect outcomes do not undermine an election, but otherwise a
Certification Officer can hear complaints about malpractice, make inquiries, and issue enforcement orders, which can in turn be appealed to the High Court. For example, in
Ecclestone v National Union of Journalists Jake Ecclestone, who had been the Deputy General Secretary of the
National Union of Journalists for 40 years, was dismissed by the executive. He attempted to run for election again, but the executive introduced a rule that candidates had to have the executive's "confidence". Smith J held the union had no express rule stating the executive could do this, nor could any be construed consistently with the democratic nature of the union's constitution. The executive's "new rule" was also contrary to
TULRCA 1992 section 47, which prohibits unfair exclusions of candidates. Where statute is not explicit, standard principles of construction apply. There have been dissenting views, notably in
Breen v Amalgamated Engineering Union, over the extent to which principles of natural justice may override a union's express rules. However, the better view appears that construction of a union's rules consistently with statutory principles of democratic accountability do require that express rules are disapplied if they undermine the "reasonable expectations" of members. In addition, "best practice" standards will be used to interpret union rules. In
AB v CD, where the union's rules were silent on what would happen when an election was tied, the court referred to the
Electoral Reform Society's guidance. Beyond union governance through the vote and elections, members have five main statutory rights. First, although statute asserts that a union is "not a body corporate", in every practical sense it is: it can make contracts, commission torts, hold property, sue and be sued. The union's executives and officials carry out actions on its behalf, and their acts are attributed to it by ordinary principles of agency. However, if any union official acts
ultra vires, beyond the union's powers, every member has a right to claim a remedy for the breach. For example, in
Edwards v Halliwell a decision of the executive committee of the
National Union of Vehicle Builders to increase membership fees was restrained, because the constitution required a two-thirds vote of members first. Second,
TULRCA 1992 section 28 requires unions to keep accounts, giving a "true and fair" view of its financial affairs. Records are kept for six years, members have a right to inspect them, they are independently audited and overseen by the
Certification Officer. Third, members have a right to not give contributions to the trade union's political fund, if there is one. Since the early success of the
UK Labour Party in promoting working people's welfare through Parliament, both courts and Conservative governments attempted to suppress unions' political voice, particularly compared to funding by employers through control of
corporations. Under
TULRCA 1992 sections 72, 73 and 82, a union must hold a separate fund for any "political object" (such as advertising, lobbying or donations), members must approve the fund by ballot at least every 10 years, and individual members have a right to opt-out of it (unlike shareholders in companies). Unions must also have political objects in the constitution. In 2010, just 29 from 162 unions had political funds, though 57 per cent of members contributed. This generated £22m. Consolidated statistics on corporate political spending, by contrast, are not available. , in 2007, 2010 and 2013
Jerry Hicks challenged the general secretary of
Unite the Union, and only lost by small margins in the system of voting by
postal ballots among members. Fourth, members must be treated fairly if they are disciplined by a union, in accordance with judicially developed principles of
natural justice. For example, in
Roebuck v NUM (Yorkshire Area) No 2 Templeman J held that it was unfair that
Arthur Scargill was on the appeal panel for journalists being disciplined for appearing as witnesses against a
libel action by Scargill himself. In another example,
Esterman v NALGO held that Miss Esterman could not be disciplined for taking up an election counting job outside of her work, especially since the power of the union to restrain her was not clearly in its own rules. Fifth, members cannot be expelled from the union without a fair reason, set out in the statutory grounds under
TULRCA 1992 section 174. This could include an expulsion under the
Bridlington Principles, an agreement among unions to maintain solidarity and not attempt to "poach" each other's members. However, the legislation was amended after
ASLEF v United Kingdom to make clear that unions may exclude members whose beliefs or actions are opposed to the union's legitimate objectives. In
ASLEF, a member named Lee was involved in the
British National Party, a neo-fascist organisation committed to white supremacy, and Lee himself was involved in violence and intimidation against Muslim people and women. The
European Court of Human Rights held that
ASLEF was entitled to expel Lee because, so long as it did not abuse its organisational power or lead to individual hardship, "unions must remain free to decide in accordance with union rules, questions concerning admission to and expulsion from the union." Lastly, union members also have the more dubious "right" to not strike in accordance with the decision of the executive. This precludes a union disciplining members who break solidarity, and has been criticised by the
International Labour Organization for undermining a union's effectiveness, in breach of core labour standards.
