England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIS HONOUR JUDGE LANGAN Q.C.

		Royal Courts of Justice Strand, London, WC2A 2LL Wednesday 25th July 2001

LORD JUSTICE SCHIEMANN: This is the judgment of the Court

Introduction

1. This appeal raises some important questions in relation to the immunity of trade unions from action in respect of industrial action organised by them.
2. The railway company obtained on 22 June an interim injunction from HH Judge Langan QC in these terms:-

1. … the Defendant shall not induce, procure or persuade employees of the Claimant to break their contracts of employment by taking strike action on 25 or 26 June or 4 or 5 July 2001, or by failing to book in for turns of duty commencing on 25 June or 4 July 2001; or interfere with the trade or business of the Claimant by so acting;

2. The Defendant shall forthwith withdraw and revoke any order, instruction, direction or advice which it has given whether directly or indirectly to any employees of the Claimant to do any such act in breach of their contracts of employment with the Claimant or to threaten to do any such act.

3. It was common ground that what the Union had done would justify the grant of an injunction unless saved by the provisions of the Trade Union and Labour Relations Consolidation Act 1992 ("the Act"). The Judge held that the way in which the pre-strike procedures set out in the Act had been operated by the Union was such as not to provide the Union with a statutory defence against the tort of inducement of breach of contract.
4. An application by the Union for permission to appeal that order came before us on 29 June. Mr John Hendy Q.C, who appeared for the Union, indicated that, while the Union did not, in the events that have happened, want to reinstate the strike call for 4 July, it did wish to pursue the appeal since it contended that what the Judge had done was wrong in principle and since it wished to have guidance as to the interpretation of the relevant legislation in relation to the conduct of pre-strike ballots. The parties wished to put before us some additional evidential material which had not been before the judge and we indicated that we would look at it all. This judgement contains references to that material. We indicated that we would convey in this judgement our formal decision in relation to the application for permission to appeal. We give that permission and also give permission to the respondent to rely on some additional grounds for supporting the judge's order.
5. The economic tort of procuring a breach of contract is well established although there is room for dispute as to what precisely must be proved as to the mental state of the defendant – see Clerk & Lindsell on Torts (18^th Edition) Chapter 24. For nearly a century, however, Parliament has thought it right to provide certain immunities in relation to trade disputes involving unions. The current regime is contained in the Act. It provides that immunity is only to attach to Unions if various statutory preconditions are satisfied.
6. The general background considerations include the following. Individual workmen are seldom in a position to bring substantial pressure to bear on their employers. Therefore they have combined in Unions so that the Union can, by threat of industrial action, bring to bear on the employers the combined pressures of all their members. Parliament has enacted that in principle there should be nothing unlawful in the Union doing this provided that various pre-conditions are fulfilled. Commonly not all of the members of the Union will agree with a decision to take industrial action – not least because doing so will often involve the individual in real immediate hardship and may result in the employer becoming insolvent with the result that all lose their jobs. Therefore Parliament has enacted that before industrial action is taken by the Union it must ascertain by secret ballot the will of those of its members who are going to be affected by a Union decision that industrial action should be taken.
7. In London Underground Ltd v National Union of Rail, and Transport Workers [1995]IRLR 636, Millett L.J. delivering the only reasoned judgement of this court said:

"Parliament's object in introducing the democratic requirement of a secret ballot is not to make life more difficult for trade unions by putting further obstacles in their way before they can call for industrial action with impunity, but to ensure that such action should have the genuine support of the members who are called upon to take part. The requirement has not been imposed for the protection of the employer or the public, but for the protection of the union's own members. Those who are members at the date of the ballot, and whom the union intends to call on to take industrial action, are entitled to be properly consulted without pressure or intimidation."

8. Parliament has provided that the employers should have a right to know of any intended ballot or industrial action so that they, just like the Union, can have an opportunity to make plans and to influence the minds of potential strikers. Because there are often many involved and there are time lags, because people change jobs, records are incomplete and so on, in real life the balloting procedures may not always totally achieve all the foregoing aims. Parliament has recognised this and made provision for it.

