Any of our business? Human Rights and the UK private sector - Human Rights Joint Committee Contents


Memorandum submitted by the Institute of Employment Rights

INTRODUCTION

  1.1  The activities of business affect human rights in a number of ways, but most obviously as employers. There are a number of human rights obligations to which the United Kingdom is a party which are designed to protect the human rights of people while at work and to regulate the abuse of power by businesses over their employees. We would accept that not all international labour treaties are classified as human rights treaties; and here we address only a few those which are so classified. We accept also that these treaties are not normally addressed to businesses directly; but they create norms with which businesses can be expected to comply, or in relation to which the State has a duty to compel compliance.

  1.2  The IER is concerned that these fundamental human rights provisions inadequately implemented in the United Kingdom. The state of law is such that it is possible for British business operating in this country to act lawfully in circumstances in which these obligations are not circumvented. As will be clear from what follows, the human rights obligations that affect businesses as employers are vast. Space permits only a brief account of one of these aspects of the problem, namely the right to freedom of association. Questions relating to the role of British business overseas are considered in a separate submission by ICTUR, which we support.

INTERNATIONAL HUMAN RIGHTS OBLIGATIONS

  2.1  The starting point is the International Labour Organisation which is responsible for advancing and protecting labour standards throughout the world. There are now 182 countries which are members of the ILO (a United Nations agency), and at the present time there are 188 international labour conventions (treaties binding in international law, when ratified). These conventions include a number of Conventions (all of which have been ratified by the United Kingdom) dealing with what are regarded by the ILO as human rights issues, as follows

    — Freedom of association and the effective recognition of the right to collective bargaining (Conventions 87 and 98);

    — Effective abolition of child labour (Conventions 138 and 182);

    — Elimination of all forms of forced or compulsory labour (Conventions 29 and 105);

    — Elimination of discrimination in respect of employment and occupation (Conventions 100 and 111).

  2.2  In addition to the ILO, a second source of human rights obligations designed to constrain the activities of business (and others) is the Council of Europe. Here the European Social Charter of 1961 (ratified by the United Kingdom) includes a number of obligations addressed to States though designed to deal with the protection of workers from abuse by business (and other employers). They include the

    — The Right to Organise (article 5)'

    — The Right to Collective Bargaining (article 6(2));

    — The Right to Strike (article 6(4)).

  There is now a Revised Social Charter of 1996 (signed but not ratified by the UK), which includes a more comprehensive list of rights and a procedure (the Collective Complaints procedure) for their better supervision. The United Kingdom has signed but not ratified this treaty, though we have proposed in the past that it should do both.

  2.3  The foregoing ratified treaties have yet greater force by reason of the reliance on ILO and Social Charter jurisprudence by the European Court of Human Rights in recent cases on article 11 of the ECHR. This provides protection for the right to freedom of association "including the right to form and join trade unions for the protection of his interests". The cases include Wilson v United Kingdom[302] which related to the conduct of Associated Newspapers in withholding benefits from Mr Wilson because he refused to surrender his rights relating to collective bargaining; and more recently the breath-taking decision of the Grand Chamber in Demir and Baykara v Turkey, 12 November 2008, where the Court repudiated earlier jurisprudence on article 11. Influenced by ILO Convention 98, the European Social Charter and the national traditions of member states of the Council of Europe, the Grand Chamber said that

    having regard to the developments in labour law, both international and national, and to the practice of Contracting States in such matters, the right to bargain collectively with the employer has, in principle, become one of the essential elements of the "right to form and to join trade unions for the protection of [one's] interests" set forth in Article 11 of the Convention, it being understood that States remain free to organise their system so as, if appropriate, to grant special status to representative trade unions.[303]

  2.4  Finally, so far as business and human rights are concerned, reference should also be made to the OECD Guidelines on Multinational Enterprises,[304] which have been endorsed by all 30 OECD member states, as well as 11 other countries.[305] The guidelines (revised in 2000) provide

  Enterprises should, within the framework of applicable law, regulations and prevailing labour relations and employment practices:

    (a) Respect the right of their employees to be represented by trade unions and other bona fide representatives of employees, and engage in constructive negotiations, either individually or through employers' associations, with such representatives with a view to reaching agreements on employment conditions.

    (b) Contribute to the effective abolition of child labour.

    (c) Contribute to the elimination of all forms of forced or compulsory labour.

    (d) Not discriminate against their employees with respect to employment or occupation on such grounds as race, colour, sex, religion, political opinion, national extraction or social origin, unless selectivity concerning employee characteristics furthers established governmental policies which specifically promote greater equality of employment opportunity or relates to the inherent requirements of a job.

THE RIGHT TO MEMBERSHIP OF A TRADE UNION

  3.1  As we have thus seen, the right to membership of a trade union is recognised by a host of human rights treaties: ILO Conventions 87 and 98, the ECHR, article 11, and the European Social Charter 1961, article 5. It is also protected by British law, in the form of the Trade Union and Labour Relations (Consolidation) Act 1992, which makes it unlawful for an employer to refuse to employ someone because of his or her trade union membership (widely construed by the courts). It is also unlawful to subject someone to a detriment because of his or her membership of a trade union or participation in trade union activities, and unfair to dismiss someone or select someone for redundancy for the same reasons. These provisions were strengthened by the Employment Relations Acts 1999 and 2004, the latter amendments having been introduced only after the European Court of Human Rights found that the discrimination against a trade union activist by Associated Newspapers (the publisher of the Daily Mail and the Mail on Sunday) violated article 11 of the ECHR.[306] The Employment Relations Act 1999 ( s 3) makes additional provision for the making of regulations to deal with employer blacklists, though theses powers have never been invoked.

