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Cite as: [1992] UKEAT 58_90_1012

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BAILII case number: [1992] UKEAT 58_90_1012

Appeal No. EAT/58/90

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 21 & 22 October 1992

Judgment delivered on 10 December 1992

Before

THE HONOURABLE MR JUSTICE WOOD MC (P)

MRS M L BOYLE

MR A D SCOTT

MR S M SPRINGER MBE

MRS M E SUNDERLAND JP

THE GOVERNMENT COMMUNICATIONS STAFF FEDERATION APPELLANT

(1) CERTIFICATION OFFICER

(2) COUNCIL OF CIVIL SERVICE UNIONS RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

APPEARANCES

For the Appellant Mr B Moore

(Chairman)

GCSF

Room A.0904A

Priors Road

Cheltenham

GLOS GL52 5AJ

For 1st RespondentMr D Pannick QC

Mr P Kilgarriff

Legal Adviser

Certification Office

27 Wilton Street

LONDON SW1X 7AZ

For 2nd RespondentsMr G Millar

(of Counsel)

Messrs Russell Jones & Walker

Swinton House

324 Gray's Inn Road

LONDON WC1X 8DH

MR JUSTICE WOOD (PRESIDENT): The Government Communications Staff Federation (GCSF) was formed in May 1985. It has been listed as a Trade Union. That took place under the provisions of the Employment Protection Act 1975 as have the proceedings to date, but as this is a rehearing before us upon both fact and law (S.136(6) of the Employment Protection (Consolidation) Act 1978) and the Trade Union and Labour Relations (Consolidation) Act 1992 (the 1992 Act) has recently come into force, it would probably be more helpful to refer to its provisions. (S.9(4) of the 1992 Act)

A Trade Union is entitled by payment of a fee to have its name listed provided that the Certification Officer is satisfied that the organisation is a trade union within the definition in S.1(a) of that Act; that the appropriate documents information has been provided, and that the name is not prohibited under S.3(4). A trade union within that Act means

"an organisation (whether temporary or permanent) -

(a) which consists wholly or mainly of workers of one or more descriptions and whose principal purposes include the regulation of relations between workers of that description or those descriptions and employers or employers' associations; or

..."

The listing of a trade union confers upon it some benefits, but a certificate that it is an independent trade union confers further rights. An application for a certificate of independence is made to the Certification Officer under S.6 (S.8 of the Employment Protection Act 1975) which provides -

"6 - (1) A trade union whose name is entered on the list of trade unions may apply to the Certification Officer for a certificate that it is independent.

The application shall be made in such form and manner as the Certification Officer may require and shall be accompanied by the prescribed fee.

(2) The Certification officer shall maintain a record showing details of all applications made to him under this section and shall keep it available for public inspection (free of charge) at all reasonable hours.

(3) If an application is made by a trade union whose name is not entered on the list of trade unions, the Certification Officer shall refuse a certificate of independence and shall enter that refusal on the record.

(4) In any other case, he shall not come to a decision on the application before the end of the period of one month after it has been entered on the record; and before coming to his decision he shall make such enquiries as he thinks fit and shall take into account any relevant information submitted to him by any person.

(5) He shall then decide whether the applicant trade union is independent and shall enter his decision and the date of his decision on the record.

(6) If he decides that the trade union is independent he shall issue a certificate accordingly; and if he decided that it is not, he shall give reasons for his decision."

Other relevant provisions of the 1992 Act are -

"S.7 - (1) The certification Officer may withdraw a trade union's certificate of independence if he is of the opinion that the union is no longer independent.

(2) Where he proposes to do so he shall notify the trade union and enter notice of the proposal in the record.

(3)-(6) ..."

"S.8 - (1) A certification of independence which is in force is conclusive evidence for all purposes that a trade union is independent; and a refusal, withdrawal or cancellation of a certificate of independence, entered on the record, is conclusive evidence for all purposes that a trade union is not independent.

(2)-(5) ..."

