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
		22nd January 2014

Mr Justice Keith:

Introduction

1. This case is the latest instalment in a long-running saga in which a trade union, the Pharmacists' Defence Association Union ("the PDAU"), is seeking to be recognised by Boots Management Services Ltd ("Boots") for the purposes of collective bargaining on behalf of the pharmacists employed by Boots, whether they are members of the PDAU or not. It arises in the context of a claim by Boots for judicial review of the decision of the Central Arbitration Committee ("the CAC") that the PDAU's application for statutory recognition of it by Boots for the purposes of collective bargaining was not rendered inadmissible by one of the provisions of the relevant statutory scheme. If Boots' claim for judicial review succeeds, the CAC will not be able to consider the application at all. If the claim fails, the CAC will continue to consider whether the application is admissible.

The facts

2. Boots is the company within Alliance Boots GmbH which employs the staff who work in its well-known retail chain of chemists throughout the UK. For many years, it has had a relationship (to use a neutral term) with the Boots Pharmacists' Association ("the BPA"). The BPA was listed as a trade union in 1979, and according to its constitution which was most recently revised in 2005, one of its objectives was "[t]o act as an officially recognised medium for representing to the management of Boots The Chemist all matters affecting the pharmacists of Boots The Chemist". The CAC was to find that "[s]ome limited negotiation had taken place [over the years] concerning the machinery for consultation with the BPA and facilities for its officials". Those negotiations resulted (a) in the BPA's chief executive officer being provided with a lap-top computer and an e-mail address, (b) in funding for the publication through which the BPA communicated with the pharmacists employed by Boots and others, (c) in the BPA being invited to have stands at the Boots Divisional Pharmacy Conferences and to make presentations at them, (d) in enabling members' subscriptions to the BPA to be collected via the payroll, and (e) in the establishment of channels through which the BPA's chief executive officer would deal with members of Boots' management and of designated meeting places. These were hardly matters of any substance, and the CAC was also to find that Boots "was absolutely clear that it had never recognised the BPA for the purposes of collective bargaining in relation to terms and conditions of employment, nor issues concerning pay, hours and holiday. It had not, did not currently do so and had no intention of doing so in the future. Its interaction with the BPA in this regard was strictly limited to consultation."
3. The Certification Officer is the officer responsible under the Trade Union and Labour Relations (Consolidation) Act 1992 ("the 1992 Act") for maintaining a list of trade unions and employers' associations. The BPA had never applied to the Certification Officer for a certificate of independence. The PDAU, on the other hand, had been certified by the Certification Officer as an independent trade union in November 2010. It was to claim that it then had approaching 18,000 members, including many of the pharmacists employed by Boots. In March 2011, its general secretary wrote to Boots' human resources director informing him that the PDAU had initially been set up to represent its members in grievance and disciplinary meetings, but that its members now wanted the PDAU "to become more involved in dealing with their terms and conditions of employment". He added that those of the PDAU's members who were pharmacists with Boots were saying that they wanted the PDAU "to be recognised for negotiation and consultation purposes". He sought a meeting with Boots to discuss the matter. Boots responded to this request by saying that it was amenable to such a meeting, since its human resources director had not met the PDAU's general secretary before, but it said that Boots saw its pharmacists "as an integral part" of the "stores team" rather than "as a separate interest group", and it made the point that it worked closely with the BPA on matters which related specifically to its pharmacists.
4. The PDAU's wish to have a voluntary agreement was rejected by Boots, and after the PDAU had gathered strength in numbers, it formally applied to Boots in January 2012 under the statutory procedure provided for by Schedule A1 to the 1992 Act to be recognised for the purposes of collective bargaining. That application was refused, and the PDAU submitted its application for recognition to the CAC in February 2012. Boots informed the PDAU that it was prepared to meet the PDAU to discuss its request for recognition, and to explore whether any agreement could be reached. On that basis, the PDAU agreed to withdraw its application to the CAC while those talks took place. It was after those talks had broken down that the PDAU submitted a fresh application for recognition to the CAC. That was in October 2012.
5. The CAC was to find that Boots "had no intention of recognising" the PDAU, and that it had "deliberately misled" the PDAU "in order to buy time" to negotiate an agreement with the BPA. That agreement was signed on 1 March 2012. The following day members of Boots' management met officials of the PDAU. No mention was made of the agreement which it had reached with the BPA the previous day. Instead, Boots said that it had found the meeting useful, and that it would proceed to consider the PDAU's application. The PDAU welcomed Boots' "apparent earnestness", but on 22 March 2012, Boots informed the PDAU that it was rejecting its application for recognition, stating that it had recognised the BPA for "certain collective bargaining purposes", although it offered to meet the PDAU on a regular basis to discuss the PDAU's "ideas, views and concerns". The CAC was to find that this was the first time that Boots had mentioned to the PDAU the agreement which it had reached with the BPA.
6. The agreement between Boots and the BPA described itself as a "partnership agreement". This is what the CAC said about it:

"It is common ground that the [agreement between Boots and the BPA] provides for consultation without any bargaining or negotiation rights in relation to pay, hours and holidays, nor working conditions, nor terms and conditions of employment. It is described as 'consultative dialogue' and the BPA is described as a 'line of communication' with 'input' into various matters. The [agreement] records, for example, how the input of the BPA on major company initiatives will be considered: 'Where practicable, our [Boots'] aim is that any proposals submitted by the BPA will be considered by management prior to any final decisions being made by the business. The BPA will be advised of the reasons for the response to its input.'

In two respects only the BPA is recognised as having collective bargaining rights:

'Under this agreement the BPA is recognised as having collective bargaining rights for the purposes of negotiation relating to facilities for its officials and the machinery for consultation in respect of the matters upon which [Boots] will consult with the BPA (which are those set out in this agreement). This agreement does not provide for collective bargaining rights on any other matters.'"

