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SPEAKERS:
K D Ewing,
King's College, London
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Title: Employment Rights: Building on Fairness at Work
15-17 September 2000
I. Introduction
The present government can fairly be said to have secured a great deal by way of labour law reform. The volume has been staggering and the content impressive. In addition to the labour legislation there is also the Human Rights Act to come on stream with its promise of even more protection at the workplace. If trade unions are wise they will use the Act in a carefully strategic way to cover the gaps in the existing level of protection. But despite all this, there is no room for complacency: a chain is always to be judged by the strength of its weakest link. Take a young man in his mid 20s, employed as a security guard. Despite the great reforms since 1997, it remains the case that he may be hired on a low minimum wage of £3.70 an hour; he may be required to agree to work long hours, certainly more than the prescribed international and EU maximum of 48 hours weekly; he may have no right to have his trade union recognised for collective bargaining if he has 19 rather than 20 colleagues; he will have no right to be represented by a trade union in the negotiation of his terms and conditions of employment; and he will have no right to be treated fairly by his employer for the first year of his employment.
So a lot done, but a lot still to do. In different circumstances concern would be expressed as outrage. It is also the case that despite the great reforms since 1997, we remain stubbornly in breach of international labour standards; we continue to be in breach of the Council of Europe's Social Charter of 1961 and have perhaps the worst record of compliance of any country which has ratified the Charter and accepted its obligations; and we continue to block or oppose progressive measures initiated in Brussels, whether they be the Information and Consultation Directive on the one hand or the EU Charter of Fundamental Rights on the other, which we propose should be a catalogue of existing rights rather than a charter of new rights. So there is a long way to go before we can say that the process of labour law reform has been completed. The process will be complete only when we can say that we have in place a framework of legal rules which deliver in practice what some continental lawyers refer to as substantive equality. But although there is a big agenda for further reform, today I would like to concentrate on the general question of representation at work. There are two areas in particular where there is scope for improvement. These relate to the statutory recognition procedures on the one hand, and to information and consultation procedures on the other.
II. The Statutory Recognition Procedures
One area where there is unfinished business is in relation to the statutory recognition procedures. At the TUC last week, the first motion on the first day of Conference in a debate which occupied the whole of the first morning was dedicated to extending employment rights. The new employment legislation was stated there as being 'the first steps towards, but do not represent the achievement of, the Government's stated policy of establishing 'Fairness at Work'. The canvass for further reform cut by the TUC was huge, but at the heart of it were concerns about the recognition legislation which was said in the General Council motion to be 'biased against unions' in some key respects, most notably in the requirement under para 26 of the procedures that a union should be able to demonstrate that it would be likely to win a majority in a recognition ballot. There are also concerns about and a commitment to campaign around:
- the 21 employee threshold in para 7 which is said to deny five million workers the right to claim statutory recognition, and in the printing industry is said to exclude as many as 85% of employers;
- the removal of the requirement in para 29 for a 40% yes vote in a recognition ballot, and automatic recognition where union membership is at 50% plus one in the bargaining unit.
Yet paradoxically, there was also a sense of achievement at the TUC, particularly about the recognition legislation. The TUC reckons that several hundred voluntary agreements have been struck already, with details on the TUC website. This is confirmed by information released by ACAS last week that in the year to August 2000, the Service was asked to assist in 260 recognition disputes, double the average in the 1990s. In the cases handled by ACAS in the last year, about one half have resulted in voluntary agreements leading to full recognition. The NUJ appears to have been particularly successful in its use of the legislation: like a first world war statesman, the union's general secretary, John Foster, announced that there would be thousands of new members by Xmas. This is no idle boast: the work done by the NUJ in assessing its use of the Act would appear to bear this out. What it reveals is that the position is one of emerging complexity: from reluctant compliance on the part of some employers, to outright hostility on the part of others, laced with a small dose of inter - union tension.
