Definitive Report - Report No 211, November 1981

Case No 1038 (United Kingdom of Great Britain and Northern Ireland) - Complaint date: 12-MAY-81 - Closed

1. 120. The complaint of the Trades Union Congress (TUC) is contained in communications dated 12, 15 and 20 May 1981. The International Confederation of Free Trade Unions (ICFTU) associated itself with the complaint in a communication of 21 May 1981, and the Public Services International (PSI) in a communication of 28 May 1981. The Government sent its reply in a letter dated 7 September 1981.
2. 121. The United Kingdom has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), the Right to Organise and Collective Bargaining Convention, 1949 (No. 98) and the Labour Relations (Public Service) Convention, 1978 (No. 151).

A. The complainants' allegations

1. 122. The TUC alleges that the Government has violated Conventions Nos. 87 and 98 and Articles 7 and 8 of Convention No. 151 through its unilateral suspension of the Civil Service Pay Agreement (which provided agreed arrangements for jointly determining pay in the civil service), through its refusal to negotiate with civil service trade unions for pay increases which were due on 1 April 1981 and through its refusal to have the issue of civil service pay and conditions referred to the duly constituted machinery for arbitration - the Civil Service Arbitration Tribunal.
2. 123. According to the TUC, on 27 October 1980, the Lord President of the Council (the minister responsible for the civil service) informed the Council of Civil Service Unions (CCSU) that the Government had decided to suspend the 1974 Pay Agreement so far as the settlement for 1981 was concerned; the Agreement was devised and operated to keep the pay of civil servants in line with that of employees in the private sector and in the rest of the public sector. It states that the Government, by letter dated 29 October, also denied to the CCSU access to the reports of the Pay Research Unit which provided the data on pay movements on which settlements were based. The TUC continues that on 5 February 1981, the CCSU made a claim for a pay increase and the Government made an offer substantially below it; at a meeting on 9 February the Lord President refused recourse to arbitration proposed by the CCSU. It states that on 23 February, the Lord President announced that the Government intended to review arrangements for determining the pay of non-industrial civil servants with the object of establishing an agreed system, but when the CCSU sought elucidation of this statement, none was forthcoming.
3. 124. In the additional information supplied by the TUC is a copy of the writ of injunction served on the Director of the Pay Research Unit on 31 October 1980 ordering him to deliver up the Unit's reports, and a copy of the Chancery Division judgement of the application handed down on 2 December 1980 in which the Court held that, as the Pay Research Unit is a government body and its director and staff are civil servants, the Government had the right to stop it continuing to prepare the reports, the Crown having the right to withdraw the services of its servants whether that withdrawal involved a breach of the Pay Agreement or not.
4. 125. The TUC also attaches a document describing the history of arbitration within the context of the Civil Service Arbitration Agreement, signed in 1925, and pointing out that the Government's refusal of arbitration "on grounds of policy" stems from a 1926 statement that " the Government of the day, to whatever political party it may belong, is responsible to Parliament for the administration of the public service. It cannot relieve itself of this responsibility, or share it with any other persons or organisation". It also describes subsequent uses of this limitation: in the 1936 equal pay for women dispute; the 1950 Interned Admiralty Staff pay dispute; the 1961 pay pause policy; and the 1978 Society of Civil and Public Servants' pay claim and London weighting dispute. This document refers then to the "Staff Relations in the Civil Service" handbook, first drafted in 1947, which includes in the section entitled "Arbitration policy" the following paragraph:
5. 94. On the other hand, there have been refusals to allow certain claims to go to arbitration. Some refusals have been based on interpretation of the Arbitration Agreement, and have already been described (paragraphs 79-82 above). (It should of course be emphasised that the decision whether a claim is arbitrable within the terms of the Agreement has no necessary connection whatsoever with the merits of the claim; indeed, departments have accepted as arbitrable a great many claims which they have regarded as possessing no merits at all.) But the government must also reserve to itself the right to refuse arbitration "on grounds of policy"; because the government is responsible to Parliament for the administration of the public service and cannot relieve itself of that responsibility or share it with any other persons or organisation.