The CAC commented that "the borderline between consultation and negotiation can be problematic: this was not such a case". Boots, it said, had made it "absolutely clear" that apart from the two specific topics referred to in the agreement, it did not negotiate with the BPA.

7. The CAC found that the agreement which Boots reached with the BPA – which on the face of it did little more than put the nature of their relationship over the years on a more formal basis – was in truth a device which was designed to defeat any formal application for recognition which the PDAU might resubmit. It said that "the reason why [Boots] formalised its arrangement with the BPA … was in order to block the [PDAU's] request for recognition under the statutory procedure without conferring those rights on any other union (whether independent or not)." In that way, Boots sought to prevent their pharmacists from having the benefit of collective bargaining over their pay, hours and holidays, whether conducted by the PDAU, the BPA or any other union. In order to understand how, it is necessary to look at the legislative scheme, though in the interests of completeness I should add that following the CAC's decision that the PDAU's application for statutory recognition was not inadmissible, the BPA's application for a certificate of independence (which had been sought shortly before the hearing before the CAC) was refused – not on the basis that the BPA actually was under the domination or control of Boots, but because it was liable to interference by Boots tending towards being dominated or controlled by it.

The legislative scheme

8. Schedule A1 to the 1992 Act ("the Schedule") provides a mechanism in Part I of the Schedule by which an independent trade union may compel an employer to recognise the trade union as the bargaining agent for the purposes of collective bargaining on the issues of pay, hours and holidays for a group of workers. This is known as statutory recognition as opposed to the purely voluntary recognition which an employer may choose to accord to a trade union. The group of workers for whom statutory recognition is sought is known as the bargaining unit. The recognition of the union for the purposes of collective bargaining for that group of workers extends to all workers within the bargaining unit, whether or not they are members of the recognised union or even if they are members of another union. If an employer refuses to recognise a trade union for the purposes of collective bargaining, the union may make an application to the CAC for recognition. That was the application which the PDAU made. It had to make a valid application to the CAC for recognition to initiate the statutory process. Under the statutory process, following a valid application, the CAC will consider whether the trade union meets the conditions for the grant of statutory recognition under the Schedule.
9. Two of the conditions for the grant of statutory recognition under the Schedule are that the proposed bargaining unit has to be appropriate, and the union has to have the support of a majority of the workers constituting that bargaining unit. Paras. 11 and 12 of the Schedule provide for the trade union to apply to the CAC to decide whether those conditions have been satisfied. The PDAU's application to the CAC for statutory recognition was treated as including applications under paras. 11 and 12. This is where para. 35 of the Schedule (upon which this claim for judicial review turns) comes in. Para. 35(1) provides:

"An application under paragraph 11 or 12 is not admissible if the CAC is satisfied that there is already in force a collective agreement under which a union is (or unions are) recognised as entitled to conduct collective bargaining on behalf of any workers falling within the relevant bargaining unit."

That raised the questions (a) whether the BPA was indeed a trade union for the purposes of para. 35, and (b) whether Boots' agreement with the BPA was a collective agreement of the kind to which para. 35(1) relates.

10. As for (a), the CAC was to find that the BPA was a trade union for the purposes of para. 35, and there is no challenge to that finding. As for (b), the phrase "collective agreement" is defined in section 178 of the Act. The relevant subsections are subsections 178(1) and (2), which provide:

"(1) In this Act 'collective agreement' means any agreement or arrangement made by or on behalf of one or more trade unions and one or more employers or employers' associations and relating to one or more of the matters specified below; and 'collective bargaining' means negotiations relating to or connected with one or more of those matters.

(2) The matters referred to above are –

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

(b) engagement or non-engagement, or termination or suspension of employment or the duties of employment, of one or more workers;

(c) allocation of work or the duties of employment between workers or groups of workers;

(d) matters of discipline;

(e) a worker's membership or non-membership of a trade union;

(f) facilities for officials of trade unions; and

(g) machinery for negotiation or consultation, and other procedures, relating to any of the above matters, including the recognition by employers or 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."

The CAC found that Boots' agreement with the BPA related to the matters in sections 178(2)(f) and (g), and that it therefore was, on the face of it, a collective agreement of the kind to which para. 35(1) related, unless para. 35(1) was disapplied in some way. Again, there is no challenge to that finding.

11. Two things should be added to that. First, para. 35(4), which provides that an agreement for recognition must be ignored in certain circumstances, might appear at first blush to have disapplied the effect of para. 35(1), but Mr John Hendy QC for the PDAU acknowledged that the conditions in para. 35(4) which would have had to be complied with if para. 35(1) was to be disapplied had not been met. That left, secondly, para. 3 of the Schedule, which is in Part I of the Schedule. It provides:

"(1) This paragraph applies for the purposes of this Part of this Schedule.

(2) The meaning of collective bargaining given by section 178(1) shall not apply.

(3) References to collective bargaining are to negotiations relating to pay, hours and holidays; but this has effect subject to sub-paragraph (4).

(4) If the parties agree matters as the subject of collective bargaining, references to collective bargaining are to negotiations relating to the agreed matters; and this is the case whether the agreement is made before or after the time when the CAC issues a declaration, or the parties agree, that the union is (or unions are) entitled to conduct collective bargaining on behalf of a bargaining unit.

(5) Sub-paragraph (4) does not apply in construing paragraph 31(3).

(6) Sub-paragraphs (2) to (5) do not apply in construing paragraph 35 or 44."