In August of this year the union had been able to identify 5 different types of response bu employers:
- companies
where they had achieved voluntary recognition either after a ballot
or a verification of membership, with ballot results being 84% or above;
- companies
where they were talking about voluntary agreements without resort to
the statutory procedures, with agreements reached and ballots being
proposed in most cases;
- companies
to whom they are talking after having made an application to them under
the statutory procedure, with moves towards voluntary agreements, in
some cases after agreements about bargaining units;
- companies which have refused talks after a statutory approach, in three cases the company has circulated anti union material and called in heads of department for special briefings, and told employees that they will have to leave the union if they want to go further.
Some companies have contested the proposed bargaining units and claim that the staff don't want collective bargaining. In one case another company claims to have a single union agreement with another union which includes journalists, though majority of journalists are in the NUJ; and
- companies which have not yet responded to the union's request for recognition, in one case the company having opened talks with another union.
There are thus significant achievements arising as a result of the legislation. They have been secured without the need to draw on the CAC directly which has not been a victim of the anticipated avalanche of applications. There are in fact a number of reasons why that may never happen. Apart for the difficulties of institutional design already referred to which will make it difficult for the unions to use the procedures, there is also the unwillingness on the part of some unions to risk negative precedents of wide ranging implications. As a result some unions are already reluctantly accepting narrow bargaining units on a voluntary basis to protect arrangements elsewhere which would be put at risk if the matter was taken to the CAC and lost. But although the formal statutory machinery has stood idle until now, there will inevitably come a time when some of the hard cases will have to cracked on the rock of legislation. Here there are additional problems, quite apart from questions of institutional design. Also raised at the TUC Conference last week were questions about employer avoidance tactics and concerns about whether the legislation is strong enough to deal with them. From the floor we had concerns from one union about staff associations as a device to defeat and evade the legislation, while another endorsed the General Council resolution expressing concern about 'any use of imported 'union busters' from countries such as the USA'. This latter is raised also in the General Council's Annual Report for 2000.
The Staff Association
The first issue is the staff association or consultative committee, or whatever it may be called. As is well known, only an independent trade union may make an application under the new statutory procedure (para 6). And as is also well known, an application may not be made where there is already a trade union recognised by the employer for the purposes of collective bargaining (para 35). But what appears to be less well known is that an application may be blocked by a trade union even though it is not independent, provided that it has 'negotiating rights'. It is also the case that the application may be blocked even though these negotiating rights have not led to a substantive agreement, and where they have the agreement need not relate to pay, hours or holidays (para 3(6)). The only way out of this is for a worker (not the union) to invoke the derecognition procedures in Part VI of the Schedule. If this is done the CAC will be required to conciliate between the worker and the employer, and if this fails a derecognition ballot will have to be held. During the ballot process, it is remarkable to note that the non independent union will have the right of access to the workers in the bargaining unit (paras 147, 118). The workers who initiated the claim have no such access; nor does any union with an interest in the case.
News International
This is not to suggest that this is a major problem, at least not this stage. Paradoxically indeed the WIRS survey suggests that along with collective bargaining such non union based fora have declined in recent years. But this of course could change as the legal climate has changed, and it is clearly the case that some employers are looking at such devices as a way of defeating an application by a trade union. One such example of a body which could operate to block a claim by an independent trade union is provided by the News International Staff Association (NISA: its nicer with NISA). This was recently reconstituted and was recently accepted for listing as a trade union by the Certification Officer: indeed it is quite clear from its constitution that it has been designed to meet the statutory definition. According the constitution, each staff association has as its principal purpose the regulation of relations between workers and News International. NISA does not have a certificate of independence, though it is adapting its procedures in an attempt to secure one. All workers are automatically members (though they may opt out), but there are no subscriptions. The association makes no bones about its purposes, as the following exchange between the NISA press officer and Wapping Sun representative in the August issue of The News, the company newspaper.
Q: Is News International using NISA just to keep traditional unions out?A: Quite possibly. But that's what NISA wants to do, because we know that News International staff will get a better deal that way.
