Policy Papers

Trade unions and the law - history and a way forward?

James G. Moher |

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Executive Summary

  • At the basis of British trade-union law are 'immunities' from the normal application of the common law, first established in the 1870s and then consolidated in the 1900s.
  • These protected the unions from the law of conspiracy, established their right to picket peacefully and protected them against damages actions for breach of contract during industrial disputes.
  • However, a rising wave of official and unofficial strike action during the era of full employment from the 1950s to the 1970s, along with its mismanagement by governments of both parties, culminated in Margaret Thatcher's anti-union legal drive in the 1980s.
  • In a gradual, 'step by step', way this eliminated the closed shop, imposed cumbersome membership ballots before any industrial action, hedged around the right to picket and removed the immunity from expensive damages actions.
  • Since coming to office in 1997, New Labour has honoured many of its pledges to improve the individual rights of British workers, including the minimum wage and protection against unfair dismissal.
  • However, largely out of fear of being portrayed as restoring trade-union power, it has refused to address the bigger issue of collective rights and resisted European Union initiatives in this direction.
  • This position cannot be maintained indefinitely as it leaves a real grievance among trade unionists, on whom the Labour Party is increasingly dependent for its funding.
  • But a simple 'repeal of all anti-union laws' is not a realistic option, though it has recently been re-established as official TUC policy.
  • One possibility would be openly to accept the value of membership ballots but replace current complex and sanction-threatening government regulations with a new, enabling Balloting Act.
  • Another, more ambitious, approach would be seriously to consider replacing the immunity basis of the current framework with a new constitutional settlement combining the direct enforcement of collective agreements with a clear set of rights and responsibilities for trade unions.
  • This would be a major task involving judicial as well as parliamentary consideration and so could best be started by setting up a new Royal Commission on the subject.


The question which Labour ministers must ponder, if they are to restore good relations with the trade unions at the same time as sidelining the continuing real influence of the 'hard left' in union councils, is whether unions are forever to be seen as bodies to be tightly controlled by government regulation. Are unions still to be regarded as conspirators in the law's eyes? The imposition of heavy, one-sided, and complex restrictions on traditional trade-union activities by Conservative governments in the 1980s signified a profound change of role by the state after decades of conflict. But the fact that, after ten years of Labour governments, most of these restrictive laws have been retained underlines how far apart in outlook the two wings of 'the Labour movement' have grown.

The position taken by a British Labour government, almost alone in Europe, in standing out against extending workers' collective rights through the European Union's Charter of Fundamental Rights, shows how committed they have become to a model of the labour market light years from the philosophies of the party's founders. Yet 'New Labour' in government has been sympathetic to many union aims and has advanced the condition of many workers since 1997 through the minimum wage, unfair dismissal rights, recognition rights and so on. But it has gained little credit for this, because it has simultaneously refused to address the bigger issue of collective rights, fearing the political fall-out from what would most likely be portrayed in the press as a restoration of trade-union power.

The question which trade-union activists must ponder is why there is so little media interest or public support for their many attempts to pressurise the government to repeal all the anti-union laws. In 2006, for example, a modestly-reforming private members' Trade Union Freedom Bill, though supported by well over a hundred MPs, sank without trace in the face of government hostility. Meanwhile, one would search far and wide to find journalistic or academic appreciation of the unions' many strengths and their contribution to our democracy over the centuries. So, it seems that matters are polarised between two mutually uncomprehending and dismissive perspectives, with little dialogue about how they might be reconciled. This paper is an attempt to argue the case for review and suggest possible ways forward.

As the labour laws are very much a product of history, it is to history that we need to turn. Trade-union law is one of the most difficult parts of that history to disentangle. The subject is complex because British law has constantly changed while retaining allegiance to the same underlying common-law categories and concepts, e.g., the law of conspiracy, 'restraint of trade', contract and tort (civil wrongs). That complexity has been deepened by the negative form in which trade-union law has been framed, as 'immunity' from the normal common law rather than as a declaration of positive rights for unions as free and independent associations of workers.

The emergence of immunities

As bodies of associated workers trade unions were never regarded in law as 'incorporated', i.e., as having a legal personality and status, separate from their individual members, unlike shareholders' and companies' limited liability status. Legally, they were in a twilight zone. Courts could award damages from their funds for breaches of contract or 'tortious' acts during disputes. The significant immunities finally secured in the 1870s were not the gift of legislators, but a result of a powerful craft-union campaign and the findings of a Royal Commission about the need for such protection from the common law of 'restraint of trade' and criminal conspiracy. For, after the extension of the male suffrage in 1867 and the creation in 1868 of the Trades Union Congress to lobby effectively, middle-class and parliamentary opinion had also softened towards extending union legal 'rights'. This was the first 'Charter of British Trade Unionism'.

