Contracts & unions: a case study

Contracts and unions

This case study illustrates a typical situation in which our multi-disciplinary team regularly assists many different types of client.

In this particular situation, we handled both an aggressive bid for recognition by a trade union and a simultaneous major contractual change of terms and conditions for a key part of the workforce.

The challenge

Our client, which is a global ‘household name’ manufacturing, sales and servicing business, needed to make significant changes to employment contracts for a key part of its UK workforce, since some of the long-standing and generous provisions within the contract were no longer sustainable.

The employees involved were unhappy about the proposed changes and had engaged with a major UK trade union, which was supporting them in resisting the changes.

As part of its campaign for recognition within the company, the union was threatening industrial action, bringing with it the potential for business disruption as well as the obvious risk to reputation for this prestigious global brand.

Background

The business has historically provided very generous terms and benefits to its workforce. Prevailing economic conditions were such that the business need to reduce staff costs by making some relatively modest reductions to benefits.

However, the company was struggling to manage the process of consultation regarding the proposed contractual changes, due to the significant resistance of the employees concerned.

The resulting workforce unrest threatened to escalate when a number of the employees involved had talks with a major trade union which had contacted them as part of a national drive to increase its membership. The union made far-reaching promises of the support it could provide to them in return for their membership, an offer that proved very popular within the division. As well as advising and guiding the employees in their quest to resist the forthcoming contractual changes, the union applied to the company for formal recognition and collective bargaining rights.

What needed to happen?

  • The union’s application for formal recognition and collective bargaining rights needed to be dealt with. The regional union official involved took a particularly strident and uncompromising approach.
  • A dialogue with the union and the employees in that part of the business then needed to be established.
  • The contractual changes that the company required then needed to be negotiated and agreed.

What did Menzies Law do?

Following a recommendation of our services from an HR Director of a neighbouring company, the business brought us in to take a fresh approach to the contract change proposals and also handle the union recognition process.

Drawing on our wide experience of advising unionised businesses, our specialist trade union lawyers negotiated directly with the union over its application for formal recognition and collective bargaining, via some turbulent face-to-face meetings. We robustly and successfully resisted the far-reaching, unfavourable recognition terms which the union was strongly advocating, in favour of a far more modest scope to the relationship.

This enabled the company to comply with its legal obligations to recognise the union, but only as far as the minimum requirements in law, rather than the expansive recognition terms sought by the union.

The company was then able to communicate the positive message to its workforce and stakeholders that it had willingly and readily engaged with a trade union, whilst in reality having agreed a very limited scope for the union’s involvement and power within the business.

Having established a working relationship and dialogue with the union, we drew on our team’s many decades-worth of experience to assist the business in revising its proposals for changes to the employees’ employment contracts, and we brought a range of tactics to bear to ensure that the critical changes which were needed were agreed by the union on behalf its new members.

Outcomes for our client

With our assistance, the business averted the threat of union-backed industrial action and gained the moral upper ground in agreeing to recognise the union on a voluntary basis.

We negotiated a very favourable union recognition agreement for our client, on terms that, from the company’s point of view, provide minimum bargaining power and disruptive capability for the union, whilst allowing the employees all the positive benefits of belonging to a union and having it advise and represent them collectively. It was certainly a win-win.

We supported the HR team to put in place all of the contractual changes that they needed to achieve, without any industrial action or significant alienation of staff.

We were subsequently engaged by the business on an annual retainer contract and continue to provide day-to-day support to the HR team, as well as advising senior managers on strategic and high-level people issues.

 

For more information on how Menzies Law can help your business, please contact

Luke Menzies, Director

luke@menzieslaw.co.uk

0117 325 0921