Finally we turn to the definition of a "independent trade union" which is now in a substantive section 5 (formerly it was in the "definition" section 30 of Trade Union and Labour Relations Act 1974). It reads -

"5. In this Act an "independent trade union" means a trade union which -

(a)is not under the domination or control of an employer or group of employers or of one or more employers' associations, and

(b)is not liable to interference by an employer or any such group or association (arising out of the provision of financial or material support or by any other means whatsoever) tending towards such control;

and references to "independence", in relation to a trade union, shall be construed accordingly."

On 20th April 1989 GCSF applied to the Certification Officer for a certificate of independence. Objections were received from the TUC and the Council of Civil Servant Unions (CCSU). This is the mother body for a number of independent Trade Unions whose members include civil servants. This application was rejected by a letter from the Certification Officer of 15th December 1989.

GCSF now appeal. The first Respondent is the Certification Officer. CCSU applied for and was granted leave to be joined as the second Respondent.

GCSF was represented by its General Secretary, Mr Moore, who made a long opening statement which was taken as his evidence in chief. He also handed in a written statement dated 24th August 1992. There were substantial bundles of agreed documentation from all parties much of which was duplicated. Mr David Pannick for the Certification Officer called no oral evidence. He submitted a statement from the Certification Officer which was only challenged by Mr Moore on some very minor matters of detail. We have treated it as a pleading. He can give no factual evidence.

Mr Millar, for CCSU, called Mr Peter Jones who, until 31st May 1992 was its General Secretary. A statement was filed on behalf of CCSU from the present General Secretary, Mr John Ellis, but he was not called although Mr Moore would have wished to cross-examine him. We have assured Mr Moore that the written evidence of Mr Ellis would therefore be totally ignored.

A proper understanding of the issues involved in this case demands an appreciation of the exceptional background involving National Security, in all its facets, and perhaps in particular in the sphere of intelligence gathering. There are inevitably areas of sensitivity where national interest must take priority over individual rights and rights of associations; it is the duty of Government to preserve the organs of national security from disruption.

On 25th January 1984 Sir Geoffrey Howe, as a Principal Secretary of State, issued two certificates. One was under S.121 and the other under S.138 of the 1978 Act. The effect of these was that employees at GCHQ did not have the protection of nor the other rights granted by that Act. Their rights depended solely on the terms of their contracts of service.

Paragraph 4 of the Civil Service Order in Council 1982 provides -

"4.As regards Her Majesty's Home Civil Service -

(a) the Minister of the Civil Service may from time to time make regulations or give instructions -

(i)relating to the selection and recruitment of persons to situations in the grades listed in Parts 1, 2 and 3 of the Schedule to this Order (including, in particular, regulations or instructions prescribing the qualifications for appointment to such situations and providing for such appointments being made on merit by means of open competitions, subject only to such exceptions as may be specified);

(ii)for controlling the conduct of the Service, and providing for the classification of all persons employed therein and, so far as they relate to matters other than remuneration, expenses and allowances, the conditions of service of all such persons; and

(b) the Treasury may from time to time make regulations or give instructions providing for the number and grading of posts in the Service, the remuneration, expenses and allowances of all persons employed therein and, so far as they relate to remuneration, expenses or allowances, the conditions of service of all such persons."

By a Notice GN/84 and in reliance upon the Order in Council, the terms and conditions of service of employees at GCHQ were altered. The notice explained that Government had decided -

"a. that it had become essential to except staff from the provisions of certain employment legislation on the grounds of national security;

b. that recognition of existing trade unions in respect of employment at GCHQ is to be withdrawn;

c. that accordingly GCHQ staff will not be permitted to be members of any existing trade union;

..."

It also indicated that the Director would be writing to each member of staff inviting acceptance of the revised terms and conditions of service.

The new conditions of service included a clause -

"National Trade Unions

3. National trade unions are not recognised in respect of employment at GCHQ. This means that members of GCHQ are not permitted to be members of trade unions other than a Departmental Staff Association approved by the Director GCHQ. Disciplinary action may also be taken against anyone who is involved in industrial action."

The Option Form was sent to all staff at GCHQ. The relevant part reads -

"OPTION FORM

(to be completed by all GCHQ staff)

Complete either A or B

A.I, ........... have read and understood General Notice 100/84 and wish to continue to be employed at GCHQ. I agree to resign from membership of any trade union to which I belong. I also undertake not to join a trade union or to engage in its affairs or to discuss with its officials my terms of employment or conditions of service or any other matter relating to my employment at GCHQ. I understand, however, that I may join a Departmental staff association approved for the time being by Director GCHQ.

