Employment Law Update 2018: Liverpool

A report on our conference covering changes to employment rights in 2018.

15th November 2018

Conference report

By Ben Crawford

USS dispute and pensions as an employment right

The first speaker was Professor David Whyte of Liverpool University, discussing the UCU Pensions dispute. David opened by emphasising the success of UCU members in getting out for 14 days of sustained action – the longest strike in the history of higher education – and the fact that they smashed through the Trade Union Act 2016 thresholds with a turnout of nearly 60%, and 89% voting in favour of action.

The dispute was triggered by the proposal of a change from defined benefit to defined contribution pensions, which would entail huge losses to members – averaging £10,000 per year – with one member calculating that striking for 11 years would be worth it compared to the pension cuts. But it was about much more than that. The pensions issue is part of a wider problem: the financialisation and marketisation of higher education. The fees economy has fuelled high executive pay and speculative expansion on the part of universities including in property development, all of which requires unrestricted reserves. This is the real background to the dispute, said David: that universities were seeking to shift pensions liabilities from their books to free up cash for expansion.

Universities UK originally claimed the shift to defined contribution pensions was needed as there was a £70bn deficit, which they later revised down to £6bn. UCU convened a panel of experts and demonstrated that there was in fact no pensions deficit. There is a need for ‘follow the money’ research to understand the impact of financialisation upon sectors such as Higher Education (HE). The trade union movement needs to engage with this, as it is a key driver of contemporary labour struggles.

David framed the pensions issue within the context of wider employment problems within HE, such as rising casualisation and the lack of pension coverage for many workers. He argued that pensions should be understood as an essential labour right, and crucially as a universal labour right, as in the IER Manifesto for labour law; by embracing the language of universality the pensions struggle can push back against casualisation.

The marketisation of HE is driving rising student numbers, with a corresponding rise in performance indicators and surveillance undercutting autonomy in teaching and critical research. This contrasts with the successful engagement of the student body through ‘Teach-outs’ during the strike. Students understood the link between the pensions dispute and the wider struggle with fees and marketisation; solidarity from students was huge, and crucial.

David concluded by re-emphasising the need for unions to take financialisation seriously. Too often pension funds are pursuing high-risk returns that are against the interests of workers. This is a major challenge. The fees economy in HE is driven by market interests; the repackaging and sale of student loans to investors costs taxpayers more than a public system. The labour movement must push back.

Download Professor David Whyte’s paper

Developing caselaw on unlawful inducements

Neil Todd of Thompsons Solicitors was next, discussing developments in case law on unlawful inducements out of collective bargaining. He began by discussing the Wilson and Palmer decision (ECtHR 2002), which led the British government to adopt the legal provisions now found in the Trade Union & Labour Relations (Consolidation) Act (TULR(C)A) Sections 145A and B. These were brought in as the UK was found to be in breach of its obligation to protect applicants’ Article 11 rights under the European Convention on Human Rights (ECHR).

Neil outlined some key definitions within TULR(C)A s.145A and B. As the word ‘inducement’ is not contained in the statute, the definition of an ‘offer’ is key. Importantly, an offer includes the unilateral imposition of terms on the part of an employer, as where an employee continues to work under imposed terms there is implied acceptance. This may also apply where less favourable terms and conditions are imposed: an offer need not be a blatant inducement but applies when an employer rejects collective bargaining and imposes a pay settlement.

Neil highlighted the importance of the determination of whether or not an offer was made with the sole or main purpose of circumventing collective bargaining. Therefore the action must have a prohibitive result, that it ends collective bargaining. Whether or not the effect of this must be permanent has been disputed in the Dunkerly v Kostas UK Ltd case. The Employment Appeals Tribunal found that the effect need not be permanent so long as the employer’s intention was to circumvent collective bargaining and that was the effect. The employer argued that the outcome amounted to a right of veto on the part of trade unions on employers’ ability to go directly to their workforce, for example to offer performance-related pay. Neil argued that the case law so far shows that it is the intention of the employer construed as sole or main purpose which matters, therefore employers with genuine reasons for going directly to employees with offers need not be concerned. He feels that this will therefore be the key battleground in case law going forwards.

Download Neill Todd’s presentation

The McDonalds dispute

Ian Hodson, President of the Bakers Union (BWAFU) took the last morning slot, talking about the outstanding success they have had in organising Mcdonalds workers. Ian told the room that the fight with McDonalds over the issue of zero-hours contracts (ZHCs) is especially symbolic, as McDonalds was the first employer to introduce them back in 1974, ushering in an era of profit maximisation at the expense of labour.

Only a few years ago – back in 2014 – there was a media and political consensus on what these workers could expect: the minimum wage as a pay ceiling and ZHCs as standard. Coordinated action by the labour movement across low-paid sectors such as hospitality is now smashing this perception.

