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Industrial Relations (Closed Shop)

Volume 929: debated on Thursday 7 April 1977

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3.30 p.m.

Just over a year has passed since the Trade Union and Labour Relations (Amendment) Act received its Royal Assent on 25th March 1976, and whatever view one takes of the closed shop, it is a matter of the keenest public interest and it is right that the House should consider, albeit for only half an hour, what the story has been over the past year and since the 1974 Act.

Both the Act of 1974 and that of 1976 were criticised strongly from these Benches. Fears were expressed that the legalisation of the closed shop and the absence of safeguards for those who did not want to join a union would result in a serious erosion of individual liberty and a massive extension of union power.

Those fears have proved to be well founded. The debate gives the Minister a chance to give the Government's view on some of the most objectionable features of the closed shop. I say that advisedly because one of the most disquieting features of the Government's attitude is their repeated statements that their policy is one of neutrality. In an answer to me on 19th October, the Minister of State at the Department of Employment said:
"The Government maintain a neutral policy towards the closed shop. It is entirely up to employers and unions to decide whether or not they wish to operate a closed shop in any particular case"—[Official Report, 19th October 1976; Vol. 917, c. 1101.]
On Tuesday this week, in reply to another question, the hon. Gentleman said that the Government's policy on these matters was one of neutrality.

The Minister must understand that this Government passed the 1974 and 1976 Acts and have stood aside as those with deeply-held personal convictions and long years of service have had them ignored and set aside. The Government have therefore not been neutral, as they suggest, but have, in fact, been intensely partial in these matters.

Paragraph 598 of the Donovan Report says:
"In our view, the Closed Shop as it operates at present is not always in the best interests either of workers or of the community as a whole. It is liable from time to time to cause substantial injustice to individuals from which they have no effective means of redress."
I believe that that comment, made nearly 10 years ago, has been proved to be justified to the full by our experience since that report was written.

In evidence to the Donovan Commission, the former Ministry of Labour drew attention to four instances in which the closed shop might interfere unduly with the freedom of the individual. The first was where workers have conscientious reasons for not belonging to trade unions. The second was where workers, although willing to belong to a trade union, are refused admission or are expelled unreasonably. The third was where there are irregularities in the conduct of affairs of a union operating a closed shop and individaul members are adversely affected. The fourth was where a closed shop is introduced in an establishment where 100 per cent. membership does not already exist.

I wish to refer to the case of British Rail, where two of those four conditons, which were given as warnings by the former Ministry of Labour, have applied in an industry which is publicly owned and for which the Government therefore have a special responsibility.

As the Minister knows, since January 1966 there has been a pre-entry closed shop operated by British Rail. But the closed shop was also applied to existing employees of British Rail. They were exempted from the requirement to join a union only on the grounds of genuine religious belief. As a result, British Rail dismissed 31 of its employees. Of those, six had between 13 and 19 years' service, five had between 29 and 39 years' service and two had more than 39 years' service. Of those 31, six were dismissed because the regional appeal body found that the religious grounds were not sufficient and 25 were dismissed because they had other conscientious grounds for not joining a union. It is simply not good enough for the Government to say that they are neutral when 31 employees in a publicly owned industry, some of whom had given a lifetime of service, are dismissed because they do not wish to join a union, particularly where that is a new condition imposed on employees in the course of their employment.

I wrote to the Leader of the House when he was the Secretary of State for Employment on 4th December 1975. He replied on 7th January last year as follows:
"I could not accept that a condition of employment relating to union membership which has the effect of making someone decide not to take a certain job is more of an infringement of individual liberties than any other condition of employment which proves unacceptable to certain individuals—such as, for instance, that the employee should be prepared to travel or should have to contribute to a firm's pension scheme."
That is a ludicrous proposition. If an employee does not wish to travel, or does not wish to contribute to a firm's pension scheme, he can obtain another job where such preconditions do not apply. It was absurd for the Leader of the House to compare the unwillingness of a man to join a union with the unwillingness of a man to travel or contribute to a pension scheme.

On 29th October 1975 the present Secretary of State for Employment, who was then Minister of State, wrote to my right hon. Friend Lord Carr stating:
… "of course the man who claims that he objects on grounds of principle or conscience to joining a trade union is at liberty to seek alternative work where management and employees have not agreed that trade union membership should be a condition of employment."
That letter from the Secretary of State shows how out of touch the Government are with the real world. The man who objects today on grounds of principle or conscience, to use the right hon. Gentleman's words, to joining a trade union is finding it increasingly difficult to obtain employment because the closed shop is being rapidly expanded.