  3.2  In addition, trade union membership data is sensitive personal data for the purposes of the Data Protection Act 1998, and as such cannot be processed without the consent of the individual to whom it relates. This, however, has not been effective. On 6 March 2009, the Information Commissioner's Office issued a Press release in which it was alleged that 44 construction companies had used the services of the Consulting Association Ltd run by a man called Mr Ian Kerr.[307] According to the ICO, this man is believed to have "run the database for over 15 years", and it was said to have included the details of 3,213 workers. According to the ICO. "it uncovered evidence at Kerr's premises that named construction firms subscribed to Kerr's system for a £3,000 annual fee" It was stated further that "[c]ompanies could add information to the system and pay £2.20 for details held on individuals", and that [i]nvoices to construction firms for up to £7,500 were seized during the raid". According to press reports, details of workers' trade union activities and past employment conduct were said to have been recorded on cards, with one individual said to be a "poor timekeeper, will cause trouble, strong TU [trade union]", while another card referred to a member of the Union of Construction, Allied Trades and Technicians as "Ucatt … very bad news".[308]

  3.3  The companies alleged to have been involved are: Amec Building Ltd; Amec Construction Ltd; Amec Facilities Ltd; Amec Industrial Division; Amec Process & Energy Ltd; Amey Construction Ex-member; B Sunley & Sons Ex-member; Balfour Beatty; Balfour Kilpatrick; Ballast (Wiltshire) plc Ex-member; Bam Construction (HBC Construction); Bam Nuttall (Edmund Nuttall Ltd); C B & I; Cleveland Bridge UK Ltd; Costain UK Ltd; Crown House Technologies; (Carillion/Tarmac Construction); Diamond (M & E) Services; Dudley Bower & Co Ltd Ex-member; Emcor (Drake & Scull) Ex ref; Emcor Rail; G Wimpey Ltd Ex-member; Haden Young; Kier Ltd; John Mowlem Ltd Ex-member; Laing O'Rourke (Laing Ltd); Lovell Construction (UK) Ltd Ex-member; Miller Construction Ltd Ex-member; Morgan Ashurst; Morgan Est; Morrison Construction Group Ex-member; NG Bailey; Shepherd Engineering Services Ltd; Sias Building Services; Sir Robert McAlpine Ltd; Skanska (Kvaerner/Trafalgar House plc); SPIE (Matthew Hall) Ex-member; Taylor Woodrow Construction Ltd Ex-member; Turriff Construction Ltd Ex-member; Tysons Contractors Ex-member; Walter Llewellyn & Sons Ltd Ex-member; Whessoe Oil & Gas Ltd; Willmott Dixon Ex-member; Vinci plc (Norwest Holst).[309]

  3.4  An enforcement notice was issued by the ICO against Mr Kerr,[310] who according to the BBC "faces prosecution and a £5,000 fine if found guilty of breaching the Data Protection Act'', while the businesses using his services "would be issued with a legal order not to repeat the offence, and if they breached it they too would face prosecution".[311] That, however, does not seem an adequate response to the very real hardship potentially suffered by the blacklisted individuals, as reported in the national and regional press.[312] In our view, a scheme should be introduced to compensate these people, with a template for this purpose to be found in the Employment Act 1980.[313] This established a publicly funded retroactive compensation scheme for workers who claimed that they had suffered loss as a result of having been excluded from employment because of their non-membership of a trade union where a union membership agreement was in force. The individuals who appear on Mr Ian Kerr's blacklist should be informed of that fact;[314] they should be informed of the identity of the companies which were supplied with their personal data (if that information is currently available); and they should be also to entitled to make an application under the proposed compensation scheme if they are able to demonstrate the likelihood of having suffered loss because of unemployment relating to their blacklisting. Legislation which may be necessary for these purposes should also impose a levy on the employers who used the services of Mr Kerr, to pay for the compensation of the workers affected. This would be in addition to any other possible legal remedies the blacklisted workers may have against Mr Kerr, his company, and the businesses that used Mr Kerr's services.

THE RIGHT TO BARGAIN COLLECTIVELY

  4.1  The right to bargain collectively is also protected by a number of the international human rights treaties referred to above; it has also been read into article 11 of the ECHR, with potentially important implications for domestic law, particularly in view of the Court of Appeal's reluctance to engage with the issue in a case involving Mirror Group Newspapers.[315] According to the Court of Appeal, "the right to be recognised for the purposes of collective bargaining does not fall within the rights guaranteed by Article 11" (para 35).[316] In the Mirror Group case, the company had recognized a small union (BAJ) which had at most one member, in a deliberate attempt to prevent recognition by the NUJ which was thought to have a majority of the workers of the bargaining unit in membership. This dispute arose in the context of the statutory recognition procedure, which enables trade unions to make an application for recognition to the Central Arbitration Committee with a view to a bargaining order being imposed unless the employer agrees to recognize the union voluntarily in the meantime. The process, which requires the union to demonstrate majority support, is complicated and provides employers with many opportunities to resist the union's application. The TUC has also made complaints to the ILO that the procedure fails to comply with Convention 98.[317] Many businesses have resisted collective bargaining arrangements and have usually been able to avoid extending bargaining rights to their workers despite the procedure.[318] These include household names such as Amazon, Asda, Black and Decker, BSkyB, Gatwick Express, Kettles' Foods, Kwik-Fit, Ryanair, Shoezone, and T Mobile. Others include the following.