(Signed) ............ (Date) ...............

(Division/Station .............. (Grade) ..............

B. ..."

The broad effect of all this was that staff thereafter had no right to bring proceedings before an Industrial Tribunal and that the only Trade Union of which they were entitled to be members was GCSF.

As a result of these steps taken by Government, CCSU sought Judicial Review upon the basis that it had not been consulted. This was refused. The facts lying behind the decision of Government are conveniently summarised in the speech of Lord Fraser of Tullybelton in the House of Lords - [1985] ICR 14 at p.21H - 23B.

"It is necessary to refer briefly to the events which led up to the decision on 22 December 1983. Between February 1979 and April 1981 industrial action was taken at GCHQ on seven occasions. The action took various forms - one day strikes, work to rule, and overtime bans. The most serious disruption occurred on 9 March 1981 when about 25 per cent of the staff went on one-day strike and, according to Sir Robert Armstrong, the Secretary to the Cabinet, who make an affidavit in these proceedings, parts of the operations of GCHQ were virtually shut down. The appellants do not accept the respondent's view on the seriousness of the effects of industrial action upon the work at GCHQ. But clearly it must have had some adverse effect, especially by causing some interruption of the constant day and night monitoring of foreign signals communications. The industrial action was taken mainly in support of national trade unions, when they were in dispute with the Government about conditions of service of civil servants generally, and not about local problems at GCHQ. In 1981 especially it was part of a campaign by the national trade unions, designed to do as much damage as possible to Government agencies including GCHQ. Sir Robert Armstrong in his affidavit refers to several circular letters and "campaign reports" issued by CCSU and some of its constituent unions, which show the objects of the campaign. One of these is a circular letter dated 10 March 1981 from the Society of Civil and Public Servants. In a paragraph headed "Selective Strikes" the letter states as follows:

"Union members at certain key Government sites are now on permanent strike. This is the first phase of the selective action: it includes naval supplies and dockyards, locations where the Government finance machine can be disrupted, a Government surveillance centre and the DHSS contributions records computer." (emphasis added.)

Among the selective strike areas referred to in the list appended to the letter is "GCHQ Bude, Cornwall." The seriousness of the intended challenge to the security system of this country can be gauged from the literature issued at the time by the CCSU, of which the following are examples:

"Our ultimate success depends upon the extent to which revenue collection is upset, defence readiness hampered, and trading relations disrupted by this and future action."

"Walk-outs in key installations have affected Britain's defence capability in general, and crippled the UK contribution to the NATO exercise 'Wintex'."

"another vital part of the Government's Composite Signals Organisation ... is to be hit by a strike from Friday, 3 April."

"48-hour walk-outs have severely hit secret monitoring stations belonging to the Composite Signals Organisation. The Government is clearly worried and will be subject to huge pressure from NATO allies."

"Defence plans have been upset by the continuing action at naval supplies depots, dock-yards, and other crucial establishments."

Approaches were made on behalf of the Government to local union officials, and later to national CCSU officials, to dissuade them from action which would directly adversely affect operations at GCHQ. Some co-operation was given by the local officials, but none at all by national officers. Sir Brian Tovey (former director of GCHQ) gave evidence to the Employment Committee of the House of Commons on 8 February 1984 and told them that, after one of his subordinates had sought to explain to the general secretary of one of the trade unions the serious consequences that might follow from disruption of certain parts of GCHQ work, the answer was "Thank you. You are telling me where I am hurting Mrs Thatcher the most." "

In an attachment to a circular sent by the Director of GCHQ to all members of staff there is reference to "The Staff Association" -

"5. The Staff Association will be established permanently to represent all members of GCHQ and (industrial and non-industrial), but will be able (if staff wish) to have separate sections for the different disciplines - for example Radio, Science and Technology, Administration and Support. Its constitution will be for staff to propose, but must be acceptable to the Director (the main provisos will be no external membership or affiliation) so as to ensure that it will not come under outside influence. All GCHQ staff will be able to be members. People experienced in Whitley and Industrial trade union affairs have already been invited to help in forming the Association, but all members of GCHQ will be eligible for office...."

