What will 2017 bring the unions?
What the economy delivers at work will be at the centre of things once again in 2017, together with the implementation of the government’s union-bashing Trade Union Act and the impact of the Brexit process.
It may be a cliché to say the economic outlook is uncertain, but rising inflation and a renewed squeeze on pay and earnings looks a racing certainty.
Pay and inflation
The mid-point in pay settlements has been stuck at 2% for more than two years while most of the public sector remains subject to a seemingly perpetual 1% cap on average pay rises. Average regular weekly earnings have been a little stronger recently, but that could be undone if employers react to weakening growth and higher costs by shifting work to lower-paid and insecure forms of employment. Industrial disputes are at a historically low level, and it remains to be seen whether trade union members are willing to let these trends continue.
The one clear and immediate effect of June’s referendum vote to exit the European Union — the decline in the value of sterling — set the clock ticking for a rise in consumer price inflation, putting an end to the first real respite from falling living standards since the recession.
The Office for Budget Responsibility forecast that Consumer Prices Index (CPI) inflation — currently the officially preferred inflation measure — would rise above 2% early this year, peaking at 2.6%, while cutting back on its expectation for growth in the UK economy. Independent forecasts compiled by the Treasury put CPI inflation in the fourth quarter of 2017 at an average of 2.7%, and inflation as measured by the Retail Prices Index (RPI) at 3.3%.
The reported inflation rate is likely to rise in March when CPI changes to “CPIH” which includes owner-occupiers’ housing costs. Over the last two years, CPIH has been around 0.3 percentage points ahead of CPI, although it will still fall short of the Retail Prices Index (RPI) measure which many negotiators continue to regard as the “real” inflation rate.
The statutory National Living Wage (NLW, the higher over-25 minimum wage rate) will rise by almost 4.2% to £7.50 in April. But the NLW didn’t feed through to general pay rises last year and seems unlikely to do so this time.
Rising minimum wages will, in any case, be offset by cuts in state benefits and tax credits.
The apprenticeship levy scheme comes into force in England from 1 May, and we can expect the debate over apprenticeship quality and the cost of the levy to employers to capture headlines.
Concerns about scams and more collapses affecting pension scheme members are also likely to be high on the agenda. An increase in the already high level of complaints received by The Pensions Regulator — currently an average of 240 a month — could be on the cards. The government has promised an enquiry.
Trade Union Act
Looming on the horizon for 2017 is the implementation of the Trade Union Act (TUA), introducing a raft of provisions aimed at restricting unions.
The timing for many of the Act’s provisions is still unclear, although recently-published regulations suggest some may come into force in March 2017. What is clear is that the main changes will see significant new restrictions on the right to strike by way of new ballot thresholds (see page 23) and notice requirements, and stricter requirements for lawful pickets and protest. It will also see a Certification Officer bestowed with investigative powers and the ability to impose criminal penalties (see Labour Research, October 2015 page 25).
Meanwhile, opposition to the Act from devolved nations continues. At the time of writing, the Welsh government planned to issue a call for evidence on the principles of a Bill intended to repeal some aspects of the Act.
In the coming year, unions will need to remain vigilant against the introduction of further restrictive measures. In particular, it will be important to keep an eye on right–wing think tanks and lobbying activities. Unions will also be staying abreast of proposed revisions to the picketing code of practice and fully engaging with any consultations.
Challenging employment tribunal fees will remain high on trade union agendas. Recent figures published by the TUC show that, on average, in 2012-13, the year before fees were introduced, 16,000 people a month took a claim against their employer. However, by 2015-16 the average number taking claims plunged to 7,000 a month.
The UNISON public service union’s long battle against tribunal fees will head for the Supreme Court in the spring. The union has been pursuing judicial review of the fees regime on the basis that fees have a discriminatory effect.
Another area of concern for unions will be proposed reforms and cuts to the tribunal system and regulatory bodies. The recently-published document, Transforming our justice system, set out the proposal that by 2020, all tribunals will be part of a single justice system with a single judiciary. Other proposals include the issuing and management of claims online.
The government has launched a consultation on reform to the Employment Tribunals and the Employment Appeal Tribunal, due to close on 20 January 2017 (see page 23).
These reforms will take place against a backdrop of proposed cuts in funding to Her Majesty’s Tribunal Service, as well as bodies such as the Acas employment advisory service and the Equality and Human Rights Commission.
Following on from the GMB general union’s landmark employment tribunal victory against Uber at the end of last year, successfully establishing that Uber drivers are “workers” and not self-employed (see pages 16-18), the battle will continue to protect vulnerable workers in the “gig economy” .
Uber is sure to appeal. Meanwhile, the Independent Workers Union of Great Britain (IWBG) is assisting couriers in similar claims against various companies. At the time of writing, a claim against CitySprint was being heard in the Employment Tribunal. There are other attempts at challenging the exploitation of workers in the gig economy, for example, the IWGB’s application to the Central Arbitration Committee on behalf of Deliveroo drivers.
