61.     In general the Bill is not concerned with voluntary recognition, other than to allow scope for voluntary agreement before imposing a decision. However, in order to prevent voluntary recognition being used to circumvent the Bill's provisions, this Part of the Schedule sets out a process by which a union or employer who believes that the other party is failing to honour a voluntary recognition agreement can ask the CAC to determine the method by which collective bargaining should take place.

62.     Paragraph 38 defines the scope of this Part and paragraph 39 makes provision as to definitions. Under paragraph 40, a union may in certain circumstances make an application to the CAC to specify a method of bargaining. Sub-paragraph (2) makes provision for exemptions for employers with fewer than 21 workers. Paragraph 41 provides for the form of applications in similar terms to those in respect of recognition applications under Part I.

63.     Paragraph 42 provides that, if an application is made under paragraph 40 and either the employer and union have not agreed a method for collective bargaining or a collective bargaining agreement has not been followed, the CAC must try to help them agree the method to be used. If no agreement is reached, the CAC must specify the method for collective bargaining unless the parties jointly request otherwise. This is the same procedure as that under paragraph 27 in respect of collective bargaining following an award of recognition under the statutory procedure, and as with the paragraph 27 procedure the Secretary of State may specify a model collective bargaining method under paragraph 127.

Part III: Changes affecting bargaining unit

64.     If an employer's business changes in structure or scope, or if it changes significantly in size, it may be appropriate for collective bargaining arrangements to alter to reflect the change in the business. In the case of purely voluntary agreements, this is a matter for negotiation between parties. Where recognition has been imposed by the procedure in Part I, or a bargaining method has been decided under Part II following voluntary recognition, Part III provides a procedure for altering the recognition arrangements. Figure 3 illustrates the application procedure.

Figure 3: Changes affecting bargaining unit

65.     Paragraph 47 allows the employer or the union to apply to the CAC for a decision as to whether the bargaining unit has changed. For the CAC to accept the application, paragraph 48 means there must be evidence that the original unit is no longer appropriate because the organisation, structure, nature or size of the business has changed. Sub-paragraph (2) defines the matters which may lead to the bargaining unit being declared inappropriate.

66.     Paragraph 49 provides that the CAC must reject an application unless:

• there is evidence that the original unit is no longer appropriate (paragraph 48);

• it is made in the proper form (paragraph 70(1))

• a copy of the application, with its supporting documents, is given to the union if an employer applies or to the employer if a union applies (paragraphs 70(2) and 70(3))

67.     Paragraph 50 gives 10 working days in which the employer and union may attempt to agree a new bargaining unit. If they do so, the CAC must declare the union recognised for the new unit, and the method of collective bargaining for the original unit shall apply to the new unit, with any modifications the CAC thinks necessary to take account of the change of bargaining unit. If the union and employer do not agree, paragraph 51 gives the CAC 10 working days in which to decide:

• whether the original unit is appropriate, using the same criteria as in paragraph 48;

• if the original unit is not appropriate, what other unit (if any) is appropriate.

68.     If the CAC decides that the original unit remains appropriate, it will take no further action. If the CAC decides that the original unit is not appropriate, it will decide the appropriate unit, taking into account the factors in sub-paragraphs 51(4) and (5). These are the same criteria used for applications under Part I. Once the appropriate unit is determined, the CAC must decide under paragraph 64 whether the union should be recognised for that unit. It is also possible for the CAC to decide that no unit is appropriate, in which case the union will be derecognised.

69.     The employer may also seek derecognition if he believes the bargaining unit has ceased to exist. Paragraph 55 gives details of how the employer must notify the union of such a claim. Paragraph 56 allows the union 10 working days from the receipt of the application to respond. The union may ask the CAC to decide one or more of three questions: whether the notice is valid, whether the unit has ceased to exist and whether another unit is appropriate. If the union does not apply to the CAC, recognition will end. Paragraph 57 requires the CAC to check that the union's application is admissible, in terms of paragraph 70.