6. According to the complainant, the first draft of the handbook was transmitted to the staff side with a covering letter stating that it was not "in any way intended to be an agreed Whitley document, and we do not ask you to accept any kind of responsibility for views expressed in it or for the manner of their presentation It thus claims that the staff have never accepted the explanation of the "grounds of policy" argument included in the handbook and relied on by the Government.
7. B. The Government's reply
8. 126. In its reply, the Government states that the TUC's complaint is in very general terms and that it can see nothing in the complaint, nor in the dispute itself, which could support the allegation that the provisions of Conventions Nos. 87 and 98 have been infringed, or indeed any matter which is in any way relevant to them.
9. 127. Turning to Article 7 of Convention No. 151, the Government states that it fully accepts its obligation to encourage and promote the full development and utilisation of machinery for the negotiation of terms and conditions of employment between the Government as employer and the civil service unions; such machinery has existed since 1919, enabling union representation in negotiations with the Government or discussion on all issues and it has always been recognised that parties to agreements or arrangements under this machinery were free to seek to alter them by agreement, or to withdraw from them. According to the Government, it was necessary, in view of public criticism of the existing arrangements and also because of the increasingly difficult economic position of the country, to suspend the existing Pay Agreements for the 1981 pay settlement on grounds of national policy and finally formally to confirm its withdrawal from these Agreements in accordance with their terms. It claims that, in taking this action, it nevertheless remained anxious to reach a negotiated and agreed pay settlement for 1981 and accepted the need to establish new and agreed pay arrangements as soon as practicable.
10. 128. Referring to Article 8 of Convention No. 151, the Government states that notwithstanding the suspension of the Pay Agreements, negotiations continued in the attempt to reach agreement on a pay settlement for 1981. It points out that agreement was finally reached on 31 July 1981. In its view, as throughout the dispute the Government sought an agreed settlement through negotiation, there was no obligation to pursue one of the alternative courses mentioned in Article 8 by seeking a settlement through independent and impartial machinery, such as mediation, conciliation and arbitration. In support of this, it refers to the guidance given as to the meaning of the term "as may be appropriate to national conditions" during the discussion of this Convention at the International Labour Conference in 1978. With specific reference to the allegation that the Government refused to allow the dispute to go to arbitration, it points out that successive governments have always publicly reserved the right to refuse arbitration on grounds of national policy, and that in continuing to subscribe to the Civil Service Arbitration Agreement all parties have been fully aware that its operation is subject to this reservation. The Government claims that this reservation is appropriate to national conditions and is in no way incompatible with its obligations under Convention No.
11. 129. Lastly, the Government explains that in the agreement which ended the dispute, it was accepted that in the event of disagreement in negotiations for the 1982 pay settlement, the Government will accept recourse to the Civil Service Arbitration Tribunal, subject to the understanding that it reserves the right to ask the House of Commons to approve setting aside the Tribunal's award on grounds of overriding national policy. For the longer term, the Government announced on 29 June 1981 the appointment of an independent Inquiry under the chairmanship of a retired Lord Justice of Appeal to conduct a review of civil service pay arrangements and to make recommendations on the principles and the system by which remuneration of the non-industrial civil service should be determined. It explains that the inquiry has been appointed with the objective of establishing as soon as practicable an ordered and agreed system which takes account of all relevant factors and which could command the widest possible acceptance. It states that the civil service unions have welcomed the setting up of this inquiry and have been invited to contribute their views to it. According to a copy of the announcement supplied by the Government, the inquiry is to report by the summer of 1982.