Collective bargaining The right of workers to collectively bargain with employers for a "
fair day's wage for a fair day's work" is regarded as a fundamental right in
common law, by the
European Convention on Human Rights article 11, and in
international law. Historically the UK had, however, left the procedure for making collective agreements, and their content, largely untouched by law. This began to change from
1971, though by contrast to other countries in the
Commonwealth,
Europe, or the
United States the UK remains comparatively "voluntarist". In principle, it is always possible for an employer and a trade union to come voluntarily to any collective agreement. Employers and unions would usually aim to develop an annually updated
wage scale for workers, fair and flexible
working time, holidays and breaks, transparent and just procedures for hiring or
dismissals, fair and jointly administered
pensions, and a commitment to work together for the enterprise's success. In 2010, around 32 per cent of the UK workforce was covered by a collective agreement, leaving around two-thirds of the British workforce with
little influence over the terms of their work. (1900–1979), was a Berlin Labour Court judge who was forced out in 1933, heavily influenced the idea of UK labour law as "collective
laissez-faire". Traditionally, if workers organise a union, their last resort to get an employer to the bargaining table was to threaten collective action, including exercising their
right to strike. In addition, the
Trade Union and Labour Relations (Consolidation) Act 1992 Schedule A1 contains a statutory procedure for workers to become recognised for collective bargaining. To use this procedure, first, a trade union must be certified as independent and the workplace must have a minimum of 21 workers. Second, there must not already be a recognised trade union. This caused particular problems in
R (National Union of Journalists) v Central Arbitration Committee as the Court of Appeal held that a recognised union which lacked any significant support could block the bargaining claim of a union with support. Third, the union must identify an appropriate "bargaining unit" for a collective agreement, which a government body named the
Central Arbitration Committee (CAC) can verify and approve. On the union's proposal, the CAC must take into account whether the proposed bargaining unit is "compatible with effective management", as well as the employer's views and the characteristics of the workers. The CAC has broad discretion, and may only be challenged by an employer under the general principles of
natural justice in
administrative law. In
R (Kwik-Fit (GB) Ltd) v CAC the Court of Appeal found that the CAC's determination that the appropriate bargaining unit was all of
Kwik Fit's workers within the
M25 London
ring road. The union's recommendation is the starting point and the CAC is entitled to prefer this over an employer's alternative, especially since the employer will often attempt to define a larger "unit" so as to limit the likelihood of union members holding greater majority support. Fourth, once the bargaining unit is defined, the CAC may be satisfied that there is majority support for the union to represent the workforce and will make a recognition declaration. Alternatively, fifth, it may determine that the position is less clear and that a secret ballot is in the interests of good industrial relations. Sixth, if a ballot takes place both the union and the employer should have access to employees, and be able to distribute their arguments, and threats, bribes or undue influence are forbidden. Seventh, when a vote takes place the union must have at least 10 per cent membership, and win 50 per cent of the vote, or least 40 per cent of those entitled to vote. If the union wins a majority, the eighth and final step is that if the parties do not reach an agreement the CAC will regulate the collective agreement for the parties and the result will be legally binding. This contrasts to the basic position, under
TULRCA 1992 section 179, which presumes that collective agreements are not
intended to create legal relations. The long, problematic procedure, was partly based on the model of the US
National Labor Relations Act 1935, but because of its cumbersome nature it strongly encourages the parties to seek voluntary agreement in the spirit of cooperation and
good faith. has continually held, like the UK courts, that collective bargaining is a basic right guaranteed by
ECHR article 11. Though most collective agreements will come about voluntarily, the law has sought to ensure that workers have true
freedom of association by prohibiting employers from deterring union membership, and by creating positive rights for members. First, the
Trade Union and Labour Relations (Consolidation) Act 1992 sections 137-143 make it unlawful for employers, including agencies, to refuse anyone employment on grounds of union membership. The courts will interpret the legislation purposively to protect union activities, with the same strictness as other anti-discrimination laws. Second,
TULRCA 1992 sections 146-166 state that workers may not be subject to any detriment or dismissal. For example, in
Fitzpatrick v British Railways Board the Board dismissed of a lady who had been a member of a
Trotskyist group (which promoted
international socialism). The Board justified this on the ground that she had not told the employer about having previously worked for the
