Changes to trade union law are long overdue

This afternoon is the Second Reading of the Trade Union Bill in the House of Lords. The Taxpayers’ Alliance (TPA) has led the way in recent years in exposing the considerable taxpayer-funded subsidies to trade unions. It is wrong that taxpayers continue to see their money used to pay for thousands of trade union activists, who organise strikes that disrupt services for which taxpayers already pay handsomely. Tens of millions of pounds are wasted effectively supporting aggressive political campaigns. This is something The TaxPayers’ Alliance has researched extensively and a summary of our work relevant to today's debate follows.

Clause 2: Ballots: 50% turnout requirement

Under the current legislation, it requires a trade union to secure only a simple majority of received ballots to be successful, regardless of the turnout. This seems entirely unjust for taxpayers and leaves the system open to abuse by a small minority of militant activists, hell bent on causing as much disruption as is possible. Under the newly proposed legislation, trade unions will be required, before industrial action can be taken, to achieve a 50 percent turnout of its members. For example, where one thousand members are balloted, at least five hundred of those members would need to vote in order for the ballot to be valid.

TaxPayers’ Alliance view

Figures from the Officer for National Statistics show how unsustainable the current system is when you look at the number of days lost due to labour disputes:

(Source: ONS)

That’s almost 3 million days lost between 2011 and 2014 – that is bad for business, for the commuter and for the taxpayer. As the above figures show, the public sector loses far more days to strike action than the private sector, despite comprising a lower proportion of the country’s workforce (and enjoying higher pay and more generous pensions).

Therefore, the TaxPayers’ Alliance supports the proposed changes as it will bring balance to an unfair system.

Clause 12: Paid time off for trade union activities: publication requirements

Background

Trade Union representatives are entitled to take paid time-off to carry out union ‘duties’ and have been since the Employment Protection Act of 1975. The Advisory Conciliation and Arbitration Service (ACAS) states trade union duties as including:

• The terms and conditions of employment;
• The physical conditions in which workers are required to work;
• Matters of trade union membership or non-membership within the organisation.

Under the same Act any employee who is a union representative or member of a recognised trade union is also entitled to unpaid time off to undertake union activities – which are distinct from duties. Union activities defined by ACAS can include voting in a union election or meeting regarding union business. There is no statutory requirement to pay union representatives or members for time spent on union activities.

But union duties and activities both fall under the remit of a union representative and therefore some union representatives are paid for undertaking union activities and duties.

Union Learning Representatives (ULRs) are also entitled to paid time off, for duties including:

• Analysing learning or training needs;
• Providing information and advice about learning and training matters;
• Arranging learning and or training and promoting the values of learning and training.

This seems wholly unfair - trade unions should pay for representation within public sector organisations themselves through subscriptions; it is unjust that taxpayers have to shoulder that burden when unions raise substantial sums through membership subscriptions.

TaxPayers’ Alliance view

InTaxpayer funding of trade unions 2012-13, published by the TPA in 2014, the TPA revealed that trade unions received at least£108 million in subsidies from taxpayers in 2012-13. Our comprehensive research showed that trade unions received an estimated £85 million in paid staff time (facility time) plus £23 million in direct payments in 2012-13.