Acceptance as listing as a trade union may not mean a great deal in substance. But it may help to remove any doubt that the agreement between NISA and NI is a party to a collective agreement to which paragraph 35 applies. Under s 2 of the 1992 Act, the fact that the name of an organisation is on the list of trade unions 'is evidence that the organisation is a trade union', though not conclusive evidence as in the case of a certificate of independence. Nevertheless it is a status which will be difficult to challenge in the courts. But NISA does not yet have a certificate of independence, as presently constituted it is difficult to see how it could get one. Under its Charter, NI undertakes to meet the 'reasonable' costs of the staff associations, including the costs incurred in taking legal advice provided it is from a solicitor approved by the company. The files and records of the staff associations are to be kept in a place expressly designated for use by the staff associations, and appropriate administrative assistance is to be arranged by the Human Resources Manager. There are, however, plans for further changes to enable the staff association to apply for a certificate of independence: these include the creation of a trust funded by the company for use by the association, the moving of the associations to offices outside the company, and the introduction of a subscription for members.
International Standards
It is strongly arguable that these arrangements breach ILO Convention 98. This provides expressly by article 2 (2) that 'acts which are designed to promote the establishment of workers' organisations under the domination of employers' organisations, or to support workers' organisations by financial or other means, with the object of placing such organisations under the control of employers or employers' organisations' are deemed to violate the principle of freedom of association. This is complemented by article 3 which provides 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' of the Convention. The Committee of Experts has made two points in relation to these provisions in recent years. The first is that there is a need to adopt specific legislative measures to protect workers organisations against acts of interference, including support by financial or other means. And the second is that not only must acts of anti union interference be prohibited, but there must be 'effective and sufficiently dissuasive procedures' operating in practice. It is unclear whether in this country we meet this particular international obligation. In some systems which lend themselves to this particular form of employer conduct, such as the USA and Canada, it may be prohibited by the labour board as an unfair labor practice.
In this country we simply deny them the right to have access to prescribed statutory rights, such as the disclosure of information and time off, though it is highly unlikely that the need for such measures would arise in practice. These bodies are not, however, excluded for the procedures relating to the right to accompany a worker under s 10 of the 1999 Act. But this can hardly be enough. We are required to prohibit acts of anti - union interference and to have effective and dissuasive procedures in place. Yet we permit rather than forbid, and indeed we give non independent trade unions the same rights in the recognition procedure in some respects as independent trade unions. Given that it appears to be a breach of international labour standards, it is interesting to note that both the European Commission of Human Rights and the European Court of Human Rights have indicated that it is necessary to have regard to these international instruments in the interpretation of article 11 of the Convention. Trade union lawyers will no doubt wish to consider the extent to which this jurisprudence could be used to build an argument around the Human Rights Act which would address this particular abuse. But it would be much better if the matter were to be addressed by Parliament rather than dragged like the GCHQ affair through the courts both here and if necessary in Strasbourg, and ventilated with embarrassing regularity before the supervisory bodies of the ILO and the Council of Europe.
Coercive Employer Tactics
The second major gap in the legislation relates to employer conduct when a trade union arrives on the scene, and begins to organise or requests recognition. One strategy might be to set up an organisation by way of competition with the union, in the manner described. But the other may involve the use of coercive means of resistance. There is no evidence of this yet, though there are signs in some sectors of employers issuing threats to workers. Now there are two ways by which employers might resist. There is various forms of intimidation aimed at the individual workers, such as we saw in Carrington v Therm - Stor Ltd in 1983 where the employer responded to a request for trade union recognition by declaring a number of workers redundant as an example to the others. The other way is less dramatic, but no more subtle. This is the issuing of threats of the kind that we saw in Brassington v Cauldon Wholesale Ltd in 1978 during the last round of recognition legislation. In that case the employer threatened that if he had to recognise a trade union (following an ACAS communication), he would dissolve the company and recreate it in a new form.