Ford Motor Company, and so for 'untruthfulness and lack of trust'. Woolf LJ held that this was not the true reason - Trotskyism was the issue. The dismissal was unlawful under section 152. Given the technicality of the legislation, the most important case is
Wilson and Palmer v United Kingdom, where Wilson's pay was not increased by the
Daily Mail because he wished to remain on the union collective agreement, and Palmer's pay was not put up by 10 per cent because he would not consent to leaving the union, the
NURMTW. The
European Court of Human Rights held that any ambiguity about protection in UK law contravened
ECHR article 11 because, In principle, like any victimisation case in discrimination law, 'a detriment exists if a reasonable worker would or might take the view that the [treatment] was in all the circumstances to his detriment'. If the UK statutes are not updated, the
Human Rights Act 1998 section 3 requires interpretation of the common law, or statute, to reflect ECHR principles. More specific legislation, with the
Data Protection Act 1998 sections 17-19 and the
Employment Relations Act 1999 (Blacklists) Regulations 2010, penalises a practice of recording or
blacklisting union members, and potentially leads to criminal sanctions for employers and agencies who do so. Third, union members have a right to be represented by union officials in any disciplinary or grievance meeting under
Employment Relations Act 1999 sections 10-15. This can be particularly important when a worker is in trouble with management. Fourth, an employer must permit officials of independent trade unions, which it recognises for collective bargaining, to a reasonable amount of time off to fulfill their role. Also, union members have a right to a reasonable amount of time off during work hours also to participate in meetings about agreements with the employer, or voting for elections. An
ACAS Code of Practice sets out the general guidelines. A final "right" is that under
TULRCA 1992 a worker may not be compelled to become a union member in what used to be called
closed shop arrangements. Collective agreements had required that employers did not hire anyone who was not a union member. However, the
European Court of Human Rights decided in 1981 that "freedom of association" under
article 11 also entailed "freedom from association". This shift in the law coincided with the start of a Europe-wide trend toward falling union membership, as the closed shop had been the main mechanism to keep up union support, and thus collective bargaining for fairer workplaces. The ECHR does not, however, prevent unions pursuing
fair share agreements, where non-union members contribute to union fees for the services they get for collective bargaining. Nor does it prevent collective agreements that would
automatically enroll staff in the trade union, as happens under the
Pensions Act 2008, with the right for the worker to opt-out if they chose.
Collective and strike action The right of workers to collectively withdraw their labour has always been used to make employers stick to a collective agreement. At critical moments of history, it also combatted political repression (e.g. the
Peasants' Revolt of 1381, and the
Indian Independence Movement up to 1947), prevented military coups against democratic governments (e.g. the
general strike in Germany against the
Kapp Putsch in 1920), and overthrew dictatorships (e.g. in the
2008 Egyptian general strike). Anti-democratic regimes cannot tolerate social organisation they do not control, which is why the right to strike is fundamental to every
democratic society, and a recognised
human right in
international law. Historically, the UK recognised the right to strike at least since 1906. UK tradition has inspired the
International Labour Organization Convention 87 (1948) articles 3 and 10, the case law of the
European Court of Human Rights under
article 11, and the
EU Charter of Fundamental Rights article 28. However, the scope of the right to take collective action has been controversial. Reflecting a series of restrictions from 1979 to 1997, the law was partially codified in the
Trade Union and Labour Relations (Consolidation) Act 1992 sections 219 to 246, which now falls below international standards. , used throughout history like in the
Peasants' Revolt of 1381, is a fundamental right in every democracy.
TULRCA 1992 sets limits which have been found by the
International Labour Organization to violate international standards. There is no consensus about the status of the right to strike at
common law. On the one hand, the House of Lords and the Court of Appeal has repeatedly affirmed that "to cease work except for higher wages, and a strike in consequence, was lawful at common law", that "right of workmen to strike is an essential element in the principle of
collective bargaining", "that workmen have a right to strike", and that this is "a fundamental human right". This view would accord with international law, and see the right to stop work in a good faith trade dispute as an implied term in every employment contract. On the other hand, differently composed courts have asserted that the common law position sits at odds with international law: that a strike is a breach of contract, and this creates tortious liability for unions organising collective action, unless it falls within an immunity from statute. On this view, even though an employer is not liable for economic loss to workers who are collectively dismissed, a union could be liable to the employer for taking collective action.
