England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		12 September 2014

Sir Brian Keith:

Introduction

1. On 29 January 2013, the Central Arbitration Committee ("the CAC") decided that the application of the Pharmacists' Defence Association Union ("the PDAU") to be recognised by Boots Management Services Ltd ("Boots") for the purposes of collective bargaining on behalf of the pharmacists employed by Boots was admissible. Boots sought judicial review of that decision, and in the Court's judgment of 22 January 2014 ([2014] EWHC 65 (Admin)), the Court made various findings on its way to concluding that it was not yet appropriate for the Court to make any final order on the claim. Specifically, the Court wanted to give the PDAU the chance to consider whether to apply for a declaration of incompatibility between various provisions in Schedule A1 ("the Schedule") to the Trade Union and Labour Relations (Consolidation) Act 1992 ("the 1992 Act") and Art. 11 of the European Convention on Human Rights ("the Convention").
2. Following that judgment, the PDAU applied for declarations that para. 3(6) of the Schedule, alternatively para. 3(5) of the Schedule, alternatively the whole of para. 3 of the Schedule, were incompatible with Art. 11. If it was necessary to amend its grounds of resistance to Boots' claim in order to be able to apply for any of these declarations, it sought permission to do so. That application was served on the Treasury Solicitor (as well as on Boots' solicitors), and the Secretary of State for Business, Innovation and Skills subsequently exercised his right under section 5 of the Human Rights Act 1998 ("the 1998 Act") to intervene in the proceedings. He opposes the application for these declarations on the basis that other provisions of the Schedule can and should be read in such a way as to prevent the supposed incompatibility from arising. The hearing to determine the PDAU's application for the declarations of incompatibility has now taken place, and this is the Court's judgment following that hearing. This judgment will necessarily have to be read in conjunction with the Court's previous one, and I proceed on the basis that anyone reading this judgment will have access to the Court's earlier one.

Two preliminary matters

3. The PDAU's standing to make the application. In a note to the parties, I questioned whether a declaration of incompatibility could be made on the application of an interested party to a claim for judicial review as opposed to the claimant or the defendant. A declaration of incompatibility is a remedy available under section 4(2) of the 1998 Act, and my concern was that, on a literal reading of para. 15 of the Practice Direction supplementing Part 16 of the Civil Procedure Rules, only a "party" to the proceedings could seek a remedy under the 1998 Act. But it seems to me that once a person or body has been regarded as "directly affected by the claim", so as to be treated by rule 54.1(2)(f) of the Civil Procedure Rules as an interested party to the claim, and is for that reason to be regarded as sufficiently interested in the claim to be served with the claim under rule 54.14, that person or body is to all intents and purposes a party to the proceedings. Apart from anything else, it would defeat the overriding objective of the Civil Procedure Rules if an interested party who was directly affected by a provision arguably incompatible with their rights under the Convention was prevented on technical grounds from seeking a declaration of incompatibility in respect of that provision. The PDAU therefore has the standing to apply for the declarations of incompatibility which it seeks.
4. The application for permission to amend. The PDAU's original grounds of resistance did not include a claim for declarations of incompatibility. That is not altogether surprising. Its case was that the CAC had been right to read para. 35(1) of the Schedule in the way that it had, thereby making it compatible with Art. 11. It was only when the Court (a) decided that it had not been open to the CAC to read para. 35(1) in the way it had, and (b) reminded the parties that it could make a declaration of incompatibility, that the PDAU decided to advance a secondary case which relied on the power which the Court has to make a declaration of incompatibility, but which the CAC does not have. With the advantage of hindsight, it might be said that the PDAU should have protected itself by seeking in its grounds of resistance the declarations of incompatibility it now seeks should the Court conclude that the CAC could not have read para. 35(1) in the way that it had. But subject to one important reservation, there has been no discernible prejudice to any of the parties. Moreover, there is a strong public interest in having the uncertainty which the Court's judgment raised over the compatibility of some of the provisions in the Schedule with Art. 11 properly resolved. In my opinion, it is desirable for the supposed incompatibility of para. 3 of the Schedule with Art. 11 to be addressed on the basis of a properly pleaded amendment, and subject to the caveat to which I am about to come, I give the PDAU permission to amend its grounds of resistance to include a claim in the terms of para. 3 of the document attached to its application notice dated 10 February 2014.
5. The one reservation relates to the stance taken by the Secretary of State when the PDAU's application notice for the declarations of incompatibility it now seeks was filed. He argued that the proceedings should have been adjourned as soon as it became apparent that the compatibility of any of the provisions in the Schedule with Art. 11 might be called into question, so as to give the Secretary of State the opportunity to intervene in the proceedings at that stage if he chose to. At the very least, the parties should have informed the Secretary of State that the compatibility of some of the provisions in the Schedule with Art. 11 was being questioned. Since neither of those steps were taken, the Secretary of State contended that the Court's earlier judgment should be treated as provisional to allow the Court to consider the Secretary of State's case that no question of any such incompatibility arises.
6. It is important to identify what the Secretary of State's concern really was. It related to the construction which the Court placed on the meaning of the phrase "collective bargaining" in para. 134(1) of the Schedule. He wishes to argue for an alternative construction, which, if correct, would, he says, prevent the supposed incompatibility from arising. The Secretary of State was anxious that if the Court was not willing to re-visit the proper construction of the phrase "collective bargaining" in para. 134(1), he would have been denied, by the failure of the parties to notify him of the supposed incompatibility, of the opportunity to make submissions on the issue. Accordingly, if the Court was not prepared to re-visit the issue, he contended that the application for permission to amend should be refused.
7. Boots, of course, was quite content for the issue to be re-visited, because its case always was that the phrase "collective bargaining" in para. 134(1) of the Schedule could not be construed in the way that the PDAU contended for. And the PDAU was content for the issue to be re-visited as well. As Mr Hendy said, it is "obviously right" that the Secretary of State should be able to advance the arguments he wants to, even if that involves addressing again some of the issues which the Court had previously decided. That stance reflects the proposition that if the Secretary of State's right to intervene in a case where the compatibility of legislation with the Convention is being questioned is to be effective, he should have the opportunity to address, not merely the question whether a declaration of incompatibility should be made, but whether the particular provision which is said to give rise to that incompatibility can and should be construed in such a way which prevents the supposed incompatibility from arising. In the circumstances, there is nothing to prevent the Court from re-visiting the issue of the proper construction of para. 134(1) of the Schedule, nor any reason why the PDAU should not have permission to amend its grounds of resistance.