However, with the emergence in the late 1880s of unions for general workers and as the craft unions became more militant, employers banded together in federations and engaged strike-breaking agencies to hire and deploy replacement labour aggressively. This led to bitter and protracted disputes and often violence on picket lines. Against this background, the judicial mind began to interpret the 1870s legislation in such a way as to undermine the union immunities, culminating in two notorious Law Lords' rulings of 1901 which resulted in huge (about £2million in today's terms) damages awards and injunctions: the cases of the Taff Vale Railway Company v Amalgamated Society of Railway Servants and Quinn v Leathem. It was their experience of this hostile judicial intervention which gave that generation of trade-union activists and leaders a deep suspicion of any positive legal status. Thus a determined and highly effective union political campaign developed to restore and strengthen the immunities: 127 unions, representing 50% of the TUC's million or so members, affiliated to the Labour Representation Committee led by Keir Hardie, which would become the British Labour Party.

This followed the landslide victory of the Liberal Party in 1906, in which twenty-nine Labour MPs were also elected and founded the Parliamentary Labour Party. The unions and the new Labour Party got the bill they wanted, despite the opposition of a Royal Commission, senior cabinet members such as Herbert Asquith, and the reservations of labour experts, such as the Fabian socialist, Sidney Webb. The Trade Disputes Act 1906 fully restored and strengthened the 1870s immunity legislation and, unusually for that parliament, it sailed through both houses without amendment, indicating a consensus at Westminster which was to last for the next sixty years.


  • Section 1 eliminated the tort of civil conspiracy, so overruling the Law Lords' judgement in Quinn v Leathem. Things which were lawful for individuals to do, would not be considered unlawful if done by two or more individuals combining in 'contemplation or furtherance of a trade dispute'. This became known as 'the Golden Formula'.
  • Section 2 restored the right to peaceful picketing during such trade disputes. It explicitly made it lawful 'to attend at or near a house or place where a person resides or works or carries on business or for the purpose of peaceably obtaining or communicating information, or of peacefully persuading any person to work or abstain from working'. Each of those words would be pored over by lawyers every time a picket-line situation brought the parties to court.
  • Section 3 prevented court challenges (injunctions), by employers, customers or suppliers, to union actions during trade disputes on the grounds that they had broken, induced a breach or interfered with an individual or commercial contract.
  • Section 4 made it crystal clear that an action against a trade union in respect of any such 'tortious act ', 'shall not be entertained by any court'. This clause overturned the Law Lords infamous Taff Vale judgement.
  • Section 5 provided very broad definitions which would limit the scope for judicial interpretation and they stood the test of time in the decades to come.

Even in the industrially turbulent period after the First World War which culminated in the General Strike of 1926, there was no major challenge to the immunities. The Trade Disputes (Amendment) Act of 1927, did not erode them significantly though it did require members to 'contract in' to the political fund, which depleted union funds considerably. More effectively, the demoralisation which followed the General Strike and the deep depression which lasted until the mid 1930s, minimised the incidence of industrial disputes.

The first challenges to immunities

However, the more turbulent industrial-relations scene which developed from the boom mid-1950s onwards would test the immunity system to destruction. This turbulence grew from a situation of full employment, generous welfare benefits and the assertiveness of a new generation of consumer-orientated young workers. It manifested itself in the increased number of frequent, short but sudden 'walk outs' in key manufacturing industries, such as the car industry. Far from controlling these outbreaks, union officials were running after them, seeking to get their members back to work and the issues raised into the agreed procedural framework for resolution. As a result the rather chaotic industrial-relations scene became a focus for the media, much of it anti-union.

By the late-1950s, mutterings were growing in the media and London clubs, that the unions had grown 'too powerful'. In fact, they were becoming weaker, in the sense of being unable to control their activists and members in a sellers' labour market. In 1958, the Inns of Court Conservative Party published an influential pamphlet entitled, A Giant's Strength, some Thoughts on the Constitutional and Legal Position of Trade Unions in England, questioning the principle of legal immunities, with reference to the American experience of more legally-restricted industrial relations. But the first probe at the edges of the unions' immunities came from the judiciary in a famous Law Lords' ruling over a 'closed shop' dismissal case at Heathrow Airport, Rookes v Barnard. For the first time in sixty years, the courts held that the union action constituted 'civil intimidation', a 'tort' ruled out by the Trade Disputes Act, it had been thought. It was on this basis that the TUC persuaded the Labour government to restore the previous position through the Trade Disputes Act 1965.

