Unions prepare to campaign for recognition

THE GOVERNMENT yesterday proposed sweeping changes to labour law which will scrap the upper limit on compensation for unfair dismissal and threatens employers with contempt of court if they ignore the right to union recognition.

The radical Fairness at Work White Paper attracted a qualified welcome from unions, grudging acceptance from the Confederation of British Industry and contempt from the Conservative Opposition.

One of the key elements of the legislation will be to enforce collective bargaining where 40 per cent of the relevant workforce back it, not just a simple majority of those voting. Much to the dismay of the CBI and the Tories, automatic recognition is to be granted where there is majority union membership.

Unions were last night preparing to contact a range of companies to demand recognition on the basis of the document and some employers have indicated their readiness to cooperate before the proposals become law. Among the organisations on the "hit list" are Harrods, Body Shop, Honda, the big oil companies and a series of newspaper groups. One of the most symbolic targets is Rupert Murdoch's Wapping plant, where unions were "derecognised" after 5,000 print workers were dismissed.

Companies who ignore the new right to recognition could find themselves held in contempt of court where penalties vary from a mild ticking-off, through fines to imprisonment.

The White Paper also promised a reduction of the qualifying period for employment rights from two years to one and the removal of the upper limit on compensation for unfair dismissal.

In his introduction to the document - and in a clear attempt to maintain his employer-friendly image - the Prime Minister was at pains to point out that even after the changes, "Britain will be the most lightly regulated labour market of any leading economy in the world". He said: "The White Paper steers a way between the absence of minimum standards of protection at the workplace and a return to the laws of the past."

Launching the new industrial blueprint, Margaret Beckett, President of the Board of Trade, said it was a landmark in the Government's drive to create a more prosperous and fairer Britain. "It sets out support for a new culture of co-operation and partnership in the workplace, a culture which is already evident in the best companies."

The union movement was ambivalent about the proposals. John Monks, TUC general secretary, said they restored "much-needed balance" into the world of work.

The TUC leader declared his disappointment with the 40 per cent threshold for recognition ballots, arguing that it was a "stiff target". He pledged that the TUC would continue its campaign against the formula. In the Commons, a clutch of backbench Labour MPs pledged their support for a fight against the formula and the Trade Union Group of MPs promised to continue to make representations to ministers.

Mr Monks criticised the decision to exempt firms employing fewer than 20 employees from recognition legislation. He declared his satisfaction with much of the rest of the White Paper, which ignored CBI arguments that employers should be able to define the bargaining unit and with the provision of "automatic" rights to collective bargaining where a union commanded majority membership.

He congratulated ministers for ignoring employers' calls for a union membership test before a ballot could be triggered.

Adair Turner, director general of the CBI, welcomed the fact that individuals could opt out of a collective agreement and sign a personal contract. But trade unionists argued yesterday that it would not be possible to "bribe" workers to go their own way because the White Paper proposed outlawing discrimination against trade unionists.

Mr Turner took issue with the provision for "automatic" recognition and contended that union members should have the opportunity to say their membership was not a sign that they supported full-scale recognition. He also attacked the plan to extend the eligibility to claim unfair dismissal and the removal of the upper limit of compensation.

John Redwood, shadow president of the Board of Trade, characterised yesterday's document as "Labour's new burdens on business". He said: "Astonishingly, Labour has managed to alienate both business and unions. The bungled White Paper is an ugly compromise."

Mr Redwood said the proposals risked undermining British companies' hard-won gains in competitiveness and damaging labour market flexibility. "Labour is bad for business," he said.

Leading article, page 22

The White Paper

Unions must be recognised where 40% of a workforce vote for it.

Investigate how a "de-recognition" process might work.

Contempt of court proceedings to be taken against employers who ignore recognition law.

Workers sacked for involvement in lawful strikes to have the right to claim unfair dismissal.

Upper limit on compensation for unfair dismissal to be abolished, qualifying period cut to one year.

Unlawful to discriminate against union members or draw up "blacklists".