  4.2  News International, like media companies all over the world relies heavily on human rights instruments as the foundation of its business, including the right to freedom of expression, which it is assiduous in promoting, through the courts at the highest level if necessary. News International derecognized the print and journalist unions in the 1980s in controversial circumstances, and ceased collective bargaining with them. Since then the company has established the News International Staff Association which it recognized for the purposes of collective bargaining, but which has been denied a certificate of independence from the Certification Officer for Trade Unions and Employers' Associations (the trade union regulator) on the ground that while it was no longer subject to domination or control by the company, it could not be said that it was not "liable to interference".[319] Nevertheless, independent trade unions are not permitted to make an application for recognition under the statutory procedure because the Employment Relations Act 1999 prevents an application being made by one union where another is already recognized. Although an application for recognition can be made only by an independent trade union, an application by such a union can be blocked by the pre-existing recognition of a non-independent trade union. This is despite the fact that ILO Convention 98 provides that "workers" and employers' organisations shall enjoy adequate protection against any acts of interference by each other or each other's agents or members in their establishment, functioning or administration' (article 2). It is also provided that "Machinery appropriate to national conditions shall be established, where necessary, for the purpose of ensuring respect for the right to organise as defined in the preceding Articles" (article 3).

  4.3  Cable and Wireless plc has a Code of Ethics and Business Principles in which it is committed "to providing a working environment in which employees can realise their full potential and contribute to business success". It also declares that the company will "respect the dignity of the individual and support the Universal Declaration of Human Rights and the ILO Core Conventions".[320] The latter include the right to freedom of association, which for this purpose includes the right to bargain collectively. In 2007 the CWU made a request for recognition which was refused. The company contested the admissibility of the claim, it contested the union's proposed bargaining unit before the CAC and then all the way to the High Court), it successfully contested the union's right to automatic recognition (despite the union having a majority of members in the bargaining unit), it resisted a union complaint that it had indulged in an unfair practice, for example by means of a letter from the CEO of the company to staff during the balloting period "which mentioned, in the first paragraph, the successful trading year and the size of the consequent bonus payments and then, in the second paragraph drew attention to the union recognition ballot and urged colleagues to vote "No'', and it won the ballot, with the union securing 77 votes (23% of those voting), despite having 185 members (55.2%) at the start of the balloting period.[321] The CAC procedure took over a year to complete, the company was represented by city solicitors (with a partner of Herbert Smith attending one of the CAC cases) and a member of the Bar at key stages, and it employed the services of labour consultants The Burke Group, whose web site brazenly states that it has expertise in "union avoidance", and "preventive labor relations—union free workplaces".[322] Such organizations are sometimes referred to colloquially as "union busters".

  4.4  General Electric has an impressive code of conduct, entitled The Spirit and the Letter,[323] in which it commits to

  Fair employment practices do more than keep GE in compliance with applicable labor and employment laws. They contribute to a culture of respect. GE is committed to complying with all laws pertaining to freedom of association, privacy, collective bargaining, immigration, working time, wages and hours, as well as laws prohibiting forced, compulsory and child labor and employment discrimination. Beyond legal compliance, we strive to create an environment considerate of all employees wherever GE business is being conducted.

  General Electric is also a participant in the UN Global Compact,[324] as well as a TOP Olympic sponsor, and as such enjoys various legal privileges bestowed upon it by the British State in the Olympic and Paralympic Games Act 2006. GE companies have, however, strongly resisted collective bargaining in the United Kingdom:

    — GE Caledonian is a company based in Scotland; its website proudly carries both the GE and the Olympic logos. The company refused an application for recognition by AEEU as it then was, and in the process tried unsuccessfully to persuade the CAC to provide the company with a list of the names of its employees who had signed the union's petition requesting recognition (a claim can only get off the ground with the support of 10% of the workforce). If that application had succeeded, it could have had very significant implications for the statutory procedure as a whole, though this was denied by the company's legal representative (Mr Martin Warren), as placing "too much reliance is placed on unsubstantiated allegations of employer victimisation". In that case a union activist formerly employed by the company told the CAC that a company circular sent around the time of the application for recognition invited employees to attend small group meetings during which the company would present both sides of the argument in respect of union recognition. He then explained that these meetings had in fact been management presentations as to why union recognition had to be resisted.[325] Support for collective bargaining was overwhelmingly rejected in a ballot (by 449 to 243 on a 95% turnout.[326]

    — In another case involving a GE company (GE Thermometrics UK Ltd), the union (Amicus) had 47.1% membership (49 members) in a bargaining unit of 104 workers, with support from 55% of the workforce. The union claimed that there had been large scale anti union activity from the company, and "provided evidence of briefings for the workers indicating that recognition will bring about a loss of flexibility which the parent company would not stand for and would endanger the future of the plant and their jobs". The union also "pointed out that all this went on at a time when the Union had no official access to the workforce and coupled with the one-to-one meetings where pressure was put on workers to resign from the union and a "25th hour" speech on the issue by the worldwide CEO of the company placed unreasonable pressure on the workers to vote against recognition". The latter were said to be "personal views which the Company had sought to distance itself from", the company also dismissing "allegations of intimidation as a misrepresentation or misunderstanding of the company's attempt to make its views about recognition know[n] by the workers". On another high turnout (95%), a majority voted against the union, with only 38 workers voting in favour of recognition[327].