The effect of this complicated provision is that although para. 3(2) provides that the definition of the phrase "collective bargaining" (and therefore of the phrase "collective agreement") in section 178 is not to apply for the purposes of the Schedule, para. 3(6) excludes para. 3(2) when it comes to the definition of the phrase "collective agreement" in para. 35(1), since para. 35(1) is in Part I of the Schedule. In other words, the definition of the phrase "collective agreement" in section 178 applies to para. 35(1). The result is that the definition of "collective agreement" in section 178 continues to apply to para. 35(1), and Boots' agreement with the BPA was therefore one to which para. 35(1) related. The effect of that was that the PDAU's application to the CAC for statutory recognition was inadmissible, unless some other route to render the application admissible could be found.

12. Art. 11 of the European Convention on Human Rights ("the Convention") was said to provide such a route in the light of Supperstone J's acceptance in Netjets Management Ltd v Central Arbitration Committee [2012] IRLR 986 that the Schedule has to be construed so as to give proper effect to such rights as Art. 11 gives. The PDAU argued that Art. 11 required para. 35 to be interpreted in such a way as to make the PDAU's application for statutory recognition not inadmissible. The CAC agreed with that argument. Whether that argument is right is the core issue which the court has to decide.

Art. 11 of the Convention

13. Art. 11 of the Convention deals with the right to freedom of assembly and association. The relevant right for present purposes is the right to freedom of association, but it is useful to have the whole Art. 11 in mind. It provides:

"1. Everyone has the right to freedom of peaceful assembly and to freedom of association with others, including the right to form and to join trade unions for the protection of his interests.

2. No restrictions shall be placed on the exercise of these rights other than such as are prescribed by law and are necessary in a democratic society in the interests of national security or public safety, for the prevention of disorder or crime, for the protection of health or morals or for the protection of the rights and freedoms of others. This Article shall not prevent the imposition of lawful restrictions on the exercise of these rights by members of the armed forces, of the police or of the administration of the State."

14. Art. 11 does not include a right to engage in collective bargaining in so many words, and many years ago the European Court of Human Rights took the view that the right to engage in collective bargaining was not included in the right to form or join a trade union, at least not in cases where the state was the employer: see Swedish Engine Drivers' Union v Sweden (1976) 1 EHRR 617 and Schmidt and Dahlström v Sweden (1976) 1 EHRR 632. The Court returned to that in Wilson v UK (2002) 35 EHRR 523. It said at [44]:

"… the Court has consistently held that although collective bargaining may be one of the ways by which trade unions may be enabled to protect their members' interests, it is not indispensable for the effective enjoyment of trade union freedom. Compulsory collective bargaining would impose on employers an obligation to conduct negotiations with trade unions. The Court has not yet been prepared to hold that the freedom of a trade union to make its voice heard extends to imposing on an employer an obligation to recognise a trade union. The union and its members must however be free, in one way or another, to seek to persuade the employer to listen to what it has to say on behalf of its members."

And at [45], the Court concluded that the absence under our domestic law of an obligation on employers to engage in collective bargaining did not amount to a violation of Art. 11. In the light of Wilson, Buxton LJ said in R (on the application of The National Union of Journalists) v Central Arbitration Committee [2006] IRLR 53 at [32] "that the right to be recognised for the purposes of collective bargaining does not fall within the rights guaranteed by Article 11". But the European Court returned to the issue yet again in Demir and Baykara v Turkey (2009) 48 EHRR 54. It held that the right to engage in collective bargaining had become one of the essential elements of the right to form and join a trade union, though whether such a right could be equated with a right for a trade union to be recognised for the purposes of collective bargaining is something to which I shall have to return.

15. When it came to the topics which the right to engage in collective bargaining covered, the CAC found that collective bargaining merely over (a) facilities for trade union officials and (b) the machinery for consultation in respect only of such matters as the employer was prepared to consult with the trade union over, and not over terms and conditions of employment – in particular, pay, hours and holidays – did not amount to the sort of collective bargaining envisaged by Art. 11. In those circumstances, the CAC held that the prohibition in para. 35 of the Schedule on a trade union applying to the CAC for a determination that the conditions for the grant of statutory recognition had been satisfied where no other trade union had collective bargaining rights over pay, hours and holidays interfered with the rights guaranteed by Art. 11. It thought that what Boots had done had been to exploit a loophole in the law – namely the disapplication of para. 3(3) of the Schedule to the construction of the phrase "collective bargaining" in para. 35 of the Schedule – to deny the pharmacists employed by Boots from having any union to bargain with Boots on their behalf over pay, hours and holidays. That would not have been consistent with the right to engage in collective bargaining recognised in Demir.
16. The CAC accepted that it did not have the power to declare that para. 35 was incompatible with the rights guaranteed by Art. 11. But given that para. 35 was required by section 3(1) of the Human Rights Act 1998 to be "read and given effect in a way which [was] compatible" with Art. 11 "[s]o far as it [was] possible to do so", and given its view that effect could be given to Art. 11 by reading words into para. 35, the CAC held that para. 35(1) should be read as follows (with the words which it read into para. 35(1) being italicised):

"An application under paragraph 11 or 12 is not admissible if the CAC is satisfied that there is already in force a collective agreement under which a union is (or unions are) recognised as entitled to conduct collective bargaining in respect of pay, hours and holidays on behalf of any workers falling within the relevant bargaining unit."

On that reading of para. 35(1), the PDAU's application for statutory recognition was not inadmissible.

