UK Employment Law Coffee Break: Webinar on new employment laws, Supreme Court ruling on industrial action, and our latest incentives spotlight

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Please join Natasha Burbidge and Laura Crang, from our employment team, on Thursday 16 May for our latest Eating Compliance for Breakfast webinar which will look at the new employment laws introduced this year and the steps employers should be taking now to ensure they are compliant. We will also look ahead at how businesses can prepare for further changes in 2024, including the new legal duty to prevent sexual harassment and the new code on fire and re-hire.
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Action short of dismissal for participating in industrial action: Supreme Court declares UK laws incompatible with Article 11

The Supreme Court has handed down a significant decision looking at the current statutory protection afforded to an employee or worker under UK law participating in lawful industrial action, where their employer takes action against them short of dismissal. The Supreme Court has declared that the existing protection is incompatible with the right of freedom of association under Article 11 of the European Convention on Human Rights.

The appellant was employed as a support worker in the care sector. She was also a workplace representative for UNISON and, as such, was involved in planning and taking part in lawful industrial action at her workplace. She was suspended by her employer with the effect that she was removed from her workplace while industrial action was in progress. During her suspension she received her normal pay but did not receive payment for the overtime she would normally have worked.

The appellant brought a tribunal claim alleging that the decision to suspend her was taken with the sole or main purpose of preventing or deterring her from taking part in the activities of an independent trade union or penalising her for having done so.

The relevant statutory protection for employees or workers where an employer takes action short of dismissal is set out in section 146 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) and which on its face the Supreme Court noted "is apt to include participation in, or the organisation of lawful strike action".

However, the protection afforded is qualified by the inclusion of the words "at an appropriate time" which is defined as meaning outside working hours, or within those hours where the employer consents. The Supreme Court noted that normally industrial action will "be carried out during working hours if it is to have the desired effect"; withholding labour at a time when the employer has no expectation of labour being provided is unlikely to have any consequence.

The Supreme Court went onto find that this lack of statutory protection for workers and employees was incompatible with Article 11; "the failure to provide any legislative protection at all against any sanction short of dismissal for lawful industrial action against those who take it, does put the [UK] in breach of its possible obligation to secure effective enjoyment of the right to participate in a lawful strike that is protected by article 11".

However, it found itself unable to interpret section 146 to reflect the protection afforded under Article 11 – "a Convention compatible interpretation… is not possible and would amount to impermissible judicial legislation rather than interpretation". Indeed, seeking to interpret section 146 in line with Article 11 "fundamentally alters the scope and structure of the rights conferred by TULRCA, re-drawing the balance between workers' and employers' rights. There is no formulation that does not involve making a series of policy choices that may have far-reaching practical ramifications. This goes beyond the permissible boundary of interpretation".

The Supreme Court concluded by making a declaration that section 146 TULRCA is "incompatible with article 11", insofar as "it fails to provide any protection against sanctions, short of dismissal, intended to deter or penalise trade union members from taking part in lawful strike action organised by their trade union".

What does this mean for employers?

The Supreme Court's declaration does not affect the existing validity of section 146 TULRCA. However, it will now be for Parliament to decide whether to legislate and, if so, the scope and nature of such protection.

The Supreme Court noted that there is a need to maintain "an appropriate balance between the competing rights of employers and their workers in this politically and socially sensitive context" and that there are "policy choices" that will have to be made regarding the level of protection if Parliament decides that legislative protection is required.

A general election is expected to take place later this year (or at the latest, January 2025) and it seems unlikely that the current government will take any action to introduce statutory protection to protect workers and employees from action short of dismissal for lawful industrial action before then. However, this may be progressed by a new government. The Labour Party has already indicated that, should it win the next election, it will be seeking to introduce reforms to trade union laws.

In the meantime, employers should ensure that they take this decision into consideration when faced with industrial action, given the potential reputational and employee relations issues which may arise from taking action short of dismissal, as well as potential legal challenges in this complex area.

Employers should also remain alert to the risk of claims under the Employment Relations Act 1999 (Blacklists) Regulations 2010, which prohibits employers from compiling or using a "prohibited list" of individuals taking part in trade union activities where it has been compiled with a view to being used for discriminatory purposes.

Incentives spotlight | Developments in employee share plans and employee tax

Our Incentives team has published its latest Employee Incentives Update, covering the extension of the notification period for enterprise management incentive options granted on or after 6 April 2024 and the upcoming 6 July deadline for companies to file their employment-related securities annual returns. It also covers changes to HMRC's clearance process for certain termination payments (including those involving the disability and injury compensation exception). 

Please get in touch with Michael Carter or your usual Osborne Clarke contact if you have any queries or would like to discuss this further with our incentives team.