As the Southern rail dispute becomes ever more fractious, lawyer PAUL MCFARLANE analyses the complexity of the legal situation

The Southern rail dispute escalated further in recent weeks when a three day walk-out (between 11-13 October) went ahead with a reported loss of almost 40 per cent of services. Talks with the RMT broke down on 12 October and the RMT has given notice of further strikes to take place this later this year, in November and December.

In a bid to try and bring this six month dispute to an end, on 6 October Southern issued an ‘ultimatum’ to the affected staff – sign off new contracts or face being dismissed. RMT advised its members to sign off the new contract (but added that they would seek to overturn the new contract). The RMT also reported, on the afternoon of 10 October 2016 – less than a day before the first day of the strike – that it had received a legal challenge from Southern which it was considering. However, there were no reports of court proceedings taking place between Southern and the RMT on 10 October.

These events raise a number of legal and tactical issues for both sides. For example, can Southern rely on an ultimatum to fairly dismiss employees who have not signed the new contract? Why would Southern threaten the RMT with a legal challenge but not pursue this in the courts? Will the new rules on strikes in the Trade Union Act 2016 change things?

The Ultimatum – is this legal?
Potentially yes, but Southern must demonstrate to an employment tribunal (ET) that it has jumped through a number of legal hoops before it could fairly dismiss an employee who refused to sign the new contract. Those are:
1. was the dismissal for a potentially fair reason in law; and
2. has Southern acted reasonably in relying on that reason as the reason for dismissal? (When answering this second question, an ET must have regard to the size and resources available to Southern.)

Here, ‘some other substantial reason’ (SOSR), which covers a refusal to accept changes to terms and conditions of employment, is the only potentially fair reason in law that could apply. Southern would need to satisfy an ET that its changes were for sound business reasons. Southern would not be required to prove that this change was crucial for its survival. No doubt Southern would, if required, put forward evidence to an ET to say that its plans for the removal of guards from its trains were in line with industry practice.

If the reason for dismissal falls into the SOSR category, the ET would go on to consider whether Southern had acted reasonably in dismissing those employees who had not signed the new contracts. An ET would look at a range of factors when considering this issue, including: whether a reasonable and genuine consultation process with the affected employees has taken place; the respective motives of both sides in both putting forward the proposed changes and rejecting them; and whether the employees have been given sufficient warning of the changes, et cetera.

I consider it likely that Southern would be able to show that a dismissal of an employee who has not signed the new contract would be fair. This might explain why the RMT has advised its members to sign the new contract. I suspect the RMT has advised its members to sign the new contract under protest so that it can say that they are still in dispute with Southern. To do otherwise would bring into question the legality of the strikes it has called its members to take part in (see more below).

Southern’s threat of legal action
This is one of the more curious aspects of this dispute. Why threaten legal action but not follow this up? The grounds for Southern’s purported threat have not been reported. However, it is likely to be one or both of the following: there is no longer a trade dispute – as employees have accepted the new contract; and/or the ballot giving the RMT the mandate to call its members out on strike is stale [old]. At this stage, it is my view, that both of these arguments are weak. This probably explains why Southern did not go to court last week.

Taking them in turn: if the RMT has advised its members to sign the new contracts under protest they would argue that there remains a trade dispute – which in law includes a dispute over terms and conditions of employment.

As for the stale ballot argument, a court would need to decide if there had been a substantial interruption in the dispute. If so, would an average reasonable trade union member consider the dispute had come to an end. This, in my view, cannot be said to be the position here. Since April, Southern has been subjected to a series of strikes. The RMT would, I suggest, argue that there has not been a significant interruption between these strikes.

Trade Union Act 2016 – would this have made a difference?
This act, when it comes into force, makes two very significant changes to the law. As well as still being required to get a majority of those who have voted, to vote in favour of strike action, a union must:
1. in all cases get at least 50 per cent of those entitled to vote in a ballot to do so; and
2. where those involved in the dispute work in an important public service there will be a requirement that 40 per cent of those entitled to vote in a ballot concerning employees normally engaged in important public services have voted ‘Yes’.

The government will publish regulations setting out precisely what important public services means but they will specify activities including transport services – which includes rail services.

Once the act comes into force, the RMT will have to comply with these additional provisions before it can call for strike action. Failure to do so would mean that Southern (and other rail companies) could challenge their proposed strike(s) in the courts.

As with all industrial disputes, eventually the parties will have to negotiate a settlement.

With the most recent talks breaking down, Southern will need to consider its next steps.

Southern may seek to implement the terms of the new contract, bringing to a head whether staff have actually agreed to those terms. For those who did not abide by the new terms, dismissal for gross misconduct might be an option that is considered. Obviously this would further inflame an already fractious dispute. However, with this dispute showing no signs of ending soon, Southern may consider it has no option but to adopt this position.

paul-mcfarlanePaul McFarlane is a partner in the London office of Weightmans LLP Employment, Pensions & Immigration team.
He is also chair of the Employment Lawyers Association’s Legislative & Policy Committee, that commented on the consultation papers on Trade Union Bill as it progressed through Parliament.