Mandatory recognition

17. Boots' core argument is that the CAC impermissibly equated (a) the right of a group of workers to engage in collective bargaining with their employer with (b) a duty on their employer to engage in collective bargaining with its workers. The effect of the CAC's decision is therefore said to treat Art. 11 as forcing employers to recognise a trade union as being the body with whom collective bargaining was to take place, whereas Demir on its true analysis did no more than entitle a trade union to engage in collective bargaining if the employer was prepared to, and to seek to persuade the employer to engage in collective bargaining with it if it was not prepared to do so voluntarily.
18. The factual context in which the Court considered Art. 11 in Demir is important. A trade union whose members were civil servants had concluded a collective agreement with a municipal council in Turkey which covered all aspects of working conditions of the council's employees. The agreement was held by the Court of Cassation to be unenforceable. Although there was nothing in Turkish law to prevent civil servants from forming a trade union, such a union had no authority to conclude collective agreements. Since the collective agreement had been freely entered into by the trade union and the council, the case was not about whether the council had a duty to engage in collective bargaining with the trade union. The case was only about whether Art. 11 gave the trade union the right to engage in collective bargaining with the council.
19. It was in that context that the Court in Demir considered whether the increasing emphasis in international law on the importance of collective bargaining and the practice of European states was consistent with its previous thinking about the ambit of Art. 11. The Court noted that member states were obliged by Art. 6(2) of the European Social Charter to promote collective bargaining, though it also observed that this did "not oblige authorities to enter into collective agreements". However, the Court went on to note that the right to engage in collective bargaining had been enshrined in Art. 4 of the Convention on the Right to Organise and Collective Bargaining adopted by the International Labour Organisation in 1949 (as interpreted in 1994 by the Committee of Experts on the Application of Conventions and Recommendations) and in Art. 28 of the Charter of Fundamental Rights of the European Union. And when it came to state practice, the Court pointed out that, in the vast majority of European states, the right of civil servants to engage in collective bargaining had been recognised.
20. These were the considerations which led the Court to conclude as follows at [154]:

"Consequently, the Court considers that, having regard to the developments in labour law, both international and national, and to the practise of contracting states in such matters, the right to bargain collectively with the employer has, in principle, become one of the essential elements of the 'right to form and to join trade unions for the protection of [one's] interests' set forth in Article 11 of the Convention, it being understood that states remain free to organise their system so as, if appropriate, to grant special status to representative trade unions. Like other workers, civil servants, except in very specific cases, should enjoy such rights, but without prejudice to the effects of any 'lawful restrictions' that may have to be imposed on 'members of the administration of the state' within the meaning of Article 11(2) – a category to which the applicants in the present case do not, however, belong (see paragraph 108 above)."

That led the Court to decide at [155] that the trade union had had the right to engage in collective bargaining with the council.

21. The Court's comment in [154] that "states remain free to organise their system so as, if appropriate, to grant special status to representative trade unions" requires some comment. Although the principle of "most representative union" is a feature of the regimes relating to collective bargaining in some European states, it is not a feature of the right to engage in collective bargaining conferred by the Schedule. That was the effect of the decision of the Court of Appeal in the National Union of Journalists case. In that case, an agreement had been concluded between the Mirror Group and a trade union which had broken away from the National Union of Journalists ("the NUJ") recognising the trade union for the purposes of collective bargaining within its Sports Division over, amongst other things, changes to pay, hours and holidays. The union had at the most only one member working for the Mirror Group within its Sports Division, whereas a significant number of members of the NUJ worked within the division. The NUJ's application for statutory recognition under the Schedule was held to be blocked by para. 35. The fact that the breakaway union had at the most only one member within the bargaining unit was not regarded as preventing the application of para. 35.
22. Although the Court in Demir held that the trade union had the right to engage in collective bargaining with the council, the Court did not address whether the council had a corresponding duty to engage in collective bargaining with the trade union. The Court did not have to consider that in view of the council's willingness to do so. What the Court would have decided if it had had to address that question is a matter of speculation. Some people might think that the Hohfeldian view about rights giving rise to corresponding duties if such duties are necessary for the rights to be exercised in a meaningful way is engaged here. The same thing can be said about the point made by Mr David Reade QC for Boots that the Court did not say in so many words that it was departing from its previous decision in Wilson. The Court in Demir did not have to say whether it was departing from what it had said in Wilson about there being no obligation on an employer to engage in collective bargaining with a trade union. The issue whether an employer is obliged to engage in collective bargaining with a trade union was not before it.
23. Having said that, whatever the reach of Art. 11 may be, the fact is that our domestic law requires employers to recognise trade unions and to engage in collective bargaining with them in certain circumstances. That is what the Schedule provides for. The campaign by the trade union movement for compulsory recognition has been won. The current claim for judicial review is all about whether para. 35 of the Schedule – which is intended to prevent inter-union disputes about who should have collective bargaining rights for a particular group of workers, and which prevents the PDAU from invoking the procedure in the Schedule because of Boots' agreement with the BPA – should be read in such a way as to enable the PDAU to invoke it. That does not raise the issue whether Boots may be compelled to engage in collective bargaining with the PDAU. That issue only arises once the PDAU's application to the CAC has been held to be admissible. The issue which the present claim raises is whether the PDAU's inability to invoke the statutory procedure in the Schedule simply because Boots concluded an agreement with another trade union which permitted collective bargaining on some limited topics is compatible with such rights as Art. 11 gives.
24. That issue does not turn on whether the rights which Art. 11 gives include the right to compel Boots to engage in collective bargaining with the PDAU. Rather, it turns on whether the PDAU's exclusion from invoking the statutory procedure in the Schedule simply because Boots has agreed to engage in collective bargaining with the BPA on topics which do not relate to the terms and conditions of employment of its pharmacists is compatible with the PDAU's undoubted right under Art. 11 to engage in collective bargaining with Boots over the terms and conditions of employment of Boots' pharmacists. That very much reflects Mr Hendy's formulation of the issue. As he put it in para. 12 of his skeleton argument:

"… compulsion to collectively bargain is not the issue in the instant case. The issue is whether the prohibition of entry to a procedure established by law (which may result in compulsion to recognise for voluntary collective bargaining) is justified in accordance with Article 11 where the ground for prohibition of entry is merely the employer's desire not to collectively bargain with any (and not just the applicant) union on behalf of his employees."

