ANNEX II
Letter from the Clerk of the Committee
to Rowley Ashworth Solicitors
The Deregulation Committee has begun its consideration of the
proposal for the Deregulation (Deduction from Pay of Union Subscriptions)
Order 1998. At its meeting on 13 January, questions were raised
about the necessity for the transitional arrangements outlined
in the proposal.
You stated in your response to the consultation paper that the
provisions for transitional arrangements were unnecessary on the
grounds that union members invariably gave an indefinite authorisation
to check off. The Department, however, argued that it may be difficult
to determine in particular cases whether a worker's authorisation
should be construed to have been given for indefinite deduction
or to have been given on the understanding that renewal would
be required (paragraph 44 of Explanatory Memorandum to the proposal).
All workers using check off will have signed authorisations or
re-authorisations which under the existing statutory requirement
would be required to be renewed after no more than three years.
It was thus claimed that the transitional arrangements were essential
to give legal certainty on this point to employers and workers.
The Committee would be grateful for any comments you may make
on this point.
14 January 1998
Letter from Rowley
Ashworth Solicitors to the Clerk of the Committee
You have asked for our comments on the Department of Trade &
Industry's response at paragraphs 44-46 of the Explanatory Memorandum.
The subject is the proposal in the consultation paper that as
a transitional measure employers should be required to send notice
to all employees on check off advising them that check off arrangements
will continue indefinitely unless the employee instructs otherwise.
At paragraph 44 the Department sets up as a hypothesis the suggestion
that authorisations given by some workers should be construed
as intended to expire after 3 years. It then proposes a transitional
measure in order to provide for that eventuality. We consider,
however, that such a measure is unnecessary because it is addressing
a problem which is purely hypothetical and does not arise in practice.
While the precise form of words for authorising check off varies
from trade union to trade union typically it will authorise the
employer until further notice to deduct from pay on each pay date
a specified sum or such other sum as may from time to time be
notified to the employer by the union. In our experience the
form of words used invariably gives the employer express authority
to make such deductions until further notice.
We have never heard of any such authorisation being confined to
a limited period and we note that no such evidence is cited in
either the consultation paper or the explanatory memorandum.
If, however, there are any authorisations which specify an expiry
date (which we very much doubt) then clearly those authorisations
cannot and should not be relied upon after that date. That will,
however, be clear to the employer concerned from the wording of
the authorisation given by that worker.
It seems that the Government is suggesting, because Section 68
(3) of the 1992 Act provides that an authorisation should only
remain current for 3 years, that in signing an indefinite form
of authorisation the worker concerned might impliedly have intended
that authorisation should be limited to the statutory period of
3 years. That argument does not, however, bear analysis. First,
it cannot apply to authorisations signed before the 30th August
1993 when the statutory provision requiring reauthorisation every
3 years came into effect. Secondly, there is nothing in the wording
of such authorisations or re-authorisations which expressly refers
to the statutory limit of 3 years. If in reply it is argued that
workers must be deemed to have known the then current law that
same argument will apply equally once the law has been changed
again by the proposed Order. Correctly analysed it is clear that
workers have invariably given indefinite authority for check off.
The 1993 Act prevented employers relying on such an authorisation
after 3 years but that statutory intervention in no way alters
the clear meaning and effect of the authorisation itself. If,
therefore, the 3 year limitation is removed the authorisation
will remain valid indefinitely unless the worker gives notice
withdrawing that authority.
Once it is recognised that the problem that the Government has
posed in paragraph 44 is a purely hypothetical one which does
not exist in practice, it should be clear that there is no need
for the remedy to that hypothetical problem suggested in paragraph
46.
Wording of any Notice
If notwithstanding the above the Committee is minded to approve
a transitional measure requiring employers to send a notice to
all employers on check off, we consider that the form of words
described in paragraph 46 would only cause confusion. To ask
workers to indicate whether they wish to retain the conditions
attached to their existing authorisations begs the question of
whether individual workers will know what conditions, if any,
are attached to their existing authorisations.
Furthermore, such a notice will create considerable administrative
confusion and additional costs for employers because those workers
who responded to the notice would then have to be given notice
of every subscription increase and have their authorisations renewed
every 3 years while the authorisations from other workers would
continue indefinitely. This suggestion is, therefore, a recipe
for confusion.
