England and Wales Court of Appeal (Civil Division) Decisions

FC3 98/7188/1 QBEN1 98/1210/1

(MR JUSTICE TIMOTHY WALKER )

Royal Courts of Justice

Strand

London WC2

Tuesday 13 October 1998

B e f o r e:

THE MASTER OF THE ROLLS

(LORD WOOLF)

LORD JUSTICE HUTCHISON

LORD JUSTICE JUDGE

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UNIVERSITY COLLEGE LONDON HOSPITAL NHS TRUST

Plaintiff/Respondent

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UNISON

Defendant/Appellant

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(Computer Aided Transcript of the Palantype Notes of

Smith Bernal Reporting Limited, 180 Fleet Street,

London EC4A 2HD

Tel: 0171 421 4040

Official Shorthand Writers to the Court)

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MR J HENDY QC and MR D BROWN (Instructed by Messrs Beachcroft Stanleys, London, EC4A 1BN) appeared on behalf of the Appellant

MR J BOWERS QC and MR C CIUMEI (Instructed by Unison Legal Department, London, WC1H 9AJ) appeared on behalf of the Respondent

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J U D G M E N T

(As approved by the Court)

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©Crown Copyright

Tuesday 13 October 1998

JUDGMENT

LORD WOOLF, MR: This is an appeal from an interlocutory decision of Timothy Walker J given on 17 September 1998. The judge granted an interlocutory injunction to restrain a series of strikes by members of the defendants. The strikes were due to commence on 21 September 1998. As the matter was obviously urgent the judge did not reserve his judgment.

Before this court the matter is not as urgent because of statutory provisions to which I will draw attention hereafter, but we thought it appropriate to give judgment as soon as possible as it is important that where there are disputes such as this the position should be clarified as soon as possible.

The primary issue with which we are concerned is a question of law as to the proper interpretation of section 244 of the Trade Union and Labour Relations (Consolidation) Act 1992 ("the Act"). That section gives a definition of a trade dispute which has to be complied with for a trade union to have immunity from suit.

The facts leading up to the dispute can be summarised shortly. The hospital Trust ("the Trust") came in to existence in 1994. While it was initially only concerned with University College London Hospital, it subsequently became responsible for managing a group of hospitals which now employ over 5,000 staff. The defendants ("the Union") represent many of the non clinical staff and some of the nursing staff. The Trust are in the process of negotiating with a consortium under the Private Finance Initiative ("the PFI") an arrangement whereby private companies will first erect and then run for the Trust a new hospital. This will result in members of the Union, who are at present employed by the Trust, being transferred to the employment of the consortium. The Union are, as a matter of principle, against this method of financing the new hospital. The Union would like to see a new hospital, but it would like to see it being built and run by the National Health Service and not being built and run by the private sector. The Union regard what is intended to happen to the new hospital as being form of privatisation.

There is a local branch of the Union at the hospital. In addition there is a regional office with a regional officer, Mr Thompson, who has sworn an affidavit in this matter on behalf of the Union. Negotiations between the Union and the Trust have been taking place at the regional level with Mr Thompson playing a part. The evidence also contains an affidavit sworn by Mr Bickerstaffe, who is the general secretary of the Union. He confirms Mr Thompson's evidence as to the role Mr Thompson was playing.

The regional office, through Mr Thompson, was seeking to persuade the Trust to enter into a contractual arrangement with the consortium. The arrangement was to ensure that members of the Union who came to work for the consortium would be given a guarantee of equivalent terms and conditions of employment to those which existing employees who were not transferred to the consortium would obtain from the Trust. The policy was designed to benefit not only employees who were transferred from the employment of the Trust to the consortium, but also employees who were employed by the consortium who had not previously been employed by the Trust.

I have used the term "consortium" but it is not clear who will actually constitute the consortium, nor is it clear who will be subcontractors of the consortium. Ideally the Union are seeking a policy which will achieve a guarantee on the lines already indicated for a period of up to 30 years. However, I have no doubt that something which approached that objective might well be acceptable to the Union.