THE RIGHT TO STRIKE

  5.1  The third of the human rights affecting business considered in this submission is the right to strike. As we pointed out in pars 2.1—2.3 above, it is widely recognized as a human right in international human rights treaties, and indeed has incongruously (in light of the current state of English law) been recognized as such by the Court of Appeal.[328] British law has been widely criticized by international human rights agencies over many years for failing to comply with minimum international standards, a matter to which we have brought to the attention of the JCHR on an earlier occasion. These criticisms have been levelled by the UN Committee on Economic, Social and Cultural Rights, the ILO Committee of Experts (on which sits an English High Court judge (Cox J)) and the ILO Freedom of Association Committee, as well as the Social Rights Committee of the Council of Europe.[329] These criticisms relate to the circumstances in which trade unions may be restrained from taking collective action and the circumstances in which individual workers can be dismissed without a remedy for taking such action. In recent years a number of businesses have taken advantage of legal rules operating in the United Kingdom to undermine the right to strike as recognized in international instruments.

  5.2  One of the most notorious cases on the dismissal of strikers in recent years relates to the conduct of Friction Dynamics in 2001. The details are to be found in an article published in The Lawyer magazine by Mr Andrew Chamberlain, a partner in the law firm Addleshaw Goddard which acted for the company in unfair dismissal claims from August 2002 until the company went into liquidation. According to Mr Chamberlain,

    On 30 April 2001, having followed the correct balloting and calling procedures, 86 of [Sir Bill] Morris's members at the company commenced industrial action. On 1 May 2001, company management wrote to each striker telling thme that "you have . . repudiated your contract of employment. The company accepts your repudiation".[330] Following several ACAS brokered meetings between ACAS and T&G officials, the company wrote a further letter to each striker on 27 June 2001, just over eight weeks after the strike started, in which it purported to dismiss them with effect from the following day.[331]

  The story is continued by Ward LJ, according to whom the 86 strikers "brought claims before the Employment Tribunal in Liverpool and in December 2002 that Tribunal found that they had been unfairly dismissed", with "the compensation which would have become payable to the strikers by Friction... estimated to amount to approximately £3 million".[332] There is evidence that the company's owner, a Mr Craig Smith, told an employee that "Friction would not be paying the strikers following the decision by the Liverpool Employment Tribunal", and soon thereafter the company went into voluntary liquidation. However, the business was reformed as Dynamex Friction, buying back the assets from the administrator, but leaving the dismissed strikers to pursue their claim against the empty shell that was their former employer. In subsequent unfair dismissal claims by a number of the non striking employees one member of the Court of Appeal (Ward LJ) referred to the employer (Mr Craig Smith) as having engaged in "Machiavellian machinations" (para 38), questioned whether he had "cynically manipulated the insolvency of Friction" (para 61), and accused him of being guilty of "scheming" and "lacking in fair play" (para 62).

  5.3  Gate Gourmet is a large airline catering company, owned by a US private equity firm called Texas Pacific, which boasts that it is "a leading global private investment firm with over $50 billion of capital under management.".[333] According to Hendy and Gall,

    on 10 August 2005, "667 low paid workers, mostly middle-aged Asian women, and mostly members of the TGWU, gathered in the works canteen top discuss the implications of the introduction by the company that day of 130 agency workers on lower rates of pay than themselves. Whilst the union representatives were talking to management, the workers in the canteen were instructed by megaphone to return to work within three minutes or be sacked. Those who failed to return to work (virtually all) were sacked. Those who turned up the next day were given the choice of signing new contracts on worsened terms or being unemployed".[334]

  According to the ICFTU (now ITUC) there were "strong suspicions that Gate Gourmet management had deliberately provoked industrial action to give it the excuse to dismiss staff and replace them with cheaper labour", and that a "management plan [to] that effect came to light, but Gate Gourmet, while acknowledging the existence of the plan, claimed that it had been drawn up under its previous directors, and the existing directors had rejected such a plan". It is further claimed that "the Transport and General Workers' Union (TGWU) tried to negotiate the reinstatement of the sacked workers with Gate Gourmet did appear ready to reinstate the sacked workers, but the talks collapsed when it the company said it would only do so selectively".[335] Because the action was unofficial none of those dismissed fro taking part in the industrial action was entitled to bring a claim for unfair dismissal, and although 272 workers were reinstated, another 411 given the equivalent of redundancy, while 130 workers got nothing.

  5.4  British Airways is one of the largest airline companies in the world. A document on its website states that the company "aspire[s] to work together as one team, to treat each other fairly, respecting individual and collective rights, and striving for high levels of employee motivation and satisfaction through training, development and honest communications".[336] In 2007, BA announced plans to offshore part of its operation to France following the liberalisation of the rules relating to transatlantic flights. This caused some concern on the part of BALPA the airline pilots union, which balloted its members for industrial action. A large majority voted in favour and the union duly gave notice of industrial action, to be threatened by the company's lawyers that if it proceeded with the action (which appears to have been perfectly lawful under British law—said by Tony Blair to be the most restrictive in the western world),[337] would be unlawful under the newly created liability for collective action created by the European Court of Justice on 11 December 2007 in its notorious Viking case.[338] What is more, the union was also advised that the company's losses would run to £100 million per day, a sobering prospect which could have the effect of liquidating the union iif the action went ahead, if the company was able to establish liability, and if ithe company then sought to recover the losses in question. The union took the unusual step of seeking a High Court declaration that its proposed industrial action was lawful, but this aborted as futile, in the light BA's vigorous defence which meant that the exercise of collective rights (to the limited extent protected by British law) had to be called off. BALPA has made a formal complaint to the ILO alleging a breach of Convention 87 on Freedom of Association and Protection of the Right to Organise.

