UK Update: Summer of Discontent: What Can Employers Expect from the Trade Unions?

Is now the summer of our trade union discontent?

This week we will see three days of industrial action by RMT, the transport union, which will bring much of the country to a standstill. Similar industrial action is being threatened across other sectors, including education, Royal Mail, other public services and even oil & gas. Unite and Unison are reported to be doubling their daily “strike pay” to cushion the financial burden on workers who take part in industrial action.

Unlike in previous periods of industrial unrest, these strikes will not be about changing legislation (e.g. lobbying for equal pay or the right to seek trade union recognition) but rather this time it’s about the cost of living, as unions take pay disputes to the workplace. For the UK’s largest trade union, Unite, the focus is no longer about politics or backing a Labour Government into power, but rather fighting employers for better pay and conditions to offset inflation.

With RPI and CPI levels rocketing, we are seeing pay disputes up and down the country. The trilogy of legal risks for employers includes threatened industrial action, campaigns for trade union recognition and class action “inducement claims” against those employers who implement pay deals outside of collective bargaining. Perhaps more damaging than these legal remedies, we are seeing an increase in “leverage” tactics being employed by the trade unions.  These involve unions employing not just the power of persuasion but also the persuasion of power. In other words, active corporate campaigning against an employer’s key stakeholders (not only their employees but also customers, Boards, suppliers, and funders) is designed to cause damage to the business’s reputation (often using social media) in order to apply industrial pressure.

With news headlines warning of a “summer of discontent”, the contradiction is that despite the volume clearly having turned up on trade union disputes, membership of trade unions has been in steady decline in the UK for decades. While we anticipated that there could have been a spike in membership following the impact of the global pandemic, in fact, very recent statistics from the Department for Business, Energy and Industrial Strategy have shown that the proportion of UK employees who were trade union members fell to 23.1% in 2021 down from 23.7% in 2020. This represents the lowest union membership rate on record among UK employees for which there is comparable data (since 1995). Union membership in the private sector is only around 13%.  Despite this, industrial action is at a five-year high, as pay is hit by inflation.

With society already fatigued by the disruption caused by Covid-19 lockdowns and rising fuel costs, the trade unions are not necessarily going to win in the courts of public opinion. The Transport Secretary Grant Shapps suggested that the RMT is competing not just with other public transport providers but also Teams and Zoom with which those who are able to work from home have become so familiar during lockdown. But that won’t be much comfort for essential workers who are unable to travel by train to their places of work on strike dates. Even if the unions haven’t entirely fallen out of love with the Labour party, the disruption to public services caused by industrial action this summer could ironically play to the Conservative Government’s advantage.

Employees in the UK have the right to strike, provided that they have the protection of a lawful industrial action ballot by their trade union. I think that it would be a step too far to remove that right altogether. The Trade Union Act of 2016 already reigned in those rights quite considerably. The balloting and notification requirements are tougher than ever and, significantly, in order to be democratic, there is now a 50% minimum turnout requirement for an industrial action ballot to get off the ground. The UK Government is apparently also now considering removing the legal bar on breaking strikes by hiring agency workers, which would reduce the impact of industrial action on employers even more.

So, in the meantime, what can corporate employers do when faced with threats of industrial action or a leverage campaign? Back in the old days of unrest in the maritime sector, militant dockers were described as “broken arrows” – that is, they don’t work and you can’t fire them. Nowadays, workers who take part in unlawful industrial action (wildcat strikes) do risk immediate dismissal without the right to claim unfair dismissal. Similarly, the trade unions could themselves face litigation for interdict or injunction and damages for lost revenues due to disruption of business if they “endorsed” the unofficial action.

These are, however, costly remedies for employers both in the form of litigation spend and potential reputational backlash. For me, there is a more positive way for employers to respond when faced with a leverage campaign or threatened industrial action arising from a pay dispute.  The advice to employers in difficult times at work is to overcommunicate with all employees and out-communicate the trade union. Whether it be a dispute overpay and conditions, or a union recognition campaign, it is vital for managers to engage with colleagues throughout the business to explain the rationale and reality of the dispute to win over the hearts and minds of the wider workforce.

Whether rightly described as ‘sinister’ (at worst) or ‘cynical’ (at best), trade union leverage campaigns can be toxic. This is, of course, what trade unions do – but it doesn’t mean that employers need to accept this conduct. The temptation for managers is to shy away from the problem or to come out fighting the trade union.  Instead, employers should actively engage and consult with the people who really count – their employees and customers – to get the business’s side across and correct any inaccuracies in the union’s messaging.

The current blame game in the rail dispute will only be resolved by conciliation and compromise. But first, the parties have to communicate.  As was famously attributed to George Bernard Shaw, “the single biggest problem with communication is the illusion that it has taken place”.

By Burness Paull LLP, Scotland, a Transatlantic Law International Affiliated Firm.