Surmounting the barrier in para. 35

8. The Secretary of State does not challenge the Court's previous decision that para. 35 of the Schedule cannot be interpreted in a manner which renders it compatible with Art. 11. The case he wishes to advance - which was Boots' alternative case - is that the barrier which para. 35 placed in the way of the PDAU's application for statutory recognition could be removed by a successful application for the de-recognition of the Boots Pharmacists' Association ("the BPA") under Part VI of the Schedule. That argument depends, of course, on the proper construction of the phrase "collective bargaining" in para. 134(1) of the Schedule, but before returning to that topic, it is necessary to address a new and important point which has emerged. That relates to the extent to which the de-recognition of the BPA can be sought by the PDAU, and relies on the fact that para. 137 of the Schedule gives the right to apply to the CAC to have the bargaining arrangements between an employer and a non-independent trade union which it has recognised as entitled to conduct collective bargaining on behalf of a group of workers ended only to "[a] worker or workers within the bargaining unit". In other words, a trade union which wants the incumbent union to be de-recognised has to persuade at least one of the workers in the bargaining unit to initiate the application for de-recognition. Unless it can do that, the barrier to statutory recognition under Part I of the Schedule which para. 35 places in the way of the non-incumbent trade union cannot be surmounted.
9. In para. 34 of my earlier judgment, I touched on one consideration which might conceivably make it difficult for the PDAU to find pharmacists in Boots who were willing to make the application for de-recognition. "It may be", I said, "that the pharmacists would prefer the BPA to continue to have bargaining rights in respect of facilities for trade union officials and machinery for consultation, but for the PDAU to bargain with Boots over their terms and conditions of employment." To that, one might have added that it may be that that is what the PDAU wanted as well, but Mr Hendy went on to say that although he did not know what his instructions were on the issue, the PDAU "don't care whether the BPA is recognised or de-recognised". By that he presumably meant that the PDAU was indifferent to whether the BPA should continue to be recognised by Boots for collective bargaining over the limited matters over which it bargained with Boots.
10. I do not think it at all likely that Boots' pharmacists would want their bargaining rights to be divided between the BPA and the PDAU in that way. In my view, a much more significant consideration which might make Boots' pharmacists unwilling to apply for the de-recognition of the BPA is the fear of reprisals being taken against them, whether by Boots or by other pharmacists who do not wish the PDAU to displace the BPA. It should be said at once that there is no suggestion whatever that any of Boots' pharmacists would be treated detrimentally by Boots if they applied for the de-recognition of the BPA, but it is necessary to look at the bigger picture. In that context, it would be shutting one's eyes to industrial reality if one ignored the possibility that an unscrupulous employer might take it out on a worker who agitated for recognition by another trade union with a large number of members, for example by declining to promote him or by selecting him for redundancy, when the real reason had nothing to do with merit but everything to do with punishing the worker for behaving in a manner regarded as disloyal to management. Similarly, it has not been unknown for workers to be sent to Coventry by their fellow workers for breaking ranks.