LABOUR CONSULTANTS AND LAWYERS

  6.1  Related to the activities of companies are the activities of the businesses who advise them—the labour consultants and the lawyers. One such business which has attracted some notoriety is the Burke Group. According to its own web site

  The Burke Group [TBG], established in 1982, is the international leader in guiding management during union organizing (recognition) and union card signing campaigns. With 1400 clients in 50 industries and 10 countries (including the United States, E.U., Canada, Mexico and China), we have participated in over 800 elections and employees in 96% have either voted no, decertified or experienced petition withdrawal. Our record of success is unequaled and our professional labor relations consultants are the most culturally diverse and experienced in the world.[339]

  TBG's expertise is said to rest in "union avoidance", and "preventive labor relations—union free workplaces". Although operating mainly in the United States, a report for the TUC by Dr John Logan claims that TBG has conducted "several high-profile organizing campaigns in the UK, including ones at T-Mobile, Amazon, Virgin Atlantic, Honeywell, GE Caledonian, Eaton Corporation, Calor Gas, Silberline Ltd, FlyBe, Cable & Wireless, and Kettle Chips".[340] Others include European Hydraulics Operation, where the TUC reports a company director as saying that that "Union free activities are high adrenal and time consuming events…. TBG was able to assess the situation and provide confidential shop—floor data that helped drive a successful union free strategy. I was amazed [about] … the accuracy of the information…".[341] The TUC report also points out that "many of TBG's anti-union campaigns have had a devastating impact",[342] citing the examples of

    — Amazon, where "the GPMU stated that the company mounted "the most aggressive campaign it had ever encountered", receiving "fewer votes than it had members in a company—sponsored ballot", and accusing the company of sacking a union activist and acting unfairly in other ways.[343]

    — Kettles' Foods—where "organisers reported that the most striking aspect of the Kettle campaign was the aggressive use of supervisors to spearhead the anti-union drive and the company's manipulation of the bargaining unit—tactics that consultants have used in the US for decades".[344]

  6.2  Other recent TBG campaigns (including Cable & Wireless, GE Caledonian and T Mobile) are said to have displayed a similar pattern of what has been referred to as "aggressive anti—union behaviour".[345] Although Cable & Wireless recognizes unions in several European countries, including the Republic of Ireland, it resisted workers' right to collective bargaining in the UK. Advised by TBG, it "appealed to the courts the appropriateness of the CAC-defined bargaining unit, bombarded employees with anti-union emails, and held one-on-one sessions with local managers in advance of an expected representation ballot".[346] On this occasion, however, depending on one's point of view, the work of TBG scaled new heights or plumbed new depths, when it was reported in the press that:

    In the most recent case involving Cable and Wireless (which the union lost despite having 56% membership), the CAC panel said that it "shares the union's concerns about TBG's unfortunate track record, according to union and academic sources". TBG complained and the Chairman of the CAC forced the panel to reissue its decision with the offending passage replaced to read that "TBG is alleged by the union to have an unfortunate track record". The TBG chairman was said to be "happy" with the committee's decision.[347]

  It is not clear how widespread is such commercial responsiveness to the legal process, or how widespread is the willingness of the legal process to respond to these initiatives from the commercial sector. Nevertheless, it can hardly be considered to be good practice for quasi-judicial bodies to respond in such a fashion. More generally, however, businesses of this kind appear to us to raise questions similar to those businesses that make money by trading in blacklists (though unlike blacklisting such business activity of course is perfectly lawful). Although the nature of the businesses are very different, it appears nevertheless to be the case that at least one purpose of a labour consultancy is to prevent unionization of an enterprise, and thereby deny workers the opportunity to engage in collective bargaining. We do not understand why it should be lawful in this country to conduct a business (of any kind), where the successful provision of it's services will impede the exercise of human rights, in this case the human rights of workers, including the most vulnerable workers in society.

  6.3  So far as solicitors are concerned, we are aware of one firm that advertises on its website that it "help[s] employers maintain a union-free environment". This is despite the recognition in the UN Global Compact that "Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining", and despite the recognition of collective bargaining as a human right in international treaties. It is not clear if this applies only to Dechert LLP's US practice or whether it applies elsewhere as well. We are, however, aware of press reports published on the eve of the implementation of the recognition procedure introduced by the Employment Relations Act 1999 that one prominent British law firm was organizing a "Trade Union Roadshow" for the benefit of business-people at which an "unambiguous" message was being conveyed to those attending about trade unions in the workplace. Those invited were said to include McDonalds, Dow Chemical and Bristol Myers Squibb, though it is not clear which if any of these companies attended. According to a long article in the press in which two Eversheds' partners are quoted or referred to (Mr Martin Warren and Mr Owen Warnock), Eversheds' preparations "appear to have been carefully planned", the firm having "made contacts with leading US consultants, who advise management on tactics to win recognition battles using videos and other "persuasive" techniques".[348] The Observer also writes that Eversheds was "pushing US methods in the UK", these methods having been described earlier in the article as "union resistance techniques".

  6.4 A number of other law firms were named in this article, though it was based mainly on Eversheds, which appeared to enjoy the attention, with their annual report in 2002 reproducing a magazine article which pointed out that

    Eversheds... is also the most highly regarded law firm among HR professionals, according to a survey conducted for Personnel Today and Employers' Law. The unions take a different view. When Eversheds ran a "TU roadshow" last summer advising companies on US style strategies for preserving a union—free workplace, the TUC was not amused.[349]

  We do not suggest that this conduct by law firms is improper or unlawful. But it does raise general questions about the extent to which legal businesses should be involved to any extent in activity that may have the effect (albeit inadvertently) of undermining the human rights of third parties (such as workers). Although such conduct is perfectly lawful and no doubt ethical under the existing Code of Conduct for Solicitors, we would nevertheless invite the Committee to examine whether the existing ethical boundaries within which legal businesses may operate take adequate account of human rights standards within which these businesses should operate. In the present context we would invite the Committee to consider in particular the extent to which it is appropriate for legal businesses to provide services which may have the effect—intended or otherwise—of frustrating the exercise by workers of their fundamental right to engage in collective bargaining, and to be protected by a collective agreement.