The identifying who the Trust and the consortium will in turn be contracting is complicated by the fact that it is proposed that the performance which is being achieved by those who constitute and are working for the consortium are to be reviewed every five years, so that the identity of suppliers of the service could change from time to time.

Mr Hendy QC, who has appeared on behalf of the Union, has accepted in the course of argument that the arrangement the Union want to achieve will be difficult to enforce. However he is entitled to say that he is dealing with a public sector where one can expect those who have entered into commitments to honour those commitments, and if a guarantee was obtained by the Union that could be of benefit to the members of the Union.

The Trust on the other hand consider that for them to enter into an arrangement providing a guarantee such as this would be wholly impractical. The Union can point to the fact that they have already had greater success with other trusts who have been prepared to cooperate with the Union. It is by no means self-evident that the proposal which the Union is pursuing is impractical. Mr Thompson's position is that the difficulties that can be encountered in achieving the Union's aims could be overcome in the course of negotiations.

The regulations which are relevant to the transfer of employees to the consortium are the Transfer of Undertakings (Protection of Employment) Regulations 1981 ("TUPE"). However the Union consider, and this is not disputed, that the protection which the regulations provide is of a limited nature, and a guarantee of the sort to which I have referred, if it were to be honoured by those who would be responsible for fulfilling its terms, would provide additional protection.

The chronology of this matter is as follows. On 22 April 1998 the Union intimated a request for the 30 years' guarantee. Subsequently the Union also intimated that they were seeking a guarantee which would include subcontractors and as providers. On 27 July 1998 the Union sent a letter reiterating a request that:

"terms, conditions and benefits enjoyed by transferred staff and subsequently employed and sub-contracted staff remains the same as (or at least favourable as), and governed by the same collective bargaining machinery as NHS Trust staff....

....you will note from our first meetings on these matters that we have requested that the Trust insist in their dealings with the Consortium that these protections be included in the contract....

....I would now wish formally to reiterate our insistence that you do include such a clause in the contract you finally sign with HMG",

(a company who it was anticipated would be part of the consortium at that time),

"....binding on it, its associates, sub-contractors and successors, and furthermore that you reach a collective agreement with this union which may be incorporated into each member of staff's contract of employment, guaranteeing the terms, conditions and benefits referred to."

The response which the Union wanted was not forthcoming to that letter and on 10 August 1998 they gave the Trust notice of a ballot in relation to a trade dispute which was described in these terms:

"The failure of the Trust to agree that TUPE protection should be written into the Hospital New Build PFI Project, for the duration of the contract."

This was followed by the preparation of ballot papers which contained the following statement and question:

"The Union has requested a guarantee that the terms, conditions and benefits enjoyed by UCLH staff to be transferred to the new employer, and also staff subsequently employed and sub-contracted staff remain the same as (or at least as favourable as), and governed by the same collective bargaining arrangements as NHS, UCLH Trust staff. The UCLH Trust has not agreed to give this guarantee by making it a part of the contract with the new employers for by making it part of individual contracts of employment. The Union is therefore in dispute with the UCLH NHS TRUST

ARE YOU PREPARED TO TAKE STRIKE ACTION IN SUPPORT OF THE REQUEST FOR THE GUARANTEE DESCRIBED ABOVE"

There was provision made in the ballot paper for the person completing it to indicate a single response to that question.

There was also a guidance note which accompanied that ballot paper to members which had two strands: (i) indicating the policy, in general, of the Union of opposition to PFI schemes; and, (ii), referring to the guarantee which the Union was seeking from the Trust.

In the ballot paper it is possible to identify four different strands. First, what is sought to be achieved for existing staff where the existing terms are to continue to apply when they are transferred to a new employer; secondly, that staff who have not previously been employed by the Trust are to have equal protection; and, thirdly, there should be the same collective bargaining arrangements. There is also a separate strand which refers to the employees having equally favourable conditions as the National Health Service UCLH Trust staff.