11. These are important considerations, but it should not be forgotten that the Schedule provides a bespoke scheme for any worker who may be singled out for detrimental treatment for seeking to secure the ending of bargaining arrangements between his employer and the incumbent trade union to obtain compensation for his treatment: see the combined effect of paras. 156(1), 156(2)(c) and 156(5) in Part VIII of the Schedule. All the more so if he is dismissed for that reason: see paras. 161(1) and 162(2)(c) in Part VIII of the Schedule. I appreciate, of course, that these are remedies which relate only to detrimental treatment by the employer, and there is little that a worker can do if he is given the cold shoulder by fellow workers. But that is a reflection of the framework of industrial relations in this country, and although there are many recorded instances of workers being treated as "scabs" for ignoring instructions from a trade union which commands the respect of the majority of the workforce, it is fanciful to suppose that the members of what is in effect an in-house non-independent consultative body would react strongly towards a worker who wishes their bargaining unit to be represented by a large independent trade union for the purposes of collective bargaining.
12. All in all, the PDAU's concern about the impact of these considerations is more theoretical than real. It is very unlikely that the PDAU will be unable to find a single pharmacist within Boots who wants the PDAU to be recognised for the purposes of collective bargaining in place of the BPA, and who is willing to put their head above the parapet. And if the PDAU is not able to find such a pharmacist, that is overwhelmingly likely to have been because there is insufficient support for the PDAU among Boots' pharmacists for any application for statutory recognition to be successful. That is because one of the conditions for the grant of statutory recognition to the PDAU under the Schedule is that it has to have the support of a majority of Boots' pharmacists.
13. Ultimately, the question is whether the machinery in Part VI of the Schedule for securing the de-recognition of an incumbent non-independent trade union, coupled with the machinery in Part VIII of the Schedule for awarding compensation to workers who are subjected to detrimental treatment for seeking to secure that, enables the PDAU to avoid the consequences of para. 35 of the Schedule and to invoke the machinery in Part I of the Schedule for securing its own recognition. Subject, of course, to the issue over the proper construction of the phrase "collective bargaining" in para. 134(1) of the Schedule, I think it does. The mechanism may not be perfect, but the existence of the mechanism means that para. 35 does not render the right of the PDAU to engage in collective bargaining with Boots devoid of substance.

The proper construction of the phrase "collective bargaining" in para. 134(1)

14. The route to de-recognition afforded by Part VI of the Schedule can only be invoked by the PDAU through one of Boots' pharmacists if the bargaining arrangements between Boots and the BPA amounted to the sort of "collective bargaining" to which para. 134(1) related. At the previous hearing, the PDAU argued that the phrase "collective bargaining" in para. 134(1) means negotiations over terms and conditions of employment. Boots did not contend for any particular meaning. It merely argued that the CAC had been wrong to give it the same meaning as the phrase "collective bargaining" in para. 3(3) of the Schedule, namely negotiations over pay, hours and holidays. Although I was a little sceptical about the route by which the CAC had come to that conclusion, that was the view I ultimately reached as well. The Secretary of State contends that that conclusion was wrong, and that the phrase "collective bargaining" in para. 134(1) should be regarded as meaning negotiations over any matters which the parties have agreed should be the subject of collective bargaining.
15. In para. 36 of my previous judgment, I noted that not only did para. 136 of the Schedule provide that the phrase "collective bargaining" in para. 134(1) was not to have the meaning given to it by section 178 of the 1992 Act, but in addition it did not provide an alternative meaning. When you think about it, the phrase "collective bargaining" in para. 134(1) could mean one of five things. Going from the narrowest to the widest meaning, they are:

(a) negotiations over pay, hours and holidays (i.e. the core topics of collective bargaining),

(b) negotiations over terms and conditions of employment (i.e. all terms and conditions of employment, and not just those terms relating to pay, hours and holidays),

(c) negotiations over the seven matters referred to in section 178(2) (i.e. not just terms and conditions of employment, but other specific topics as well),

(d) negotiations over those topics on which the parties have agreed should be the subject of collective bargaining, and

(e) negotiations over any topics at all.

(c) can be disposed of immediately, because para. 136 expressly disapplied that meaning in relation to Part VI of the Schedule. (e) can be disposed of as well, because it is difficult to see how negotiations can take place on topics which the parties have not agreed to negotiate over. And for present purposes, the difference between (a) and (b) can be ignored because, on either construction, the bargaining arrangements between Boots and the BPA did not cover them. The choice, therefore, is between (a)/(b) - which, for ease of reference, I shall refer to as (a) - and (d).

16. Both (a) and (d) are included in the definition of the phrase "collective bargaining" in Part I of the Schedule, although not in Part VI. (a) is in para. 3(3), and (d) is in para. 3(4). In Part I, the phrase means negotiations over pay, hours and holidays unless the parties have agreed that other topics should be the subject of collective bargaining, in which case the phrase "collective bargaining" means negotiations over those topics. Indeed, the formula used in Part I of the Schedule is in effect the same formula as that used in Parts II and III of the Schedule: see paras. 54 and 94 of the Schedule. The draftsman was, therefore, alive to the fact that either or both meanings were possible, and accordingly could have given either or both meanings to the phrase in Part VI, but did not do so. It is unlikely that this was just an oversight, and in any event the Court has to assume that the omission of a definition of the phrase "collective bargaining" in Part VI of the Schedule was deliberate. The one thing that cannot be said is that the unwillingness to adopt one meaning militates in favour of the adoption of the other meaning.
17. Mr Hendy argued, with some force, that it is difficult to see what (d) adds once the definition of the phrase "collective bargaining" in section 178 has been expressly disapplied by para. 136. What might an employer and a trade union want to bargain about over and above the topics set out in section 178(2)? If there is nothing that they could bargain over, the disapplication in Part VI of the definition of the phrase "collective bargaining" in section 178 suggests that the phrase "collective bargaining" in Part VI is indeed limited to either pay, hours and holidays or terms and conditions of employment. The response of Mr Daniel Stilitz QC for the Secretary of State was that there are a number of topics, not included in the list of topics in section 178(2), which an employer and a trade union might want to bargain over. The examples he gave were "levels of boardroom pay, possible merger and acquisition and/or restructuring activity and corporate social responsibility (and other) policies". I am sceptical about some of that. I have never heard, for instance, of an employer and a trade union agreeing to negotiate over the remuneration of the directors or whether a particular merger or acquisition should proceed, and there was no evidence of any agreement to that effect. But it would not be uncommon, I expect, for an employer and a trade union to agree to negotiate over the restructuring of departments or some other internal reorganisation which might have an important impact on the working conditions and future prospects of significant sections of the workforce. That may well come within "the physical conditions in which workers are required to work" (section 178(2)(a)) or the "allocation of work or the duties of employment between workers or groups of workers" (section 178(2)(c)). In the circumstances, the fact that the definition of the phrase "collective bargaining" in section 178 was disapplied for the purposes of Part VI does not militate against the construction for which the Secretary of State contends.
18. On the other hand, there is a compelling argument in favour of the construction advanced on behalf of the Secretary of State. The inference to be drawn from the draftsman deciding not to limit the definition of the phrase "collective bargaining" in Part VI to negotiations over any particular topics (whatever those topics may have been) is that the draftsman must have had it in mind that the negotiations could cover any topics over which the parties were prepared to negotiate. Moreover, it makes the topics on which an independent trade union can compel an employer to recognise it for the purpose of collective bargaining under Part I if those topics have been agreed the same topics as the employer has agreed to negotiate over with a non-independent trade union when an independent trade union seeks the de-recognition of the non-independent incumbent trade union under Part VI. I have not discerned any reason why the phrase "collective bargaining" in Part VI should be given a definition which is narrower than the one in Part I.
19. For these reasons, I have concluded, notwithstanding my previous judgment, that the phrase "collective bargaining" in para. 134(1) of the Schedule should be interpreted as meaning negotiations over any matters which the parties have agreed should be the subject of collective bargaining. I have reached that conclusion, of course, by applying the ordinary principles of statutory interpretation, and without resort to the special interpretative duty imposed by section 3(1) of the 1998 Act which arises only where the legislation, if read and given effect according to the ordinary principles of statutory interpretation, would result in a breach of any of the rights guaranteed by the Convention. No such breach arises since, on this interpretation of the phrase "collective bargaining" in para. 134(1), the bargaining arrangements between Boots and the BPA are terminable by the process in Part VI.
20. What would have been the result had I remained of my previous view that the phrase "collective bargaining" in para. 134(1) meant negotiations over pay, hours and holidays? Since Part VI of the Schedule would not have applied as, on that construction of the phrase "collective bargaining", Boots and the BPA would not be regarded as having agreed that the BPA was entitled to conduct collective bargaining on behalf of Boots' pharmacists, the bargaining arrangements between Boots and the BPA would not have been terminable by the process in Part VI. Then, and only then, would the special interpretative duty imposed by section 3 of the 1998 Act have been engaged.
21. At the previous hearing, the only argument advanced was whether para. 35 could be read in such a way as to render it compatible with Art. 11. I decided that it could not be, and the Secretary of State does not challenge that finding. Instead, he invited me to consider whether para. 134 could be read in such a way as to cure the supposed incompatibility. Had it been necessary for me to consider that argument, I would have ruled that it could. Mr Hendy conceded as much. He accepted that it could not be asserted that the construction of the phrase "collective bargaining" in para. 134 advanced on behalf of the Secretary of State was not a possible construction, and in those circumstances he acknowledged that the only way the PDAU could resist the contention that section 3 of the 1998 Act required that construction to be adopted was by succeeding in his first argument – which was that the fact that the PDAU could not itself initiate the machinery for de-recognition in Part VI meant that the barrier to the statutory recognition which para. 35 placed in the way of the PDAU could not be surmounted. Since I have rejected that argument, it follows that I would have ruled that section 3 of the 1998 Act required the phrase "collective bargaining" in para. 134 to have referred to negotiations over any matters which the parties have agreed should be the subject of collective bargaining.

