26 February 2016

In its fourth day at Committee Stage in the House of Lords, the Trade Union Bill was yesterday (25 February 2016) debated once again, with enormous opposition to Clause 14 - the prohibition on check-off arrangements in the public sector - being demonstrated from all benches.

An amendment was put forth to legislate for an ACAS code of practice on check-off rather than an all-out ban on the practice and Baroness Wheeler, for Labour, explained that this measure would remediate all of the Conservative Party’s concerns.

The Tories have argued that check-off - through which union members can choose to have their subscriptions deducted from their wages - is an outdated mode of collecting money. They instead believe union members should set up direct debits. The Conservatives have also argued that the check-off system is an administrative burden on public sector employers and too costly.

Baroness Wheeler stated that the proposed ACAS code of practice could meet all of these concerns by making the process open and transparent. It would be made clear to members that they had a choice whether or not to use check-off and that they could open a direct debit instead; reports would be published to show the cost and burden on employers; and there would be guidance on what employers should charge unions for the service.

Unions including UNISON - the largest public sector union - have already said they would be happy to pay for the continuation of check-off.

However, the government are not moved by this argument, prompting Baroness Wheeler and many other peers to question their motive in bringing forth Clause 14.

“What is so wrong with it that it has to be abandoned in this draconian way, and what evidence is there that justifies an established system, currently well supported and valued by employers, trade unions and their members, and recognised as forming a crucial part of local industrial relations, partnerships and frameworks, just being dropped?” she asked.

Human Rights breach

Indeed, it was highlighted several times in Committee that the government could potentially breach the European Convention of Human Rights if it pushed ahead with the ban on check-off without being able to objectively justify this decision.

The Joint Committee on Human Rights has asked for strong evidence of the need for prohibition of check-off in a recent report.

Furthermore, in a leaked letter to Ministers, Tory MP Nick Boles warned that the Party is in danger of breaching the Convention if it does not tone down certain aspects of the Bill, including the ban on check-off.

Making an exception of trade unions

As has been argued about several Clauses in the Trade Union Bill, Clause 14 once again makes an exception out of trade unions, imposing restrictions that other organisations do not have to face.

It was highlighted by several Lords that the private and voluntary sector will be allowed to continue with check-off practices; and also that deductions from wages are made for a whole host of other payments, such as student loans and cycling schemes. Indeed, the government’s own auto-enrolment into pensions programme - rolled out just two years ago - uses check-off to collect pension contributions.

For these purposes, at least, the Conservative Party apparently do not see check-off as outdated.

Against the “localism" values of the Conservative Party

Lords from across all parties highlighted that the prohibition of check-off in the public sector appears to be at odds with the Tories’ own policy.

The Conservative Party has long pushed for further devolution and for local government making more of its own decisions without the imposition of Westminster. Yet when it comes to how trade union members pay their subscription fees - and check-off is a system roundly supported by public sector employers - it seems the government feel it necessary to get involved.

Tory peer Lord Balfe said: “Any Government with a localism agenda should not be promoting this amendment, because it has nothing at all to do with localism.”

Crossbench peer Lord Kerslake added: “I cannot understand why this Government are not in favour of giving people choice.”

Employers are in favor of check-off

Lord Balfe referred to correspondence from the Conservative leader of North Yorkshire County Council, who had complained about the proposals in the Bill, saying the ban on check-off was not only unnecessary but would be unhelpful to the workings of local government.

“The deduction … from employees via the payroll is not a process problem for us … Unison pays £7k a year, which more than covers the cost and work involved … with minimal effort from payroll staff … [it] requires no development, adaptation or extra cost … [and] provides us as an employer with valuable information on trade union membership numbers and density across our workforce,” the councillor told Lord Balfe.

Indeed, the Tory peer added that he had not received a single letter from any public sector employer in favour of the proposals, but had spoken to one Conservative council leader who had simply responded that he was “in favour” of anything that could hurt the union movement.

“That is how he saw this: it makes life difficult for the unions,” Lord Balfe said “He did not see it as modernising the relationship in the workplace.”

Indeed, Baroness Wheeler noted that private employers including E.ON, United Utilities and Tesco prefer to use check-off as it fosters more positive industrial relations and increases transparency between bosses and unions.

Labour peer Lord Beecham pointed out that some public sector employers even make financial gains from check-off, including Newcastle Council, which receives £20,000 profit per year from its arrangement with UNISON.

He also spoke to the Director of Human Resources at Leeds Teaching Hospitals NHS Trust who was astonished by the proposals.

“From what I can tell there has been no consultation with employers, no engagement with trade unions, no assessment of what it may mean for employee relations or, more importantly, recent progress in partnership with trade unions," the NHS executive told the Lord.

Even when employers do not financially profit from check-off arrangements, the associated costs are very small (and unions have offered to cover them).