The Statutory Provisions

9. The broad scheme of the relevant part of the Act is fairly clear. An immunity is conferred by section 219(1); subject to s.232B in the case of trade unions that immunity is only conferred if the industrial action has the support of a ballot conducted in accordance with the provisions of the Act – 226(1); entitlement to vote in the ballot is determined in accordance with s.227 and see also s.232A; a pre-ballot notice of those entitled to vote must be given to the employers – s.226A; the ballot must be conducted in accordance with s.230; a pre-strike notice must be given to employers – s.234A.
10. Our approach to the construction of these sections has been influenced by the following five considerations – the union is seeking an immunity from the general law, the broad aim of the legislation is to secure a situation in which those who will actually be induced to take industrial action have the opportunity to take part in the ballot which authorises that action, section 230 concerns employee's entitlement to vote and restrictions of that entitlement ought to be construed narrowly, s.232B is there to deal with inconsequential failures and the Union has an obligation under s.24 of the Act to keep a register of members names and addresses. That obligation is reinforced by section 207 and the Code of Practice on industrial action ballots & notice to employers. This provides:

"38. In order to reduce the risk of failures to satisfy the statutory requirements and invalidating the ballot, the union should establish an appropriate checking system so that –

No-one properly entitled to vote is accidentally disenfranchised, for example through the use of an out of date or otherwise inaccurate membership list; and

Votes from anyone not properly entitled to vote are excluded.

The independent scrutineer may provide advice on this."

The Statutory preconditions for immunity

11. The frame work is set by sections 219, 226 and 232A.

s.219 (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.

s. 226 (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.

(2) Industrial action shall be regarded as having the support of a ballot only if-

(a) the union has held a ballot in respect of the action –

….

(ii) in relation to which the requirements of sections 227 to 231 were satisfied, and

(iii) in which the majority voting in the ballot answered "Yes" to the question applicable in accordance with section 229 (2) to industrial action of the kind to which the act of inducement relates:

….

(bb) section 232A does not prevent the industrial action from being regarded as having the support of the ballot;

(4) For the purposes of this section an inducement, in relation to any person, includes an inducement which is or would be ineffective, whether because of his unwillingness to be influenced by it or for any other reason.

s.232A Industrial action shall not be regarded as having the support of a ballot if the following conditions apply in the case of any person –

(a) he was a member of the trade union at the time when the ballot was held,

(b) it was reasonable at that time for the trade union to believe he would be induced to take part or, as the case may be, to continue to take part in the industrial action,

(c) he was not accorded entitlement to vote in the ballot, and

(d) he was induced by the trade union to take part or, as the case may be, to continue to take part in the industrial action.

Small accidental failures

12. Parliament clearly foresaw that there would be small accidental failures to comply with the balloting provisions. It enacted in s.232B that if these were on a scale unlikely to affect the result of the ballot they should be disregarded. The section reads:-

(1) If –

(a) in relation to a ballot there is a failure (or there are failures) to comply with a provision mentioned in subsection (2) or with more than one of those provisions, and

(b) the failure is accidental and on a scale which is unlikely to affect the result of the ballot or, as the case may be, the failures are accidental and taken together are on a scale which is unlikely to affect the result of the ballot,

the failure (or failures) shall be disregarded.

(2) The provisions are section 227 (1), section 230 (2) and section 230 (2A).

Entitlement to vote in ballot

13. A key provision is section 227(1) which indicates who is entitled to vote in the ballot.

(1) Entitlement to vote in the ballot must be accorded equally to all the members of the trade union who it is reasonable at the time of the ballot for the union to believe will be induced to take part or, to continue to take part in the industrial action in question, and to no others.

