What UK employers can learn about trade union dynamics from Australia and Asia

Crowley:

Hello, and welcome to Ashurst Legal Outlook and the next episode in our World@Work series, where we're going to be focusing on developments in relation to industrial relations and trade unions. My name's Crowley Woodford and I'm Head of Ashurst's London Employment team. I'm delighted to be joined by Peter McNulty, a partner in our Australian Employment team. Hi, Peter.

Peter McNulty :

Hi Crowley.

Crowley :

Karen Mitra, Employment Council in Singapore. Hi to you, Karen.

Karen :

Hi Crowley.

Crowley :

And Norman Ibnuaji, Employment Senior Associate in Jakarta. Hi, Norman.

Norman :

Hi Crowley. Thanks so much for having me.

Crowley :

In the UK, our newly elected Labour Government has published the Employment Rights Bill that proposes significant reforms across lots of different facets of Employment law. And one area of particular focus is trade unions. There will be no surprise that a new Labour Government is bringing in reforms in favour of unions and workers, but it's true to say that this is the most ambitious reform package for trade union rights since the Thatcher era. It marks a clear reversal of the direction of travel under previous governments in the UK and could have far-reaching implications for employers. This Bill is yet to pass through Parliament and the government has been clear that it won't come into effect immediately, but there's a huge amount for employers to digest in the meantime. We're going to be comparing and contrasting these reforms, in particular with Australia.

Peter McNulty :

And Crowley, it's a really good time for that compare and contrast because there's been a huge period of change for Australian employers as well following the Labour Government's election a couple of years ago here.

Crowley :

Thanks, Peter. And certainly, Karen and Norman will be giving us their perspectives in Singapore and Indonesia respectively. We're going to look at the changes thematically, based on what effect we think the changes are going to have. the first theme is 'Getting a foot in the door'; reforms that will make it easier for unions to access and organise within workplaces. The second theme is 'Entrenching their role'; reforms that will give unions and their representatives more prominence and rights within the workplace. And the third theme is 'Striking a balance'; reforms that relate to unions' ability to take industrial action.

So without further ado, the first category of reforms in the UK Bill, as I say, are targeted at helping trade unions get that all important foot in the door. The Bill proposes to impose a new duty on employers to inform workers of their right to join a trade union. Now, this information must be included in the written statement of particulars that employers have to provide to their new hires. And currently in the UK, there's an obligation to inform an employee in writing whether there are any collective agreements which directly affect the terms and conditions of employment. So I would expect that this is the obvious term to be expanded to detail this new notification requirement. In the short term, this will obviously create some limited administrative work as employers will need to update their template employment contracts, but the real significance of this reform is in the way it will draw attention to unions from day one and indeed, on an ongoing basis. So with that in mind, Peter, is there any similar requirement in Australia?

Peter McNulty :

There is, Crowley. Employers in Australia must provide new employees with a Fair Work Information Statement, and that's a statement which sets out information about minimum entitlements and rights, including employees' right to join a union and decide to participate or not participate in industrial activity.

Crowley :

Great. Well, that sounds along a similar track to the UK. Is that statement very detailed or high level? What's its form?

Peter McNulty :

It's a fairly high level statement because it applies to all employees in a standard template form, but it's fair to say the role of unions is fairly well known and prominent in Australia because of union activities in industrial relations, in bargaining and industrial action and public campaigns. And it's through those activities that the unions really drive their membership, rather than through those information statements.

Crowley:

Another even more significant change in the UK Bill creates a new right for listed trade unions to access workplaces to meet, represent, recruit or organise workers and to facilitate collective bargaining. And critically, this is a direct right given to unions and it doesn't depend on any individual exercising a right to invite in a union, being a member of a union, or even the union being recognised by the employer. Now, there are already provisions governing access by unions in the context of applications for recognition, which I'll discuss more in a minute, but this new right allows union entry at a much earlier stage in the process and unions are able to request access and employers must then respond, agreeing or disagreeing in all or in part to that request.

If the union and the employer don't reach an agreement on access, then the listed trade union can apply to the Central Arbitration Committee, or the CAC, to determine the question of whether your union should be granted access and if it does, on what terms? The CAC will make their decision based on set principles, including that a listed trade union should be able to access the workplace if it does not unreasonably interfere with the employer's business, and the employer should take reasonable steps to facilitate that access by the official.