BWAFU decided to take Mcdonalds on over ZHCs following its success at Hovis, where members at the Wigan factory went out for two full weeks, demanding and winning full-time permanent contracts. For the Mcdonalds action, the union realised it needed a broader strategy, bringing in support from across the movement to change the political narrative on low pay and precarious work. The campaign launched under the name ‘Hungry for Justice’ at a parliamentary event, which set the abolition of ZHCs, a £10 per hour minimum wage and an end to youth rates as objectives.

Ian recounted being challenged by a member of McDonalds’ senior management during their Oxford Street demonstration in early 2017 – why did BWAFU think they could succeed where other larger unions had not? “Because it’s not about size, but about the determination to organise workers which will prevail, this is what the Bakers Union is all about,” he said. In this context, the strike on 04 September was a historic event. Mcdonalds responded by rolling out new contracts and a 5.4% pay increase – the largest Mcdonalds workers had seen in 10 years. This pales in comparison to the 360% pay increase the Mcdonalds CEO got in 2013, alongside a 175% of salary bonus, and is far short of the £10 per hour the workers are seeking, so the action continued with another strike in May 2018 and an October demo. And it’s spreading across the sector – Unite and the TGI Friday’s workers won their dispute over pay and tips, Wetherspoon’s workers in Brighton went out over youth rates, and Uber Eats and Deliveroo workers have led the way in challenging ‘gig economy’ exploitation. Ian believes this momentum will continue to build, rolling into public sector strikes next year, he hopes he can say “it all started with the bakers!”.

Download Ian Hodson’s paper

Cases from the workplace

Paul Scholey from Morrish Solicitors gave an update on Cases from the workplace. It has been an interesting 12 months in employment law, said Paul. Particularly in his core area of interest – the impact of technology and social media in the context of employment law. A selection of the cases discussed by Paul are presented below.

In the case of Talon Engineering v Smith (UKEAT/0236/17/BA), the employee was dismissed following email monitoring which brought to light a derogatory email in which they referred to a fellow employee as a ‘knob’. Following a finding of unfair dismissal at tribunal, the EAT upheld this, rejecting the claim that the tribunals application of the ‘band of reasonable responses’ tests involved a ‘substitution mindset’ for that of the employer. This pushes back against employer attempts to define the ‘band’ as anything which fits their actions. Paul states that there is a need for a legal challenge to the band, as the case law has developed such that unfair dismissal cases are no longer about fairness but only a broad definition of ‘reasonable responses’. The Supreme Court has actively encouraged a challenge to the band test at this level; the right case is now needed.

In Guler v Turkey (2018) IRLR 880, ECtHR) the European Court found that disciplinary action taken against a Turkish civil servant for attendance of a Labour day parade breached Article 11 rights. This has potential ramifications in the UK where participation in trade union activities such as a march are restricted to the ‘appropriate time’. This finding highlights that freedom of assembly entails unions’ right to organise as they see fit. There is scope for an Article 11 challenge to the UK law.

The Flowers v East of England Ambulance Trust (UKEAT/0235/17) case may have finally settled the question of voluntary overtime in holiday pay calculations. The answer is overtime should be included if it is part of usual remuneration, whereby there is an element of regularity. Paul states that this is a good outcome in terms of clarity as the test is much less technical than the ‘intrinsic part’ test used in the European Court, rather the question is only ‘is it normal’? The case is however subject to appeal.

In Quintiles Commercial UK Ltd v Barongo (UKEAT/0255/17 16 March 2018, unreported) the EAT stated that there is no distinction in s.98 (4) ERA between gross misconduct and other misconduct for the purposes of finding a dismissal unfair. The tribunal finding in favour of Barongo had erred by assuming as a general rule that a dismissal for a first offence for something short of gross misconduct was necessarily unfair. Paul says this finding risks a shift towards dismissals ‘willy-nilly’, especially given the ‘band of reasonable responses’ case law to date.

In City of York Council v Grosset (2018 EWCA Civ 1105), the EAT found that in cases where a disabled worker’s misconduct may be related to their disability it is the obligation of the employer to seek any relevant and available medical evidence to substantiate whether the misconduct arose as a result of disability, prior to taking any disciplinary action. Paul notes that in disability cases at least, the UK has pro-claimant jurisprudence well ahead of other European countries.

The final case of X v Y Ltd (UKEAT/0261/17 (9 August 2018, unreported)) demonstrates where exceptions may be found to legal professional privilege. In this case, the disabled claimant in a disability discrimination case received two inadvertent communications from the respondents’ law firm, in the form of an email and an overheard pub conversation. Both communications made clear there was intention to get rid of the claimant through redundancy as they were a ‘problem’. The court found that the ‘iniquity of conspiring to fraud’ exception to professional privilege applied to an attempt to cover up disability discrimination, therefore the case could proceed.