The initiative for its establishment was to remain with the staff. A Steering Committee meeting was held on 15th May 1984 and after further several meetings a draft constitution was prepared and put to a Referendum. As a result GCSF was formed early in 1985 and a general executive council chosen. GCSF was accorded sole negotiating rights on departmental issues.

There is one particular matter to which Mr Moore attaches great importance and that is the Framework Agreement to which is annexed "The arbitration arrangements". It is his submission that GCSF has a binding right to proceed unilaterally to arbitration upon all matters in dispute and that the management of GCHQ is virtually bound by any award. He relies upon clause 10 of Agreement which reads -

"Terms of Agreement

10. This agreement will come into effect upon exchange of letters and may be terminated by either side giving 12 months notice. Any amendment to this agreement will be dependent upon the mutual agreement of both parties."

It must however be noted that in clause 2 under the heading of "Aims and objectives" the following appears -

"2.Subject to the overriding objective of maintaining effective operations at GCHQ at all times, the aims and objectives of this agreement are: ..."

Moreover the matters which can be referred to arbitration are limited to those concerning "emoluments". These are defined as including "pay, weekly hours of work, annual leave, allowances in the nature of pay, bonuses, overtime rates, subsistence rates, travelling and lodging allowances and similar terms and conditions of employment, to the extent that these are exclusive to employment at GCHQ."

The relevant statutory provisions have been set out above. It is our function to consider all the evidence afresh and to reach our free and independent decision. This is not an appeal in the ordinary sense. GCSF must satisfy us -

a.that it is not under the domination or control of the management of GCHQ, which in effect will no doubt be controlled by Government: and,

b. that it is not liable to interference by that management whether arising out of the provision of financial or material support or by any other means whatsoever which tends towards control. This is to apply the definition of "independent trade union" under S.5 of the 1992 Act.

The phrase "liable to interference" in S.5 has been considered by the Court of Appeal when examining section 30 of the Trade Union Law Reform Act 1974 in Squibb UK Staff Association v. Certification Officer [1979] ICR 235. The facts of that case are not material, but we would take our guidance from passages in the judgments of all three members of the Court. At p.245B Lord Denning MR said -

"... To be independent the trade union must be one which "is not liable to interference by an employer ...tending towards such control."

The Certification Officer interpreted the words "liable to interference" as meaning "vulnerable to interference" or "exposed to the risk of interference" by the employer. Whereas Mr Irvine for the association suggested that it meant "likely" or "not unlikely" to be subjected to interference by the employer. ..."

In that passage the learned Master of the Rolls is clearly posing the issue before the Court of Appeal.

Later in deciding that issue the learned Master of the Rolls says this at p.245F -

"I agree that there are two possible meanings of the word "liable." It is a very vague and indefinite word. Having heard very good arguments on both sides, it seems to me that the Certification Officer's interpretation of "liable" is correct and the staff association's interpretation is not correct. One has to envisage the possibility that there may be a difference of opinion in the future between the employers and the staff association. It does not matter whether it is likely or not - it may be completely unlikely - but one has to envisage the possibility of a difference of opinion. It may be on the amount of pay; it may be on the question of a pension; it may be on the safeguards; and the like. Whatever it may be, there may be a difference of opinion. It may be a mere possibility. But when it arises, the questions have to be asked. What is the strength of the employers? What facilities could they withdraw? Section 30(1) of the Act of 1974 contemplates that the association may be liable to interference arising out of "the provision of financial or material support or by any other means whatsoever.""

In dealing with the facilities which could be taken away by the employer and which the Court of Appeal considered would effectively render the association vulnerable were the ability to take away the facility for time off for meetings and secondly, of free use of office accommodation. Those are very minor forms of interference which were open to the employer when compared with the facts of this case.

At p.247F Shaw LJ refers to the principle thus -

"The phrase "liable to" when used otherwise than in relation to legal obligations has an ordinary and well-understood meaning, namely, "subject to the possibility of." Counsel for the association has in fact contended that it means "subject to the likelihood of." Upon this basis, so the argument goes, the good relations which have long subsisted between the association and the employers belied the likelihood of the employers seeking to interfere with the affairs of the union so as to tend towards control of it; and the Certification Officer failed to pay due regard to the harmonious future which was suggested by the evidence of past goodwill."