14. It is common ground between leading counsel, both experienced in this branch of the law, that the proper way to construe this oddly worded subsection is to ask oneself two questions. First "Who did the union at the time of the ballot believe would be induced to take part in the industrial action". Second, "was such a belief a reasonable one on the part of the union". We incline to the view that they are right in the view which they take of the proper approach to this section and proceed on that basis.
15. The concept of inducement in the section is manifestly intended to fit the component part of the action in tort immunity from liability for which this part of the Act is designed to secure. There are uncertainties in this area and decisions are very fact dependent. However we do not accept Mr Hendy's submission that unless the Union or one of its staff intended to ask a specific member to take part in the industrial action then the union could not believe that he would be induced by the Union's actions to take part in that industrial action.
16. The Union will start by defining the designated class of members who the Union wishes to take part in the industrial action. Where a Union distributes documentation calling upon members of the designated class to take part in industrial action which has received majority support in a ballot, then one would expect members of that class to take part in that industrial action. This expectation should in our judgment extend to at least some of those members of the designated class who have not received the ballot papers. This is because it is overwhelmingly probable that there will be some who are induced to take industrial action by their own feelings that this is appropriate. After all, the Union would not call for a ballot unless it felt that it had widespread support. Moreover, even amongst those who would, if they had been given the chance, have voted against the strike, there will be some who, in the knowledge that many of their colleagues will expect them to take industrial action, will do so. Any reasonably worldly-wise judge would reach that conclusion independently of any evidence to that effect. Furthermore, in the present case there is evidence that some unballoted members took precisely that attitude. In those circumstances, it would not be reasonable for the Union to believe at the time of the ballot that all such unballoted members would not take part in the industrial action. If follows that such unballoted members should have been, in the words of section 227 (1), accorded entitlement to vote.

What the employers are entitled to know

17. This is set out in two sections, one of which deals with the notice which has to be given to employers before the ballot and the other of which deals with the notice to be given to employers after the ballot if the union decides to go ahead with the proposed industrial action. The sections are as follows.

226A (1) The trade union must take such steps as are reasonably necessary to ensure that-

(a) not later than the seventh day before the opening day of the ballot, the notice specified in subsection (2)

…

is received by every person who it is reasonable for the union to believe … will be the employer of persons who will be entitled to vote in the ballot.

(2) The notice referred to in paragraph (a) of subsection (1) is a notice in writing -

…

(c) containing such information in the union's possession as would help the employer to make plans and bring information to the attention of those of his employees who it is reasonable for the union to believe (at the time when the steps to comply with that paragraph are taken) will be entitled to vote in the ballot.

3A These rules apply for the purposes of paragraph (c) of subsection (2) –

(a) if the union possesses information as to the number, category or work-place of the employees concerned, a notice must contain that information (at least);

(b) if the notice does not name any employees, that fact shall not be a ground for holding that it does not comply with paragraph (c) of subsection (2).

234A (1) An act done by a trade union to induce a person to take part, or continue to take part, in industrial action is not protected as respects his employer unless the union has taken or takes such steps as are reasonably necessary to ensure that the employer receives within the appropriate period a relevant notice covering the act.

(3) For the purposes of this section a relevant notice is a notice in writing which –

(a) contains such information in the union's possession as would help the employer to make plans and bring information to the attention of those of his employees whom the union intends to induce or has induced to take part, or continue to take part, in the industrial action ("the affected employees").

5A These rules apply for the purposes of paragraph (a) of subsection (3)-

(a) if the union possesses information as to the number, category or work-place of the employees concerned, a notice must contain that information (at least);

(b) if a notice does not name any employees, that fact shall not be a ground for holding that it does not comply with paragraph (a) of subsection (3).

18. In National Union of Rail, Maritime and Transport Workers v London Underground Ltd [2001] EWCA Civ 211 Robert Walker L.J., delivering the only reasoned judgement of this court said

"45. … Under s. 226A (2)(c) and s. 234A(3)(a) in their original form, the clear legislative purpose was to enable an employer to know which part or parts of its workforce were being invited to take industrial action, in order that the employer could (first) try to dissuade them and (secondly, and so far as unsuccessful in its first aim) make plans to avoid or minimise disruption and continue to communicate with the relevant part or parts of the workforce. That required the employer to be able to ascertain (that is, identify) the relevant employees. As Morison J. said in the Blackpool case (cited with strong approval by this court [1994] ICR 648, 655):