As a result of the ballot, there was an overwhelming majority in favour of strike action. One of the issues which was both before the judge and before this court is whether or not the strike is being politically inspired. Is it being inspired by the Union's opposition to the PFI policy? Whether it is not in that sense political? Whether it is concerned with the conditions of work of employees who are members of the Union? For that reason only I refer to two documents, exhibits SAM1 and SAM2 which are contained in the bundle of documents before the court. It would not be unfair to describe those documents as highly tendentious, if that does justice to the terms in which they are written. If the question as to whether this is a threatened strike which is motivated by political considerations was to be determined having regard to the contents of those two documents alone, then there could only be one answer. However, I consider that it would be wholly inappropriate to assess what the Union's intentions are having regard to those immotive documents.

I now turn to consider the statutory provisions relevant to the issue before us. We are primarily concerned with part 5 of the Act. The part 5 of the Act commences with section 219 which provides for protection from tortious liabilities in certain circumstances. Subsection 1, so far as relevant. reads:

"(1) An act done by a person in contemplation or furtherance of a trade dispute is not actionable in tort on the ground only-

(a) that it induces another person to break a contract or interferes or induces another person to interfere with its performance, or

....

(4) Subsections (1) and (2) have effect subject to sections 222 to 225 (action excluded from protection) and [to sections 226 (requirement of ballot before action by trade union) and 234A (requirement of notice to employer of industrial action): and in those sections 'not protected' means excluded from the protection afforded by this section or, where the expression is used with reference to a particular person, excluded from that protection as respects that person.]

I now refer to section 221(2) which contains a restriction on the grant of an interlocutory injunction such as that granted by the judge in this case. The subsection reads:

"(2) Where-

(a) an application for an interlocutory injunction is made to a court pending the trial of an action, and

(b) the party against whom it is sought claims that he acted in contemplation or furtherance of a trade dispute,

the court shall, in exercising its discretion whether or not to grant the injunction, have regard to the likelihood of that party's succeeding at the trial of the action in establishing any matter which would afford a defence to the action under section 219 (protection from certain tort liabilities) or section 220 (peaceful picketing)."

Section 224 excludes from the protection secondary action in the circumstances referred to therein. Section 225 excludes protection if there is an imposition of a Union recognition requirement. Mr Bowers QC, who appears on behalf of the Trust, relied on that section because of the terms of the ballot paper, but I do not propose for the purposes of this judgment to express any view about it, as I am certainly not satisfied that the section has any application to this situation.

Section 226 deals with requirements of a ballot before action by a trade union. In so far as is relevant it provides:

"(1) An act done by a trade union to induce a person to take part, or continue to take part, in industrial action-

(a) is not protected unless the industrial action has the support of a ballot."

Section 234 deals with the period after which a ballot ceases to be effective. The section enables that period to be extended in circumstances which exist here and, if and in so far as it was necessary to do so, I would have applied that section to this situation so as to protect the Union in relation to the ballot which has taken place.

I now turn to section 244 which I regard as critical to the outcome of this appeal. So far as relevant, that section reads as follows:

"(1) In this Part a 'trade dispute' means a dispute between workers and their employer which relates wholly or mainly to one or more of the following."

There are then set out categories (a) to (g). Although I take into account the language of the other categories, (a) and (g) are the categories directly relevant to this case.

"(a) terms and conditions of employment, or the physical conditions in which any workers are required to work."

After "terms and conditions of employment," I note there is a comma.

"(g) machinery for negotiation or consultation, and other procedures relating to any of the above matters, including the recognition by employers of employers' associations of the right of a trade union to represent workers in such negotiation or consultation or in the carrying out of such procedures."

Subsection (5) reads:

"In this section-

'employment' includes any relationship whereby one person personally does work or performs services for another; and

'worker', in relation to a dispute with an employer means-

(a) a worker employed by that employer."