Economic torts have been said to include
conspiracy to injure,
inducement of breach of contract, and
tortious interference with a contract. However,
TULRCA 1992 section 219 contains the classic formula, that collective action by a trade union becomes immune from any liability in tort if done "in contemplation or furtherance of a trade dispute". This said, various further hurdles must be jumped for a union to be certain of immunity from employers suing for damages, or an injunction to stop a strike. ,
New Labour Prime Minister from 1997 to 2007, said in 1997 that "changes that we do propose would leave British law the most restrictive on trade unions in the Western world." This is still seen as accurate. First, the meaning of a "trade dispute" under
TULRCA 1992 section 244 is confined to mean a dispute "between workers and their employer" and must mainly relate to employment terms. In
BBC v Hearn Lord Denning MR granted an injunction against a strike by
BBC staff to stop broadcast of the
1977 FA Cup Final to
apartheid South Africa. He reasoned that this was a political dispute, not a "trade dispute", unless the union was requesting "putting a clause in the contract" to not do such work. Strikes against government legislation (rather than an employer), or privatisation, or outsourcing before it happens, have been held unlawful. However, at the least, any dispute over the terms or conditions on which workers do their jobs will allow protection. Second,
TULRCA 1992 section 224 prevents collective action against someone who is "not the employer party to the dispute". "Secondary action" used to be lawful, from the
Trade Union Act 1871 until 1927, and again from 1946 till 1980, but today it is not. This makes the definition of "employer" relevant, particularly where a trade dispute involves a company group. A worker's written statement of the contract may purport to say that the only "employer" is a subsidiary, although the parent company carries out the employer's function of ultimately setting the contractual terms and conditions. Further, any
picketing or protest outside a workplace must be "peaceful" and there must be a picket supervisor. There are a limited number of outright prohibitions on strike action, but in accordance with
ILO Convention 87 this is only for workplaces that involve the truly essential functions of the state (for armed forces, police, and prison officers), and only when impartial arbitration is used as an alternative. Third, under
TULRCA 1992 section 226 a union wishing to take collective action for a trade dispute must conduct a ballot. In summary, the union must give 7 days notice to the employer about holding a ballot, state the categories of employees being balloted, give a total number, all "as accurate as is reasonably practicable in the light of the information". Since the
Trade Union Act 2016, there is an additional requirement that a ballot has a 50% turnout for a strike to be supported, and a total of 40% of voters supporting a strike (i.e. an 80% turnout if the vote is evenly split) in "important public services" that include health services, schools, fire, transport, nuclear and border security. A scrutineer must be able to oversee the conduct, the vote must be given to all workers who could strike, the vote must be secret and by post, allowing for 'small accidental failures' which are 'unlikely to affect the result of the ballot'. The union must inform the employer of the result "as soon as reasonably practicable", call action within four weeks, and tell the employer of the people taking part. The rules are poorly drafted, and this has generated litigation where some courts allowed injunctions on ostensible technical glitches. However, the Court of Appeal since emphasised in
British Airways Plc v Unite the Union (No 2) and
RMT v Serco Ltd that the rules are to be interpreted consistently with the purpose of reconciling the equally legitimate, but conflicting interests of employers and unions. No employee can be dismissed for taking part in a strike for a period of 12 weeks, so long as the strike is officially endorsed by the union. However, if strikes are not conducted in accordance with law, employers can (and often do) go to court to seek an injunction against a union conducting the strike, or potentially damages. A court should not grant any injunction against a strike unless there is a 'serious question to be tried' and it must consider where the 'balance of convenience lies'. In
The Nawala the House of Lords stressed that injunctions should be granted rarely and give 'full weight to all the practical realities' and the fact that a court should not end the strike in the employer's favour.