The closed shop is not a static concept. It is being extended all the time. If the present trend continues, if the unions have their way, and if the Government continue to act in collusion with the unions we shall find that the man without a union card will discover it impossible to get a job. If that happens we shall have a closed shop Britain.

I believe that the founding fathers of the trade union movement and of the Labour Party would be appalled that nowadays workers are being conscripted into the unions as a precondition of employment, instead of joining as volunteers. The concept devised by the founders of the trade union movement was that the unions should be there to protect those who had voluntarily sought the protection and support of the unions in securing better wages and conditions.

During the war those who objected on religious or conscience grounds to joining the Armed Forces were not compelled to do so. Thirty years later, however, workers are compelled to join a union whatever their religious or conscientious objections, or they are denied the right to work. In the nationalised industries, in the public corporations and in the Government service there is an increasing probability, fast becoming a certainty, that those who lose their jobs because they will not or are not able to join a union will have increasing difficulty in finding employment elsewhere.

It is a denial of individual liberty that an existing employee should be compelled to join a union against his will or lose his job, as happened in British Rail. Those who have strong personal convictions which make it impossible for them to join a union should be exempt from membership.

Any closed shop agreement should protect the rights of members of professions, the codes of conduct of which forbid them to take part in industrial action. There should be an independent tribunal to which those who have strong personal convictions against union membership or who are arbitrarily excluded or expelled from a union should have a right of appeal.

There are, however, even wider issues than this. Anyone who has followed the story of the National Union of Journalists will understand the real threat which is posed by the closed shop to the freedom of the Press.

Rolls-Royce (1971), which is the nationalised aero division, now insists that sub-contractors doing work at its Coventry works must employ only trade union labour. In a letter sent to all contractors and suppliers this nationalised industry wrote,
"in no circumstances is non-union labour to be utilised by sub-contractors on premises of Rolls-Royce (Coventry) Ltd. Factories".
It continues,
"It is your responsibility to ensure that in future every person employed by you or by others on your behalf are in possession of the necessary union cards."
This country alone in Western Europe is seeing a rapid extension of the closed shop. It is seeing the elevation of trade unions into a new master race.

It is understandable that Members of this House and others should say, "We do not think that it is worth standing up for the rights of that comparatively small minority of workers who do not want to join unions." But this House is deeply concerned about the rights even of a small number of citizens. Indeed, many of us believe that we were sent here partly to ensure that minorities as well as the majority have rights.

The purpose of this debate is to champion the cause of the minority, to champion the cause of individual freedom, to ask the Government to look again, in the light of the history of these past months, at the closed shop to which their own legislation has given birth and extended and to challenge the proposition that it is proper for the Government in a matter of such importance to remain neutral.

3.46 p.m.

The hon. Member for Eastbourne (Mr. Gow) has been very persistent in recent months in asking questions about the closed shop. It is one of the more controversial and perhaps most misunderstood subjects in industrial relations. Therefore, I welcome this opportunity to put the record straight at greater length than has been possible in the House recently and to reply to the hon. Gentleman in fuller terms than I have been able to employ previously about the closed shop and the effects of legislation.

Closed shop arrangements have been part of the industrial relations scene in the United Kingdom for many years. Contrary to popular belief, they were for many years before 1971 perfectly lawful. Indeed, contrary to the hon. Gentleman's assumption, they are widespread in other countries—even in countries where they are theoretically illegal. Like other collective agreements, they reflect what the people concerned in a particular bargaining group consider suits their circumstances.

It is foolish to believe that the law could eradicate such agreement or that in practice it would be able to do so. The Industrial Relations Act amply proved that point. The Industrial Relations Act granted employees a statutory right not to belong to a trade union and sought to outlaw the closed shop, except on certain narrowly defined circumstances. That proved totally unenforceable in practice.

An illuminating study on the effects of the Act, carried out by the University of Warwick, showed that in general, during the period when the Industrial Relations Act was in force, closed shops were maintained notwithstanding the law. Moreover, employers defended them—often almost as tenanciously as did the workers themselves.

I am glad that this point now seems to have been taken on board at least by the Opposition Front Bench. I understand that there are no proposals from that quarter for the reintroduction of such measures.

The failure of the Industrial Relations Act was not altogether surprising since, as is becoming more widely recognised, closed shop arrangements can be of advantage to both sides of industry. For trade unions, these advantages are obvious: greater solidarity and support—hence, greater bargaining power—increased membership and finance—no free riders—and a reduction in the risk of breakaways and competition.

