Trade unions to gain muscle under Labour's new employment laws – what does it mean for SMEs?

Will the government’s reforms to trade union rights presage a new wave of confrontations with employers, as some small and medium-sized enterprises (SMEs) fear? The legislation includes a raft of measures that give employees new rights, such as the right to claim unfair dismissal from day one in a new job. But one particularly controversial area of the legislation is focused on trade unions, making it simpler for employees to secure representation in the workplace and to take collective action in the event of a dispute.

The current rules on when employers have to recognise a trade union in their workplace – and therefore to engage with it over issues such as pay and conditions – are relatively tough. If an employer does not voluntarily recognise the union, the latter has to apply to the Central Arbitration Committee, a state-backed body, for statutory recognition. This will only be granted if the union can show that at least 10% of employees are already members and that a majority of employees are in favour of recognition, typically through a ballot.

A lower threshold for trade union recognition

However, under the new legislation, the 10% threshold will fall – the exact details will vary by the size of the workforce. And the requirement for 40% of staff to take part in a recognition ballot will be dropped. In addition, unions will have a right to request broader access to the workplace – including campaigning for employees to support recognition ballots. And there will be a ban on “unfair practices” – such as employers recruiting additional staff they know will vote against recognition.

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Unions hope these changes will make it easier for them to win recognition in more workplaces. But there will still be strict processes for both sides to follow governing recognition campaigns, including on union access to the workplace . In the end, employers will only have to recognise unions where their employees actively want them to do so.

As for the increased likelihood of industrial action, it’s true that the Employment Rights Bill gets rid of some restraints on unions. For example, where employees vote to take industrial action – such as a strike – the union will only have to give ten days’ notice of action, down from 14 now. And where they secure a mandate for action, this will now last for a year, up from six months currently.

There are also plans to introduce electronic balloting on industrial action, which could increase turn-outs on strike actions – and therefore strengthen the mandates of unions. Importantly, however, a union proposing industrial action will still have to hold a ballot before members can follow its instructions and win a majority in that ballot. And making it easier to vote could also increase the number of employees who vote against taking action.

The bottom line is that the new legislation makes it easier for trade unions to achieve recognition, access workplaces and take industrial action. But that won’t necessarily lead to an increase in disputes. The number of work days lost to disputes in the UK has fallen sharply over the past couple of years, suggesting there is no huge appetite for confrontation.

In practice, many employers enjoy constructive relationships with the unions in their workplace. Academic research suggesting such relationships can have a positive impact on company performance. That said, employers, including SMEs, do need to understand how employment rights legislation is changing and be ready to deal with the potential consequences. Don’t be unduly defensive, but do make sure you understand your rights as an employer as well as your responsibilities.

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