Information and consultation While rights to take collective action, including strikes, are fundamental to
democratic and civilised society, the UK has introduced a growing menu of collective rights to have a "voice at work" without a need for
protest. "Information and consultation" are usually seen as precursors to actual participation rights, through binding
votes at work. The economic benefit is that
directors or decision-makers who inform and consult staff on important workplace changes (e.g. redundancies) think harder, and see alternatives with fewer costs for the enterprise,
taxpayers, and staff. Information and consultation rights have historically derived from collective bargaining models. The
Trade Union and Labour Relations (Consolidation) Act 1992 sections 181-182 require employers on a union's written request to disclose information, without which collective bargaining could be materially impeded, according to "good industrial relations practice". The
Companies Act 2006 section 417-419 also requires disclosure of information in a director's report each
financial year on how companies "have regard" to "the interests of the company's employees" and "business relationships with suppliers" down the
supply chain. General consultation rights existed in the UK with
collective bargaining since the
Whitley Councils from 1918. A general consultation right is now codified in the
Charter of Fundamental Rights of the European Union, article 27. The
Court of Justice held this was not directly binding, but specific rules apply in four main contexts: in general
work councils,
transnational work councils, for collective redundancies,
transfers of undertakings, and health and safety. with over 50 people has a right to elect a
work council which management must
inform and consult before major workplace changes. Staff who work for companies that operate in two or more
EU countries have a right to start a
transnational work council. First, the
Information and Consultation of Employees Regulations 2004, require
undertakings with 50 or more employees to inform and consult on probable developments in the enterprise, changes to job structures, and contract changes - especially
redundancies. Employees must voluntarily initiate an "information and consultation procedure". If they do, but employers cannot find a negotiated agreement, a "standard procedure" model requires between 2 and 25 elected employee representatives having the right to be consulted on an ongoing basis: that is, an elected
work council. A negotiated agreement can cover more issues than the model (for instance, to integrate health and safety issues in one council) if the parties choose. Crucially, consultation is not merely an exercise in management telling staff about their decisions, but requires meaningful dialogue "with a view to reaching an agreement". This is "an obligation to negotiate", similar to a duty to bargain in
good faith. To start a procedure, at least 15 employees or 10 per cent of staff (whichever is higher) can request it. Occasionally, there could be a "pre-existing" council, or procedure in writing, covering all employees. If so, if it is not as good as the new method requested, and if the employer wants to keep it that way, a ballot must be held where over 50 per cent of staff favour a new procedure. For example, in
Stewart v Moray Council, after 500 teachers requested a new procedure (over 10 per cent of staff, but under 40 per cent), the employer argued that a ballot had to be held, because the existing collective agreement with the union had a protocol on information and consultation. The
Employment Appeal Tribunal, rejecting the employer's claim, held the pre-existing procedure was not good enough to force a ballot, because it did not explain how the views of staff would be sought. Employer currently face penalties up to £75,000 for failure to comply with the rules, though it is far from clear this is sufficient to ensure an "effective remedy" under
EU law. Second, the
Transnational Information and Consultation of Employees Regulations 1999 enable unified work councils in multinational enterprises, operating in the
EU. This is most likely for
US multinational enterprises. In "community scale undertakings" or corporate "groups" with over 1000 employees, and 150 employees in two or more member states, employees have a right to a transnational work council to consult on any "probable trend of employment, investments, and substantial changes... introduction of new working methods or production processes... and collective redundancies." A "group" of undertakings exists when one undertaking has a "dominant influence" over another, for instance through company share ownership or rights to appoint or remove directors. Other features of transnational work councils are similar to the
Information and Consultation of Employees Regulations 2004. Management can initiate a work council, or 100 employees in at least two undertakings and member states can make a request. Then, a "special negotiating body" (elected worker representative and management) will try to seek an agreement on the terms. If agreement cannot be reached, a template set of "subsidiary requirements" will form the work council's constitution. The rules have been criticised for not going further, or being integrated with other consultation laws, although every member state in the EU is able to go beyond the minimum standards laid down. Third, the
Trade Union and Labour Relations (Consolidation) Act 1992 section 188 requires employers, who are "contemplating" redundancies of 20 employees, in an "establishment" over 90 days, to consult for 30 days with the workforce. "Redundancy" is an economic dismissal "not related to the individual concerned" (e.g. for poor work or misconduct). In
University of Stirling v UCU the Supreme Court held that expiry of fixed term contracts, for 140
University teaching staff, did not count as a reason "related to the individual", and so staff should have been consulted. An "establishment" includes "a distinct entity that is ordinarily permanent, entrusted with performing specified tasks, namely primarily the sale of goods, and which has, to that end, several workers, technical means and an organisational structure in that the store is an individual cost centre managed by a manager." In
Lyttle v Bluebird UK Bidco 2 Ltd, the
Court of Justice held this meant that
Woolworths shops in Northern Ireland, each with under 20 employees, could claim to be separate establishments. More doubtfully, it was held by the
Employment Appeal Tribunal in
E Green & Sons (Castings) Ltd v ASTMS that three companies, all operating from the same premises, were different establishments even though they were part of the same group. There is considerable disagreement over when an employing entity must begin consulting: the Directive says when decision-makers are "contemplating", while the Regulations say "proposes". In
AEK ry v Fujitsu Siemens Computers Oy the
Court of Justice held consulting must begin "once a strategic or commercial decision compelling him to contemplate or to plan for collective redundancies has been taken." In groups of companies, where a parent controls the subsidiary, the duty to perform the consulting process falls on the subsidiary, but the duty begins as soon as the parent has contemplated that a particular subsidiary "has been identified" for redundancies for consulting "to have any meaning". Consultation should take place with the recognised
trade union first, but if there is none, then elected employee representatives, if necessary giving enough time to organise an election. Section 188(7) says that an employer has a "defence" for not consulting if there are "exceptional circumstances", but this "exception" is not in the Directive, and courts have avoided applying it. Dismissals cannot take effect until meaningful negotiation has taken place. If employers fail to negotiate, they must pay a "protective award" of up to 90 days' pay to each employee. Essentially similar rules apply for consultation with staff before any transfer of an undertaking.