However, a continually rising wave of industrial action simultaneously led that government to the conclusion that there was a problem to be solved, so Harold Wilson persuaded the TUC to agree to the holding of a full independent inquiry into the unofficial strike phenomenon - the Donovan Commission (1965-68). Donovan recommended that the 'voluntarist' system of industrial relations should be retained but better regulated with clearer written agreements, better procedures and structures. But the majority of the Labour cabinet rejected this approach, their White Paper, In Place of Strife proposing instead that

  1. secret ballots before strikes become compulsory
  2. a cooling off period of 90 days could be imposed at ministerial discretion
  3. fines be available for breaches of the law by union activists.

These fairly limited proposals caused uproar in the trade-union movement, and split the governing party right up to cabinet level: partly as a consequence Labour lost the subsequent general election of 1970.

The incoming Conservative government returned to the battle with 'union power' with its Industrial Relations Act 1971. This sought to provide a framework to regulate industrial relations and to legalise collective agreements on the American model, reinforced by a Registrar of Trade Unions and a new National Industrial Relations Court. There was provision for ministerial intervention to order a ballot of individual members, but only in 'emergency situations'. The unions simply refused to register and the TUC mobilised a massive campaign of non-cooperation. They also persuaded most employers to insert a clause in collective agreements specifying that, 'this is not a legally-binding agreement'. The ordinary courts were very lukewarm towards the new body, which was not governed by their preferred common-law principles. After a number of high-profile clashes in which unions were heavily fined, it became clear that the new legislation was unworkable and leading to even further strife and civil disobedience. The 'Pentonville Five' dockers, who had gone to jail rather than pay their fines, had to be bailed out by a government officer to prevent a general strike in 1973. Thereafter, the act was a 'dead letter': another government had been obliged to give way in the face of the power both of the unions and of the strength of assumptions about their immunities.

The incoming Labour government therefore repealed the Industrial Relations Act and extended the scope and force of immunities in the Trade Union & Labour Relations Acts 1974 and 1976. They also agreed a programme of new legal rights for workers on health and safety, employment protection, earnings-related pensions and union recognition: in return, the unions agreed to enter a form of wage restraint, a sort of national collective bargain which became known as the 'Social Contract'. Initially this voluntary incomes' restraint assisted the government with the deep economic crisis of the time but, as the then-Chancellor, Denis Healey, has since admitted, the government 'overloaded the circuit' with a pay increase limit of 5%, well below the level of inflation. The unions at the grassroots rebelled and the forces let loose culminated in chaos in the essential public services as a result of industrial action by low-paid workers with genuine grievances - forever to be known as the 'Winter of Discontent'. With a hostile media, public opinion crystallised against trade unions in general. Too late, the TUC drew up a voluntary code of practice on strike ballots, limits to picketing and the closed shop as well as on the need to maintain essential services during strikes. By delaying the next general election until 1979, Labour paid the price and the unions would too.

Outflanking the unions

The new Conservative government under Margaret Thatcher, was determined to break union power once and for all. In her view British industries' well-known low productivity was mainly due to trade-union attitudes and, restrictive practices. She saw the 'union bosses' of the time as 'socialist politicians first, second and third'. So, she decided to 'appeal over their heads to their members'. She made a strategic break with all post-war governments and discarded 'the whole approach based on prices and incomes controls'. At a stroke, this removed the TUC's relevance to her government: no more 'beer and sandwiches' at No.10. More important than any laws, the government's monetarist economic and social policies during the world recession of 1981-2 accelerated the destruction of much of traditional 'smokestack' manufacturing industry, which employed the big battalions of the trade-union movement. Levels of unemployment not seen since the 1930s, (over two million rising to four by the mid '80s), decimated all unions at the workplace. By simultaneously adopting a 'step by step' piecemeal approach instead of the 'big bang' tried in 1971, Mrs Thatcher was able to hamstring the steadily weakening unions by use of the law.

The first Employment Act of 1980, included only limited reforms to picketing law and the operation of 'closed shops',. Its provision of state funds for postal ballots even appealed to some right-led unions such as the engineers and the electricians, who already balloted their members regularly. It also divided the TUC, as the left-led unions tried to prevent them availing themselves of these funds.