"Whilst Parliament could have required a union always to name their members, by using the language it did, I think that Parliament apparently allowed for the possibility that there would be occasions on which a union could properly identify employees by category rather than by name". (emphasis supplied)

46. After the concerns expressed by this court in the Blackpool case, and no doubt for other reasons also, Parliament altered the legislation by the 1999 Act so as to make plain that a union could not be compelled to provide a list of names (although a union is still at liberty to do so if it thinks fit, and if RMT had done so it seems likely that LUL and the other claimants would have continued their previous practice of themselves annotating the list with grades and workplaces). But there was not any significant change in the legislative policy or in the purpose for which information was to be given to the employer. The change was a change of means, not of objective, in order to meet the concerns of those members of a union who objected to being included in a list of names. It was not intended to make it easier for a union to prepare notices under s. 226A and s. 234A, and indeed it is clear from the facts of this case that it may make the task more onerous. But that is not as surprising as Mr. Hand has contended. It is the inevitable consequence of expressly enacting that a union is not bound to provide a list of names."

Conduct of ballot

19. For present purposes the relevant provision is section 230

(2) … so far as is reasonably practicable, every person who is entitled to vote in the ballot must –

(a) have a voting paper sent to him by post at his home address or any other address which he has requested the trade union in writing to treat as his postal address; and

(b) be given a convenient opportunity to vote by post.

20. Section 230 makes it clear that the obligation to send a ballot paper to everyone entitled to vote is a qualified one. The paper has to be sent to one of two addresses – the actual home address of the member or any other address which he has requested the trade union in writing to treat as his postal address. Clearly the last few words cover the situation where a person has specifically requested the union to treat an address as his postal address although it is not his home address. More difficult is the situation where a member has made no such specific request but where, having given one home address at address A, he moves to another home at address B without having notified the union of that fact. If in that situation the ballot paper is sent to address A it has not been sent to his home address and thus does not fall within the opening words of the section. Nor does it fall within the closing words of the section. At the time of the giving of address A when A was his home there was no request in writing to the Union to treat any other address as his postal address. Nor has there been any such request since then.
21. Once it is established which is the appropriate address for the purposes of section 230, the union is not under an obligation to secure that the ballot arrives at that address: it must do what is reasonably practicable to secure that this is the case. This means what is reasonably practicable for a union to do. One possible reading of the section is to hold that what "is" reasonably practicable must be assessed in the light of the facts as they are on the day that the ballot papers are sent out. We reject that reading. It can not have been intended that a ballot will be regarded as having been properly conducted if the union does not properly record changes of address notified to it. Where, on the other hand, the union has a system for reminding members of the need to keep the union notified of any changes of addressees but a member fails to notify the union of such a change of address and the union is in fact ignorant of that change of address and sends the ballot paper to the old address then a court would probably find that the union will have done all that is reasonably practicable.

The discretion of the judge

22. The judge in deciding whether or not to grant an interlocutory injunction in this type of case must have regard to the likelihood of the Union establishing that it has fulfilled the Parliamentary preconditions for immunity. This appears from section s. 221

(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) …

The facts of the present case

23. The claimant, Midland Mainline Limited, operates a railway service on the main line between London St. Pancras and Sheffield. The defendant, the National Union of Rail, Maritime and Transport Workers, usually known as RMT, has within its membership certain persons employed by Midland Mainline. They used to be known as drivers and guards. But of late they have been renamed. They are now known as train managers, senior customer hosts and drivers who collectively are styled "operational train crew".
24. RMT, whose secretary is Mr Knapp, is in dispute with Midland Mainline. We are not concerned with the merits of that dispute.
25. A circular from Mr. Knapp was sent to members early in the year, referring to the dispute with RMT about the safety responsibilities of operational train crew contains the sentence: "This dispute may mean that the union needs to ballot all train crew grades in the very near future".
26. On 21^st. May Mr. Knapp wrote to advise the Human Resources Manager of Midland Mainline, Mr. Mason, of arrangements for the ballot. This letter was intended to be the pre-ballot notice required by section 226A of the Trade Union and Labour Relations (Consolidation) Act 1992 ("the Act"). He wrote :

"The ballot will be of RMT members employed by your company in the grades of operational train crew. According to my records, at the time of serving this notice there are ninety-one such members. You will appreciate that our record of the number of members changes from day to day, but this is the figure for to day.