The Bill facilitates regulations being made about when access is not reasonable. So an important component that we don't quite know full details of yet.We will look with interest as to how that develops and whether it gives scope for employers to push back on any of these quite expansive rights. But in any case, it is a significant development and we think that that's one that will empower unions to access workplaces and galvanise support. So as you can see, an important shift in the UK. So more broadly, do we think there are any practical lessons that employers could learn from, say, Australia in this respect? What do you think, Peter?

Peter McNulty :

Australia does have a similar mechanism already in place known as right of entry, whereby union officials have the right to lawfully enter premises and workplaces to hold discussions with employees, but also to investigate suspected breaches of workplace law and suspected breaches of health and safety law. Now, there are a few checks and balances on those rights of entry. One, union officials must give notice of entry of at least 24 hours in most circumstances and must include particular detail in the notices they provide. And two, those union officials must hold a right of entry permit granted by the Fair Work Commission.

The Fair Work Commission must be satisfied in order to grant one of those permits that a person is a fit and proper person to hold a permit. These conditions are intended to ensure that those rights of entry are not improperly used and permits can be lost in circumstances where they are improperly used. Unlike the regime in the UK, if a valid notice is issued, entry must be granted by an employer and penalties and contraventions can be upheld in circumstances where an employer hinders or obstructs that union entry. It is therefore critical in our experience for employers to ensure their managers understand the right of entry provisions and are also trained in facilitating that right of entry.

Crowley :

Thanks, Peter. Just picking up on your last point, I think the training of managers is a really interesting point for those particularly in the UK. Are there any practical tips you can share on how employers facilitate access in Australia?

Peter McNulty :

Different employers approach right of entry in different ways. Some employers have sought to reach agreement with unions as to the rooms in which meetings will be conducted and the manner in which right of entry can take place. Others have put in place policies and procedures that managers are required to follow when they receive a right of entry notice, and others also will appoint key contact people who must be contacted in the event of a receipt of a right of entry notice to ensure they can comply with those obligations.

Crowley :

And Norman, what's the situation in Indonesia?

Norman :

Right of entry is not specifically governed under Indonesian law, and so typically what the unions can do and cannot do would be incorporated in the collective agreements between the employers and the unions. Nonetheless, it's generally acceptable that unions would have the right to enter a workplace and recruit members.

Crowley :

Thanks, Norman. An interesting development in the UK is that over the past five years or so, we've seen new unions emerge with a focus on representing particular workers, and I'm thinking here of gig economy workers and other workers in more precarious work situations. We've also seen some evidence that trade unions in the UK have recently been exploring recognition in workplaces in sectors without a history of trade union members, and I know that's something that's maybe happening in Singapore. Karen, could you talk to that?

Karen :

Yes, certainly. We've definitely seen in Singapore, the development of the industrial relations regime to deal with non-traditional workers. Singapore has a unique non-adversarial approach to industrial relations, but worker representation is recognised as a real matter of importance. And specifically in relation to platform workers, we actually had the introduction of the Platform Workers Act in September this year, and that's going to take effect in stages from 2024. It extends a range of employment-like benefits to platform workers and is relevant in relation to trade unions. It amends the current industrial relations framework to allow representation by a registered platform work association for platform workers. That's basically a union for gig workers and that right to representation includes in relation to matters such as the engagement of workers in their terms and conditions. So we do think that's really going to expand the total number of workers who are eligible for representation.

Peter McNulty :

And it's relevant to note that Australia has also introduced rights for platform workers this year, which are yet to be tested. The first case, which involves a delivery driver, is set to be heard later this year, so it's certainly an expanding area in Australia as well.

Crowley :

Thanks, Peter. It certainly seems to be a common theme across jurisdictions. So having covered how the Bill helps unions get a foot in the door, we're now going to look at how it facilitates unions entrenching their role in the workplace. Firstly, there is a set of reforms that make it easier for unions in the UK to gain statutory recognition, and many of our listeners will be aware that recognition is where an employer recognises a union for the purposes of collective bargaining.

There are two ways that a trade union can receive recognition in the UK, either if a company agrees to recognise a union on a voluntary basis, or if a company is compelled to recognise them as an outcome of an application to the CAC for statutory recognition. The new Bill is changing this to make it easier for unions to secure that all important statutory recognition by lowering some of the thresholds.

Firstly, to make an application for statutory recognition, a union must currently show that they have 10% membership of the proposed bargaining unit, and that they are likely to have a majority in a ballot about recognition. The new Bill gives the Secretary of State the power to pass regulations to reduce that 10% level to as low as 2%, and also removes the requirement to show that the union is likely to win any recognition ballot.