12. 130. In an explanatory note attached to the Government's communication, it gives its version of the facts of the dispute, pointing out in particular that, as a result of the suspension of the Pay Agreements, the Pay Research Unit did not deliver the evidence it had collected for the 1981 settlement to either of the negotiating parties and that in negotiating the three closely related issues (i.e. the level of pay increase for 1981, the way in which the 1982 settlement would be reached and the longer-term arrangements for determining pay) eight meetings were held between Civil Service Department Ministers and the Council of Civil Service Unions from February to June 1980, in addition to a number of meetings between union representatives and department officials and exchanges of correspondence. It also points out that the Civil Service Arbitration Agreement provides for the reference of disputes on pay and associated matters to the independently chaired Civil Service Arbitration Tribunal by the Secretary of State for Employment at the request of either party (though for grades with pay above that of Principal the agreement of both parties is required and has rarely been given by the management) and that the Government's reservation of the right to refuse this is made clear in the "Staff Relations in the Civil Service" handbook, and has been exercised on a number of occasions on grounds of national policy.

C. The Committee's conclusions

1. 131. The Committee notes that this case involves allegations of violations of Conventions Nos. 87 and 98 and Articles 7 and 8 of Convention No. 151 arising out of the Government's termination of Pay Agreements, which operated to keep the pay of civil servants in line with that of other sectors, and its alleged refusal to negotiate or to allow arbitration of the civil service pay for 1981 as provided for under the Civil Service Arbitration Agreement, 1925, as amended. The complainants also allege that the Government denied access to information prepared by the Pay Research Unit in accordance with the Pay Agreements as a basis for determining civil service pay increases, and that the Government, after announcing its intention to review arrangements for determining such pay, had not answered the unions' request for elucidation of this statement.
2. 132. The background of the dispute, as it appears to the Committee from the documentation supplied by both sides, is as follows: under the Civil Service Pay Agreement which came into effect from 1 January 1975 and was amended in 1977, the Pay Research Unit would establish and report to the parties concerned the facts of outside remuneration for comparable work annually, so that negotiations could take place for pay increases by 1 April each year. Under the Agreement, it was open to either side to propose, at any time, a review of any of its provisions or to give six months' notice of an intention to withdraw from it or any part of it; where a review was proposed, the existing provisions were to continue in force until the date agreed for the implementation of provisions revising them (paragraph 2). On 27 October 1980, the Minister responsible for the civil service suspended the Pay Agreement and on 29 October the Pay Research Unit informed the unions that it would not be delivering the reports to the negotiating parties. At a meeting of government officials and the Council of Civil Service Unions on 5 February 1981, the unions claimed a pay increase of 15 to 19 per cent and the Government offered 6 per cent. On 23 February, the Government offered 7 per cent and a further offer of a flat rate of 30 pounds a head or 7 1/2 per cent was finally agreed upon on 31 July. Arbitration was refused by the Government on economic grounds as from 9 February 1981.
3. 133. The Government argues that Conventions Nos. 87 and 98 are not relevant to the dispute and have not been infringed. The Committee considers that in the present case Article 3 of Convention No. 87 could be of some relevance since it provides for the right to trade unions to organise their activities and formulate their programmes, a right that has always been considered by the Committee to embrace the right of trade unions to engage in collective bargaining on behalf of their members. In the present case this requirement of the Convention would appear to have been satisfied, since high-level negotiations did in fact take place between the parties until a settlement of the dispute was reached. Moreover, since a large proportion of the employees involved in the dispute are employed in the administration of the State and are thus excluded under Article 6 from the terms of Convention No. 98, this Convention cannot be invoked in discussion of the whole dispute. In view of the fact that a more recent Convention exists covering the workers concerned and directly relevant to the central points at issue, the Committee will base its examination of the case on Convention no.
4. 134. Regarding the alleged breach of Article 7 of Convention No. 151,1 the Committee notes that the complainants allege that the Government unilaterally terminated the previously existing negotiating procedure and refused to negotiate with the civil service trade unions for the pay increases due on 1 April 1981, whereas the Government states that, because of public criticism of the existing negotiation arrangements and the difficult economic position of the country, it was necessary to withdraw from them. It claims that it did so in accordance with the terms of the Agreement but that discussions, exchanges of correspondence and high-level negotiation continued from the date it announced its suspension of the arrangements until a settlement was reached on 31 July 1981.