I enclose a matrix compiled from RMT's head office membership records updated from Regional Offices and relevant Branch Secretaries' records, which details the number of members in each category and location. This is all the information the union has in its possession to help you make plans and bring information to the attention of your employees."

27. The matrix referred to in the letter listed 5 depot locations and set out in relation to each location the number of senior customer hosts and train managers; it also included 3 drivers whose location was described as unknown. It totalled 91 members. No names or addresses were given in relation to these members.
28. On 24 May Mr Mason indicated to Mr Knapp that he did not accept what was said in the last sentence quoted. He pointed out that at St Pancras the RMT evidently intended to ballot 15 staff but there were only 12 Train Managers/Senior Customer Hosts at that location. He asked to be told the names of those whose whom the Union intended to ballot and their addresses.
29. On 30 May Mr Knapp replied refusing to give this information and continuing

"If you wish to provide a list of employees at each location named on the matrix I will be happy to check this new information – over and above that which was in my possession at the time of dispatch – against the union's records."

30. The Respondents did not provide a list of employees.
31. Ninety-one persons were balloted between 29 May and 11 June. Of those, twenty-five voted in favour of strike action, seventeen against strike action and forty-nine did not vote. It will therefore be seen that the constituency was small, the turnout low, and the majority eight. After the ballot had taken place it transpired that some twenty-five persons, who were employed by Midland Mainline as operational train crew and were members of RMT, had not been balloted.
32. On 14^th June Mr. Knapp sent a letter to Mr Mason informing him of the intended strike. This letter was intended to be the pre-strike notice required by section 234A:

" … I am writing to inform you that RMT members employed by your company in the grades of operational train crew will be taking discontinuous strike action on the following dates. [The dates are then set out]

The members concerned are all RMT members employed by your company in the grades of operational train crew. According to my records, at the time of serving this notice there are approximately ninety such members. You will appreciate that our record of the number of members changes from day to day, but this is the figure for today.

I enclose a matrix …

[The letter continues in similar terms to its predecessor and encloses a nearly identical matrix]

33. On 14^th June James Knapp, General Secretary of the Union, sent a notice of strike document addressed to "All RMT train crew members" but only sent to those who had previously been balloted. The crucial parts reads as follows:

"I congratulate RMT train crew members for returning magnificent strike mandates amongst all but 2 companies…. Members realise how vitally important this issue is. The mandates are overwhelming…. Unless you are advised otherwise, industrial action must be taken as follows …" The dates are then set out.

34. The twenty-five operational train crew who were members of the union but did not receive ballot papers fall into four distinct categories.
35. The first category consists of eleven persons who were not balloted because, although they worked as operational train crew, the union had not received or recorded information about their joining such grades. Of those eleven persons, one became operational train crew in June 1998, one in April 2001, while the other nine all joined the relevant grades on dates in the years 1999 and 2000. It is not suggested that the employers knew of the union's lack of knowledge.
36. The second category relates to ten persons whom the union believed to be in arrears of contributions. It is in evidence from the union, and not seriously disputed, that union policy with respect to such persons is that they are not balloted nor called upon by the union to take industrial action, nor provided with any benefits by the union. It is not suggested that the employers knew that these persons were in arrears or of the union policy towards such persons. There is no evidence that union members knew of this union policy.
37. The third category comprised three persons who were sent ballot papers at the wrong addresses. The Union members concerned had moved address, respectively, in May 1999, June 2000 and September 2000, but RMT claimed that it had never received, or if it had received had never recorded, information as to the change of address. It may well be the union had simply never been told by some or all of these about their change of address.
38. The fourth category consists of one member. She is a person who all agree should have been balloted but, by reason of some mistake made in the offices of RMT, no ballot paper was ever sent to her.