Votes at work Rights of staff to vote for governing boards and bodies in UK enterprises, whether corporations, partnerships or other statutory entities, have an established history in the UK. They remain today in institutions such as
universities, NHS hospitals, and many workplaces organised as
partnerships. Since the turn of the 20th century Acts such as the
Port of London Act 1908,
Iron and Steel Act 1967, or the
Post Office Act 1977 required all workers in those specific companies had votes to elect directors on the board, meaning the UK had some of the first "
codetermination" laws in the world. However, as many of those Acts were updated, the
Companies Act 2006 today still has no general requirement for workers to vote in the
general meeting to elect directors, meaning
corporate governance remains monopolised by shareholding institutions or
asset managers. By contrast in 16 out of 27
EU member states employees have participation rights in private companies, including the election of members of the boards of directors, and binding votes on decisions about individual employment rights, like dismissals, working time and social facilities or accommodation. At board level,
UK company law in principle allows any measure of employee participation, alongside shareholders, but voluntary measures have been rare outside employee share schemes that usually carry very little voice and increase employees' financial risk. The
Companies Act 2006 section 168 defines only "members" as those with participation rights. Under section 112 a "member" is anybody who initially subscribes their name to the company memorandum, or is later entered on the members' register, and is not required to have contributed money as opposed to, for instance, work. Moreover, under the
European Company Statute, businesses that reincorporate as a
Societas Europaea may opt to follow the Directive for employee involvement. An SE may have a two-tiered board, as in
German companies, where shareholders and employees elect a supervisory board that in turn appoints a management board responsible for day-to-day running of the company. Or an SE can have a one tiered board, as every UK company, and employees and shareholders may elect board members in the desired proportion. An "SE" can have no fewer employee participation rights than what existed before, but for a UK company, there is likely to have been no participation in any case. are generally required to give staff members a right to vote for the board of managers at the head of
corporate governance, such as in the
Oxford University Act 1854, or the
Cambridge University Act 1856. In the 1977
Report of the committee of inquiry on industrial democracy the Government proposed, in line with the new German
Codetermination Act 1976, and mirroring an EU
Draft Fifth Company Law Directive, that the
board of directors should have an equal number of representatives elected by employees as there were for shareholders. But reform stalled, and was abandoned after the
1979 election. Despite successful businesses like the
John Lewis Partnership and
Waitrose that are wholly managed and owned by the workforce, voluntary granting of participation is rare. Many businesses run
employee share schemes, particularly for highly paid employees; however, such shares seldom compose more than a small percentage of capital in the company, and these investments entail heavy risks for workers, given the lack of
diversification. Another form of direct participation rights is for employees to exercise voting rights over specific workplace issues. The primary example is the
Pensions Act 2004 sections 241-243 state employees must be able to elect a minimum of one third of the management of their occupational schemes, as "
member nominated trustees". This gives employees the ability, in principle to have a voice on how their pension money is invested in company shares, and also how the voting power attached to company shares is used. There have, at the initiative of the
European Union been a growing number of "work councils" and "information and consultation committees", but unless an employer voluntarily concedes to staff having a binding say, there is no legal right to participate in specific questions of workplace policy. Participation at work is limited to information, consultation, collective bargaining and industrial action. ==Equality==