That in turn depends on whether collective bargaining on the limited topics covered by Boots' agreement with the BPA amounts to the sort of collective bargaining envisaged by Art. 11.

25. On that issue, the CAC was unequivocal. It said at [67]:

"The Panel agrees with Mr Hendy's submission that a right merely to bargain collectively over facilities for trade union officials and consultation machinery – the full extent of the bargaining rights under the Agreement – does not, on the face of it, amount to collective bargaining within the meaning of the EHRC, ILO and EU source material and jurisprudence since it expressly excludes bargaining on matters to do with any of working conditions, terms of employment, hours, pay and holiday."

I unhesitatingly agree. It is important to note that the right to form and join trade unions in Art. 11 is expressed to be "for the protection of [one's] interests". So the ambit of such collective bargaining as is an essential element of that right extends to what is required if those interests are to be properly protected. Whatever the true ambit of that collective bargaining is, it cannot be limited merely to bargaining over (a) facilities for trade union officials and (b) the machinery for consultation. The interests which workers seek to protect by forming and joining trade unions go much further than that.

26. The reality is that in the field of industrial relations, collective bargaining between employers and trade unions is meaningless if it does not engage in some meaningful way with the terms and conditions of employment of the relevant section of the workforce. I did not understand Mr Reade to disagree with that, and in those circumstances it is unnecessary to increase the length of this judgment by citing the many sources from which Mr Hendy gleaned the proposition that, whatever else collective bargaining may be, it covers at the very least "negotiations over terms and conditions of employment". Indeed, it is inconceivable that when the Court in Demir held that the right to engage in collective bargaining had become one of the essential elements of the right to form and join a trade union, the Court would have regarded collective bargaining which was limited to the topics covered by Boots' agreement with the BPA as the sort of collective bargaining envisaged by Art. 11. That was regarded as axiomatic by Supperstone J in Netjets. Although he did not think that it was either necessary or appropriate in that case to consider the extent of the right to engage in collective bargaining, he did say at [42] that the reality was that if the union could not engage in collective bargaining with the employer "in relation to [the workers'] pay, hours and holidays", they would not be able to exercise their right under Art. 11 to engage in collective bargaining.

The two guiding principles in Demir

27. At [144] the Court in Demir said:

"… the evolution of case law as to the substance of the right of association enshrined in Article 11 is marked by two guiding principles: firstly, the Court takes into consideration the totality of the measures taken by the state concerned in order to secure trade union freedom, subject to its margin of appreciation; secondly, the Court does not accept restrictions that affect the essential elements of trade union freedom, without which that freedom would become devoid of substance."

In the light of these principles, Boots argued that the CAC should have held (i) that the restriction in para. 35 on the right of trade unions to engage in collective bargaining was within the margin of appreciation afforded to the State, and (ii) that para. 35 did not render the right of the PDAU to engage in collective bargaining with Boots devoid of substance. I deal with this argument briefly because it was articulated in Mr Reade's skeleton argument, and although it was not developed in the course of the hearing, Mr Reade said when responding to Mr Hendy's submissions that he was not abandoning it.

28. (i) The margin of appreciation. The rights guaranteed by Art. 11 are not absolute. Domestic law can impose such restrictions on their exercise as are necessary, among other things, for the protection of the rights and freedoms of others. The persons and bodies whose rights and freedoms might be affected by Boots being compelled to engage in collective bargaining with the PDAU are Boots itself, its pharmacists and the BPA. The recognition of the PDAU for the purposes of collective bargaining over terms and conditions of employment would affect

(a) the freedom of Boots to choose the trade union with which it engages in collective bargaining and to choose the topics which that collective bargaining will cover (in that connection Boots prefers to engage in collective bargaining with the BPA, and on limited topics not including the pharmacists' terms and conditions of employment),

(b) the freedom of Boots' pharmacists to be represented by the union of their choice (in that connection, and despite the PDAU's evidence to the CAC, it may turn out that they would prefer to be represented by the BPA rather than the PDAU and not to have their terms and conditions of employment to be the subject of collective bargaining at all), and

(c) the freedom of the BPA to choose how best to protect its members' interests by deciding which topics it should bargain with Boots over.

Mr Reade acknowledged that he could not rely on (a) since freedom of association under Art. 11 does not extend to the relationship between an employer and a trade union. But when it came to (b) and (c), he contended that para. 35 of the Schedule was there to prevent voluntary arrangements between an employer and a trade union being displaced by another trade union muscling in, and attempting to compel the employer to recognise it instead. The manifest purpose of para. 35 is therefore said to be the laudable one of maintaining good industrial relations between the employer and the trade union it chooses to recognise. The restriction in para. 35 on the right to engage in collective bargaining is said for that reason to be within the margin of appreciation afforded to the Government of the UK to impose legitimate restrictions on the exercise of that right.

