Trade unions in the gig economy – a sign of things to come? A short guide for HR and legal teams

The Supreme Court recently ruled in a much-discussed judgment that Uber drivers were “workers” and therefore entitled to certain employment rights, such as holiday pay and the national living wage. 

Against that background, Uber has recently agreed a recognition deal with the GMB trade union (an amalgam of many unions and associations with over 600,000 members).  The deal could result in eventual trade union representation for over 70,000 Uber drivers in the UK.

Trade union recognition in the gig economy was again more recently in the news with the Court of Appeal’s judgment in IWGB v Central Arbitration Committee.  There, the Court held that Deliveroo was not legally required to recognise the Independent Workers Union of Great Britain (“IWGB”) as a union for certain delivery riders for the purposes of collective bargaining.  This was because the Deliveroo riders did not meet the definition of “worker” under the Trade Union and Labour Relations (Consolidation) Act 1992. The issue was similar to that in Uber but decided differently on the facts, because the riders did not perform “personal” work or services for Deliveroo as they could appoint a substitute to carry out their deliveries. 

However, it is clear that unions will play more of a role in the gig economy and the wider tech sector. Here is our short guide for HR and legal teams in the tech sector about what union recognition means for your business.  We cover:

1. What is recognition and how does a union become recognised by an employer?
2. What happens once recognition is granted?
3. Collective bargaining
4. Time off for union duties
5. Information and consultation rights
6. Redundancies
7. Conclusion

1. What is recognition and how does a union become recognised by an employer?

Trade union recognition is, put simply, where an employer accepts that a trade union is entitled to act on behalf of its workers – or a particular category of workers – for a particular purpose.  This may allow the union to consult with workers on issues which affect the workforce or to undertake collective bargaining on their behalf.    

A union can either be “voluntarily” recognised by an agreement with an employer (as in Uber’s case) or a union can apply by an application to the Central Arbitration Committee (“CAC”), which occurred in the Deliveroo case, although the application was unsuccessful.  Most recognition agreements are voluntary.    

A. Voluntary recognition process

In the first instance, a union must make a request in writing to an employer for voluntarily recognition.  The response may be to:

1. Agree to the request
2. Reject the request
3. Reject the request but agree to negotiate

If the employer refuses to agree or negotiate terms for union recognition, then the union can apply for statutory recognition under the process described below.

In some cases, it may be beneficial for employers to recognise trade unions without the need for a protracted and expensive statutory process.  It is important to note that an employer can withdraw their recognition (with reasonable notice) only when it has been given voluntarily and cannot withdraw from statutory recognition except in limited circumstances via one of the derecognition procedures.

B. Statutory recognition process

The statutory recognition route requires the union seeking recognition by the employer to make an application to the CAC.  The CAC must first consider if the request for recognition is valid.  The application must meet a number of requirements in this regard before it is accepted for consideration, including:

• the application must be submitted by a certified independent union using the correct forms;
• the employer must have at least 21 workers (when aggregated with group companies and associated employers);
• the employees of the employer must have at least 10% union membership with the relevant employee group; and
• there must not be another trade union that already represents the employee group in question, or another application for recognition for the same employee group already in process.

If these requirements are met, the CAC then needs to consider what the “bargaining unit” should be, if its members need to be balloted (to ensure that the majority of the bargaining unit are union members or otherwise want the union to be recognised) and the method of conducting collective bargaining. 

If a ballot is ordered by the CAC it will issue a declaration that the union is to be recognised if a majority of votes cast are in favour of recognition and 40 per cent or more the bargaining unit votes in favour.  If one or both of these tests are not met, then the CAC will issue a declaration that the union is not recognised. If that is the case, the CAC cannot accept any applications from the union for the same bargaining unit within the following three years.

2. What happens once recognition is granted?

If recognition is granted under the statutory process, the union and the employer must then agree a method of collective bargain (which is a set of procedures for negotiating collective employment terms and conditions such as pay, hours and holidays), failing which the CAC will impose a method.  Collective bargaining is discussed in more detail in the following section.

Additionally, when a union is recognised, its members will typically obtain various other statutory rights including:

• the right for time off for members to carry out union activities;
• the right to information and consultation in certain areas such as redundancies and occupational pensions schemes;
• the right in certain circumstances to insist that the employer consults the union about training of workers;
• rights to information and consultation and other rights in connection with the transfer of an undertaking; and
• the right to appoint safety representatives and associated rights to information and consultation.

3. Collective bargaining

Collective bargaining is the process which occurs when a trade union engages with an employer to agree any of the following on behalf of employees within the bargaining unit:

• the terms and conditions of employment or the physical work conditions;
• engagement, non-engagement, suspension or dismissal of workers;
• work allocation;
• disciplinary matters;
• union membership or non-membership; and
• trade union facilities.

The process of bargaining is agreed between the trade union and employer (unless imposed by the CAC in the absence of an agreement) in order to determine procedural matters such as the frequency of meetings, who falls into the bargaining units and what happens in stalemates when matters cannot be agreed upon.

Typically, unions will try and reach agreements surrounding pay, but they may also focus on holidays, sick leave and other types of improvements to worker conditions. Once an agreement is reached, it is called a collective agreement.

4. Time off for union duties

Employees must be permitted to take “reasonable” time off in order to either carry out official union duties or to take part in union activities. In the case of the former, it must be paid time off, whereas employees need not be paid when taking part in union activities generally (such as attending meetings to discuss outcome of negotiations or voting in elections for the union). 

What is determined as “reasonable” will vary depending on the roles and requirements of the union, the profession and the employee.  Examples of official union duties may include:

• negotiations relating to collective bargaining matters
• helping union members with disciplinary or grievance matters
• discussing flexible working requests
• redundancy talks

Strikes are not permitted activities, and union officials can only attend such industrial actions if they are there to carry out their official functions of the roles.  If they participate in the industrial action, or support it in any way, they may find that they are not permitted to take this as paid or authorised time off.

5. Information and consultation rights

Once a union is recognised, it is allowed to request certain information and the right to be consulted in the following areas.

6. Redundancies

If an employer plans on making more than 20 employees redundant within 90 days or less they are required (amongst other things) to engage in collective consultation with the representatives of the affected employees. When a trade union represents employees, the obligation is to discuss the proposed redundancy with all appropriate employee group representatives at the trade union.  The union will seek to ensure that all relevant statutory and legal requirements are followed by the employer and will also assist in ensuring that the process affects as few employees as possible. 

7. Contact us

If you have any questions about these issues in relation to your own organisation, please contact a member of the team or speak to your usual Fox Williams contact.