70.     If the CAC accepts an application, paragraph 58 requires it to give both parties an opportunity to give evidence. If the CAC decides that the employer's notice is not valid, or that the notice is valid but the original unit remains appropriate, the notice has no effect. If the notice is valid and there is evidence that the original bargaining unit is no longer appropriate, the CAC must give notice to that effect. In that event, paragraph 59 applies and the parties have 10 working days to agree a new bargaining unit. If they do so, the CAC must declare the union recognised for the new unit, and the method of collective bargaining for the original unit shall apply to the new unit, as in paragraph 50. If the union and employer do not agree, paragraph 60 gives the CAC has 10 working days in which to decide:

• whether the original unit is appropriate, using the same criteria as in paragraph 48;

• if the original unit is not appropriate, what other unit (if any) is appropriate.

71.     The procedure the CAC follows is the same as in paragraphs 51-54: if the CAC decides that the original unit remains appropriate, it will take no further action. Otherwise, it will decide the appropriate unit, taking into account the factors in sub-paragraphs 60(4) and 60(5), and must then decide under paragraph 64 whether the union should be recognised for that unit. It is possible for the CAC to decide that no unit is appropriate, in which case the union will be derecognised.

72.     Paragraph 64 applies if the CAC decides a new appropriate bargaining unit under paragraph 51 or 60. The procedure is illustrated in Figure 4. If the new unit includes at least one worker who was not part of the original unit and was covered by a collective agreement (i.e. was a member of another bargaining unit for which a union was recognised) then the collective bargaining arrangements shall cease in respect of all workers in the new unit. The CAC will take no further action, but it would be possible for a union (or unions) to request recognition under Part I of the Schedule for the new unit.

73.     If the new unit contains no workers covered by other collective agreements, paragraph 65 requires the CAC to decide whether the difference between the new unit and the original unit is such that support for recognition needs to be reassessed. If support does not need to be assessed (i.e. the changes are minor), the CAC must declare the union recognised for the new unit, and the original method for collective bargaining will apply, with any modifications the CAC decides are necessary as a result of the change in bargaining unit. If support does need to be assessed, then the tests parallel those in Part I: paragraph 66 requires the CAC to decide whether the union has 10% membership in the new unit, and recognition is likely to have majority support. If the test is failed, then the union ceases to be recognised. If not, then automatic recognition may be granted to unions with over 50% membership of the bargaining unit under paragraph 67, or a ballot will be held under paragraph 68.

74.     Paragraph 69 allows the union and employer to agree to cancel the ballot. If they do not, the ballot will be run in exactly the same way as in Part I, paragraphs 21-25. If the ballot is not in favour of recognition, then the union is derecognised.

Part IV: Derecognition: General

75.     Chapter 4 of Fairness at Work set out that procedures for derecognition would be similar to those for recognition, and invited views on how this should work. The statutory derecognition process set out in Part IV applies only where a declaration of recognition has been made by the CAC under Part I or III or where a union has had a collective bargaining method specified by the CAC under Part II. Applications for derecognition may only be accepted three or more years after the CAC's original decision. In other circumstances, Part IV does not apply, but if a voluntarily-recognised union is derecognised, it may then apply for recognition under Part I.

76.     Paragraph 71 provides that the derecognition procedure applies to a union recognised through a CAC declaration. Paragraph 72 provides that the derecognition procedure also applies to voluntarily-recognised unions where a method for collective bargaining was specified by the CAC under paragraph 43(2). If the employer and the union agreed in writing to replace a CAC-imposed method for collective bargaining, or that the CAC method should not be legally binding, then the derecognition procedure does not apply.

77.     As proposed in Fairness at Work, paragraph 73 provides that derecognition may not take place until three or more years after a CAC declaration was made (if paragraph 71 applies) or a voluntary agreement on recognition was reached (in the cases covered by paragraph 72).

78.     The statutory recognition and bargaining method procedures in Parts I and II do not apply to an employer with fewer than 21 workers. If, at least three years after a CAC decision, an employer has fewer than 21 workers, it can notify the union that it will therefore be derecognised. The union may appeal to the CAC if it believes the request is unfounded.