The much tougher Employment Act 1982 restricted 'closed shops' with impossibly high (85%) ballots, reduced dismissal compensation, and allowed employers to sack all strikers. But the really crucial step was to repeal the protection 'which prevented action being taken by the courts against union funds'. Unions were again exposed to large claims for damages during disputes ('limited' to £250,000 for each offence).

The lack of any effective opposition from either the unions or the Labour Party, both preoccupied with internal left-right factional disputes, meant that the Conservatives' post-Falklands electoral landslide of 1983 gave them the 'green light' to go further than they had ever dared hope. They immediately introduced the Trade Union Act 1984 which, among other things, compelled all unions, on pain of loss of their immunities :

  1. to hold secret ballots of individual members before calling on them to take industrial action
  2. to elect their principal executive committees and voting general secretaries at least every five years and
  3. to validate their political objects and funds at least every ten years.

The union leaders failed to appreciate that the key proposal to give workers a right to vote individually on industrial action was popular, even with their own members: in fact, the provisions of the bill on union elections were modelled on the engineers' rule book. It was this which really exposed the unions' Achilles heel. By counter-posing this direct individual form of democracy to most unions' indirect, delegated forms of democracy, the government had stumbled upon a reform which would transform British industrial relations.

The Scargill-led National Union of Mineworkers fell foul of this by declaring a national strike in March 1984 without balloting the very independent and crucial coal-getting areas, such as Nottinghamshire and Derbyshire. As a result it was the 'working miners', often financed by shadowy employer and right-wing organisations, who used the law against the NUM, getting the courts to declare the strike unlawful. When the NUM ignored the judgements, the courts imposed huge fines and ultimately sequestration of all the union's assets, under the Trade Union Act 1984. The disastrous defeat of the previously invincible miners ended all union hope of continuing to defy those laws.

Following this and another disastrous defeat for the London printers at Wapping in 1985, and a further election victory for the Conservatives in 1987, the Employment Act 1988, was mainly about giving rights and resources to dissident individual members. But only a handful of members ever availed themselves of the services of the new Commissioner for the Rights of Union Members, and in a few years that office was wound up. The act also made the balloting requirements far more complex and onerous for unions and more open to legal challenge by employers.

From immunities to positive rights

This series of heavy electoral and industrial defeats undoubtedly knocked the confidence of the left-led trade-union movement, as much as their debilitating loss of collective bargaining from declining manufacturing industry did for particular organisations. The Labour leader, Neil Kinnock, openly distanced himself from the NUM leadership and some of the violent actions perpetrated during the strike. Meanwhile, most other unions finally came to terms with the new situation. In July 1986, the General Council of the TUC and the National Executive Committee of the Labour Party adopted a joint statement which, for the first time, did not simply call for repeal of anti-union laws, but instead for their replacement 'by positive legislation': 'In our view, there is no question of excluding the law from industrial relations. But it can be given a positive role - with new rights and protection for individual workers and their unions.' Then, after the further electoral defeat of 1987 in which the issue of 'union power' again played well for the Conservatives, a major review of Labour's policy ensued, which lasted into 1988. The emphasis shifted decisively to the improvement of individual workers' rights, with the restoration of collective union immunities taking a back stage. This approach was further strengthened when the new TUC leader, John Monks, sought to turn the government's flank by espousing the 'European Social Charter of Fundamental Rights', and invited the EU Commissioner responsible, Jacques Delors, to address Congress in 1988.

This 'Social Charter' also emphasised individual rights and it was this cover which the new shadow Employment Secretary, Tony Blair, adopted when he made Labour's break from the 'closed shop' in 1989. He argued that Labour could not espouse both consistently, as the Charter included the right not to belong to a union. Kinnock, now acutely aware of media 'spin' - Peter Mandelson had become a key adviser - gave Blair his head. Blair once told this writer that his brief from Kinnock was to sustain half an hour of interrogation on Newsnight by the 'rottweiler' interviewer, Jeremy Paxman, on all the tough industrial conflict issues and present Labour as electable. He proved well able to cope with that challenge, indeed too capable. For, in correctly distancing Labour from the untypical Scargillite style of trade unionism, Blair abandoned the other, more normal, collective side of things altogether.