Having set out the statutory provisions which are directly relevant, I would mention that section 218 contains a definition of a trade dispute for the purposes of part 4 of the Act. It is in broader terms than the definition contained in part 5 and reflects the wider definition which was contained in what is now section 244 in the original legislation of 1974 and prior to it being amended in 1982 by the Employment Act of that year.

I draw attention to the fact that section 244 opens by referring to a dispute between workers and their employer. That can be said to be the first requirement of a trade dispute. The second requirement is that the dispute must relate wholly or mainly to one or more of the activities which are set out in subparagraphs (a) to (g) of which (a), and possibly (g), are relevant. The third requirement that can identified is that the Act for which protection is sought must be carried out in contemplation or furtherance of a trade dispute. This third requirement is not an issue on this appeal. It is the first and second requirements which are important.

I have already drawn attention to section 221(2) which identifies a consideration to which the court must have regard before granting an injunction. As the injunction which was granted in this case is also an interlocutory injunction, the court has to take into account, when deciding whether to grant an injunction or not, the balance of convenience. Mr Hendy recognises that any strike of hospital staff regrettably must have an impact upon those who are being treated in the hospital. That is something which is appreciated by the Union. Nonetheless, he submits, and in my judgment correctly submits, that it would be quite wrong for the court to be influenced by the fact that a strike could have that adverse consequence in coming to the conclusion on the legal issue which is before the court. In this regard he cited from the well-known speech of Lord Diplock in Duport Steels Limited v Sirs & Ors [1980] ICR 161 at 178, where Lord Diplock commented:

"It endangers continued public confidence in the political impartiality of the judiciary, which is essential to the continuance of the rule of law if judges, under the guise of interpretation, provide their own preferred amendments to statutes which experience of their operation has shown to have had consequences that members of the court before whom the matter comes consider to be injurious to the public interest.

....

The legitimate questions for a judge in his role as interpreter of the enacted law are: ´How has Parliament, by the words that it has used in the statute to express its intentions, defined the category of acts that are entitled to the immunity? Do the acts done in this particular case fall within that description?'"

The test which Lord Diplock indicated in those final words is the test I propose to adopt. It is the only test which a court can appropriately adopt.

In his judgement Walker J explained his decision to grant an injunction in two passages to which I will now refer. At page 6 of the judgment he said:

"On the face of the evidence this is not a dispute about terms of condition of employment at all, but a dispute about the terms and conditions of contracts yet to be entered into between the plaintiff employer and the new employer."

Subsequently he summarised his reasons for regarding the dispute as one not qualifying for protection in these words:

"(1) On the basis of the Strike Bulletin number 1, the court is likely to find that the dispute in fact relates mainly to the political objectives of the defendant Union's opposition to the private finance initiative as a matter of policy."

I apprehend the judge is there referring to "SAM1".

"(2) In any event, the court is likely to find that the dispute is not about terms and conditions of employment at all, but about the terms and conditions of the contracts yet to be entered into between the plaintiffs and the new employers who are to take over the provision of services at the hospital. This was the central demand the union made and they are pursuing that demand as a matter of policy."

The judge then quotes an observation of Lord Cross in the case of Universe Tankships Inc of Monrovia v International Transport Workers Federation [1982] ICR 262 at 280H where Lord Cross said:

"A trade union cannot turn a dispute which in reality has no connection with terms and conditions of employment into a dispute connected with terms and conditions of employment by insisting that the employer inserts appropriate terms into the contracts of employment into which he enters."

The third reason identified by the judge was in these terms:

"Even if both these points are ignored and even if there is a dispute about terms and conditions of employment, the reference in the ballot paper to future employees and sub-contracted staff does not fall within the protected trade dispute definition. As I have already set out, 'worker' is specifically and restrictively defined in section 244(5) of the Act and the Act does not protect a dispute involving workers yet to be engaged. I accept the plaintiffs' submission that the terms and conditions of employment with which the dispute 'between employers and workers' is required to be connected, must be the terms and conditions of the workers in dispute. It follows that the dispute about future employees and sub-contracting staff is not protected. Thus the ballot paper poses questions, and the strike has been called, by reference to impermissible matters which are not capable of constituting a trade dispute (ie the terms and conditions of future employees and sub-contracted staff in addition to existing staff)."