Techniques of Coercion
These are obviously concerns that some employers will respond in the same way under the new procedure. These are real and serious problems in Canada and the United States where similar legislation is in force. If anything these problems are getting worse rather than better. The New York Times last year reported that 'Workers are constantly faced with harassment, intimidation, firings and threats of firings', and that 'The environment is not conducive to workers who want to freely form and join unions'. The issue has even drawn in Vice President Gore who has expressed concern about a minority of employers who 'use tricky loopholes to frustrate and ultimately deny workers from joining a union'. It may not happen here. But the fact that US union busters are setting up in this country is hardly propitious. In a report in The Observer newspaper in June there is a report that the law firm Eversheds had organised a conference in which these people were given a platform, and that a number of UK law firms were developing what were called a 'union resistance practice', or union busting as it is called in the United States. It is obvious that these law firms will operate within the law and will advise their clients to do the same. But the language of the US visitors (who are said to have a web site for us all to visit) is hostile and aggressive, and the tactics used in the USA are equally hostile and aggressive. The danger is that there may be circumstances where the enthusiastic employer crosses the line and engages in unfair (though lawful) campaign techniques, in a procedure in which the dice are already stacked against the union.
If these activities do take hold in a systematic way, we need to prepare for the fact that the legislation may not be strong enough to meet the challenge which they present.
There is in fact very little protection against abuse. In Brassington v Cauldon Wholesale Ltd an industrial tribunal held that the employer's action amounted to action short of dismissal. But the EAT was clearly uncomfortable with the decision, and it may not now be open to a tribunal following the amendments to s 146 of the 1992 Act in the Schedule 2 of the Employment Relations Act 1999 to meet one of the limbs in the Wilson and Palmer case. Although this extends the protection for action short of dismissal to cover omissions, it rather enigmatically says that the protection shall apply to protect the employee from being 'subjected to any detriment as an individual by any act, or any deliberate failure to act, by his employer if the act or failure takes place'. It is not clear if the threat of closure is an act for this purpose with the result that the protection would bite at the time the threat is made; or whether the threat of closure is the threat of an act which would lead to protection only of the threat is carried out. If the latter the protection would be useless in the sense that the employer will be able to achieve the desired result without needing to carry out the threat and without ever having to face legal liability. And if the latter then Schedule 2 may have inadvertently narrowed the protection in a crucial respect.
Employment Relations Act 1999
The other possible regulation of employer conduct is under the procedure itself. One possibility is the Code of Practice on access arrangements. Paragraph 43 of the Access Code implores both parties to avoid acrimonious situations such as the use of defamatory material or provocative campaigning, personal attacks, harassment or intimidation, issuing threats, placing pressure on workers to reveal their voting intentions, and otherwise behaving in a way likely to cause offence. These are welcome suggestions, but there are two problems which have to be confronted. The first is that they apply only during the access period, by which time the seeds of doubt may be sown. Conduct of this kind ouside the access period is not covered by the access code nor by any sanction which may underpin the code. The second difficulty relates to the Code itself, in the sense that it is difficult to see how these provisions could be enforced by the CAC in the event of their violation. The CAC can intervene under paragraph 27 only if the employer fails to comply with one of its three duties under paragraph 26. These include a duty to give the union access to the workers for a limited purpose set out in the sub paragraph 3. There is no restriction there on the conduct which an employer might use in the course of a campaign during the access period. So far as the code is concerned, time will tell whether Section D is no more than unenforceable platitudes.
The second possibility then is the detriment and dismissal provisions of Part VIII. Although this may be useful in some cases, it is not clear whether it is enough to deal with all forms of hostile employer conduct. In any event, there is also the question of just how effective the protection will be. In the first place, although workers have a right to organise under the recognition procedure, and although workers are protected from action short of dismissal, only an employee may bring an application for unfair dismissal under these provisions. So we are back to O'Kelly v Trusthouses Forte plc. Secondly, there is the question of the remedy for the worker discriminated against or dismissed under Part VIII. It remains doubtful whether the sanction of compensation - subsidised presumably by the taxpayer - is an adequate deterrent to the large anti-union US multinational. There is perhaps a need for a more imaginative form of protection. And there is perhaps also a need to follow the example of the North American jurisdictions by taking steps to deal with conduct of this kind by some kind of unfair labour practice jurisdiction. It ought to be unlawful for an employer to engage in conduct of the kind identified in paragraph 43 of the Access Code, and unlawful to do so at any time after an application has been made to the employer under the procedure.
