#15008 - Industrial Action - Labour Law

LABOUR: INDUSTRIAL ACTION

• 1. INTRODUCTION

  • 1. Categorisation of Industrial Action

    • Hepple and Kahn Freund: “Why is the strike or better perhaps the potentiality of a strike, that is of an event which of necessity entails a waste of resources, and damage to the economy nevertheless by general consent an indispensable element of a democratic society?”

    • Key question: where should industrial action be located within labour jurisprudence? It may be categorised as a fundamental human right, that is, from an individualist perspective. Alternatively it may be a corollary to collective bargaining as the counterbalance in the power balance.

      • Ewing and Hendy: Argue if industrial action is not seen as a corollary to collective bargaining, then collective bargaining is nothing more than a right to collective begging.

      • Marc Moore: Argues that industrial action is a “structural imperative” to legitimise and sustain the reciprocal power imbalance central to the employment relation.

      • Deakin: Outlines four main perspectives when looking at trade unions: (i) the individual rights approach; (ii) democratic approach; (iii) equilibrium approach (i.e. the idea that unions provide an effective counter-balance to re-address the one-sidedness of the employer-employee relationship); (iv) the autonomous sanctions approach (i.e. the idea that unions are a deliberate pooling of power which deliberately and purposefully sanctions an employer to enforce compliance with desired norms).

• 2. LIABILITY IN TORT

  • Hazel Carty The economic torts in the 21^st century [2008] LQR 641 at 666: “the one certainty about the future development of the economic torts is that it is uncertain”

  • 1. What are the likely torts that may be committed via industrial action?

    • Identification of the torts committed is necessary in order to determine whether immunity is available. The economic torts are uncertain but can be categorised as follows:

      • (1) Torts based upon interference with the claimant’s pre-existing rights

      • (2) Torts based on the use of unlawful means

      • (3) Torts of conspiracy.

    • Individuals also have an independent statutory right to seek an injunction to halt a strike. This does not rely on establishing common law tortious liability.

    • (a) Torts based upon interference with the claimant’s pre-existing rights

      • This can be broken down further into:

        • Inducing breach of contract;

        • Other inducements to breach obligations.

      • Inducing Breach of Contract

        • An employer will almost always breach their employment contract by undertaking industrial action.

        • A union acts tortiously where they induce the employee to breach their contract with their employer:

          • Lumley v Gye (1853) 2 E&B 216: D induced Ms Wagner to sing in his theatre, for a higher fee, when he knew that she was contracted to singe in C’s theatre for 3 months. Held: D was liable for inducing Ms W to breach her contract with C

          • South Wales Miners’ Federation v Glamorgan Coal Co Ltd [1905] AC 239: Workers agreed not to work on certain days in order to create a supply shortage of coal and maintain a higher price. Held: The union was liable for inducing the workers to breach their contract. It was no defence that the employer had been on board, nor that their action was OPEC-like and not designed to injure the employer.

        • An injunction cannot be granted against an employee because such an injunction would compel them to do work (s236 TULRCA 1992). Therefore this tort is particularly useful in industrial action because it enables the employer to seek an injunction against the union.

        • The liability of the union is parasitic to the liability of the contracting party and therefore depends upon the contracting party (here, the employee) having committed an actionable wrong i.e. breach of contract:

          • OBG Ltd v Allan [2008] 1 AC 1: HL Held: The defendant must have an intention to procure a breach of contract. However there is no requirement for them to intend to cause the claimant harm. Further, actual knowledge of the breach is required. Nevertheless it is unlawful for a third party to procure a breach of contract knowingly, or recklessly, indifferent to whether it is a breach or not: turning a blind eye is no excuse. This is a subjective not an objective test.

        • “Inducement” will usually consist of a direct approach. It must be directed at one of the parties to the contract:

          • Middlebrook Mushrooms Ltd v TGWU [1993] IRLR 232: Mushroom growers and the Union could not agree on overtime rates. A dispute followed. The Union got its members to leaflet against buying mushrooms at supermarkets. Injunction sought. Held: Because the action was directed at the customers and not the parties involved, this was not a direct interference and was therefore not inducement.