NEW POWERS FOR BUSINESS TO UNDERMINE HUMAN RIGHTS

  7.1  We have already highlighted the recent decision of the European Court of Justice in Case C 438/05, ITF and FSU v Viking Line.[350] In that case the ECJ introduced a number of treaty-based restrictions on the right to strike, which as we have also seen greatly empowered BA in a dispute with BALPA. A week after Viking, the ECJ published its decision in the Laval case where it was held that Swedish trade unions could not take collective action to require a Latvian contractor to observe the terms of a Swedish collective agreement in the construction sector.[351] This decision has major implications for the right to bargain collectively, a right which is to be found in the EU Charter of Fundamental Rights, but which the ECJ failed to acknowledge. According to the Court, businesses posting workers from one EU member state to work in another cannot be required to observe the terms of collective agreements in the host State except to the limited extent provided for by the Posted Workers Directive. This means that where the latter does not apply, businesses which have won contracts in this country cannot be required to observe collective agreements here, with an obvious risk to the integrity of these agreements and the rights of those protected by them.

  7.2  The Laval case was followed in turn by the decision in Ruffert where it was held that businesses posting workers (in that case to Lower Saxony from Poland) could not be required as a condition of a public procurement contract to comply with collective agreements save to the limited extent provided by the PWD.[352]In requiring contractors to pay certain minimum terms and conditions of employment, Article 3(1) of the PWD refers to those terms laid down in "law, regulation or administrative provision". In some cases (notably construction), the Directive also says that member states must require contractors to pay the minimum rates laid down in collective agreements negotiated between trade unions and employers. But under Article 3(8) of the Directive this applies only where these collective agreements have been declared universally applicable to all undertakings in the geographical area and in the profession or industry concerned. There are no such agreements in this country, though it was open to the British government to require businesses posting workers here to abide by agreements which are generally applicable to all similar undertakings in the geographical area and in the profession or industry concerned. Although there are almost certainly agreements that could be deemed to fall within this provision,[353] the power to require contractors to abide by these agreements has not been taken by the British government, whether in relation to the construction sector, or any other sector.

  7.3  The toxic mix of the United Kingdom's regulatory failure topped up by the ECJ decision in Viking and Laval and their progeny was spectacularly revealed by the bitter dispute at the East Lindsey oil refinery in late January/early February 2009, when construction workers walked out in protest at the use of posted workers by an Italian company (IREM), which was a sub-contractor to a UK company, which in turn had a broader sub-contract to a US company, which had the primary construction contract[354]. There was an expectation that all workers on the site would be paid in accordance with the National Agreement for the Engineering Construction Industry (NAECI) (although they were not under a duty to do so). There was concern on the part of the unions, however, that the posted workers were employed on terms and conditions that may have been well above the statutory minima for pay in this country, but were below the terms and conditions in the NAECI agreement. This, the unions thought, enabled the Italian contractor to obtain a competitive advantage.[355] The concerns over terms and conditions related specifically to hours of work, travel allowances, and auditing of wages as well as wage levels themselves.[356] In an inquiry into the dispute, ACAS did less than justice to the issues involved, finding "no evidence" that any of the parties involved (contractors or sub-contractors) had "broken the law in relation to the use of posted workers or entered into unlawful recruitment practices".

  7.4  This, however, was not the point, the main question being whether the sub-contractors were complying with non—legally binding collective agreements. On this latter issue, the best ACAS appeared able to offer was that it had received assurances from the management that they will abide by the NAECI agreement "though there are clearly some issues of interpretation to be determined between management and the trade unions". The most revealing passage in the report, however, is to be found in paragraph 11 where it is stated that "ACAS has inspected the contract documentation which commits IREM to pay the going rate; but IREM were not yet in a position to provide evidence to demonstrate that they were doing this". In other words, nobody knows what rates were being paid. ACAS confirmed, however, that by reason of Laval and Ruffert the NAECI collective agreement could not be imposed on the Italian contractor.[357] Although the terms and conditions under which the posted workers were engaged was never confirmed (though the companies in question denied any exploitation or undercutting), the incident nevertheless provided a glimpse—on the basis of highly charged speculation—of life under the PWD, as it had been gift wrapped for employers by the ECJ. As the ACAS report pointed out, because of the government's failure to legislate to protect collective agreements, "the mandatory rules governing the terms and conditions of posted workers in the construction sector are derived only from the law or from administrative provisions".

CONCLUSION: WHAT NEEDS TO BE DONE?

  8.1  There is so much that needs to be done to address the problems identified above, with initiatives required at domestic, EU and international level. One thing which is clear, however, is that self-regulation does not appear to work, as revealed by those companies which have codes of conduct extolling virtues which the companies do not appear to comply with in practice in all of their operations. This suggests to us that companies should be placed under stronger obligations, and that businesses over a prescribed size which are incorporated in this country should be required by law to have a human rights audit conducted on a regular basis by an independent person to assess the extent to which the business in question complies with human rights obligations of the kind found in ILO Conventions, international human rights treaties, and the OECD Guidelines. There should be an additional obligation that these independent audits are distributed to shareholders and made publicly available. Criteria would have to be developed to establish mechanisms to ensure the independence of those conducting the audits.