But there can be significant advantages for employers, too: in particular, more stable collective bargaining arrangements; the avoidance of inter-union disputes; full representation of their employees in negotiations; better union discipline over members—an advantage recently well illustrated in The Times newspaper dispute—and probably more chance that agreements and established procedures will be adhered to.

The repeal of the Industrial Relations Act, which was universally welcomed, inevitably removed the statutory ban imposed by the then Tory Government. The consequences of doing so have been widely misrepresented. This afternoon I hope to clear up some of the misconceptions about it.

It is alleged that the Government favour the closed shop and have sought to encourage it. Not so. No matter how tedious the hon. Gentleman may find it, I must repeat yet again that the Government are neutral on the question of the closed shop. He and certain of his hon. Friends seem most reluctant to accept that fact. We regard a closed shop agreement simply as a kind of collective agreement which employers and trade unions may find to their mutual advantage. But it is up to the two sides of the industry in each particular instance and situation to decide for themselves whether to have a closed shop, and, if so, on what terms.

As with so much in collective bargaining, it is not a matter in which it would be appropriate or even practicable for the Government to try to interfere, and we do not do so. We are not trying to enforce closed shop agreements on anyone in either the public sector or the private sector. Moreover, not only are the Government neutral on the question, but current legislation, to which the hon. Gentleman referred, reflects that neutrality. The law leaves employers and unions free to decide for themselves whether to have a closed shop agreement.

Of course, current legislation makes specific mention of the closed shop, whereas the pre-1971 legislation did not. This, too, has been the subject of considerable misunderstanding and, I may say, wilful misinterpretation. The reason for this difference is the statutory provisions that we now have about unfair dismissals. To have failed clearly to define the effect of those provisions on the closed shop would inevitably have led to confusion and dispute, and we determined that the legislation should provide that dismissal for refusal to comply with the terms of a closed shop agreement, except in the case of religious objections, was not unfair, and that in those circumstances employers should not be liable to pay compensation.

Does not the hon. Gentleman find it faintly absurd that a man should have to appear before three lay people who will determine theologically whether his religious objections are valid? Is not that procedure more like an inquisition than a modern industrial society?

If we are to have a body that is to put to the test a matter of religious objection, I am not sure whether the hon. Gentleman thinks that an industrial tribunal is inappropriate or whether he thinks it should be the Synod of the Church of England. But I will return to this point later.

I repeat that the legislative position is broadly the same as it was prior to 1971. It has been alleged that the closed shop represents an infringement of individual rights. But is the right not to belong to a trade union a fundamental freedom of the sort opponents of the closed shop suggest? I doubt it. In this and any other society, it is always necessary to balance the rights and interests of the individual against the rights and interests of other individuals and of the generality of the people.

The rules that society adopts—whether in the form of law or convention—are designed to enable that society to function effectively. They almost invariably involve restrictions on the rights and freedoms of the individual. The same applies in any smaller grouping in society. Thus, in the case of the closed shop, we doubt whether it is right that the individual should be given statutory rights to take a line which conflicts with a rule or practice which the majority see as advantageous. Surely the hon. Gentleman should not expect his point of view to be imposed on the majority by statute.

It has also been suggested that the legislation of the closed shop creates a situation in which trade unions have unwarranted power over the individual because of the power to expel him from, or refuse to admit him to, membership, and hence employment. But in my experience, it is unusual for trade unions to act in the sort of arbitrary way that is sometimes alleged and here I am entitled to draw on long experience. The trade union movement has taken pains to ensure that union rule books provide sensible safeguards for individuals facing exclusion or expulsion. Moreover, in the case of a serious dispute, the individual does have means of redress. First, he may appeal to the courts on the grounds that a union's action constitutes a breach of his rights in natural justice. This right has not been impaired by recent legislation.

Furthermore, the TUC has set up its own independent review committee, with a legally-qualified chairman, in consultation with the Secretary of State for Employment and the Chairman of ACAS, to hear complaints of this kind. The committee has now begun its work. I am convinced that these voluntary arrangements are likely to prove more effective in practice than the unnecessary and unworkable statutory safeguards of the Industrial Relations Act. I stress that. If the view I have expressed turns out to be wrong, we have made it clear on a number of occasions that we are ready to look at the matter again.

It is suggested that the legislation encourages inflexible and rigid closed shop agreements which do not take sufficient account of the particular circumstances of individuals and small groups and which result in dismissals of established staff. I doubt whether that allegation matches reality. In fact, the legislation on the statute book, following the passage of the Trade Union and Labour Relations (Amendment) Act, was carefully and deliberately designed to provide for flexibility and to ensure that employers and unions have plenty of elbow room to negotiate closed shop agreements, or perhaps less formal agreements, which would fully take into account individual or minority circumstances.