29. There are, I think, a number of problems with this argument. First, it presupposes (at least for the most part) that the attack being made on the compatibility of para. 35 with Art. 11 relates to the whole of para. 35. It is in truth nothing of the kind. The challenge to para. 35 is limited to the fact that the right of one trade union to engage in collective bargaining with the employer can be blocked if another trade union has been recognised by the employer for the purposes of collective bargaining on topics which do not amount to the exercise of the right to bargain collectively at all. Secondly, there is no question of the freedom of Boots' pharmacists to be represented by the union of their choice being interfered with by the application of the PDAU for compulsory recognition for the purposes of collective bargaining. If the evidence before the CAC shows that the PDAU does not have the support of the majority of the pharmacists, at least one of the conditions for the grant of statutory recognition under the Schedule will not have been satisfied.
30. Thirdly, it is important to distinguish between those rights and freedoms which are expressly protected by the Convention, and those rights and freedoms which are not. As the European Court said in Chassagnou v France (1999) 29 EHR 615 at [113]:

"In the present case the only aim invoked by the Government to justify the interference complained of was 'protection of the rights and freedoms of others'. Where these 'rights and freedoms' are themselves among those guaranteed by the Convention or its Protocols, it must be accepted that the need to protect them may lead States to restrict other rights or freedoms likewise set forth in the Convention. It is precisely this constant search for a balance between the fundamental rights of each individual which constitutes the foundation of a 'democratic society'. The balancing of individual interests that may well be contradictory is a difficult matter, and Contracting States must have a broad margin of appreciation in this respect, since the national authorities are in principle better placed than the European Court to assess whether or not there is a 'pressing social need' capable of justifying interference with one of the rights guaranteed by the Convention."

But it then went on to say:

"It is a different matter where restrictions are imposed on a right or freedom guaranteed by the Convention in order to protect 'rights and freedoms' not, as such, enunciated therein. In such a case only indisputable imperatives can justify interference with enjoyment of a Convention right."

For the reasons I have given, the right guaranteed by Art. 11 is a right to engage in collective bargaining relating to the terms and conditions of employment of a particular group of workers. As I have said, the freedom of Boots' pharmacists to choose whether the BPA should continue to exercise that right on their behalf in preference to the PDAU is protected by the conditions for the grant of statutory recognition under the Schedule. I rather question whether the freedom of the BPA to choose what topics it should bargain with Boots over is an important freedom, but if that freedom is to be exercised in a way which denies the pharmacists their Convention right to engage in collective bargaining relating to the terms and conditions of their employment, there must be an indisputable imperative to justify that. I did not understand Mr Reade to suggest that such an indisputable imperative existed.

31. (ii) Devoid of substance. Boots' argument here is that even though para. 35 prevented the PDAU from invoking the procedure in the Schedule for obtaining compulsory recognition, there were other routes available to the PDAU by which it could try to achieve the same end. It could request the BPA to try to persuade Boots to extend the topics on which Boots negotiated with the BPA to cover the terms and conditions of employment of the pharmacists employed by Boots. Failing that, it could renew its attempts to persuade Boots to negotiate with it, reinforcing those attempts by calling on the pharmacists to take industrial action if necessary. These alternative routes which the PDAU could use to persuade Boots to recognise it meant that its inability to invoke the procedure for statutory recognition because of the application of para. 35 did not render its right to engage in collective bargaining "devoid of substance".
32. I cannot go along with this argument at all. The Schedule is all about the compulsory recognition of a trade union for the purposes of collective bargaining if the conditions for statutory recognition are satisfied. Once the right to engage in collective bargaining is regarded as an essential element of the right guaranteed by Art. 11, a trade union's inability to invoke the procedure which would enable it to exercise that right would render the right which it sought to exercise as devoid of substance.

Derecognition under Part VI of the Schedule

33. Where a trade union which does not have a certificate of independence has been recognised by an employer for the purposes of collective bargaining, Part VI of the Schedule provides a mechanism for another trade union to get the recognised trade union derecognised. Para. 137 of the Schedule enables workers within the relevant bargaining unit to apply to the CAC "to have the bargaining arrangements [between the employer and the trade union it has recognised as entitled to conduct collective bargaining on behalf of the workers] ended". If that trade union is derecognised as a result of a declaration by the CAC to that effect, the way is open for another trade union to apply to the CAC for statutory recognition under the Schedule. If the PDAU had chosen to adopt this route, it is said that the barrier in para. 35 of the Schedule to its application for statutory recognition would have been removed. In the event, the PDAU did not adopt this route. In other words, it did not get any of the pharmacists employed by Boots, i.e. any of the workers within the relevant bargaining unit, to apply to the CAC to have the bargaining arrangements between Boots and the BPA ended. So Boots' argument in the CAC was that, whatever the effect of Demir may have been, para. 35 did not have to be rewritten for the PDAU's application for statutory recognition to be considered by the CAC on its merits. All it needed to do was to persuade one of the pharmacists to initiate an application for derecognition. Putting it in another way, para. 35 did not render the pharmacists' right to engage in collective bargaining "devoid of substance", because the barrier which para. 35 placed in the way of any application by the PDAU for statutory recognition could be removed by a successful application for derecognition.
34. This argument, of course, presupposes that Boots' pharmacists no longer want the BPA to look after their interests at all. That may not be correct. It may be 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. In those circumstances, why should they be forced to abandon their reliance on Boots' agreement with the BPA?
35. This was not how the CAC looked at things. In order to understand how the CAC approached Boots' argument, it is necessary to set out the relevant provisions of Part VI. They are paras. 134-136. They provide:

"134. (1) This Part of this Schedule applies if –

(a) an employer and a union (or unions) have agreed that the union is (or unions are) recognised as entitled to conduct collective bargaining on behalf of a group or groups of workers, and

(b) the union does not have (or none of the unions has) a certificate of independence.

(2) In such a case references in this Part of this Schedule to the bargaining arrangements are to –

(a) the parties' agreement mentioned in sub-paragraph (1)(a), and

(b) any agreement between the parties as to the method by which they will conduct collective bargaining.

135. In this Part of this Schedule –

(a) references to the parties are to the employer and the union (or unions);

(b) references to the bargaining unit are to the group of workers referred to in paragraph 134(1)(a) (or the groups taken together).

136. The meaning of collective bargaining given by section 178(1) shall not apply in relation to this Part of this Schedule."