Brandon LJ deals with the principle in two passages on p.248. The first reads -

"... Is the association exposed to risk of interference by the employers tending towards control of such association? If the answer to that question is "Yes," then the association is not an independent trade union. The degree of risk concerned is irrelevant so long as it is not insignificant or de minimis."

and

"... The sole question, as I read that part of the definition, is whether vulnerability to the relevant kind of interference exists or not. If it does, then the union or staff association concerned is not independent. The further question whether it is likely or not unlikely that the employers will exploit such vulnerability is not relevant."

Thus we ask ourselves, is GCSF vulnerable to the actions of management at GCHQ, of Government? Is there a risk that management could interfere with its freedom of action?

Mr Moore has presented his case with admirable clarity. No one could have said more. He made a number of specific points to each of which Mr Pannick replied.

First, he submitted that there was a degree of permanency about GCSF. He relied upon the terms of the Framework Agreement and on a number of passages in various documents that had been circulated during the course of the history of the Federation. We find ourselves unable to accept this.

That it is not permanent is made perfectly clear in a recent letter to Mr Moore from the present Director dated 9th December 1991, the relevant parts of which read -

"CERTIFICATE OF INDEPENDENCE

In your letter of 16th October you sought views on three matters which you and the GCSF's Council see as needing clarification in order to allow your appeal to the Employment Appeals Tribunal for a Certificate of Independence to proceed.

...

5. Your second question related to the statement in my predecessor's letter to staff of 21 February 1984 that the staff association would be established permanently. It was envisaged in 1984, and remains the Government's intention, that a staff association would be a permanent feature of staff relations at GCHQ for as long as the staff of GCHQ wished.

6. As you are aware, certain provisions were introduced prior to the establishment of a staff association which had the effect of ensuring that external influence could not be brought upon the staff of GCHQ. Were these conditions to be breached by the GCSF, it is conceivable that action would be taken which resulted in withdrawal of official recognition, facilities and support. Moreover, it would be possible for HMG, for whatever reason, to change the conditions of service of GCHQ staff in such a way as to prohibit them from joining or continuing to belong to the GCSF.

7. These factors mean that I cannot give an assurance that the GCSF will exist for all time. However, on the basis that there is no breach of the provisions aimed at preventing external influence being brought to bear on GCHQ staff, and in the absence of a fundamental change of Government policy with respect of arrangements for staff representation at GCHQ, I can confirm that it is the Government's intention that the GCSF should continue to exist for as long as the members of staff of GCHQ wish. As Director, I remain convinced that the retention of an effective in-house staff association is in the best interests both of GCHQ and its staff."

Then there is the wording of the Option Form signed by each member of staff. The reality is that if approval or recognition is withdrawn on grounds of National Security there is no sanction, indeed no remedy, open to the Federation. They are at the mercy of management at GCHQ and Government.

Mr Moore submits, secondly, that the framework agreement and the arbitration agreement provide him with a unilateral right to an arbitration in almost all circumstances. For the reasons which we have already given, in our judgment there is no such binding agreement, there is no indication that a system of arbitration could be utilised if management thought it was an inappropriate way to negotiate. The fact that there is 12 months' notice is really of little weight when one considers the power of GCHQ to disapprove of GCSF and of its right to terminate the contracts of service if a member of staff continued to be a member of the Federation thereafter.

Thirdly, Mr Moore submits that the staff at GCHQ are no different from any other civil servant in any other part of the Service. This does not seem to be so because other civil servants have rights under the 1978 Act. This is indeed recognised on p.50 of the GCSF Annual Report for 1991.

Fourthly, Mr Moore points out that there have been other associations in the past who have been granted certificates of independence and who on the facts of each case have been treated differently from the way in which GCSF has been treated. We note that the Certification Officer has power to recall certificates if he feels that the position has changed and in our view the other cases are distinguishable in that the right to bring proceedings before an Industrial Tribunal has not been removed. However, on general principle, because a certificate has been granted in another case does not mean that it should necessarily be granted in the present case. Each case must be considered on its own facts against the wording of the statute understood in the light of the decision in Squibb.