  8.2  There are also, however, other steps that need to be taken to reform British labour law to take account of some of the issues identified above. These include

    — Right to Organise: Invoking the power in the Employment Relations Act 1999, s 3, to make it an offence to compile, hold, trade in, solicit, or use blacklists which include details of people's trade union membership or activities. This would be in addition to the retroactive compensation scheme to which we refer in para 3.4 above, and to the powers available to the Information Commissioner under the Data Protection Act 1998.

    — Right to Collective Bargaining: Amending the statutory recognition procedure to remove the barrier to applications where there is already a non independent union recognized by the employer; remove the requirement that recognition can only be awarded where there is majority support; and take steps to improve the weak unfair labour practice provisions in the statutory procedure, including a ban on the use of union busters.

    — Right to Strike: Amend the existing legislation so that lawful strike action is not regarded as a breach but as a suspension of the contract of employment; employers are required to re-employ workers at the end of collective action; and that collective action may be taken in line with international standards, as developed under ILO Convention 87 and the Council of Europe's Social Charter.

  8.3  In addition to the above, we believe that these rights ought to be safeguarded and protected from erosion in a British Bill of Rights. We do not understand how there can be a Bill of Rights for everyone except trade unions, and were astonished by the absence of any significant discussion of trade union rights in either the Government's Green Paper, or the JCHR's report on A Bill of Rights for the UK? (which dealt with the matter in less than six lines).[358] The exclusion of from the latter is all the more remarkable in view of the facts that

    — four of the 31 written submissions (TULO, TUC, Unite, and Thompsons) directly addressed this question (and warranted the courtesy of a fuller response);

    — trade union rights as protected by human rights treaties are extensively violated by the UK (as the TULO submission points out);

    — the South African Constitution which the Committee studied (at taxpayers' expense) expressly includes trade union rights in Chapter 2 entitled "Bill of Rights", including the right to strike and collectively bargain in section 23 (as well as freedom of association in section 18 and the right to picket in section 17;

    — such rights have been developed in the constitutional jurisprudence of important common law jurisdictions, notably in Canada under the freedom of association provisions of the Charter of Rights and Freedoms;[359]

    — such rights are included in the national constitutions of many of our partners in the European Union, including the bulk of those countries which have most recently joined;

    — recent decisions of the ECJ have put trade union rights at serious risk (as in the BALPA case in which the union was faced with the risk damages of £100 million a day (for exercising a human right)), in a manner that should send shivers down the spine of anyone with a passing knowledge of British social history.[360]

  We believe that the right to organise, the right to collective bargaining, and the right to strike should be included in a Bill of Rights, either expressly or by means of incorporating an appropriate treaty (such as the European Social Charter) on the model of the Human Rights Act. We note, however, that these rights are quickly emerging under the fascinating and progressive jurisprudence of the European Court of Human Rights, and will be enforceable under domestic law as a result of the HRA, leading in turn to the possibility of a long overdue direct challenge to the Thatcher inheritance in the courts.[361]

  8.4  Finally, we believe that steps should be taken to address the decisions of the ECJ which threaten to undermine both the right to collective bargaining and the right to strike, as indicated above. To this end, we recommend that the British government should

    — Introduce regulations to implement the Posted Workers' Directive (following the example of the Irish government) so that collective agreements which are widely applied within a sector can be registered with the Central Arbitration Committee, with a view to becoming obligatory on all employers in the sector in question, including in particular employers who post workers to this country. Amending legislation should also be introduced to counter aspects of the Viking decision by making clear that the existing cap on trade union liability in damages applies to actions brought under EC law, as well as to action brought for unprotected common law liability.

    — Support steps proposed at EU level to amend the EC Treaty by the introduction of a social protocol. As proposed by the ETUC, this provides that

    Nothing in the Treaties, and in particular neither economic freedoms nor competition rules shall have priority over fundamental social rights and social progress as defined in Article 2. In case of conflict fundamental social rights shall take precedence'.

  Steps need also to be taken to amend the Posted Workers' Directive, so that employers posting workers to this country can be required to apply any appropriate collective agreement, whether or not it is generally applicable within the terms of the existing Directive. We would hope that these matters will be taken more seriously by the Committee on this occasion than on the occasion of its Bill of Rights inquiry, and that trade unions can feel confident that their internationally recognized human rights will be shown the same respect by Parliament as the human rights of others.

May 2009






302   [2002] IRLR 568. Back

303   Application No 34503/97 , para 154. See also Enerji Yapi-Yol v Turkey, 21 April 2009-the ECtHR re-asserted the right to strike as inherent in article 11. Back

304   For more details, see the submission to this inquiry by ICTUR. Back

305   Reference might also be made also to the UN Global Compact which provides by principle 3 that: "Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining"; and to the ILO, Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (4th ed, 2006). Back

306   Wilson v United Kingdom [2002] IRLR 568. Back

307   http://www.ico.gov.uk/upload/documents/pressreleases/2009/tca_release_060309Back

308   Guardian, 6 March 2009. Back

309   See www.ico.gov.uk/upload/documents/pressreleases/2009/tca_release_060309Back

310   Seewww.ico.gov.uk/upload/documents/library/data_protection/notices/tca_enforcement_noticeBack

311   According to the BBC, "Balfour Beatty said it would co-operate with the ICO investigation, and that it did not condone the use of blacklists "in any circumstances". Other companies either said they would conduct their own investigation, or had "inherited" their links with the Consulting Association from previous firms they had taken over". Back

312   The matter has also been raised in Parliament by Mr Michael Clapham MP. Back

313   See K D Ewing and W M Rees, "Closed Shop Dismissals 1974-1980-A Study of the Retroactive Compensation Scheme" (1983) 12 ILJ 148. Back