Public sector termination payments
Government proposals to reduce termination packages for public sector workers will come into effect over the year. There will be a new structure for termination payment calculations, including a salary cap and limits on early pension access. Scotland, Wales and Northern Ireland will decide separately whether to apply these changes to devolved bodies.
The proposal for an overall cap on public sector exit payments and clawback remains outstanding, and unions will continue to challenge this. The government has also recently released draft legislation setting out changes to taxation of termination payments, likely to come into force in 2018.
Impacting on all these developments is Brexit and how this will affect employment rights. Prime minister Theresa May has announced that there will be a “Great Repeal Act” in the Queen’s speech in the spring. On leaving the EU, this will annul the 1972 European Communities Act, which gives EU law effect in the UK and transposes EU law into British law. The government will then be able to retain, amend or revoke this legislation.
A danger highlighted by Clive Lewis, shadow business secretary, is that the government has not given any “promise or guarantee that employment legislation will not, once it comes out of international law, simply go into secondary law”.
While primary law is created by Parliament, secondary law allows the government to make changes to legislation without having to go through Parliament.
Lewis said Labour wants to see employment rights enshrined in primary law and is concerned that the government will use statutory instruments — a type of secondary law — “to undermine employment law and workers’ rights”.
The Institute of Employment Rights (IER) think tank has recently issued A manifesto for labour law. This has secured support from shadow chancellor John McDonnell and shadow minister for trade unions Ian Lavery, who have confirmed that the manifesto will be the blueprint for Labour’s official position on workers’ rights in post-EU Britain.
The manifesto sets out 25 policy recommendations, including restoring the influence of collective bargaining, repeal of the TUA and new, enforceable rights for workers. The IER is putting together draft legislation to accompany the manifesto.
Two union mergers are definitely taking place this year, both commencing on 1 January 2017, with the possibility of a highly significant one taking place later in the year.
One of the two taking place this month involves construction union UCATT —formed in 1971 from four unions covering separate building trades — and the giant Unite general union. UCATT’s 49,000 members are joining Unite members working in the same industries to form the Unite Construction Allied Trades and Technicians Sector.
The other merger involves broadcast and entertainment union BECTU, which is transferring engagements to managers’ and professionals’ union Prospect. BECTU’s 26,000 members will merge with Prospect’s communications, media and digital industry members to form a new BECTU sector with over 40,000 members. This will be the largest sector within the merged union.
However, in the offing is an even more significant amalgamation in the wider scheme of things — of two of the three largest teaching unions in the UK. Members of the 333,000-strong NUT and the 125,000-strong ATL will be balloted this March on whether they wish to merge. If the ballots are both successful, a new union of some 450,000 members will come into operation in September 2017.
The new organisation — to be called the National Education Union — would be the country’s fourth largest union, and would represent teachers and support staff in schools and some teachers in further education and higher education colleges and universities.
Trade Union Act
Meanwhile, all unions will be affected by a number of changes to their internal and administrative operations brought about by the TUA.
As well as bringing significant new restrictions in the area of industrial action ballots and picketing, it includes new rules on the use of check-off for collecting member subs, the way new union members are enrolled into the political fund and the use of facility time in the public sector.
The new rules on political funds will come into full force at the end of February 2018 and mean unions with such funds will have to ask new members to opt in to the fund, rather than leaving them to opt out if they don’t wish to contribute. Unions now have to draw up new political fund rules which must be approved by the certification officer.
UNISON has been consulting relevant groups in the union to develop proposals on its political fund’s operations under the new provisions.
The union currently gives new members three options — to contribute to the Labour Party-affiliated part of the fund, to contribute to the non-party-affiliated part of the fund or to opt out of contributing to the fund altogether.
It notes that new members who do not opt in will, potentially, pay a lower-rate sub as a result. If the changes agreed require amendments to UNISON rules, these will be considered by the union’s 2017 conference.
During the passage of the Act, the government was forced to make a concession on the subject of electronic balloting in industrial action votes (see Labour Research, December 2016, page 7). It has commissioned an independent review into the security and other aspects of e-balloting, without any commitment on whether their use will be permitted, as the unions want. In any case, don’t expect any conclusions in a hurry — the review does not have to be presented to Parliament until December 2017.
Many unions will be taking an active part in the review over the year, with TUC general secretary Frances O’Grady saying “it is time to bring union balloting into the 21st century and let members vote securely online”. She urged the government to carry out the review without delay.
The year is also likely to see a change in the rules on the check-off system in which employers deduct union subs direct from wage packets to forward to the union. The TUA says that, in the public sector, this will only be lawful if members have an alternative means of paying, and if the union makes “reasonable” payments to reimburse the employer for the cost of running the system. The government has yet to introduce the regulations to implement this provision, but it is expected to do so this year.
On facility time, the Act retains reserve powers for the government to limit it in the public sector, though again this awaits specific regulations. Even then, there will be no statutory capping for three years while the government monitors information to be provided by public sector employers on the number of union officials they employ and the amount spent on paid facility time.
From the UK’s point of view, the most important developments in Europe in 2017 will be linked with the decision to leave the EU.