Secondly, in a ballot, a union currently has to obtain a majority and there have to be at least 40% of the workforce supporting recognition. Once again, the situation has changed under the new Bill. There will no longer be a need for the union to show at least 40% support overall in the bargaining unit, just a simple majority of those voting. These reforms will undoubtedly make it easier for unions to obtain recognition. In response, in my view, employers may want to strengthen alternative forms of employee engagement if they want to position themselves to better persuade employees in the future that existing informing and consulting mechanisms mean that unionisation is not needed. So Peter, can the UK learn anything Australia in dealing with union recognition?

Peter McNulty :

Well, in terms of the position in Australia, the starting point is different. Union coverage is determined by union eligibility rules and by default, a union will be a bargaining representative in bargaining for a proposed enterprise agreement if any employee who will be covered by the agreement is a union member. So what that means is a union only needs to have one union member to get a seat at the bargaining table. This means with large employers or diverse workforces, there's often multiple unions sitting around the bargaining table seeking to negotiate those agreements. It also means that unions play a really prominent role in enterprise bargaining and bargaining is often that central time that unions can demonstrate their value to members and build their membership as well.

Individual employee bargaining representatives are also entitled to participate in bargaining, but oftentimes, their role isn't as prominent as that of the unions. Obviously where unions have more members in a workplace, they may have a more active or a more vocal role in bargaining, but employers need to be conscious of that different dynamic between the interests of those individual employee representatives and those union representatives and the claims they might be making. Another interesting legislative development, which has occurred recently, is that unions can now effectively initiate bargaining if an enterprise agreement has passed its nominal expiry date and the employer hasn't yet commenced enterprise bargaining. So what that's meant for employers is they're really having to bring forward their planning for enterprise bargaining and start that planning early so that they're ready to go once the enterprise agreement hits that expiry date.

Crowley :

Thanks, Peter. That's interesting, that last point about some of the strategies that employers might adopt as part of their planning. Can you go into a bit more detail about that?

Peter McNulty :

Sure. So there's really a couple of things there. In terms of that union versus individual employee representative dynamic, it's really about trying to understand and foreshadow what claims might be made, where there are similarities in the claims that might be made and also where there are differences, and then also in developing communication strategies with employees, noting that unions might have their own communication strategies in place to try and promote their particular agenda at a particular point in time.

Crowley :

Thanks, Peter. Norman, Karen, what are the procedures for union recognition in Indonesia and Singapore?

Norman:

In contrast to the UK, in Indonesia, employers do not have any involvement in the establishment of unions. Furthermore, the requirement for establishing a union is relatively simple. Any group of 10 employees can form a union by registering itself with the appropriate manpower authority, which then issues a certificate of registration. The union only needs to notify the employer of its existence after receiving the certificate. Once these are done, the union is recognised and fully vested with rights under the Labour Union Law.

Crowley :

Thanks, Norman. That sounds super easy. Does that mean that there's a large population of the workforce that's unionised in Indonesia?

Norman :

Yes, you're correct, particularly in labour-intensive sectors, such as manufacturing and mining. Based on the Ministry of Manpower's data, as of April 2024, there are more than 12,000 unions and more than 4 million workers are unionised in Indonesia.

Crowley :

That's very interesting. Thanks, Norman. And what about in Singapore, Karen?

Karen :

Singapore's kind of halfway between the UK and Australia in terms of the legislative position for union recognition. An employer can either voluntarily recognise the union, or recognition can be mandatory as a result of a secret ballot that's held as to membership. Similar to Australia, we have the concept of union rules, so an employee has to be eligible to be a member of a relevant union under that union's rules in order to vote. And we actually have both enterprise unions and industry unions.

The legislation in terms of recognition is not as prescriptive in relation to the ballot question or the numbers in terms of the outcome, as you might see in Australia, and potentially in the UK, and in practice, given the tripartite approach to industrial relations matters, ballots are actually very rare. We really see recognition occurring over time through a negotiated process, if it's not just accorded on the first request from the union. In practice, the industrial relations system is really just much less adversarial than that in Australia and the UK, and parties are really focused more on common goals and the government is very proactive in assisting to resolve potential disputes. But once you have recognition by a union, itcan invite an employer to negotiate for a collective agreement similar to the position in Australia.