If it is felt necessary that there should be a notice (and we
repeat that in our view it is unnecessary) we submit that the
Government should revert to the suggestion at paragraph 11 of
the consultation paper by which existing authorisations would
expire after 3 years unless, before that time, the worker received
a notice informing him that check off arrangements will continue
indefinitely and without prior notice of any increases in the
rate of deductions unless the worker instructs the employer to
terminate deductions.
Conclusion
The Government has accepted that the only necessary statutory
protection is that employers should obtain written authorisations
from their workers to begin deducting trade union subscriptions
and that workers should be free to withdraw that authority at
any time. Subject to those safeguards the Government accepts
that workers' rights are adequately protected elsewhere, e.g.
by the requirement for itemised pay statements (Section 8 of the
1996 Act) and by the prohibition on unauthorised deductions (Section
13 of the 1996 Act).
If the Order is made without any transitional measure requiring
a further notice to workers they will continue to be aware of
the amount of deductions for union contributions through their
itemised pay statements and they will be free at any time to withdraw
their authority for check off by giving notice to that effect
to their employer. No further protection is necessary.
If, however, a decision is taken to issue a notice to workers
on check off it should simply advise them that check off will
continue indefinitely and without prior notice of any increases
unless the worker gives notice to the employer to terminate deductions.
19 January 1998
Letter from the Clerk of the Committee
to the Industrial Relations Directorate, Department of Trade and
Industry
The Deregulation Committee has begun its consideration of the
proposal for the Deregulation (Deduction from Pay of Union Subscriptions)
Order 1998. At its meeting on Tuesday 13 December, the Committee
raised a number of questions about aspects of the proposal.
(i) First Proposal: Transitional Arrangements
In their response to the consultation document, the TUC argued
that existing authorisation forms did not refer to a three year
limit and that authorisation given should not be seen to be limited
in this way. They believed that repeal of the requirement to re-authorise
would simply lead to all existing authorisations becoming indefinitely
valid. It was further noted that workers would clearly be aware
that union subscriptions were still being deducted from their
pay because their pay slips would record that information. The
Committee would like clarification of the argument in the Explanatory
Memorandum that the transitional arrangements are necessary because
there would otherwise be legal doubt as to whether an authorisation
was indefinitely valid or not (paragraph 44).
The Committee noted that the prescribed notice to be sent to all
workers currently using the check off system informs them that
they may continue to limit their authorisation of deductions
to a 3 year maximum and that they may retain the requirement for
advance notification of increases in deductions. In practice,
this could mean that in any given workplace there may be some
workers using check off who require re-authorisations every 3
years and some who do not. There may also be some who must be
notified by their employer of increases in subscription rates,
and some for whom this requirement is not necessary. It has been
suggested that such a dual system would cause confusion and disproportionately
reduce any prospective administrative and financial savings. The
Committee wishes to know what consideration has been given to
this possibility occurring.
The Committee also expressed concern that the prescribed notice,
laid out in the schedule to the draft Order, was excessively
complicated and confusingly drafted. The Committee would like
to know whether the notice could be made simpler.
(ii) Second Proposal: Removal of Requirement to notify workers
of increases in amounts deducted.
The Explanatory Memorandum states that workers would not be deprived
of a significant right by the repeal of the requirement that workers
are told in advance of increases in the rates of subscription
deductions (paragraph 14). The Committee are concerned that they
have not been sufficiently informed about the wider legal context
of this assertion.
The Explanatory Memorandum asserts that the proposed Order would
still leave in place more protections for workers than exist in
relation to other deductions from wages (paragraph 17). The Committee
would like more information regarding present requirements for
analogous deductions. It was suggested in the Committee that the
position of a worker paying union subscriptions by check off could
be seen as analogous to that of a member of an organisation such
as the National Trust or a purchaser of a magazine by subscription.
In assessing the question of whether any necessary protection
is being removed, the Committee would therefore like to know whether
there is any general statutory protection for consumers against
subscriptions for services being increased without notification.
If equivalent provisions existed to protect individuals in other
sectors, an argument could be put forward that such provisions
would be necessary to protect unionised workers.
The Committee would also like to receive details of the comparable
arrangements for notifying workers who pay by other means, and
be informed if there are any requirements regarding notification
in these instances.
In addition, the Employment Bar Association noted in their response
to the consultation document that although, under the terms of
the Employment Rights Act 1996, employees were entitled to an
itemised pay statement (which would clearly show rates of deductions
for union subscriptions), workers who were not defined as employees
under the Act were not so entitled. The Committee would be grateful
to be informed of the categories of workers which are not entitled
to itemised pay statements.
14 January 1998
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