News - Royal Mail Group Ltd v Communication Workers Union [2017] EWHC 2585 (QB)

Employment & Discrimination - John Hendy QC, Sarah Keogh

Supperstone J grants injunction restraining strike action until contractual dispute resolution procedures are exhausted

John Hendy QC and Sarah Keogh of Old Square Chambers were instructed to represent the Communication Workers Union, defending Royal Mail’s application for injunctive relief to restrain the CWU from calling its members to industrial action.

The CWU represents 111,000 of Royal Mail’s postal workers. In 2013 the CWU entered into a collective agreement with Royal Mail known as “Agenda for Growth” (“AfG”), which appends a legally binding contract containing various protections for workers. A Schedule to the contract set outs dispute resolution procedures, providing that where agreement cannot be reached in respect of a matter at national level within one month of discussions commencing, unless both parties agree that the disagreement is likely to be resolved within a further agreed period, either party may refer the matter for External Mediation. Once commenced, an External Mediation clause contains a strict timetable (taking a minimum 8 week period to exhaust) for mediation of a dispute. The Schedule contains a further  provision that until the procedures have been exhausted in respect of any dispute, the CWU will not call on its members to take strike action in relation to that dispute.

In late 2016 and early 2017 the parties were in discussions in relation to a number of matters, including the CWU’s proposals for a new pension scheme following Royal Mail’s consultation to close its defined benefit pension plan, a shorter working week, and its 2017 pay claim. No resolution was reached on any issue.

The CWU conducted a ballot. The result on 3rd October 2017 was overwhelmingly in favour of industrial action. On 5th October 2017 the CWU gave notice to Royal Mail of an intention to strike from 19th to 21st October 2017. The same day, Royal Mail wrote to the CWU stating that it was referring the dispute to External Mediation, and seeking confirmation that the CWU would not have recourse to industrial action until the dispute resolution procedures in AfG had been exhausted. An application for injunctive relief was made on 9th October 2017, citing a breach of contract for failing to withdraw the call for industrial action until exhaustion of the External Mediation procedure.

At the hearing on 12th October 2017 before Supperstone J, Royal Mail raised no argument that industrial action was tortious such as to call into play the protections under s.219 TULRCA 1992 (a challenge to the CWU’s compliance with the statutory requirements was raised in correspondence but was not pursued). The parties agreed that the issue between them was whether, on a proper construction of the legally binding contract in AfG, Royal Mail was entitled to refer the dispute to External Mediation, and the CWU was in breach of contract by continuing its call to industrial action.

In considering whether there was a serious issue to be tried, the court was invited to apply an analogous approach to that set out in s.221 TULCRA 1992, namely that the court should consider the merits of the matter should it proceed to a full trial, in order to avoid denying the CWU’s fundamental right pursuant to Article 11 of the European Convention of Human Rights to call strike action.

The principles of contractual interpretation, it was agreed, were those set out by Lord Hoffman in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912-913 (recently endorsed by the Supreme Court).

It was the CWU’s position that the clause permitting referral to mediation had to be construed in light of other clauses in AfG, including provision that the parties should deal with any dispute for resolution in accordance with the procedures as soon as reasonably practicable, that matters should be dealt with “at pace”, and that the objective of the dispute resolution procedures was to reach agreement without undue delay. It was further argued that the requirement to deal with matters ‘as soon as reasonably practicable’ should be considered by analogy to the interpretation of the phrase by Kay LJ in Metrobus Ltd v Unite the Union [2009] EWCA Civ 829, who considered the words to impose ‘a hard-temporal burden’.

The effect was that once discussions had been ongoing for one month, the parties were then required to elect as soon as reasonably practicable, and in any event without undue delay, whether to refer to External Mediation or not. Time was of the essence and it was not open to the parties to wait weeks or months to refer. The clause did enable the parties to agree to extend this period, and it would be open to the parties to seek External Mediation at any time by consent. It was not in dispute that the parties had been in discussions for many months. However, there had been no agreement to extend time. In the circumstances, the time to refer the matter to External Mediation had long since passed. It could not have been intended that the provisions could be used unilaterally months after a dispute had arisen simply to thwart a call for industrial action.

Supperstone J examined the provisions of AfG.  He concluded that the wording of the Schedule was clear, that either party may refer the matter for External Mediation at any time after one month of discussions commencing, unless both parties agreed that the disagreement was likely to be resolved within a further agreed period. He considered that it did not make business common sense, and it was unlikely to contribute to a sensible industrial outcome, to deny either party the opportunity to refer a disagreement to external mediation unless done so immediately or very shortly after one month of “discussions” commencing. In the circumstances he considered the CWU was in breach of contract of its continuing obligation not to call for strike action until the External Mediation process had been exhausted.

Supperstone J went on to find that damages would not be an adequate remedy, and that the balance of convenience was in favour of Royal Mail. In the circumstances injunctive relief was ordered. It was expressly noted that the CWU would still have the opportunity to call its members out on strike if External Mediation turns out to be unsuccessful. The final order includes provision for the CWU to apply to extend the validity of the ballot beyond 6 months to take into account the time lost by the External Mediation process.

The decision in this matter turned on the specific provisions of the AfG. It does confirm however the principle that it is open to a union to negotiate an agreement about the timing of industrial action which could modify or override its Article 11 rights. Supperstone J in this case was not minded to have any regard to surrounding provisions requiring prompt action by the parties. While “no strike” or comparable clauses may be attractive to both employer and union alike in some circumstances, it is clear from this decision that such clauses should be drafted with care to avoid any ambiguity as to the time at which they may take effect.

On the other side of the coin, employers will need to consider very carefully the time at which such clauses are deployed. In the present case, a strike which was due to take place in October may now be pushed extremely close to Christmas or into the busy January sales period if agreement cannot be reached. This may in this case provide a strategic advantage to the CWU as it enters into the forced period of External Mediation.

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