New judgment restricts employers’ scope for responding to industrial action

In order to make the relevant statutory provisions compatible with employees’ human rights, the Employment Appeal Tribunal (EAT) has ruled that employers are only entitled to deduct pay commensurate to the period for which an employee took part in industrial action. Any other detriment short of dismissal that an employer imposes, such as withdrawing discretionary benefits, is unlawful with employees entitled to claim “just and equitable” compensation.

Legal background

Employers are prohibited from subjecting an employee to any detriment as an individual, for the sole or main purpose of preventing or deterring them from taking part in the activities of an independent trade union at an appropriate time or penalising them for doing so. This rule is set out in section 146 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).

For these purposes, an “appropriate time” is specified as being outside of the employee’s working hours, or at a time within them with the employer’s consent. It would be very unusual for an employer to consent to industrial action, which by its nature must generally take place during an employee’s working hours in order to be effective. The upshot is that, before now, employees have not enjoyed protection from detriment short of dismissal for taking part in industrial action – for instance, through their employer withdrawing discretionary benefits.

In contrast, employees have long had separate protection from being dismissed for taking part in industrial action (under provisions set out in sections 237, 237A and 238 of TULRCA).

What happened in this case?

Mrs Mercer was a support worker at a social care charity and, at the relevant time, was a workplace representative for her trade union (Unison). In early 2019, there was a trade dispute in respect of payments for sleep-in shifts and Unison called a series of strikes. Mrs Mercer was involved in planning and organising the industrial action, as well as in taking part in it. In response, she was suspended.

Mrs Mercer brought a complaint to an Employment Tribunal (ET), which included an assertion that her suspension amounted to being subjected to an unlawful detriment under section 146 of TULRCA. She argued that the activities of an independent trade union, within the meaning of that provision, included not only the planning and organisation of the industrial action but also her own participation in it during her working hours.

The ET determined that participation in industrial action is not a protected activity under section 146. While the ET recognised that the absence of any protection from detriment short of dismissal amounted to a breach of Mrs Mercer’s rights under Article 11 of the European Convention on Human Rights, it went on to conclude that section 146 could not be read in a way that would be compatible. As such, the ET determined that it could not consider that part of her complaint.

The EAT’s decision

On Mrs Mercer’s appeal to the EAT, it upheld the ET’s decision that the absence of any protection from detriment short of dismissal amounted to a breach of her human rights. This was because the ability for her employer to sanction her for exercising her right to strike would otherwise have the practical and “chilling” effect of restricting her right to participate in trade union activities, including industrial action.

In contrast to the ET, however, the EAT decided that it was possible to read section 146 in a way that was compatible with Mrs Mercer’s human rights. In particular, the EAT considered that the extensive powers given to courts under the Human Rights Act 1998 meant that it could read extra words into what is an “appropriate time” for the purposes of section 146, so that it could include “a time within working hours when [a worker] is taking part in industrial action”.

Implication for employers

This decision has highly significant implications for employers facing industrial action. It has long been common practice for employers, including high-profile ones such as British Airways, to withdraw discretionary benefits from employees who take part in industrial action. Some companies have also offered extra payments only to those employees who do not participate in industrial action. Employers adopting practices of this kind are now at major risk of being held to have acted unlawfully. Instead, they may only safely deduct from an employee’s pay an amount that is commensurate to the period for which they were taking industrial action.

Moreover, as we wrote about last year, employers who compile lists of those employees who take part in industrial action may also face potential claims under legislation on trade union blacklisting. This reinforces the importance of employers taking advice before taking any action against workers who participate in industrial action. While the financial value of claims under section 146 might be relatively low, because compensation is based on what is “just and equitable”, awards in claims for unlawful blacklisting start at £5,000.

This case also highlights the rising importance of Article 11 in the field of trade union law. For example, the Court of Appeal (CA) has suggested that it might need to revisit the legality of “sweetheart deals” in trade union recognition law in light of it, and the Supreme Court will be giving judgment soon in a case concerning employers making offers that bypass collective bargaining. Article 11 was also cited, albeit unsuccessfully, in the recent case in the CA about whether Deliveroo riders were “workers” for the purposes of UK legislation on trade union recognition. These various developments point towards it becoming increasingly difficult for employers to rely on legalistic arguments to defeat the courts’ growing tendency to endorse trade union rights under Article 11.

Mercer v Alternative Future Group Ltd – judgment available here