Download Paul Scholey’s presentation

The Trade Union Act in practice

Professor Alan Bogg of Bristol University opened the afternoon session discussing The Trade Union Act 2016 and the right to strike: where are we now? Alan began with four points to contextualise his talk: he reminded the room that the TU Act 2016 is a “nakedly ideological” piece of legislation with no empirical foundations. He pointed to the danger of the distraction of Brexit; there is a risk that the focus on high politics risks normalising the TU Act by inattention. Furthermore, EU Law says very little on the right to strike so in this area at least Brexit is largely irrelevant – what is needed is national political action. He also emphasised another risk here: the 2016 Act represents what the Tories could manage given political constraints at the time, given the chance they would go much further.

Alan highlighted two notable cases which may be indicative of the courts’ approach to the Act. In Argos v Unite (2017 EWHC 1959), the employer sought to argue that Unite had not met the TUA 2016 s.5 provisions around compulsory information on ballots. The court took a sensible view and found it was a ‘reasonable summary’. In Thomas Cook Airlines Ltd v BALPA (2017 EWHC 2253), the issue was over specification of dates for industrial action. Again, the court rejected the employer’s claims, pointing to the wording of the statute (s229 (2D TULCRA 1992), which specifies only the period within which action will take place. The s.5 provisions exist to multiply opportunities for employers to argue for injunctions. The lesson so far is that the courts will not read the statute restrictively as the legislation is already so restrictive, so the case law is positive in this regard. Alan emphasised the importance of continuing the fight throughout the legislative process; even in hard times, when Conservatives are enacting terrible legislation, lobbying efforts can affect the wording of statutes in ways which matter when cases come before the courts.

When it comes to ‘independent’ reviews under Conservative governments, Alan warned: “beware of Tories bearing gifts”. The s.4 provisions that resulted in the Knight review of E-balloting were seen as a concession, opening the possibility of maximising participation in order to meet the Act’s minimum thresholds. However, the review found that e-ballots were not suitably secure to be used, the government has gone silent on the issue and the recommended trial run has not been taken up. Why the special restrictions here for trade unions? He suggests that perhaps instead we should argue for workplace ballots, if the Act is for democracy then why not? If not, then perhaps as we know, there are other reasons driving the reforms.

The s.3 provisions enacting higher thresholds for ‘important public services’ have been challenged by the devolved Welsh government through The Trade Union (Wales) Act 2017, which disapplies the s.3 provisions in respect of devolved public services. Alan points out that this is acutely embarrassing for the government: if employment relations in public services are operating perfectly well under a different system just over the border, it demonstrates how unnecessary the TU Act provisions are. There is a risk of a constitutional challenge to the Welsh Act. For now, however, we must capitalise on this political embarrassment. Alan concluded that ultimately what is needed is a Labour government to repeal the 2016 Act in its entirety, saying: “we will win this, not in the courts but in Westminster”.

Download Professor Alan Bogg’s presentation


Catherine Hobby of the University of East London had the last slot of the afternoon with a discussion of Whistleblowing. She highlighted that this is a small but significant area of workers’ rights. As the Explanatory Memorandum to the draft EU Directive 2018 demonstrates, there is increasing recognition that ‘workers know’ when wrongdoing is occurring, but may often still be discouraged from reporting concerns.

One issue is coverage of protections, she says. The ERA ‘protected disclosure’ provisions extend only to ‘workers’. Whilst for the purposes of these provisions a wider definition is applied here, including independent contractors, this still leaves many gaps such as volunteers and interns. Judges are not currently protected as they are ‘office holders’. This has serious implications given the extent of reforms to the courts system, says Catherine. The EU Directive on the protection of persons reporting on breaches of Union Law is an excellent piece of work in this regard as protections arise from the ‘work-related context’. This could be a really effective mechanism for strengthening rights in UK law.

However, the larger issue is that the law doesn’t really protect whistleblowers at all. Rather, it allows for compensation after a worker has suffered detriment. What is needed is the development of working cultures where workers can be listened to and heard. The Law Society has emphasised that workplaces must implement appropriate policies and clear reporting procedures around unacceptable behaviour.

Recent coverage of the use of Non-disclosure agreements is also a major concern in terms of whistleblowing. The ‘Presidents’ Ball’ hostesses were made to sign extremely onerous five-page NDAs and denied a personal copy. In cases such as these, the agreements will often be unenforceable, but those subject to them will not know this.

Catherine also highlighted developments around tribunal fees, including the high success rate of those seeking fee refunds. The Ministry of Justice (MoJ), however, is not advertising the availability of refunds, so it is up to claimants to pursue this. There has been a 165% increase in claims since the Supreme Court ruling, however the MoJ have stated that it is considering reintroducing fees on a ‘proportionate and progressive basis’, which are terrifying terms indeed, Catherine says.

Download Catherine Hobby’s presentation