79.     Paragraph 75 provides that if the employer employs an average of fewer than 21 workers (using the same definition as in paragraph 6) over a period of thirteen weeks, he may at the end of that period give notice to the union of the fact and state that the existing bargaining arrangements will not apply from a given date, which shall be at least 35 working days after the union is notified. The collective bargaining arrangements will cease to have effect on the date specified in the notice unless the union makes an application to the CAC under paragraph 76.

80.     Paragraphs 76-78 provide 10 working days for the union to make an application to the CAC to determine whether an employer's notice under paragraph 75 is admissible and/or whether the employer has fewer than 21 workers. The CAC has 10 working days from the date it receives an application in which to reach a decision. If it finds that the employer has 21 or more workers or that the employer's notification was not valid, the collective bargaining arrangements will remain in place; otherwise, the notice will take effect and the collective bargaining arrangements will end on the date specified in the notice.

81.     Paragraphs 79-85 apply if the employer requests the union to end the bargaining arrangements. (These paragraphs are broadly similar to paragraphs 9-11 and 17, which deal with a request for recognition.) If the union was recognised voluntarily, and the CAC did not impose a method for collective bargaining, then this procedure does not apply and the employer may derecognise at any time without going through the statutory procedure in this Part.

82.     Paragraph 79 has the effect that a request to end the bargaining arrangements may be made under this Part only once three or more years have passed since the union was recognised.

83.     Paragraph 80 provides that the derecognition procedure is to end if the parties agree to end the bargaining arrangements within ten working days of the request. If the union agrees to negotiate, then the parties have at least 28 days in addition to the initial ten working day period to reach agreement. They can extend the period for negotiation by mutual consent. If the parties agree that the union should remain recognised, it is sufficient for them to take no further action. The CAC would not be asked to make a decision under paragraphs 81 or 82, and the bargaining arrangements would remain in force. Sub-paragraph 80(5) is for the avoidance of doubt; there is no requirement to involve ACAS.

84.     Paragraph 81 provides that if the union either does not respond to or rejects the request before the end of the first (ten working day) period, the employer may apply to the CAC to hold a secret ballot to decide whether a majority of workers support derecognition.

85.     Paragraph 82 provides that if the employer and union fail to reach agreement in the second (28 day) period, the employer may apply to the CAC to hold a secret ballot to decide whether a majority of workers support the ending of the collective bargaining arrangements. Paragraph 83 contains general procedural requirements for applications to the CAC.

86.     Paragraph 84 provides that, if the CAC is to decide whether a union should be derecognised, it must first be satisfied that derecognition is likely to have sufficient support in the bargaining unit to make proceeding with the application worthwhile. The test for this is that at least 10% of the bargaining unit favour an end to the collective bargaining arrangements and a majority of the workers in the bargaining unit would be likely to do so. This is essentially the same test as in paragraph 19 or 31 for recognition applications.

87.     These provisions apply equally if one or many workers in the bargaining unit formally request an end to collective bargaining arrangements. For simplicity these notes on paragraphs 86-89 refer to applications by a single worker but such references should be read as covering a worker or workers.

88.     Paragraph 86 provides that three or more years after recognition, a worker may apply to the CAC to end the collective bargaining arrangements. Paragraph 87 provides that the CAC may not proceed with an application unless at least 10% of the bargaining unit favour an end to the collective bargaining arrangements and a majority of the bargaining unit are likely to do so. (This is essentially the same test as in paragraph 84).

89.     Paragraph 89 requires the CAC to help the employer, union and worker with a view either to the employer's and union's agreeing to end the bargaining arrangements or the worker's withdrawing the application in the 28 days after the application is accepted. If an agreement is reached or the application is withdrawn, the CAC will take no further action. Otherwise, it must hold a ballot under the provisions of paragraphs 90-94.

90.     Paragraphs 90-94 make provision for the holding of ballots on applications for derecognition, mirroring the procedures for recognition ballots under paragraphs 22-25. Paragraph 94 provides that if the ending of bargaining arrangements is supported by a majority of those who vote and at least 40% of the workers constituting the bargaining unit, the CAC must declare that the bargaining arrangements will cease to have effect from a specified date; otherwise, the application must be refused and the union will remain recognised. The conditions for derecognition may be altered by the Secretary of State by order subject to affirmative resolution procedure.