Conclusion

22. For these reasons, the PDAU's application to the CAC was rendered inadmissible by para. 35 of the Schedule. It follows that Boots' claim for judicial review of the CAC's decision that the application was admissible succeeds, and the decision of the CAC on the admissibility of the application must be quashed. I wish to spare the parties the trouble and expense of attending court when this judgment is handed down, and I leave it to the parties to see whether they can agree the appropriate order for costs, though I know that Boots is not proposing to apply for an order that the PDAU pay its costs of the claim. If no agreement can be reached, the parties should notify the Administrative Court Office of that in writing within 14 days of the handing down of this judgment. I will then decide what the appropriate order for costs should be without a hearing on the basis of such written representations as the parties choose to make. If the PDAU wishes to apply for permission to appeal, its written grounds for such an application should be with the Administrative Court Office within 7 days of the handing down of this judgment, and I will consider that application as well without a hearing. However, the PDAU's time for filing its appellant's notice will still be 21 days from the handing down of this judgment. In the light of the outcome of the claim, Boots cannot appeal against any of the findings in the Court's earlier judgment, but if the PDAU appeals, Boots can then file a respondent's answer challenging those findings.
23. It hardly needs to be said, but Boots' success on its claim may prove to be a pyrrhic victory. It is now open to the PDAU through one of Boots' pharmacists to apply to the CAC for the ending of the bargaining arrangements between Boots and the BPA. If that application succeeds, the PDAU can apply once again to the CAC for statutory recognition, without the fear of its application being trumped by para. 35 of the Schedule.