Fifthly, Mr Moore sought to make a distinction between GCSF itself and its members. He argued that although members might be forbidden to remain members nevertheless the Federation itself could continue to exist and would be unaffected by any action by management of GCHQ. We cannot accept that this is a relevant submission, as the Federation without members and without staff would really be a nonentity, a virtual vacuum.

Lastly, Mr Moore submits that affiliation with other trade unions has now been permitted by the constitution of GCSF without serious challenge from management and that in fact discussions have taken place with the EETPU. It is right that the constitution has been amended so that Part VI now reads -

"EXTERNAL AFFILIATION

16. The Federation shall not affiliate to any political organisation.

17. Affiliation to any other organisation shall only take place following the agreement of the membership and a referendum."

Even though that amendment to the constitution has been effected without the Federation itself being de-recognised or disapproved there has been no attempt at affiliation. Affiliation, as we understand that phrase is "an agreement by one organisation to be bound by the constitution of that other organisation". If any attempt to achieve this were to occur it seems to us more than obvious from the terms of the recent letter of December 1991 that GCSF would be instantly de-recognised. Indeed, any such attempt would undermine the years of good work and successful negotiation achieved by the Federation and its officers. We also had drawn to our attention the recent oral answer of the Minister of State (Hansard 18th February 1991 - p.15) - "Affiliation by the Government Communication Staff Federation at Cheltenham to any outside bodies would not be acceptable to the Government".

Mr Millar for CCSU adopted the submissions of Mr Pannick and sought to re-enforce the risk of de-recognition by reference to some answers of Sir Brian Tovey, the former Director of GCHQ to the Employment Committee of the House of Commons on 8th February 1984. The first answer upon which he relied was that referred to by Lord Fraser of Tullybelton at the end of the passage in his speech which we have already cited, and the second was a later comment by Sir Brian upon that former reply when he said -

"... The Unions were in fact frankly glad to have found what they regarded as a soft underbelly which they could attack."

It is also clear from the evidence of Mr Peter Jones for CCSU, that the hope and intention of all its constituent members is that there will be a return to the pre-1984 position. It is clear that CCSU will continue to campaign for restoration of effective independent trade unionism at GCHQ.

As we have reached such a clear view upon the issue raised by S.5(b), we do not find it necessary to reach a conclusion on S.5(a). We have to apply the statutory provisions in the light of the facts which in essence are not in dispute.

GCSF is entitled to be proud that it has established itself together with a properly functioning office and staff. It has successfully increased its membership and improved its financial base. It has succeeded in improving a number of facets of the terms and conditions of service of its members, and as we understand it pay is some 15% higher than the equivalent rates in the other parts of the Civil Service. All this reflects greatly to the credit of Mr Moore, his officers and staff.

However, it seems to us clear that GCSF is "vulnerable to interference", or "exposed to risk of interference", because -

a.Ministers have decided to withdraw recognition of existing trade unions in respect of employment at GCHQ and to make it a condition of service of every member of staff that they are not permitted to be members of a trade union other than a Departmental Staff Association approved for the time being by the Director of GCHQ, that is GCSF, and that disciplinary action will be taken against anyone involved in industrial action.

b.certificates issued by a Principal Secretary of State have withdrawn statutory employment rights from the staff employed at GCHQ which would otherwise be available to them.

c.there seems no good reason why these changes should not continue; indeed to return to the situation pre-1984 would be to invite once more the activities which were considered by Government to place the National Security at risk.

GCSF therefore operates under a basic constraint that its continued existence depends upon the approval of the Director. If approval were withdrawn, members of the staff could not continue as members of GCSF, at least if they were involved in industrial action, because such membership would be incompatible with the conditions of service. Moreover, a threat to disapprove would necessarily affect any decision which GCSF was considering in the realms of industrial negotiations. Thus, a decision reached in those circumstances would be affected by the knowledge that some other course might involve the removal of approval.

We are therefore driven to the conclusion that GCSF has failed to satisfy S.5(b) of the 1992 Act; that this appeal must be dismissed and the Certificate of Independence refused.