III. Information and Consultation
Although trade union recognition rights are clearly important they have a great deal to achieve if the representation gap in British workplaces is to be closed. The United Kingdom has the lowest level of collective bargaining coverage in the EC, and one of the lowest levels of coverage in the developed world. Having stood proudly at 70% in 1980 (a figure which is increased when wages council orders are taken into account), coverage has slipped back to 25%, 47%, or 40%, depending on which source is consulted (ILO, OECD, WIRS). According to WIRS the decline in the private sector has been the most marked, with only 25% of workplaces now recognised in 1998 - half the level of 1980. It is also the case that other channels of worker representation are in decline. According to the WIRS survey published in the summer, the great majority of workplaces in 1998 had some form of communication channel between employees and management through which employees could, at least in principle, express their views and concerns to management'. But what the WIRS team also point out is that 'there was a major shift from channels involving representatives, usually able to call upon the information and resources of independent trade unions, to channels where employees communicated directly with management, largely on occasions and on terms set by management themselves'.
There is a long way back, and indeed that there are those who realistically predict that neither trade union membership nor collective bargaining density will return to the levels which were experienced between 1945 and 1979. Partly it is a feature of the way in which collective bargaining is conducted and the way in which collective bargaining is conducted in this country. Early State initiatives were designed to promote collective bargaining at sectoral rather than enterprise level. The fact that collective bargaining was conducted at sectoral rather than enterprise level or at both sectoral and enterprise level helps to explain the high levels of coverage in the past, and the current high levels of coverage in the rest of Europe. Among our EC partners, coverage is typically in excess of 80%, according to the ILO World Labour Report and the OECD. In other countries which have enterprise based bargaining regimes and mechanisms of legal support such as what we have in the Employment Relations Act 1999 report much lower levels of coverage: 11.2% in the case of the United States and 37% in the case of Canada (with a number of important provincial variations). There is strong evidence to suggest that the locus of collective bargaining and the nature of State support is important in determining the level of coverage.
So although there may be a case for reviewing the trade union recognition procedure with a view to make it more union friendly with a view to ensuring that workers have a voice at the workplace, there is also a case for saying that there is a role for other more subtle means of intervention which takes account of the difficulties which may be encountered with recognition but which gives additional support to trade unions and their members. One way of doing that is through the procedures in the Employment Relations Act 1999, s 10 which contains the provisions relating to the right of the worker to be accompanied in grievance and disciplinary cases. It is true that these are grievously limited by the fact that the worker cannot call on his or her union to help renegotiate his or her terms and conditions of employment, though there may be circumstances where this may be possible and where the Code of Practice gives insufficient guidance on the scope and extent of the employer's implied contractual obligations. Nevertheless trade union officials accept that this provides trade unions with a good opportunity to promote the union to both an employer and workers, as a constructive force for good. Standing procedures for the information and consultation of workers provide another opportunity.
There are of course concerns that procedures of this kind might make it difficult for trade unions to become established and that they might inadvertently create an institutional rival to the trade union, in the same manner as the staff association. But having previously shared these doubts, like many others I can see that information and consultation procedures are not merely an end in themselves but also a means to an end. They may tend to create an institutional framework for consultation which trade unions will be well placed to dominate, capture and control, by putting up candidates, by training representatives and by offering advice and assistance. It provides a platform for trade unions which can be used as a base to acquire bargaining rights, and as such could overcome some of the obstacles to worker representation found in the trade union recognition legislation. But current proposals are limited by the fact that they will apply only to companies with more than 50 employees, a higher threshold than the recognition legislation and a threshold which would also exclude what would be a larger majority of employers. It still leaves the problem of the smaller business, though progress could be made here by amending section 10 to allow a trade union to represent any worker on any matter relating to their employment, limited if necessary to trade unions which are recognised by the employer in these cases where there is a voluntary or statutory recognition agreement.