Conclusions on the present appeal

39. What happened in the fourth category was just the sort of thing for which section 232B was designed. As to the three persons in the third category the facts are not clear but the material before the judge at the time of his decision pointed to the union having done all that was reasonably practicable to send the ballot papers to the right addresses. Even if it had not and the third and fourth categories are added together section 232B would still cover the situation.
40. We are therefore concerned with categories one and two. In neither of those categories does the Union rely on section 232B. In relation to those categories the judge, in exercising his discretion under 221 was both entitled and right to come to the conclusion on the basis of the material before him that at trial the union would not establish its immunity. All the evidence reinforced the presumption that those who are in a class which the union wishes to take industrial action, namely those members of the RMT who are operational train crew, for which it has sought and obtained the support of a ballot are likely to be induced to take part in that industrial action. Although the strike notice was only sent to those who had been balloted, it is clear that those who had not received the notice, being RMT members and operational train crew, would be likely to be induced to take part in the industrial action.
41. We are prepared to proceed on the basis that the Union thought that it had balloted everyone of the class whom it wished to induce to take industrial action. In the light of the evidence as to the administrative practices of the union and its members it was not reasonable for the union to believe (if the appropriate persons did believe, as to which there is no clear evidence) that those who were on the lists to be balloted included everyone in the class who was likely to be induced to take industrial action if the ballot supported such a move.
42. Inconsequential mistakes can be dealt with under s.232B. Where as here the mistakes are not inconsequential and a significant number of the union's membership is not asked for its views on the proposed industrial action then the Union does not have the immunity from civil action. Parliament has provided that this should only be available subject to the fulfilment of strict conditions. These are designed to ensure that workers are not put in a position where, if they value their standing amongst their fellows, they have to take part in industrial action in relation to which they have not been balloted.
43. In their respondents' notice the respondents take a further point in these words:

"The notice dated 14 June 2001 served by the defendant for the purposes of section 234A stated that discontinuous strike action was to be taken by "all RMT members employed by your company in the grades of Operational Train Crew". If the defendant in fact intended to call out on strike only some of its members employed by the claimant in the grades of operational train crew, this notice was misleading and did not comply with section 234A (3)(a). An employer informed that only some of his workers are to be called out on strike is in a position to communicate with the non-striking workers with a view to organising a skeleton or partial service. An employer wrongly told that all the workforce is to be called out on strike is unable to do so. If the notice dated 14 June 2001 did not comply with the requirements of section 234A the industrial action was not protected."

44. We see force in this point. There were times when Mr Hendy appeared to argue that the Union did indeed only intend to induce a subset of its members who were operational train crew to take industrial action. That subset was those members who had been sent ballot papers. One answer to that is, as we have already indicated, that the intention of the Union is not conclusive of who is entitled to vote in the ballot. If that be wrong, a further answer seems to us to lie in the respondents notice.
45. One of the problems in cases such as the present arises from a combination of the following facts – 1. The union, in order to secure that ballot papers are sent to all appropriate persons and that no-one is omitted, wishes to identify each member of the class whom it wishes to take industrial action in the event of a supporting ballot; 2. The union is not willing to disclose to the employer which of the employees is a union member; 3. The employer is not willing to disclose to the union the name of every employee. A possible solution is for ACAS to be involved. ACAS, as we understand it, is willing and able to carry out, and is experienced in carrying out such confidential membership checks. It can do so upon the basis agreed between the parties, that, without disclosing confidential or sensitive information to the other party, it can assist in confirming that all relevant trade union members have received the ballot paper. It seems to us that even prior to the involvement of the independent scrutineer the participation of ACAS can enable compliance with the Code of Practice. We would encourage and recommend reliance by both employers and trade union upon ACAS.
46. We dismiss this appeal.
ORDER:
47. Appeal dismissed with costs agreed between the parties in the sum of £8,827
48. £10,000 to be paid on account of the costs below within 21 days.
49. Leave to appeal to the House of Lords refused.
(Order does not form part of approved Judgment)