Key statistics –

• At least 2,841 full-time equivalent public sector staff worked on trade union activities or duties at taxpayers’ expense in 2012-13. The number of full-time equivalent staff provided to trade unions is more than 2.5 times as large as the entire workforce of HM Treasury;
• 344 of the public sector organisations (out of the 1,074 surveyed) did not formally record facility time in 2012-13. This means the estimate of 2,841 staff is almost certainly an underestimate;
• 972 public sector organisations deduct membership subscriptions for trade unions. Of those, only 22 per cent, or 213 bodies, charged the unions for that service;
• The organisation with the highest number of staff working for trade unions, as was the case last year, was the Department for Work and Pensions with 248 full-time equivalent staff. HMRC had the second highest number with 172 full-time equivalent staff, an increase of 3 from last year;
• Birmingham City Council was the local authority with the highest number of staff working for trade unions with 69 full-time equivalent staff working on trade union business. The second-placed local authority was North Ayrshire Council with 45 full-time equivalent staff;
• The police force with the highest number of full-time equivalent staff working for the trade unions (not including the Police Federation) is the Metropolitan Police with 57 full-time equivalent staff;
• The fire service with the highest number of full-time equivalent staff working for the trade unions is the Scottish Fire and Rescue Service with 78 full-time equivalent staff;
• The other public bodies with the highest number of staff working for trade unions were Transport for London with 35 full-time equivalent staff, the Scottish Prison Service with 35 full-time equivalent staff and HM Land Registry with 19.1 full-time equivalent staff.

For the full report, see Taxpayer funding of trade unions 2012-13.

The TPA was encouraged in 2014 to hear former Paymaster General, The Lord Maude of Horsham, announce plans to reduce the amount of facility time taken by Civil Servants in Whitehall. However, we believed that this did not go far enough.

Therefore we were delighted to hear the Business Secretary announce in July 2015 that he would be bringing forth legislation (through clause 12 of this Bill) which would require public sector employers to publish information relating to facility time taken by union officials. This will promote transparency, scrutiny and encourage employers to moderate the amount of taxpayers’ money they spend on facility time.

At present, far too many public sector organisations do not or only partially record facility time, so the true scale of the subsidy is unknown – and certainly higher than the figure produced by our research.

“Check-off” of union dues

Another concern highlighted by our 2014 report, Taxpayer funding of trade unions 2012-13, was that public bodies are often deducting trade union subscriptions in the payroll process without charging the unions for that additional administrative support, despite union claims to the contrary.

Of the 1,074 public sector bodies the TPA considered:

• 972 deduct union dues from employees’ salaries – 91% of public sector bodies
• But only 213 bodies charge for that service – just 22% of those which deduct union dues; so 78% offer the service for free

The total costs charged for the service across those 213 bodies who do charge in 2012-13 was £1,773,526. If the other 759 bodies which provide the service were to charge at the same rate as the average for the 213 that do, that would amount to a further £6,319,748 – which is right now effectively another taxpayer subsidy.

We were therefore pleased by the announcement in August 2015 from the current Paymaster General, Matt Hancock, that a government amendment will be tabled to this Bill to end the practice of supporting the collection of trade union subscriptions.

TaxPayers’ Alliance view

This announcement is long overdue. It is simply not the business of public sector employers to be processing the union dues of their staff, and it is shocking how many bodies have been providing this service at absolutely no cost to the unions who are benefiting. The Government is rightly seeking ways of cutting wasteful public spending and this is another small move on the road to getting the nation living within its means once again.

Further Reading

On the eve of the 2012 Trades Union Congress, the TaxPayers’ Alliance published a legal briefing by Francis Hoar, a barrister who recently came to prominence for his role in bringing the case against former Tower Hamlets Mayor, Lutfur Rahman. In the briefing, he examined facility time in the public sector and found that “many public sector employers have not approached ‘facility’ time in the manner envisaged by industrial relations law”.

His conclusion was that:

“Employers have important legal responsibilities to their employees to permit them adequate representation by their trade union. As has been seen, there are strict requirements that, when not met, can lead to expensive litigation in the Employment Tribunal; and are there to ensure good industrial relations. Yet it appears that many public sector employers have not approached union ‘facility’ time in the manner envisaged by industrial relations law. Rather than arbitrating over individual requests for time off (as the law envisages), many have delegated those responsibilities to full time union officials.

“Public sector employers moving away from paying full time union representatives should not expect to do so without opposition. But, as public officials, they have a duty to ensure that their expenditure is adequately accounted for and spread fairly. Quite apart from their clear legal right to require union members to request permission before taking time off, their duty is not only to their employees but to those receiving – and paying for – their services.”

Read the legal briefing in full