As to the first of those reasons, notwithstanding the fact that there is available to this court SAM2 as well as SAM1, I would not conclude on the information that is before this court that it is likely to be found that the dispute is one with a political objective. That is a conclusion which the court who has to try this matter, if it is to be tried, could reach, but not one which meets the statutory requirement restricting the grant of this injunction.

As I have already indicated there can be two strands to a policy. A union can have a policy of opposing a particular course of action root and branch which is seeking to achieve a political objective. At the same time it could have a more limited objective, namely to alleviate the adverse consequences which it anticipates could flow from the more general policy. That more limited objective can be the reason for taking strike action. That more limited policy can comply with the requirements of section 244.

I therefore turn to consider whether the more limited policy and objective of the Union in this case falls within the requirements of section 244. In doing so, I note that the statutory categories of permitted purposes must be the predominant purpose. The dispute must relate wholly or mainly to those purposes. If it relates to them that is not sufficient to fulfil the statutory requirement.

Together with the objectives of obtaining a guarantee for existing employees, the Union is seeking to secure the same guarantee for employees who have never been employed by the Trust. As the 30 year period for which the guarantee is at present being sought progresses, there is bound to be a situation which will arise where the great majority of the employees will never have been employed by the Trust. I cannot see how it is possible to apply the language of section 244(1)(a) and (5) in a way which covers the terms and conditions of employment of employees of a third party who have never been employed by the employer who is to be the subject of the strike action. This in itself is fatal to the case which the defendants advance on this appeal.

In addition, so far as existing employees are concerned, the strike seeks to achieve protection for them in relation to employment with the so far unidentified future employer. Recognising that this does not readily fall within the language of section 244, Mr Hendy submits that the obtaining of the future protection does relate wholly or mainly to the existing terms and conditions of the employees of the Trust because it will provide those employees with a sense of security which they would not otherwise have. He rightly submits that the terms and conditions of employment referred to can be threatened with change in the future. In addition he submits that a correct reading of subsection (5) has the effect of creating a distinction between the parties to the dispute and to the subject matter of the dispute. While he accepts that the parties to the dispute must be the existing employees and the existing employer (here the Trust), there is no such restriction on the subject matter of the dispute.

In support of that argument he attaches particular importance to that part of the language of subsection (5) which, so far as relevant, states:

"(5) In this section-

....

´worker', in relation to a dispute with an employer, means-

(a) a worker employed by that employer."

Mr Hendy submits that the words "in relation to a dispute with an employer" are confined to identifying the employer. He submits that the definition does not relate to the categories set out in subsection 1(a) to (g) which are the subject matter of the dispute. He points out that there would be no purpose served by the use of the words "in relation to a dispute with an employer" in subsection (5) if his submission was not correct. The subsection could read "'worker' means a worker employed by that employer", but it does not; it is confined. As to that argument, I see its force. However, in my judgment, it does not assist Mr Hendy because, on the facts which are before the court, while it is true that a consequence of obtaining a guarantee would be to give the existing employees the additional security to which he refers, and therefore to that extent a matter which relates to their terms and conditions of employment, that is not the dispute which those employees are wholly or mainly concerned about. They are wholly or mainly concerned about the dispute with different employment; the employment with the so far unidentified new employer. For that reason, even with regard to the employees who are already employed by the Trust, I consider that on the facts which are before the court, it is unlikely that the Union could take advantage of the statutory immunity.

