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Trade Union recognition - jurisdiction and territorial limits

16 October 2012 #Employment


The High Court considered in Netjets Management Limited v CAC and another [2012] EWHC 2685 what territorial limits exist on the Central Arbitration Committee’s (CAC) jurisdiction to consider a request for union recognition.

Trade Union recognition – applications to the CAC

Under the Schedule A1, Trade Union and Labour Relation (Consolidation Act 1992 (TULRCA), a trade union may make an application to the CAC for recognition by an employer on behalf of a group of workers (the “bargaining unit”). As a result of statutory recognition under the procedure under TULCRA, the union will be entitled to carry out collective bargaining on behalf of the group of workers regarding pay, hours and holidays. Schedule A1 does not expressly impose any territorial restrictions on the CAC`s jurisdiction to consider recognition requests, except to say that, generally speaking, workers employed by an associated company of the employer which is incorporated outside Great Britain must be ignored for the purposes of the recognition application.

Facts

Netjets Management Ltd, a UK registered company, operates private business jets in Europe. There are no fixed routes or schedules as flights are arranged when clients need to travel. Pilots have employment contracts governed by English law and which are subject to the exclusive jurisdiction of the English courts. The contracts include terms relating to pay, hours and holidays and all pilots are subject to National Insurance contributions in Great Britain.

Pilots start and finish a flight in any location in Europe, so have no regular place of work or base, but choose a "gateway" airport from which they start and finish their tours. Netjets pays a pilot`s transport costs to and from that gateway. Pilots may change their gateway airport, and in the 24 months up to February 2011, the countries in which pilots had chosen a gateway airport changed 2,574 times.

In September 2011, the independent trade union Skyshare, made a request for recognition to the CAC in respect of a collective bargaining unit comprising all pilots employed by Netjets. Since only 159 out of 779 pilots in the proposed bargaining unit had a gateway in the UK, and only a minority of flights originated in the UK, Netjets argued that the CAC could not consider the request.

Consideration of the case by the CAC

As there had been no previous case law that considered the territorial jurisdiction of the CAC under  Schedule A1, the parties agreed that the CAC should consider the issue in the context of the case law regarding territorial jurisdiction of the employment tribunal to consider claims under the Employment Rights Act 1996 (ERA 1996). The CAC considered the test adopted by the Supreme Court in Ravat v Halliburton Manufacturing and Services Ltd [2012]  where it was held that the correct question for a tribunal to ask is whether the connection with Great Britain is "sufficiently strong" to enable it to be said that Parliament would have regarded it as appropriate for the tribunal to deal with the claim

The CAC ‘s view was that the connection of the pilots, as a group, was sufficiently strong with Great Britain to enable Skyshare to make a valid request for recognition.

 The CAC took the following into account:

  • Netjets is registered in Great Britain.
  • The employment contracts between the pilots and Netjets are governed by English law and are subject to the exclusive jurisdiction of the English courts.
  • The contracts include terms relating to pay, hours and holidays.
  • All members of the proposed bargaining unit are subject to National Insurance contributions in Great Britain.

Netjets applied to the High Court for judicial review of the decision. The High Court held that there were no territorial limitations on the jurisdiction of the CAC when it considered a request for union recognition in circumstances in which the workers within the defined bargaining unit were a group of pilots who worked in several European countries, and not just the UK.

The High Court adopted the approach of the Supreme Court in Ravat v Halliburton Manufacturing and Services Ltd [2012]  i.e. that, as a group, the pilots were sufficiently strongly connected to Great Britain to enable the trade union to seek recognition.

The key factors which the court took into account in Netjets were:

  • that the employment contracts between the employer and the pilots were governed by English law;
  • were subject to the exclusive jurisdiction of the English courts, and
  • included terms relating to pay, hours and holidays.

The High Court’s view was that the CAC had correctly applied the "sufficiently strong" connection test i.e. that the pilots had a stronger connection with Great Britain than the foreign countries where they work.

The High Court also concluded that individual employees’ characteristics had little relevance rejecting the argument that the situation of the majority of the workers in the group should be looked at instead of considering the group as a single entity.

This case therefore allows the CAC to consider the territorial limitations on TULRCA (where none are expressly provided).

 

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at employmentunit@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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