36. The CAC focused on para. 136, the effect of which was that the phrase "collective bargaining" in Part VI of the Schedule did not have the meaning given to it by section 178. In that respect it was similar to para. 3(2) of the Schedule, which provided that the phrase "collective bargaining" in Part I of the Schedule likewise did not have the meaning given to it by section 178 – as well as being similar to paras. 54(2) and 94(2) of the Schedule which also provided that the phrase "collective bargaining" in Parts II and III of the Schedule respectively did not have the meaning given to it. The CAC also noted that para. 136 did not provide an alternative definition for the phrase "collective bargaining" in Part VI. In that respect, it was different from para. 3 (and from paras. 54 and 94), because para. 3(3) went on to provide that the phrase "collective bargaining" in Part I of the Schedule referred to "negotiations relating to pay, hours and holidays", albeit subject to para. 3(4), even though by para. 3(6) that definition was not to apply in construing para. 35, and because paras. 54 and 94 went on to provide what the phrase "collective bargaining" in Parts II and III of the Schedule respectively meant. Despite that, the CAC added that "[c]ommon sense would suggest" that the phrase "collective bargaining" in Part VI of the Schedule was intended to bear the meaning given to the phrase "collective bargaining" in para. 3(3).
37. That led the CAC to conclude that the mechanism for derecognition was not available to the PDAU. It said:

"It follows therefore that since, for the purposes of Part VI the s.178 definition does not apply, Part VI has no application where there is an agreement, such as the Agreement in this case, which covers matters which are only considered to amount to collective bargaining under s.178, but which would not amount to collective bargaining under a statutory recognition claim. If Part VI has no application, it means that the Agreement covering only matters in s.178(2)(f) & (g) cannot be dislodged by the Union members in the proposed bargaining unit, to enable the Union to bring a Part I claim. The Union is in a classic Catch 22: because the BPA agreement does not cover pay, hours and holiday, the Union members cannot apply for the BPA to be derecognised so that the Union can then apply for recognition on pay, hours and holidays."

38. Boots challenges the premise on which this conclusion was based. It does not follow that the definition of the phrase "collective bargaining" in para. 3(3) should apply to the phrase "collective bargaining" in para. 134(1)(a). On the contrary. The fact that the phrase "collective bargaining" in para. 134(1)(a) was not defined by reference to the definition of "collective bargaining" in para. 3(3) was the very reason why the definition of "collective bargaining" in para. 3(3) should not be treated as applying to the phrase "collective bargaining" in para. 134(1)(a). It was therefore the CAC which created the interference with Art. 11 by adopting a construction of the phrase "collective bargaining" in para. 134(1)(a) which prevented the PDAU from applying to the CAC through one of Boots' pharmacists for the bargaining arrangements between Boots and the BPA to be brought to an end.
39. At first blush, this argument is not without force. It would have been questionable whether it was right for the CAC to define the phrase "collective bargaining" in para. 134(1)(a) by reference to the definition of "collective bargaining" in para. 3(3) simply because that was what commonsense would suggest, without explaining why that was what commonsense would suggest. But the fact that there is no definition of the phrase "collective bargaining" in para. 134(1)(a) nevertheless means that the lacuna has to be filled by giving the appropriate definition to the phrase. That was for the CAC to decide. It was not as if the CAC had nothing to go on. Para. 171 of the Schedule provides:

"In exercising functions under this Schedule in any particular case the CAC must have regard to the object of encouraging and promoting fair and efficient practices and arrangements in the workplace, so far as having regard to that object is consistent with applying other provisions of the Schedule in the case concerned"

One of the functions which the CAC had to exercise under the Schedule was to construe the phrase "collective bargaining" in para. 134(1)(a). So in the light of para. 171, when deciding how the phrase "collective bargaining" in para. 134(1)(a) should be construed, the CAC was required to have regard "to the object of encouraging and promoting fair and efficient practices and arrangements in the workplace".

40. So what construction of the phrase "collective bargaining" in para. 134(1)(a) would encourage and promote fair and efficient practices and arrangements in the workplace? In the course of the hearing, Mr Reade suggested that since the purpose of the Schedule was to compel an employer to recognise a trade union for the purposes of collective bargaining if certain conditions are satisfied, the derecognition provisions in Part VI would not need to be used if the phrase "collective bargaining" in para. 134(1)(a) was interpreted as covering at least bargaining over terms and conditions of employment. What would be the point in seeking the derecognition of a trade union which was recognised as having those collective bargaining rights? The answer, in my view, is that Part VI of the Schedule only applies to a union which does not have a certificate of independence (see para. 134(1)(b)), and the workforce may well prefer to have their terms and conditions of employment negotiated by a trade union which is independent of the employer.
41. So how is the phrase "collective bargaining" in para. 134(1)(a) of the Schedule to be construed? Parliament cannot have intended that it be given the meaning in section 178: in para. 136, the definition in section 178(1) was expressly disapplied. That accords with where the definition of the phrase "collective bargaining" in section 178 came from. It mirrors the definition of the phrase "trade dispute" in section 244 of the 1992 Act. The fact that a dispute over any of the seven topics covered by section 244 should be regarded as a trade dispute does not mean that bargaining over any of those topics should amount to collective bargaining for all purposes. That, no doubt, is why the definition of the phrase "collective bargaining" was disapplied in many parts of the Schedule.
42. So if the phrase "collective bargaining" in para. 134(1)(a) of the Schedule is not to be given the meaning in section 178, what meaning should be given to it? In the absence of any statutory definition, the phrase must be given its ordinary and natural meaning. There is a clue in para. 35(2)(b) of the Schedule (as well as in para. 44(2)(b) of the Schedule which is also in Part I) as to what its ordinary and natural meaning is. They both describe pay, hours and holidays as "the core topics", by which is meant, I think, the core topics of collective bargaining. For the reasons given earlier in the judgment, I think that the ordinary and natural meaning of the phrase "collective bargaining" covers at the very least negotiations over terms and conditions of employment, though since para. 35(2)(b) of the Schedule speaks of pay, hours and holidays being the core topics of collective bargaining, I have concluded that the phrase "collective bargaining" in para. 134(1)(a) means negotiations over pay, hours and holidays. Giving the phrase "collective bargaining" in para. 134(1)(a) that meaning is the only way the CAC can act consistently with its duty to have regard to the encouragement and promotion of fair and efficient practices and arrangements in the workplace. Since Part VI of the Schedule did not apply as, on this construction of the phrase "collective bargaining", Boots and the BPA had not agreed that the BPA was entitled to conduct collective bargaining on behalf of Boots' pharmacists, the bargaining arrangements between Boots and the BPA were not terminable by the process in Part VI.