Current Arrangements
It is of course the case of that we now have a number of quite different procedures already in place for consulting employee representatives: these relate to redundancy, transfer of undertakings, health and safety and working time. There are three notable features of these arrangements: the first is their ad hoc and haphazard form; the second is the lack of any institutional permanence; and the third is their failure to ensure an effective flow of information and meaningful consultation on crucial issues. The current arrangements are a shambles, and there are two compelling reasons why they need to be rationalised and extended. The first relates to reasons of institutional coherence, and second to reasons of institutional credibility, an argument that should not need to be made in the wake of Rover. It is hardly surprising that an important feature of the TUC resolution on employment rights is its call to the government to impose a duty on employers to enter into meaningful consultation when redundancies are being considered, and well in advance of any announcements being made'. But as we shall there are other compelling reasons for further reform.
Institutional Coherence
There are a number of ways in which the incoherence of the present arrangements can be shown. First, take the priority of the recognised trade union. This is now a feature of the recognition, transfer of undertakings and health and safety at work procedures, but apparently not those relating to working time. Many of the provisions of the Working Time Regulations may be established or departed form by collective agreement or by a workforce agreement. For these purposes an employer may decide to proceed by way of the latter even though there is a recognised trade union, a workforce agreement being defined for this purpose as an agreement between the employer and workers employed by him or her or their representatives. But this is not the only example of incoherence. Take also the procedures for the election of representatives in situations where there is no recognised trade union. Here we find that the procedures for the election of redundancy and business transfer representatives are different from the procedures for the election of health and safety representatives, which are different again from the procedures for the election of working time representatives. The differences are most marked in the case of the non union health and safety representatives where the employer has no responsibility whatsoever for the conduct of the election, the term of office or the number of representatives.
But it is not only the question of priority or the question of election procedures. There is also the question of the rights of the elected representatives. The provisions relating to redundancy and business transfers provide time off to carry out the functions of a candidate for the post of representative, as well as the functions of the representative itself. The position is slightly different in the case of health and safety where the safety representative is entitled to time off with pay not only to carry out functions as a candidate, functions as a representative, but also to undergo training in the responsibilities of office. Curiously there does not appear to be any provision for time off for representatives elected to negotiate workforce agreements under the Working Time Regulations 1998, though there is protection against detriment and dismissal for activities both as a candidate and as a representative. Apart from training for the safety representative, there is otherwise no provision for facilities for workplace representatives. It is true that the safety representative is a standing officer who may be elected for an indeterminate period, with a number of tasks to attend to, whereas the others are elected to deal with a single task. But this does not diminish the need for informed, skilful and effective representation of the employees concerned.
Institutional Credibility
The credibility of the information and consultation procedures relating to redundancy in particular was delivered a harsh blow by the Rover affair earlier this year. The failure of the company to inform and consult before crucial decisions were made was said by the Trade and Industry Committee to be a 'disgraceful failure'. For the unions involved in the process, it led to a number of conclusions being drawn about the Collective Redundancies Directive of 1975 (and the European Works Council Directive of 1994). In the first place, neither gives them access to the real source of decision - making; secondly the EWC (which in this case had not met since the Autumn 1999) could be easily by-passed and not consulted about a decision even as major as this; and thirdly that although the Collective Redundancies Directive may have been breached in this case, it is almost impossible to enforce. According to one union official in the course of evidence to the Trade and Industry Committee 'the remedy currently available under United Kingdom law to enforce this Directive is extremely weak, if not non - existent. We recently had a test case on this very issue on the advice of Ministers and it is still within the court system. The initial view of the tribunal concerned is that we do not have much a remedy. Let us say that it is an ineffective remedy'.