A fourth electoral defeat for Labour in 1992 provided no incentive to correct this imbalance, though the resulting change of Labour leadership did for a time promise a more traditional approach. John Smith's reassuring style brought most unions, including the pivotal Transport and General Workers, into line with the individual rights' approach, on the understanding that a Labour government would also be sympathetic to repealing certain features of the Thatcher union-laws legacy. However, Smith died from a heart attack in 1994, and Blair's emergence as Labour leader consolidated the one-sided individual rights' approach as his government's policy. He later revealed his admiration for much of Thatcher's legacy, and his electoral successes and control of the Labour Party stifled all union complaints. As a result, many unions swung back to the other pole, demanding 'the repeal of all anti-union laws', and this has again become official TUC and Labour policy in recent years even though they know this is a politically impossible demand.


The Labour Party, which was created by trade unions and socialist societies as a parliamentary force to restore legal immunities, must eventually address the deep sense of grievance unions still have about the current framework of collective labour laws. There is a strong moral case to do so, but the party's continued heavy dependence on trade-union funding also makes it a practical necessity. Meanwhile, many union leaders accept that they were, to an extent, the authors of their own misfortune and regret not having recognised that the parliamentary consensus underpinning complete immunity had gone by the 1960s. Had they done so they might not have over-reacted to government proposals to reform industrial relations, with pre-strike ballots and a light legal framework linked to union rule books. It is therefore time for them to review the ideology which prevented them from responding more effectively, and particularly to move on from the often pseudo 'left/right' politics inherited from the Cold War. At the same time, it should be recognised that all the fault for this situation does not rest with the unions and that the policies of successive governments, especially Labour ones, with their over-reliance on incomes policies in economic management, contributed significantly to the disastrous 'Winter of Discontent' and put the party out of power for nearly two decades. This recognition of past failings on both sides, could lead to a more realistic and fruitful partnership between the unions and the Labour government.

The current legal framework derives from a series of historical conjunctures rather than rational design. Complete immunity was what the unions wanted a hundred years ago to keep hostile judges out of their affairs, but hedged around with so many conditions and sanctions as it has become, it is now a vehicle of dubious value. However, it is unrealistic to expect a Labour government simply to repeal all those conditions as some of them, in particular the requirement to ballot all individual workers before industrial action, should have been introduced by Labour with union support. Recognition of this might then allow a re-examination of the over-complex and sanction-threatening nature of the current balloting regulations, with a view to returning responsibility for such matters to the unions themselves under a new enabling Balloting Act and quasi-legal Code of Practice.

Alternatively, it might be time to consider whether the nineteenth-century form of blanket immunity should be abandoned as the basis for trade-union law and replaced by a more straightforward legal status. The vast growth of legislation covering workplace terms and conditions in the last thirty or so years also begs the question whether it is not time to make collective agreements directly enforceable, a move which might lay the ground for strengthening the unions' role in regulating such matters at the workplace. This could be done as part of a new written constitutional settlement, to which all parties and unions could subscribe, giving trade unions a clear set of positive rights and responsibilities to their members, aligned with best EU and ILO standards. If such a new settlement could be achieved, all the current legislation could be repealed and the slate wiped clean. It would be replaced by a fairer, more balanced and simplified system of industrial-relations law and a fairer legal framework for union government, restoring trade-union autonomy while safeguarding individual members' and minority groups' rights. To achieve this would be a major task involving judicial as well as parliamentary consideration and so could best be started by setting up a new Royal Commission on the subject.

The Labour Party has had its 'Clause IV' re-think, but the unions remain a fortress of old-left attitudes at leadership levels, where many of Labour's hard left retreated to. Yet no one doubts their commitment to their unions and to workers' rights. On the other hand, the 'New Labour' leadership philosophy which replaced those old attitudes and policies, while electorally popular, seems under-developed on industrial relations. Though bringing new insights on how to improve individual rights at work, its 'think tanks' and policy advisors have not addressed the collective dimension of today's industrial and services world. History can help in achieving a more balanced approach for the future by examining past episodes and issues afresh, informing today's dilemmas as to how best to tackle declining membership and collective influence: in this way the 'Forward March of Labour' may be resumed.

Further Reading

John Bowers, Employment Law (Oxford UP, 7th edition, 2005)

Keith Ewing and Patrick Elias, Trade Union Democracy. Members' Rights and the Law (Mansell, 1987)

Andrew Marr, A History of Modern Britain (Macmillan 2007 - BBC series)

Henry Pelling, A History of British Trade Unionism (Penguin, 5th edition, 1992)

Henry Phelps Brown, The Origins of Trade Union Power (Oxford UP 1986)

Alastair J. Reid, United We Stand. A History of Britain's Trade Unions (Penguin 2005)

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