For example, the legislation makes clear that the employer and union, or the unions, in negotiating a closed shop agreement, can agree to allow membership of another union not party to the agreement without affecting its validity. Moreover, "union membership agreements", as the Act calls them, can include exceptions based on any characterists or circumstances whatsoever. Conscientious objectors can be excluded. I would stress that we resisted a statutory "conscience clause" not only because there would have been inevitable uncertainty over what such a provision would mean in practice, and consequent industrial friction, but also because we consider that exceptions to closed shop agreements, apart from exceptions based on religious objections to union membership, need to be agreed by the parties if they are to be effective.

I am sorry. I must press on. I am sure that you, Mr. Deputy Speaker, would be most displeased if I overran the time limit.

Existing employees can be exempted, and I understand that this has been done in a number of cases. Employees who agree to pay the equivalent of union subscriptions to a charity can be exempted. I am not recommending any of these arrangements in particular. It is for the employer and unions concerned to decide if they want a closed shop and, if so, what its terms should be. But we have stated on a number of occasions that we hope that employers and unions will operate their arrangements in the reasonable and tolerant way they generally appear to have been operated before the Industrial Relations Act first sought to outlaw the closed shop and consequently turned it into such a contentious issue.

The hon. Gentleman has expressed concern at the closed shop agreement within British Rail. In the light of the Government's policy of neutrality on closed shop matters I do not think it would be right for me to say much about this particular agreement but I can, I think help to illustrate certain aspects of our policy and to make it clear that we are being consistent in our approach. First, we have never at any stage sought to influence or in any way to interfere in the conclusion or the operation of the British Rail agreement—and do not intend to start now. These are entirely matters for the management and the unions concerned. The fact that British Rail is a public sector employer does not, and should not, affect the position, and I am surprised that members of the Opposition suggest that somehow there ought to be different treatment between the public and private sectors

The hon. Gentleman says "monopoly" and feels that the Govern- ment ought to adopt a different approach and apply different provisions in the public sector. I do not think that we can have dual standards. In the case of the British Rail closed shop agreement, which incidentally is the revival of what I understand was the normal planning agreement prior to 1971, I regret that it was not possible for differences to be resolved and that dismissals took place, including some of employees with records of long service. But this does not alter our view that such matters must be left to the parties concerned and that it would not be practicable for the Government to intervene to stop such dismissals even if they wanted to.

On previous occasions the hon. Gentleman has also suggested that the Government should require notification of closed shop agreements or of dismissals resulting from the operation of a closed shop agreement. But at present no employer is required to notify the Government of collective agreements or of individual dismissals. I very much doubt whether the notification of such information could be justified in terms of the cost and inconvenience to employers or the usefulness of the information obtained. Moreover, it would imply a degree of Government interference in industrial relations which I very much doubt whether hon. Gentlemen opposite would seriously be prepared to contemplate. However, we do keep under review such information as is available to us—in particular, cases which come to us from industrial tribunals—and we are actively considering the possibility of commissioning further research into the extent, operation and effects of closed shops.

Finally, let me say a few words about one or two incidents in recent months that have disturbed me. These are cases where an industrial tribunal found that an individual dismissed for refusal to join a trade union in a closed shop had genuine religious objections to trade union membership and thus had been unfairly dismissed but where his workmates refused to accept the tribunal's award of reinstatement.

We have raised the matter with the TUC. It has an active interest in the problems that can arise in closed shops, and we have asked whether it can help. Parliament made provision to allow individuals to opt out of union membership in a closed shop situation in very limited and well-defined circumstances, to which I have referred, that is, where a person has genuine religious objections.

Ultimately, if there is doubt on such a matter there must be an independent body to make the decision about the genuineness of those religious convictions, and I think that the appropriate body is the industrial tribunal. We must expect working people to accept tribunal verdicts in cases of this kind, in the same way as they would expect employers to accept tribunal decisions. I hope that those workmates who are refusing to accept these men back will look again at their decision and at the consequences of challenging an industrial tribunal. I hope, too, that these will remain isolated cases, and that it will be possible to secure reinstatement in conformity with the tribunal's decision.

It was a pity that the hon. Gentleman invoked the Donovan Commission in aid, in view of the defiance of the Donovan Commission as embodied in so many provisions of the Industrial Relations Act. I conclude by reminding the hon. Gentleman that in spite of what he quoted from Donovan, neither the Royal Commission nor the Ministry of Labour, as it was, in its evidence suggested any law or change in the law to contain or restrict the closed shop, or any changes in the closed shop situation.