Part V: Derecognition where recognition automatic

91.     Part V provides for a different derecognition process to apply in cases where unions have been 'automatically' recognised on the grounds of having greater than 50% membership of the bargaining unit (i.e. without a ballot). Applications for derecognition of an automatically-recognised union may be accepted only three or more years after recognition.

92.     Paragraphs 95-97 provide that the derecognition procedure applies to unions recognised as the result of a CAC declaration under paragraph 19 or 67 where a method for collective bargaining is in place, whether voluntarily agreed, imposed by the CAC or agreed as a variation on a CAC settlement.

93.     Paragraph 98 provides that derecognition may not take place until three or more years after a CAC declaration of recognition was made. This was the interval proposed in Fairness at Work and used in Part IV of the Schedule.

94.     Paragraphs 100-105 apply if the employer requests the union to end the bargaining arrangements on the grounds that fewer than half of the workers constituting the bargaining unit are members of the union. (These paragraphs are similar to paragraphs 79-85, which deal with a standard request for derecognition.)

95.     Paragraphs 100 and 102 contain general procedural requirements for applications to the CAC under this Part.

96.     Paragraph 101 provides that the derecognition procedure is to end if the parties agree to end the bargaining arrangements within ten working days of the request. If the union agrees to negotiate, then the parties can extend the ten working day negotiation period by mutual consent. If the parties agree that the union should remain recognised, it is sufficient for them to take no further action. The CAC would not be asked to hold a ballot under paragraph 105, and the bargaining arrangements would remain in force. If the union either does not respond to or rejects the request before the end of the negotiation period, the employer may apply to the CAC to hold a secret ballot to decide whether the union should be derecognised.

97.     Paragraph 104 provides that, if the CAC is to hold a ballot to decide whether a union should be derecognised, it must first be satisfied that a majority of the workers who make up the bargaining unit are not members of the recognised union. If a majority of the workers are union members, the automatic recognition remains in force and the CAC must take no further action. The CAC has 10 working days in which to decide.

98.     Paragraph 105 provides that if a ballot is to be held on derecognition the same derecognition ballot procedure as in Part IV should be followed.

Part VI: Derecognition where union not independent

99.     Part VI provides that workers will be able to apply to the CAC for the derecognition of a union which does not have a certificate of independence and which has been (voluntarily) recognised by an employer.

100.     These provisions apply equally if one or many workers in the bargaining unit formally request an end to collective bargaining arrangements. For simplicity these notes on paragraphs 106-114 refer to applications by a single worker but such references should be read as covering a worker or workers.

101.     Paragraph 106 restricts the scope of this Part to unions which do not have a certificate of independence.

102.     Paragraph 109 provides that at any time after a non-independent union is recognised, a worker may apply to the CAC to end the collective bargaining arrangements. Paragraph 110 provides that an application is not admissible unless at least 10% of the bargaining unit favour an end to the collective bargaining arrangements and a majority of the bargaining unit are likely to do so. (This is essentially the same test as in paragraph 84). Paragraphs 106, 107 and 108 provide definitions for this Part of the Schedule.

103.     Paragraph 112(1) mirrors paragraph 89(1), which requires the CAC to help the employer, union and worker negotiate, with the aim that either they agree to end the bargaining arrangements or the worker withdraws the application. If an agreement is reached or the application is withdrawn, the CAC will take no further action. Otherwise, it must hold a ballot under paragraph 113.

104.     Paragraph 114 deals with the situation where an application for derecognition under this Part has been successful but the employer has re-recognised the non-independent union for substantially the same bargaining unit. In this case, paragraph 30 allows an independent union to apply for statutory recognition under Part I within 3 years of the derecognition. If the independent union is declared to be recognised by the CAC then paragraph 114 provides that the non-independent union shall be derecognised. In this case statutory recognition under Part I replaces the voluntary recognition of a recently-derecognised non-independent union.