314   At the time of writing, the ICO is prepared to provide this information to those workers who contact them, a helpline having been set up for this purpose. Back

315   R (NUJ) v CAC [2005] EWCA Civ 1309. Back

316   Ibid, para 35. Following Demir and Baykara v Turkey (para 2.3 above), however, that is no longer an accurate statement of the law. Back

317   These complaints relate to the exclusion of small businesses, the role of employer created staff associations, and the lack of adequate protection against unfair practices. See for the most recent consideration of this issue by the ILO Committee of Experts: http://www.ilo.org/ilolex/gbe/ceacr2009.htmBack

318   In the sense we understood to be contemplated by Convention 98, that is to say bargaining with independent trade unions. Back

319   See K D Ewing" It's Nicer with NISA" Federation News, Autumn 2001. Back

320   www.cw.com/corporate-social-responsibility/code-of-business-principlesBack

321   CWU v Cable &Wireless plc, CAC, TUR 1/570[2007]. Back

322   See www.tbglabor.comBack

323   www.ge.com/files_citizenship/pdf/TheSpirit&TheLetter.pdfBack

324   www.unglobalcompact.org/ParticipantsAndStakeholders/searchBack

325   See K D Ewing, S Moore and S Wood, Unfair Labour Practices: Trade Union Recognition and Employer Resistance (IER, 2003), p 23. Back

326   AEEU v GE Caledonian, CAC, TUR 1/120[2001]. Back

327   Amicus v GE Thermometrics, CAC, TUR 1/347[2004]. Back

328   London Underground Ltd v NUR [1996] ICR 170, at p 181 (Millett LJ). Back

329   See our previous evidence to this committee: HL 193/HC 1188, 2003-04 (21st Report). Back

330   According to Ward LJ in Dynamex Friction Ltd v Amicus [2008] EWCA Civ 381, it was the company that repudiated the contracts: The company's response was to repudiate the contracts of employment with the result that 86 of the strikers were dismissed. Back

331   A Chamberlain, "The Role of the 'Eight Week Rule' in the Friction Dynamics Dispute", The Lawyer, 3 November 2003. The employment tribunal held that the 1 May letter "unequivocally tells the applicant that his contract of employment is terminated. It dismissed him". Consequently the dismissal fell within the protected period (then eight weeks now 12). Even if it did not, (there was no appeal), the employer's conduct extended the period to the second letter. See Employment Tribunal extended reasons, dated 4 December 2002, Case No 6500432-02. Back

332   Dynamex Friction Ltd v Amicus [2008] EWCA Civ 381. Back

333   www.texaspacificgroup.com/about/index.htmlBack

334   J Hendy and G Gall, "British Trade Union Rights Today and the Trade Union Freedom Bill", in K D Ewing (ed), The Right to Strike (IER, 2007), p 248. Back

335   ICFTU, Annual Survey of Violations of Trade Union Rights (Great Britain) (2006). Back

336   British Airways, Standing Instruction No 2: The BA Way of Business (June, 2006). Back

337   The Times, 31 March 1997. Back

338   Case 438/05, International Transport Workers' Federation and Finnish Seamen's Union v Viking Line [2008] IRLR 143. Back

339   www.tbglabor.comBack

340   J Logan, US Anti-Union Consultants: A Threat to the Rights of British Workers (2008), p 16. Back

341   Ibid, p 17. Back

342   Ibid, p 16. Back

343   Ibid. See also HC 90-II, 2004-05, Appendix 10 (Evidence by GPMU). Back

344   Ibid, p 18. Back

345   IbidBack

346   Ibid, p 17. Back

347   Daily Telegraph, 3 August 2008. Back

348   The Observer, 4 June 2000. Back

349   Eversheds Report 2002, p 7. The firm's website currently states that "Recent legislation has created significant trade union recognition rights and is now presenting a considerable challenge for employers. Eversheds has carried out more work in this area than any other law firm in the UK. This includes advising employers seeking to resist recognition, assisting the negotiation of the best possible collective agreement and representing companies at the Central Arbitration Committee": www.eversheds.com/uk/Home/Services/Labour_law_and_trade_unions/cac_applications_union_recognition.page?. Emphasis added. Back

350   [2008] IRLR 143. Back

351   Case 341/05, Laval un Partneri Ltd v Svenska Byggnadsarbetareforbundet [2008] IRLR 160. Back

352   Case 346/06. Ruffert v Land Niedersachsen [2008] IRLR 467. Back

353   National Engineering Construction Committee, Protecting National Agreements in UK Construction: A Report by AMICUS, GMB and TGWU (October, 2005). Back

354   For a full account of the dispute, see BBC News, 29 Jan-3 Feb 2009. Back

355   See ACAS, Report of an Inquiry into the Circumstances surrounding the Lindsey Oil Refinery Dispute (2009). See also UNITE the Union, Unite Briefing on the current UK power industry walkouts (2009). Back

356   See ACAS, ibid, paras 10-12. Back

357   Ibid, paras 14-22. Back

358   See HL 165, HC 150, 2007-08. Back

359   Health Bargaining etc v British Columbia, 2007 SCC 27. Back

360   Since the JCHR report, the Northern Ireland Human Rights Commission (A Bill of Rights for Northern Ireland-Advice to the Secretary of State for Northern Ireland, 10 December 2008), has advised the Secretary of State for NI that "A provision should be drafted to ensure that-workers have the right to strike and the right to engage in collective bargaining" (p 124). Back

361   Demir and Baykara v Turkey, 12 November 2008; Enerji Yapi-Yol v Turkey, 21 April 2009. Back


 
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