Crossbencher Lord Kerslake pointed out that he was asked to find out how much the civil service spent on check-off when he was a senior manager there and that the cost was so low that it was initially rounded to “zero”.

Creating difficulties at a time of change

Baroness Wheeler argued that the difficulties for both trade unions and employers in the public sector that will be imposed by the prohibition of check-off come at a time when devolution processes are already putting them under a lot of pressure, and is therefore asking for discontent.

“Can the Minister explain how Devo Manc is to be delivered in Manchester, for example, including closer integration between NHS and social care, at the same time as long-standing partnerships and agreements with trade unions are being dismantled, while local reps scuttle around thousands of workplaces to talk to members and get them re-signed up so that they can carry on representing them?” she asked.

Damaging for people on a low-income

Many peers put forth the argument that encouraging trade union members to pay for their subscription fees through direct debit will push the most vulnerable workers out of the movement.

For those on a low pay, or who have had financial trouble in the past, banks may not offer the facility to have a direct debit from their account, or people may be too worried about the possibility of becoming overdrawn to take the risk of union membership.

“Why was no work undertaken in the impact assessment on assessing groups particularly vulnerable to the changes, such as people with disabilities and low-paid women in particular?” Baroness Wheeler asked.

Lord Balfe said: “We need to look at this again. This is going to affect the poorest in society. This is not compassionate conservatism.”

Cost to trade unions

The Lords pointed out that the restrictions would impose a great cost to trade unions, both financially and in terms of membership levels.

Baroness Wheeler reported that 90% of public sector unions currently provide check-off and millions of members in thousands of workplaces will be affected.

Liberal Democrat peer Baroness Burt of Solihull added that evidence from the TaxPayers’ Alliance estimated the cost to trade unions of removing check-off at £6 million.

Labour’s Lord Lea of Crondall stated that it was expected a 20% reduction in trade union membership would be seen in the public sector if check-off was prohibited. His colleague Lord Brooke of Alverthorpe evidenced this by highlighting the experience of the Prison Officers’ Association, which had “real troubles” after its own check-off facilities were removed.

Doubts around which public sector bodies will be affected

The Conservatives have been vague about which public sector bodies will be affected by the change, even in their skeleton regulations issued on Monday (22 February 2016).

In the Bill, the Tories have given themselves reserve powers to decide which employers will be caught under the Clause after it has passed into law.

Baroness Wheeler complained about this move, stating: “Extending public sector bodies through secondary legislation - make unilateral changes to contracts of employment or collective agreements. This is not an appropriate use of secondary legislation.”

Lord Lea added that the way this part of the Clause had been drafted was very poor and allows the prohibition to include private sector employers that are deemed to be carrying out “functions of a public nature”.

“What sort of legal drafting is that?” he asked. “Many distinguished jurists must be turning in their graves. One is inescapably reminded of the dictum … of Humpty Dumpty: ‘When I use a word, it means just what I choose it to mean - neither more nor less’”

Ideological motivation

Not only Labour peers but also those from Liberal Democrat and Conservative Parties accused the Tories of drafting Clause 14 with a purely ideological agenda.

Lord Kerslake recalled his days negotiating with trade unions as a manager and admitted that when talks were tough they would often consider pulling out of check-off arrangements.

“My response when this was raised with me would be, ‘Let’s sleep on it’, and in the cold light of day it looked like what it was: petty and vindictive. It was about punishment because they had upset us, and it demeaned us as public sector leaders to think of doing it,” he stated.

“Just as it would have demeaned us if we had moved this forward as public sector leaders in local government, so this genuinely demeans the Government. It is a malevolent absurdity: malevolent because it wilfully sets out to cause harm, and absurd because the Government repeatedly seek to defend it with arguments that simply do not bear serious examination,” the Crossbencher added.

His arguments were echoed by three Conservative peers as well as the Labour Lords.

Tory Lord Balfe expressed his decision to vote against the Clause and his colleague Lord Deben agreed, stating that he did not feel the prohibition was “the proper way to behave”. Lord Forsyth, who described himself as a “strong Thatcherite”, added: “On both check-off and the question of opting in and out of the political levy, I believe the Government are going far too far.”

Conservative and Labour peers alike pleaded for the government to recognise the impact of the legislation on vulnerable workers and Labour’s Lord Judd highlighted the potential damage it could do to the economy.

“This country desperately needs a strong economy. It desperately needs the most effective, harmonious, productive economic system that we can ensure,” he said.

“There is simply no room whatever for a culture of confrontation. We need co-operation between self-confident people who feel that they really matter and have a stake in the process. “

Despite such overwhelming consensus among all parties in the Lords, Parliamentary Under-Secretary for Business Baroness Neville-Rolfe said the government would not amend the Bill.