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New judgment further restricts employers’ scope for responding to industrial action

01 December 2021

The Employment Appeal Tribunal recently interpreted the law on detrimental treatment for trade union activities in a way that limits the scope for employers to respond to industrial action. In another decision, it has now decided that participating staff may also bring claims under separate blacklisting regulations, which entitle employees to potentially far greater compensation in the form of an automatic minimum award of £5,000.

The Employment Appeal Tribunal (EAT) has ruled that employers who use lists of employees who took industrial action to treat them less favourably are liable for claims under the Employment Relations Act 1999 (Blacklists) Regulations 2010 (the Regulations). It also decided that it does not matter if a prohibited list is compiled overseas if it is used against employees in Great Britain or whether the industrial action they take is “protected”.

Legal background

Employers are prohibited by law from subjecting an employee to any detriment as an individual, for the sole or main purpose of preventing or deterring them from taking part in the activities of an independent trade union at an appropriate time or penalising them for doing so (section 146 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA)) .

For these purposes, an “appropriate time” is specified as being outside of the employee’s working hours, or at a time within them with the employer’s consent. It would be very unusual for an employer to consent to industrial action, which by its nature must generally take place during an employee’s working hours to be effective. The upshot is that, until recently, employees have not enjoyed protection from being subjected to detriment short of dismissal for taking part in industrial action – for instance, through their employer withdrawing discretionary benefits. This contrasts with the longstanding protection from being dismissed for taking part in industrial action, prohibited under different sections of TULRCA.

However, and as we wrote about earlier this year, the EAT recently decided in the case of Mercer that the lack of protection from detriment short of dismissal for the participants in industrial action amounts to a breach of their human rights. This is because the ability of an employer to sanction those employees would otherwise have the practical and “chilling” effect of restricting their right to participate in trade union activities, including industrial action.

Employers are also, separately, prohibited under the Regulations from compiling, using, selling or supplying a “prohibited list” of persons who have participated in trade union activities which is complied for discriminatory purposes.

What happened in this case?

Mr Morais is a pilot employed by Ryanair and a member of the British Airline Pilots’ Association (BALPA), an independent trade union. In September 2019, Mr Morais and other pilots participated in a strike called by BALPA.

As it had warned it would do, Ryanair withdrew discretionary travel benefits for 12 months from Mr Morais and the other striking pilots. In response, Mr Morais and many others complained to the Employment Tribunal (ET) that they had been subjected to unlawful detrimental treatment in breach of section 146 and the Regulations.

The ET concluded after a preliminary hearing held before the EAT’s decision in Mercer that Mr Morais and the other pilots could pursue both types of claim against Ryanair.

The EAT’s decision

On Ryanair’s appeal to the EAT, it upheld the ET’s decision that Mr Morais and the others could pursue both types of claim. In respect of the detrimental treatment claims, the EAT held that there was no basis for it to depart from its decision in Mercer in order to allow Ryanair’s appeal.

Mercer had not considered a claim under the Regulations and so the EAT did have to decide this issue for the first time. As an important distinction from section 146, however, the Regulations do not require an employee’s conduct to take place at an “appropriate time”. The EAT concluded that the Regulations therefore protected Mr Morais without needing to be interpreted in light of human rights law.

The EAT also rejected Ryanair’s ground of appeal based on its prohibited list having been compiled overseas in Dublin. Mr Morais and the other pilots were employed in Great Britain, Ryanair operated in Great Britain and the relevant treatment took place in Great Britain. As such, it was irrelevant if the list that Ryanair used for the withdrawal of benefits had been compiled in Dublin.

Finally, the EAT rejected another of Ryanair’s grounds of appeal that the industrial action was not “protected” because BALPA had allegedly not followed the relevant process to enjoy legal immunities when calling industrial action. The Regulations do not refer to those formalities and so there is no basis for any such restriction. The EAT also determined that there are no grounds to read in such a restriction for claims under section 146 TULRCA. This means that employees enjoy protection under both section 146 and the Regulations irrespective of whether the industrial action they take is “protected”.

Implications for employers

This decision is at least legally consistent with Mercer. It is otherwise further unwelcome news for employers that might wish to encourage employees not to participate in industrial action designed to damage their business. This is because awards in claims for unlawful blacklisting under the Regulations start at £5,000 rather than being based on what is “just and equitable”, which might often be a far lower sum.

There is nonetheless some potential hope for employers. Both Ryanair and the employer in Mercer have now been given permission to appeal to the Court of Appeal against the EAT’s decisions, with the appeal against Mercer being heard in January 2022. We will write further updates after each of these appeals. In the meantime, employers are advised to exercise significant caution before taking any action against employees in response to their industrial action other than a deduction in their pay commensurate to the duration of their action.

Ryanair DAC v Morais and others – judgment available here

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