Crowley :

Thanks, Karen, and thank you all for those insights. The Employment Rights Bill also strengthens protection for individuals who are involved in trade union activities. The employees already have a right to reasonable paid time off for carrying out trade union duties, but the Bill takes this further. It creates a presumption that accepts the employee's view on what is reasonable and puts the burden on the employer to show the time is not reasonable.

Further, it requires the trade union representatives to have sufficient access to facilities, like office and meeting space and the internet, in order to carry out their duties. It also creates a new right to time off and access to facilities for the person who is an equality representative of that new union. These representatives will have access to time off for activities, like arranging learning or training on matters relating to equality in the workforce, and also obtaining and analysing information on the state of equality in the workforce.

There's likely to be more detail provided in due course, but it's a substantive new right and will likely increase employer transparency obligations in relation to diversity and equality. So this new access right could be quite an important one. And I know that this is an area where recent amendments to the Fair Work Act in Australia have sought to enhance and entrench the role of unions in the workplace. So I'm really interested to hear what's happening on the ground there, Peter.

Peter McNulty :

What's happening here is really quite similar, I think, to what's been proposed in the UK. Union delegate facilities have traditionally been at the gift of an employer or the subject of agreement between a union and an employer. Earlier this year, since July, a delegate's rights clause has been enshrined into modern awards, which are the underpinning instruments setting minimum terms and conditions in industries and occupations. And all new enterprise collective agreements must also contain a delegate's rights term agreed by the parties.

Crowley :

And you mentioned minimum terms there. What are they, Peter?

Peter McNulty :

Again, similar to the UK there's a broad right for union delegates to represent employees in consultation, in resolving disputes, in disciplinary processes and enterprise bargaining, an entitlement to reasonable communication with employees for the purpose of representing their interests, including during working hours, access to facilities, rooms, notice boards, electronic means of communications, entitlements to access paid training leave, and protections for the exercise of those rights as well. And even though these provisions have only been in place for a few months, we're already seeing those questions that you foreshadowed being raised about the reasonableness of particular mechanisms for communications, questions being asked about how much time is reasonable for a union delegate to spend on these types of union delegate activities during the work day. And I anticipate there's going to be a lot more to say about those things as these rights become further entrenched in enterprise agreements as well.

Crowley :

Thanks, Peter. There are certainly some similarities there on challenges which will no doubt be faced by the UK. The final category of trade union reforms included in the UK Bill are those around industrial action. And since the Thatcher era, there have been a series of reforms by successive governments to effectively make it harder for unions to take industrial action. The new Bill reverses this direction of travel and proposes a series of reforms, which could ultimately see an increase in industrial action. I won't go through every change, but to give you a flavour of some of the measures proposed, the Bill lowers the level of support required via the balloting process for industrial action to require only a simple majority of members voting in favour. It also reduces the notice a trade union must give of any industrial action to the employer after it's secured a ballot mandate and before any action is taken. The reduction is from 14 days to seven days.

Also, the last government you might recall had introduced a particularly controversial measure relating to minimum service levels for certain critical public services, such as transport, which would've allowed workers to be called in despite any strike action. The new Bill repeals all of that in full. There's obviously quite a lot for UK employers to get their heads around. So Peter, can you share any insights on this from the Australian perspective?

Peter McNulty:

So Crowley, the key requirements for industrial action in Australia have really remained quite similar for the last 15 years since the Fair Work Act was introduced. Unions must conduct a ballot of their members. At least 50% of members on the roll must vote and a majority of those members must vote in favour of that action. Now, while that's a higher bar than that which is proposed in the UK, what we have found is that unions are well-versed in preparing for these ballots and almost inevitably, those ballots will be approved by members. In terms of timeframes, the default notice period in Australia is three clear working days for industrial action to be taken. Applications can be made for a longer notice period of up to seven clear working days to be taken, but exceptional circumstances are required to justify those longer notice periods being sought and granted by the Fair Work Commission. What an employer has to do is demonstrate that it could take action to mitigate that action within those seven days that it couldn't take within the three default days, and that is quite a high bar.

Crowley :

Thank you. And because of the potential here in the UK for more industrial action in future, what are the consequences that employers experience in Australia with lawful industrial action, and does that affect the way in which employers develop their bargaining strategy, for example?