The interpretation of para. 35

43. That brings me to the words which the CAC said should be added to para. 35 of the Schedule in order to ensure that it was compatible with Art. 11. The law in this area is well established. The CAC's obligation to read and give effect to para. 35 in such a way as to make it compatible with Art. 11 so far as it was possible to do so permitted it to add words to para. 35 if that would achieve the desired result. But in the light of Ghaidan v Godin-Mendoza [2004] 2 AC 557, that would only have been permissible if the interpretation which the CAC thought had to be given to para. 35 to make it compatible with Art. 11 was "compatible with the underlying thrust of the legislation" (to use the words of Lord Nicholls at [33]), or "with the grain of the legislation" or was not "inconsistent with the scheme of the legislation or with its essential principles" (to use the words of Lord Rodger at [121]).
44. Mr Reade and Mr Hendy advanced different views about the thrust of the legislation. They agreed that para. 35 was intended to avoid disputes between trade unions about which of them should be recognised by a particular employer for the purposes of collective bargaining. They differed in how that was to be achieved. Mr Reade contended that in para. 3(6) Parliament had deliberately adopted a definition of collective bargaining for para. 35 which enabled an employer which had recognised one trade union for the purposes of collective bargaining even over very limited topics not to be faced with an application by another trade union for collective bargaining over topics which are of much greater concern to the workforce, such as their terms and conditions of employment. By contrast, Mr Hendy argued that the purpose of the Schedule was to provide an orderly mechanism by which a trade union could seek to be recognised for collective bargaining on what the Schedule called "the core topics", namely pay, hours and holidays. What, therefore, para. 35 sought to do was to avoid inter-union disputes about who should be recognised by the employer as entitled to bargain with the employer on those topics.
45. I fear that this concentration on the thrust of the legislation misses the point. As Lord Rodger said in Ghaidan at [110], "however powerful the obligation in section 3(1) may be, it does not allow the courts to change the substance of a provision completely, to change a provision from one where Parliament says that x is to happen into one saying that x is not to happen". In my opinion, that is the trap into which the CAC fell. Once para. 3(6) had said in express terms that the definition of the phrase "collective bargaining" in para. 3(3) was not to apply to the phrase "collective bargaining" in para. 35, i.e. once para. 3(6) had expressly prohibited the phrase "collective bargaining" in para. 35 from meaning "negotiations relating to pay, hours and holidays", it was not open to the CAC to add words to para. 35 to say that that was what the phrase "collective bargaining" in para. 35 does mean. The CAC should have given effect to para. 35 in accordance with its terms, even if that meant that the PDAU's right to engage in collective bargaining by invoking the Schedule was being violated.

A declaration of incompatibility?

46. But that is not necessarily the end of the matter. The CAC could not make a declaration of incompatibility, but I can. I could, for example, declare that para. 3(6) of the Schedule was incompatible with Art. 11 to the extent that it did not disapply the definition of the phrase "collective bargaining" in section 178 to the phrase "collective bargaining" in para. 35. That would, of course, have the effect of applying the definition of the phrase "collective bargaining" in para. 3(3) to the phrase "collective bargaining" in para. 35, but since para. 3(3) takes effect subject to para. 3(4), and since the effect of para. 3(4) would be to limit the phrase "collective bargaining" in para. 35 to the limited topics covered by Boots' agreement with the BPA, consideration would have to be given to whether para. 3(4) was incompatible with Art. 11 as well.
47. These are issues on which I was not addressed because the PDAU, which is not a defendant but merely an interested party to Boots' claim for judicial review, has not sought a declaration of incompatibility if the Court took the view that the CAC's rewriting of para. 35 was impermissible. In any event, rule 19.4A(1) of the Civil Procedure Rules prohibits the court from making a declaration of incompatibility unless notice has been given to the Crown, and that has not been done.

Conclusion

48. For these reasons, it is not appropriate for me to make any final order on this claim until the PDAU has had a chance to consider whether to apply in this litigation for a declaration of incompatibility, whether of para. 3(4), para. 3(6) or para. 35(1) of the Schedule with Art. 11, and if it chooses to do so, until the Crown has been given notice of the PDAU's intention to do so. The case must not be allowed to drift, and to maintain its momentum, I direct that the PDAU notifies the Administrative Court Office within 21 days of the handing down of this judgment what it proposes to do. I shall then consider whether a further hearing is necessary or whether a final order can be made. It is only when a final order is made, one way or the other, that I will consider what order to make about costs and whether the party which ultimately loses should have permission to appeal if such permission is sought. In the circumstances, it will not be necessary for any of the parties to go to the trouble and expense of attending court when this judgment is handed down. I regret the time which has elapsed since the hearing, but I was anxious to know what academics and other commentators had written about the effect of Demir. Unsurprisingly it took a little while for Mr Reade and Mr Hendy to assemble those materials. Ironically I have concluded that the outcome of this claim was not dependent on whether Demir went any further than to recognise that the right to freedom of association in Art. 11 included the right of a group of workers to engage in collective bargaining.