I would refer to a passage from the judgment of the former Master of the Rolls, Sir John Donaldson, in the case of Mercury Communications v Scott Garner [1984] ICR 74. At page 105 of that judgment Sir John Donaldson refers to the later amendment which was made. He commences:

"This latter amendment narrows the specified subject matters wherever the word ´worker' appears, eg ´allocation of work or the duties of employment as between workers or groups of workers'. The dispute must therefore not only be between workers and their employer, but must relate wholly or mainly to matters which are specific to that employment. Thus there can be no trade dispute between employer A and his workers relating to the pay and conditions of workers employed by employer B.

In context the phrase ´wholly or mainly relates to' directs attention to what the dispute is about and, if it is about more than one matter, what it is mainly about. What it does not direct attention to is the reason why the parties are in dispute about this matter. Thus a situation can arise in which company A's workers will accept a particular rate of pay and company B's workers will not, the difference being that those who work for company B know that for one reason or another they will become redundant within the next year or so and think, perhaps not unreasonably, that they have little to lose and something to gain in terms of immediate remuneration and in the rate of redundancy payment by pressing for higher wages meanwhile. A contributory cause of the dispute and possibly the main cause is the belief that redundancy (´termination....of employment' in the words of the section) is just around the corner, but the dispute is not about that or, if it be preferred, relates wholly or mainly to pay (´terms and conditions of employment').

The view that the words of the statute ´relating to' mean ´about' (in the sense of course of ´concerning' rather than ´approximately') is supported by a decision of this court in Roberts v Cleveland Area Health Authority [1979] ICR 558 and by the decision of the House of Lords in Garland v British Rail Engineering Limited [1982] ICR 420, although in each case the words were used in a different context. Garland's case also draws attention to the fact that ´relating to' or ´about' can receive a broader or a narrower application according to context - ie ´broadly speaking about' or ´actually about' to use popular rather than legislative language. In the context of an admittedly restrictive amendment to the statute, I incline to the view that Parliament intended a relatively restrictive meaning to be given to the phrase, but this probably does not matter since the words ´wholly or mainly' themselves indicate and provide a degree of restriction."

Sir John's approach, as I see it, supports the conclusion to which I have come as to the correct application of section 244 to employees already employed by the Trust.

The third matter to which I draw attention is the different strands of the ballot paper. This refers to the subsequent staff. In view of what I have said about staff who have never been employed by the Trust, it seems to me that that is an impermissible subject for the ballot. As it is impossible to identify the motives of those who voted in favour of strike action for doing so, it follows that this nullifies the ballot which took place. In addition the ballot paper is very persuasive evidence as to what is the proposed purpose of the strike. The terms of the ballot paper support that it was for different purposes, one of which is clearly flawed.

The failure to meet the requirements of section 244, coupled with the defect in the ballot paper, means that this appeal must be dismissed. On the true approach to the statutory provisions to which I have referred, the only conclusion which a court could reach on the evidence which is before us is that the proposed strike is not subject to the protection of the Act. In those circumstances, Mr Hendy does not argue that it would not be appropriate to grant an injunction.

Accordingly this appeal must be dismissed.

LORD JUSTICE HUTCHISON: I agree that this appeal should be dismissed for the reasons that the Master of the Rolls has given.

LORD JUSTICE JUDGE: I also agree with the reasons given by the Master of the Rolls for dismissing the appeal. This dispute relates to the terms and conditions of employment which will apply to workers currently employed by the plaintiffs after that employment has ceased, and when they will have started work with new employers, as well as to workers as yet unidentified who are not at present employed by the plaintiffs but who will in future obtain employment with the same new employers.

In reality, the understandable concern of the Union is to secure the protection of all these workers by achieving satisfactory terms and conditions, not with their present but with their future employers. In my judgment, although protection from liability in tort extends to disputes between workers and their current employers about future terms and conditions, trade dispute, as defined in section 244 of the Trade Union and Labour Relations (Consolidation) Act 1992, is not apt to cover the terms and conditions of a non existent contract of employment with a potential employer.

Order: Appeal dismissed with costs. Leave to apply to the House of Lords refused.