        • There is a defence of justification for this tort but it is construed extremely narrowly and has rarely succeeded in industrial action. Where the defence is not made out, the union will have to rely on the statutory immunities.

      • Inducing Breach of Other Obligations

        • The tort of inducing breach of other obligations is even more contentious. This can concern equitable obligations and statutory duties.

        • These torts do not fall within the scope of the statutory immunities (s219 TULRCA 1992)

        • The tort of inducing a breach of statutory duty is of particular relevance in the public sector:

          • Meade v Haringey London Borough Council [1979] ICR 494: Caretakers went on strike so that schools could not open. Parents brought a claim for breach of statutory duty and asked for an interim injunction. CA: Did not address the point conclusively as the dispute had been resolved. Noted that if there had been a breach of statutory duty this would have fallen outside of the statutory immunities. However, the duty must be actionable in civil law i.e. imposed for the benefit of a particular class of persons to which the claimant belongs.

        • The tort has been used in the EU context during the BALPA and British Airways dispute.

          • BA v BALPA: BA wanted to move parts of its operations to Paris. BALPA protested. BA argued strike action would amount to a breach of their right to freedom of establishment and that the union was therefore inducing interference with a horizontally applicable treaty right. BA threatened the union with legal action for tortious breach, and sought to circumvent the cap on damages under TULRCA by relying on EU law. BALPA sought a declaration as to the lawfulness of the strike but later withdrew their application.

    • (b) Torts based on the use of unlawful means

      • These torts essentially require that the defendant intentionally causes loss to the claimant by wrongfully interfering with some activity of a third party in which the claimant has an economic interest. i.e. A union uses unlawful means to interfere with the activity of employees with the intention of causing loss to an employer.

      • Prior to OBG, the dividing line between lawful and unlawful means was simply between “doing what you have a legal right to do and doing what you have no legal right to do”:

        • Rookes v Barnard [1964] AC 1129: R was dismissed for being a non-unionist because the union threatened to strike if he was kept on i.e. enforcing the closed shop. At the time the dismissal was lawful and R could not sue his employer. Held: He could sue the union, it was a tort of intimidation: the Union had threatened strike action, constituting unlawful means. Lord Reid

          • Consequently the tort had very wide coverage and threats of unlawful action constituted unlawful means as well as intimidation. The torts of nuisance and trespass were also included.

      • The speeches of the House of Lords in OBG were not wholly clear as to the precise ambit of the tort. In particular they did not explicitly overrule Rookes v Barnard.

        • OBG Ltd v Allan and related appeals [2007] UKHL 21:

          • Lord Hoffmann (speaking for the majority), argued that the concept is restricted.

            • He said ‘unlawful means’ is narrower than simply acts that count as actionable civil wrongs: they must be actionable civil wrongs “intended to cause loss to the claimant by interfering with the freedom of a third party in a way which is unlawful as against that third party and which is intended to cause loss to the claimant”. He went further, saying: “It does not in my opinion include acts which may be unlawful against the third party, but which do not affect his freedom to deal with the claimant” i.e. it is not as simple as a causal connection: the use of the third party must be instrumental to the loss.

            • This limited definition is slightly wider than it appears, because it is subject to “the qualification that they will also be unlawful means if the only reason why they are not actionable is because the third party has suffered no loss”. Normally the starting point is that they must be actionable civil wrongs by the third party. However, sometimes have situations where the loss is not suffered by the third party, but is suffered by the claimant. This does not matter, can take the loss out of the equation.

          • Lord Nicholls, giving the minority view, however said that “unlawful means” is much broader:

            • “There is some controversy about the scope of this expression in this context… One view is that this concept comprises, quite simply, all acts which a person is not permitted to do… [It] stretches far and wide. It covers common law torts, statutory torts, crimes, breaches of contract, breaches of trust and equitable obligations, breaches of confidence and so on”.

            • Described Lord Hoffman’s conception as odd: “it would be surprising if criminal...