On 21 July 2022, new legislation came into force aiming to reduce the potential impact of the right to strike and increase the remedies against unions for unlawful industrial action. The first of these two new pieces of legislation removes the restriction that prevents employment businesses providing temporary staff to cover the hours of any striking workers. The second, the snappily named Liability of Trade Unions in Proceedings in Tort (Increase of Limits on Damages) Order 2022 (SI 2022/699), increases the limit on the maximum amount of damages that can be awarded against a union for any unlawful industrial action.
The ban preventing employers from bringing in temporary workers to make up for the shortage resulting from staff taking part in industrial action (Regulation 7 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003) has been removed with effect from 21 July.
Allowing employers to bring in temporary workers during industrial action may enable some businesses to reduce the immediate impact of that industrial action, on its own trading, its customers and in some cases the general public. For example, if a catering company is affected by strike action, it will now be allowed to bring in agency caterers to ensure that it can meet all of its obligations and avoid disappointing any customers.
However, if employers wish to consider bringing in temporary workers, there are various practical issues to take into account. Whether it is even possible to do so will depend on the extent to which agencies and temporary workers are concerned about becoming involved in the industrial action. Bringing in agency workers is also bound to be seen as confrontational and risks escalation of the original dispute.
Perhaps even more significantly, the usefulness of the new option will vary across different industries and skill levels. It is far easier for employers to find temporary staff for lower skilled roles, whereas to find temporary staff to cover industrial action by skilled roles (nurses, surgeons or train drivers for example), especially on short notice, will not be easy.
Increase in maximum compensation
New legislation also amends section 22(2) of the Trade Union and Labour Relations (Consolidation) Act 1992 and increases the maximum amount of damages that can be awarded against a trade union if the industrial action is deemed unlawful. The limits depend on the number of members of the union concerned and are increased fourfold by the Order:
- for unions with less than 5,000 members, the limit increases from £10,000 to £40,000;
- for unions with over 5,000 members, up to 24,999 members, the limit increases from £50,000 to £200,000;
- for unions with over 25,000 members, up to 99,999 members, the limit moves from £125,000 to £500,000; and
- for unions with 100,000 members or more, the limit moves from £250,000 to £1,000,000.
For larger unions, the increase in the potential liability is substantial. The new limits pose a greater risk to unions and their members, and may discourage unions from pursuing strike action in the first place in order to avoid facing a potential high-value claim.
The increase in compensation is designed to compensate employers for lost time where unlawful industrial action takes place. As a result, the new limits will not prevent unions and members from seeking to take lawful industrial action.
With more industrial action expected this year, the impact of the Orders and the changes they bring are likely to be seen in multiple industries. If you have any questions about the information above, please contact a member of our team.