Part VII: Detriment

105.     Detriment is action short of dismissal taken by an employer which is damaging to the worker. Paragraphs 115-119 set out provisions prohibiting such detriment in respect of a worker on the grounds relating to recognition or derecognition of a union listed in paragraph 115(2). Under section 146 of the 1992 Act, an employee currently has the right not to suffer detriment on grounds of membership, non-membership or taking part in the activities of a trade union. The Bill extends this right so as to prohibit detriment in respect of the paragraph 115(2) grounds and gives employees the right to complain in respect of such detriment to an employment tribunal. Paragraphs 116-119 make provision for time limits and other procedural matters and in relation to the calculation of awards.

106.     Paragraph 120 provides that an employee's dismissal is unfair if it is on the grounds related to recognition or derecognition listed in paragraph 120(2). Paragraph 121 makes similar provision in respect of selection for redundancy. Paragraph 122 provides that dismissal which would be unfair under paragraphs 120 or 121 will still be unfair even if the employee has waived rights to unfair dismissal under a fixed-term contract under section 197(1) of the 1996 Act. This provision is transitional in nature since such waivers are prohibited by clause 16 of the Bill.

107.     Paragraph 123 provides that dismissal as a result of an employee acting or failing to act for or against recognition or derecognition of a union is unfair even if the employee has not completed the qualifying period for unfair dismissal or has passed the normal upper age limit for dismissal protection.

* The qualifying period for unfair dismissal is currently two years, as set out in section 108 of the 1996 Act. The Government intends to reduce this period to one year by order under section 209 of that Act.

* The upper age limit is dealt with in section 109 of the 1996 Act.

Part VIII: General

108.     Paragraph 125 provides that if the CAC represents to the Secretary of State that the automatic recognition procedure in paragraph 19 has an unsatisfactory effect, the Secretary of State may amend it. The amendment need not be one proposed by the CAC, and must be made by statutory instrument subject to the affirmative resolution procedure. Paragraph 126 allows the Secretary of State to issue guidance to the CAC on how to exercise its functions under paragraph 19, ie how to decide the three qualifying questions in paragraph 19(4). This guidance is also subject to affirmative resolution.

109.     Paragraph 127 provides that the Secretary of State may provide guidance to the CAC on the method for collective bargaining it should impose under paragraphs 27(3) and 43(2). The Secretary of State must consult ACAS before providing the guidance, which will be made by order subject to negative resolution procedure. The CAC must take into account any such guidance in imposing a bargaining method, but may depart from it as circumstances require.

Clause 2 and Schedule 2: Detriment related to trade union membership

110.     The law currently protects employees against positive acts to prevent or deter trade union membership, non-membership or activities but not against omissions on the same grounds. In other words, if an employer takes action which gives a benefit to non union members but omits to confer the same benefit to union members, the omission does not constitute action short of dismissal on grounds related to trade union membership under section 146 of the 1992 Act. This aspect of the law was brought to light in the cases Associated Newspapers v Wilson and Associated British Ports v Palmer [HL 1995] ICR 406, where the House of Lords held that the word "action" in section 146 did not extend to omissions to act.

111.     Clause 2 gives effect to Schedule 2, which amends section 146 so as to prohibit this form of detriment by omission and makes consequential amendments to other related sections of the 1992 Act: section 147 on the time limit for applications to be made to employment tribunals; section 148 on the consideration of a complaint by tribunals; section 149 on the remedies which tribunals can award; and section 150 on awards against third parties.

112.     Paragraph 2 of Schedule 2 replaces references in sections 146(1), (3) and (4) of the 1992 Act to action short of dismissal on grounds related to trade union membership, non-membership or activities with references to a right not to be subjected to any detriment as an individual by an act or deliberate failure to act on the part of the employer for one of the prohibited purposes. Section 146(5), which sets out the ground on which an employee may present a complaint to an employment tribunal as action taken against him, is amended accordingly. Similarly, paragraphs 3 to 6 make consequential amendments to sections 147, 148, 149 and 150 of the 1992 Act, which deal respectively with the time limits for bringing complaints before an employment tribunal, the criteria to be applied by the tribunal in determining the purpose of an employer's action, the remedies available in the event that the tribunal find a complaint is well-founded and proceedings against third parties.