Peter McNulty :

What comes with industrial action and protected industrial action, that's lawful industrial action in Australia, is an immunity from adverse action being taken by employers. So there's a prohibition on employers taking any action against an employee because they've engaged in that protected industrial action, unless it involves personal injury or damage or theft of property. What that means is industrial action is a real and significant tool that union members have to exert pressure on their employers to make concessions during enterprise bargaining. And that ability needs to be carefully considered by employers in planning their bargaining strategies. Employers need to have regard to the likelihood of industrial action being taken and the possible impacts of that action on their stakeholders, and customers, and the broader community and their ability to mitigate those actions as well. And so all of that needs to be planned out in advance, and consideration also needs to be given then to the timing of enterprise bargaining in terms of when proposals are going to be put, when concessions might be made, having regard to the likelihood of that industrial action occurring.

Employers and affected parties do have the ability to apply to the Fair Work Commission to terminate or suspend industrial action where that action is endangering health safety or the economy for the population, or a significant part of the population. But that's a pretty high bar and we're seeing that bar being applied in quite a strenuous way at the moment. There have been a number of cases involving electricity distributors and the impacts that action is having on the community and a number of these cases are being challenged in the Fair Work Commission and appeals being lodged as well. In our recent Bargaining Survey that our Australian team undertook of our clients involved in enterprise bargaining, it's fair to say that we're seeing a continued uptick in the rates and prominence of industrial action being taken by employees, and that's an increasing trend since the COVID-19 pandemic.

Crowley :

Thanks Peter. And Karen, what's the approach in Singapore to industrial action?

Karen :

Well, the legislative approach is actually quite similar, but the reality is quite different about what really does occur in real life. So under law, industrial action is quite regulated. Unions can't commence any strike action without obtaining consent by secret ballot of the majority of members. And strike action has to be in accordance with the relevant rules of the union and there's some quite prescriptive steps that would need to be followed for that to be lawful. There are some key differences in terms of when strike action can occur and who can strike. There's very limited basis for strike action to be lawful and employees who are providing essential services are not allowed to strike at all. That's actually quite broad. And in contrast to what Peter has said, it's much broader here than just municipal type services, but also extends to banks, broadcasting services and others. Unlawful strike action is a criminal offence and that's really very strictly enforced.

All of that's very hypothetical, though. Because of the tripartite approach to industrial relations in Singapore, industrial action just doesn't occur in practice. Any potential dispute is resolved well before anything gets to the point that that might even be under consideration and the tripartite bodies work very quickly to head off disputes, which are usually resolved very calmly behind closed doors rather than in public.

Crowley:

Thanks, Karen. And finally, Norman, can you give us the perspective from Indonesia?

Norman :

Thanks, Crowley. I would say unions in Indonesia have a stronger right in this respect, as the unions are allowed to represent any of their members, but also non-members in a dispute against the employer and there is no specific requirement. The relevant workers only need to appoint union to represent them. Workers and unions in Indonesia also have the right to strike lawfully if two conditions are met. The first condition is that they have attempted to negotiate their normative rights with the employer, but this has been unsuccessful, which may be due to the employer's refusal to negotiate or a deadlock in discussions. And the second condition is that they provide the employer and the local manpower authority with the background and specific details about the planned strike at least seven business days in advance. If the workers are represented by a union, then the union must issue this notice. Employers cannot interfere with or retaliate against a lawful strike, for example, by demoting the workers involved in that strike.

Crowley :

And you mentioned lawful strike. What's the position if it's not lawful?

Norman :

If the strike is unlawful, then the employer can take steps to protect its assets, including by restricting the workers from entering its premises. Unlawful strikes can also be set as a ground for termination, either in the individual employment agreement or the collective agreement. The law requires that strikes must be conducted peacefully and must not disrupt public order, safety, security, or damage the employer's property. For workers in essential public services such as hospitals, firefighting, railway crossing control, waterway management, air traffic control, and maritime traffic control, the strikes must be organised in a manner that doesn't endanger public safety or disrupt essential services.

Crowley :

Thanks, Norman. Unfortunately, that's all we have time for today. So a big thanks to Peter, Karen, Norman for their time today. It's been really interesting to hear all your perspectives and suggestions on this topic. And thank you to our audience for listening. As you've heard, there's a lot more to come on this topic and indeed, on the UK Government's Employment law reforms generally. Please keep an eye out for Ashurst publications and podcasts. You can hear more of Ashurst podcasts, including more episodes from our World@Work series by visiting ashurst.com/podcast. If you don't want to miss future episodes, you can subscribe to Ashurst Legal Outlook on Apple Podcasts, Spotify, or your favourite podcast platform. While you're there, please do feel free to leave us a rating or review. But for now, thanks again for listening and goodbye.

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