Out-Law News 3 min. read

Biggest ever public sector pensions ballot could be unlawful, expert says

The UK's biggest ever trade union ballot, in which members of public sector union UNISON voted overwhelmingly in favour of a day of strike action to protect their pensions, could be unlawful an expert has said.

Employment law specialist Christopher Mordue of Pinsent Masons, the law firm behind Out-Law.com, said that an error in the ballot notification sent to employers by the union could have made the vote illegal.

"The ballot notices breach the legal rules on strike ballots and leave the union open to challenge. If successful, this would be a 'showstopper' as far as UNISON's participation is concerned," he said.

The same issue could also prevent other large unions which represent members across multiple public sector employers from participating, he said.

Aggregated ballots, in which the votes from members from a number of employers are all counted together, are not in themselves illegal where a valid trade dispute affects its members within each employer. However, complex rules must be satisfied before such a vote can be conducted.

The problem, Mordue said, was that UNISON told each employer only that it intended to "send ballot papers to our members employed by your organisation".

"That wording is only consistent with notifying a whole series of single employer ballots. If that is what the union has notified, then that is the only type of ballot it should conduct," he said.

"It's now clear that they have allowed hundred of thousands of other members outside the notified constituencies to vote in those ballots. They've also failed to declare the results on an employer by employer basis, and that also appears to be a breach of the rules governing the types of ballots actually notified. This could fatally undermine the lawfulness of these ballots."

Mordue said that this meant if an employer raised a challenge in court, the UK's largest public sector union would be prevented from taking part in the 'mass day of action' planned by the Trades Union Congress (TUC) for 30 November 2011.

"If there is a successful challenge, the unions could always postpone their action and re-ballot. But that would come at a huge price - the current ballot is estimated to have cost millions of pounds. That money would have been wasted and any second ballot would effectively double their cost - that would be a huge financial blow for the unions," he said.

UNISON general secretary Dave Prentis insisted that the union had an "overwhelming yes vote on a legal ballot".

On Wednesday the Government amended its offer to workers on public sector pensions, but admitted that most workers would still have to work longer and pay more.

The offer included a more generous accrual rate, meaning that annual benefits would be earned at a rate 8% higher to that previously proposed, and a guarantee to protect the pension entitlement of employees within ten years of their pension age when increased contributions and a higher retirement age come into force for workers from 2015.

Anyone within ten years of their pension age on 1 April 2012 will be protected, meaning that there will be no change in when they can retire or any decrease in the benefits they will receive, the Government said. Cabinet Minister Francis Maude said that the proposals represented a "settlement for a generation".

However the unions remained "firmly committed" to strike action later this month until their remaining concerns were addressed, the TUC said.

John Hanratty, public sector pensions law expert with Pinsent Masons, said that the unions main issues were the increase in member contributions and raising the age from which pension benefits could be claimed.

"The concessions given by the Government do represent an 8% improvement on the accrual rate, but taking into account the increase in the pension age and other reforms the net benefit will be less than 8%," he said.

He added that public sector employees' main concern was that, due to pay freezes, an increase in contributions would result in an overall reduction in take home pay. "This will convince the moderately-paid workers that the reduction is not worth a pension promise some 20 or 30 years into the future," he said.

The Government's guarantee to protect the pensions entitlement of older workers was also questionable, he said.

"It is a brave man who would forecast what is happening next year in the current financial situation, let alone so long into the future," he said.

"Whether Danny Alexander's comment comes back to haunt this or a successor Government remains to be seen but such a sweeping statement would seem to be leaving the Government as a hostage to fortune."

The TUC said it would consider the Government's proposals alongside the impact of those issues which had not been addressed.

"All the unions have indicated throughout this process their determination to reach a negotiated settlement on all these issues. That remains the position and unions will engage intensively in the coming weeks. But unless and until further real progress is made and acceptable offers are made within those negotiations, unions remain firmly committed to continuing their preparations for the planned day of action on 30 November," it said in a statement.

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