Whether the UK government is able to stick to its timetable of beginning the formal process to leave in March will depend heavily on the outcome of its appeal to the Supreme Court, expected this month. The appeal follows a High Court ruling last November that MPs must be consulted before triggering Brexit. There must be a strong chance that the negotiations will begin later.
In any case, serious negotiations are likely only to be possible once the results of elections in France and Germany, the EU’s most influential states, are known. (The second round of the French presidential election is on 7 May, and the German parliamentary elections will probably take place in September.)
Although all 27 states will have to agree the final outcome — planned for 2019 — as will the European Parliament, the views of governments in these two states are likely to be crucial for the negotiating process.
Negotiating the UK’s exit is by no means the only challenge facing the EU. While European economic output is now higher overall than it was before the 2008 crisis, growth remains sluggish. This suggests that there is little reason to expect that EU unemployment will fall dramatically, although the European Commission forecasts that it will drop from an average of 8.6% in 2016 to 7.9% in 2018.
In Greece, the country facing the biggest jobless crisis, unemployment is forecast to fall from 23.5% (in 2016) to 20.2% two years later; in Spain, where the situation is almost as bad, the Commission expects the current 19.7% unemployment rate to be at 16.5% by 2018.
In the social policy arena, the Commission’s work programme for 2017 contains little that is new. Further progress can be expected on the so-called “European Pillar of Social Rights”, which sets out a framework of principles in employment law. However, it’s unclear whether this involves anything new or is simply a restatement of existing policies. There will also be further progress on proposals, published in 2016, giving new rights to parents bringing up young children.
Two other significant developments are worth looking out for at national level. The first is in Germany where unions are concerned about a judgment of the European Court of Justice on employee board-level representation. The decision, expected early in the year, could present significant problems for the existing system.
The second development is in France where presidential elections look likely to produce changes to the working time rules, with the abolition of the current 35-hour limit. Centre right candidate, François Fillon has said that he plans to remove all legal limits other than the 48-hour-a-week maximum set by the European Working Time Directive.
The immediate aftermath of the EU referendum vote saw a surge in hate crime (see Labour Research, December 2016). Unions will want to continue exercising vigilance to see whether this continues into 2017.
And they will be working to protect the rights of EU workers to stay in the UK, including the 55,000 NHS workers who now face an uncertain future.
One contribution to countering the rise in hate crime will be the national anti-racist demo on 18 March, UN Anti-Racism Day, organised by Stand Up to Racism and supported by the TUC.
There are fears about how Brexit will affect equal pay and other equality legislation. Last year, witnesses called before the Women and Equalities Select Committee inquiry into how to ensure strong equalities legislation following the EU exit explained that much of the development of equal pay law has been driven by Europe. And UK workers will also miss out on new developments such as EU plans for family-friendly rights.
Gender pay gap
Employers will have to start calculating their gender pay gap from April 2017 so as to publish the details by April 2018. The legislation initially only applied to private and voluntary sector organisations employing over 250 people. But the government has now extended it to the public sector, and the intention is to have all sectors following the same timetable.
While the regulations have been broadly welcomed, there are some concerns. The TUC has repeatedly called for the legislation to make employers take action to address the gender pay gap, such as making them publish an action plan for narrowing the pay differences in their workplace. It also wants proper sanctions for employers who refuse to publish this information. The legislation also only applies to “relevant employees” of the employer, so temporary agency workers and workers employed by contractors will fall outside the remit of the legislation. This means many low-paid workers, such as cleaners, will not always be included in the results.
Health and safety
TUC health and safety priorities for 2017 include campaigning to protect health and safety rights post-Brexit.
The TUC has pointed out that 41 out of the 65 health and safety regulations introduced into UK law between 1997 and 2009 originated in the EU. A number of these are already the subject of two Health and Safety Executive (HSE) reviews which could see proposals for legislative change this year.
The safety watchdog has recently sought views on revising and possibly merging the Control of Substances Hazardous to Health Regulations 2002, the Control of Lead Regulations 2002 and the Dangerous Substances and Explosive Atmospheres Regulations 2002.
Other regulations are the subject of a second review concerning requirements for the inspection or thorough examination of work equipment. These are the Lifting Operations and Lifting Equipment Regulations 1998, Provision and Use of Work Equipment Regulations 1998, Pressure Systems Safety Regulations 2000 and the Work at Height Regulations 2005.
Eradicating asbestos from workplaces is another TUC priority campaign for 2017, as is health and safety and organising. This encourages union activists to use health and safety as a tool, both in union recognition campaigns and in developing new activists, and growing the union in organised workplaces.
Personal injury claims
But perhaps first on unions’ health and safety lists in the New Year will be to ensure that they have responded to the recent Ministry of Justice consultation paper on changes to personal injury claims in England and Wales by the 6 January 2017 deadline.
In addition to proposals on reforming the process for so-called whiplash claims in road traffic accidents, the paper sets out plans to increase the small claims limit for personal injury claims from £1,000 to £5,000.
Unions say this would deny access to justice for most workers involved in an accident or injured at work because they would no longer be able to seek legal help to pursue compensation claims against their employers.