There are thus obvious questions about the nature of the obligation to inform and consult being strengthened, and obvious questions about the remedies for failure to comply being strengthened, as reflected by the TUC resolution at the 2000 Congress. But although the DTI conceded that there were issues about the way in which the 1975 Directive worked in this case, it was not moved to concede a need for reform. According to the Minister:
'Clearly there are wider issues about the employment circumstances of UK workers compared to workers in Continental Europe. We will obviously need to consider what lessons can be learned here but what we must not do is adopt a situation where in out endeavours to offer protection to people in the workplace we actually make the United Kingdom an unattractive place for people to come and invest. Somehow striking the balance between the two, providing minimum standards but without doing it in a way which affects decisions which are taken by inward investors'.
The Trade and Industry Committee thought this unexceptionable, and agreed that it would be foolish to rush into legislative change on the basis of a single bad case, however deplorable. But although noting that a similar closure (Renault Vilevoorde) had led to a legislative response by the Commission, and recommending that the government consider the lessons to be learned, it is not yet clear how the government will respond, though there are press reports of some possible movement 'as a home-grown alternative to more radical European plans'.
European Developments
The other lesson from the Rover case was drawn by the unions involved. According to one senior trade unionist, the affair reveals more than ever that 'the Draft Directive on Information and Consultation which is currently the subject of discussion between the Member countries of the European Union is needed more than ever if employees in this kind of situation are to have any real statutory rights to consultation, because the statutory system has failed the employees of Rover BMW'. The proposed directive - the progeny of another consultation failure at Renault Vilvoorde - would require companies employing more than 50 employees to establish information and consultation machinery with a view to informing and consulting workers' representatives about issues affecting the workforce on a regular basis, and more regularly to deal with specific matters such as decisions likely to lead to substantial changes in work organisation or in contractual relations'. There is thus a second reason why existing procedures need to be rationalised and extended: to bring us into line with the best practice in a number of other European countries; there are no clear or compelling reasons why British workers should be less well informed than their counterparts elsewhere in the community, or why they should not have the same rights to be consulted by the companies by which they are employed.
The Government's Response
The provisions of the proposed directive would provide an opportunity to rationalise, develop and improve the current arrangements for information and consultation, in the context of what the TUC refers to as 'generic standing consultation mechanisms'. But as is well known the government is opposed to the draft directive, though as the Trade and Industry Committee pointed out, 'it would seem likely that the UK objection may not be indefinitely sustained by support from our European partners'. The formal position of the government appears to be that the matter is one which should be left to national governments under the principle of subsidiarity, an argument that was trailed in Fairness at Work and repeated in the government's response to the Trade and Industry Committee's inquiry into the proposed Rover closures by BMW. The official position is thus that the 'Government is not persuaded of the need for a directive on information and consultation in companies operating only at national level. Apart from being difficult to reconcile with subsidiarity, it would 'cut across existing practices in member states to no benefit'. But none of this seems very persuasive, contradicting as it does some of the sentiments expressed by Labour Party modernisers and Third Way enthusiasts: generic information and consultation through works councils is the essence of New Labourism.
Works councils fit neatly into the analysis of the 'best modern companies' which is set out in Chapter 2 of Fairness at Work. A number of criteria were identified, including a willingness to ensure that 'everybody understands the business so that change is readily accepted and implemented, not feared'; and a willingness to encourage employees 'to exercise their intitiative and to contribute their ideas to the development of the business'. But perhaps even more significantly, the works council as an institutional form seems particularly well placed to foster the spirit of partnership which the government is keen to promote. These benefits are said to be three in number. First, employees who understand the business recognise the importance of responding quickly to changing customer and market requirements. Secondly, where they are taken seriously, employees at every level come forward with ways to help the business innovate, for example by developing new products'. And thirdly, where they are well prepared for change, employees can help the company to introduce and operate new technologies and processes, helping to promote job security. Given these sentiments, the opposition to the draft directive is simply inexplicable: if the foregoing is a position genuinely believed, the works council would be a more appropriate form for promoting the kind of partnership which the government has in mind, than mandatory collective bargaining over pay, working time and holidays for which it legislated.
The EU Charter of Fundamental Rights
So there appears to be a contradiction in the government's position. But as we have seen the works council as an institutional form does not just provide a means for the promoting of partnership: it also provides an opportunity for workers to be represented as partners by an independent trade union external to the enterprise. A further opportunity to promote information and consultation arrangements and to consolidate existing measures is provided by the Draft EU Charter of Fundamental Rights which is to be considered by the Council in Nice later this year. The latest draft (28 July 2000) is divided into 7 chapters including one on 'solidarity'. In truth, the Charter represents a significant weakening of earlier versions, and indeed has been so weakened generally that it no longer has the support of the ETUC, which initially had such high hopes. Nevertheless article 25, headed 'workers' right to information and consultation within the undertaking', provides that workers and their representatives must be guaranteed information and consultation in good time on matters which concern them within the undertaking, in accordance with Community law and national laws and practices. This is said to be based on the Revised European Social Charter of 1996, article 25, and the Community Charter of the Fundamental Social Rights of Workers, article 17.
But the proposed Charter is in truth weaker than either of the foregoing. The Revised Social Charter, for example, requires ratifying States which accept this particular provision to adopt or encourage measures in accordance with national legislation and practice which enable workers to be 'informed regularly or at the appropriate time and in a comprehensible way' about 'the economic and financial situation of the undertaking employing them'. It also provides that workers are to be consulted 'in good time on the proposed decisions which could substantially affect the interests of workers'. The Community Charter of 1989 also covers companies or groups of companies operating transnationally. But like the Community Charter, it looks likely that the proposed EU Charter will be declaratory only (to be decided by the Council), though unlike the former the latter does not include any provisions in relation to its implementation. Indeed the draft Charter provides expressly that it 'does not establish any new powers or task for the Community or the Union, or modify powers and tasks defined by the Treaties' (article 49). It seems likely at this stage that the information and consultation provisions of the proposed Charter will be flushed away with the rest of the document: diluted from the position adopted in previous drafts and denied any legal status; another rhetorical flourish from Brussels with little practical substance.
IV. Conclusion
If we draw together some of the points made above, the main challenge confronting British trade unions is how to close the representation gap which has steadily opened up in British workplaces and how to extend the coverage of collective agreements. The new recognition procedure has allowed some unions to make good and steady progress, but ultimately its limits will be exposed and the need for its revision highlighted. In terms of its institutional design there are too many obstacles for trade unions to overcome, even where it applies; and it provides inadequate protection against different forms of employer resistance. These defects will have to be addressed, though at the present time, the only indication that there may be reform is a commitment form the Labour Party at the Exeter National Policy Forum in July to review the operation of the 40% threshold support in a ballot. This has caused some to be disappointed, and there is a case not only for removing some of the obstacles, but also for introducing restraints on employer conduct. Only an agreement with an independent trade union should operate to block an application under the procedure; trade unions should have a right of access from the date an application is accepted by the CAC; and the the CAC should be empowered to require an employer to refrain from unfair conduct from the time an application is received by a trade union.
There is also the question about whether worker representation through independent trade unions could be promoted by initiatives which complement the statutory recognition procedures, as a way of overcoming employer resistance. Mandatory information and consultation procedures would help to create an institutional forum in which trade unions could play a part and which they could use as a stepping stone to recognition for the purposes of collective bargaining on matters relating to pay and working conditions. A means of demonstrating to employer and employed alike the benefits which trade unions can bring to the enterprise. The obvious way forward would be accept the principles of the proposed Information and Consultation Directive. But at the time of writing the prospects look bleak. The Labour Party National Policy Forum has acknowledged that in the wake of Rover the provisions for European Works Councils and Collective Redundancies have given rise to concern about their effectiveness in practice. But all that is proposed at this stage is that the government 'should undertake a review of these matters to see how all employees can be more genuinely consulted and informed'. This falls some way short of the requirements of the draft directive and some way some way short of a commitment to its provisions.