5. 135. The Committee recognises that Article 7 allows a certain flexibility in the choice of procedures to be taken in the determination of terms and conditions of employment and that both parties in the present case did in fact continue negotiations for a 1981 settlement until an agreement was reached. Nevertheless, it observes that such negotiations took place without the aid of the independent data which, under the terms of reference of the Pay Research Unit (set out in point 7 of the 1974 Pay Agreement) should be reported to the negotiating parties as long as the Agreement is in force and which had previously been relied on in negotiating pay settlements. The Committee notes that the courts refused to order the Pay Research Unit to deliver this information even when the withdrawal of its services involved a breach of the 1974 Agreement and is bound to note that the unions may accordingly have been placed in a weaker position than they would have normally been during the negotiation of the terms and conditions of employment of civil servants. The Committee notes moreover that the Government unilaterally suspended the 1974 Pay Agreement so far as the settlement for 1981 was concerned and subsequently withdrew from it, without giving the full six months' notice as stipulated in the Pay Agreement.
6. 136. As regards the alleged breach of Article 8 of Convention No. 151,1 the Committee notes that the Government, relying on the preparatory work during the adoption of the Convention, interprets the Article as giving a choice between negotiation or other procedures (such as arbitration) in settling disputes. The Committee notes that the Government also argues that it had always had a right to refuse arbitration which other Governments in the United Kingdom had used in the past and of which the unions were fully aware. The Committee recalls that, during discussion at the Conference of the term "as may be appropriate to national conditions", the representative of the Secretary-General stated, in paragraph 63 of the Report of the Committee on the Public Service:
   • The term applied to what followed in the text and had to be interpreted in the light of the other parts of the Article which specified two different approaches to the settlement of disputes - namely, negotiation between the parties or recourse to an independent and impartial machinery, it being understood that one may follow the other. It would appear that at least one of these approaches should exist and that governments in individual countries would be free to choose in accordance with their national conditions.
   • And it was noted in the same paragraph that:
   • The workers' members agreed that the statement of the representative of the Secretary-General corresponded to their understanding of the position.
   • Thus, while the Governments choice to negotiate the dispute does not appear to the Committee to conflict with Article 8 of the Convention, it does appear clear from the evidence in the present case that the form of settling the 1981 pay dispute imposed by the Government did not have the confidence of the trade unions, a situation which might have been avoided had the Government accepted recourse to arbitration as it has accepted to do in the event of a disagreement in the 1982 pay negotiations.
7. 137. As concerns the alleged government denial of access to the Pay Research Unit's reports, the Committee notes from the Government's reply and from a copy of the Unit Director's letter dated 29 October 1980 (supplied by the TUC) notifying the Council of Civil Service Unions of the non-delivery of the reports, that none of the negotiating parties would receive the information while the Committee notes that an application to force the delivery of the reports was rejected by the courts, it regrets that such information was denied to the negotiating parties even though, under the 1974 Pay Agreement, the Pay Research Unit had a duty to report such information while the Agreement was in force, that is until the Government's notice of withdrawal took effect in April 1981.
8. 138. Regarding the complainants' allegation that the Government had not answered the unions' request for clarification of its announcement to review arrangements for determining civil service pay increases in the future, the Committee notes that the allegation was made in the TUC's letter of 12 May 1981 and that the following month the Government had publicly announced the setting up of an independent inquiry including details as to its chairmanship, terms of reference and reporting period. Consequently, the Committee considers that this aspect of the case does not call for further examination.
9. 139. Turning then to the situation for the 1982 civil service pay increases, the Committee notes that this aspect of the dispute was raised in the February 1981 discussions, was specifically discussed in correspondence dated 6 May 1981 and finally settled in the 31 July agreement which ended the dispute. The situation, according to the Government, is that in the event of disagreement in the 1982 negotiations, it will accept recourse to the Civil Service Arbitration Tribunal, subject to the understanding that the Government reserves the right to ask the House of Commons to approve setting aside the Tribunal's award on grounds of overriding national policy in examining this arrangement under Article 8 of Convention No. 151, the Committee does not challenge the Government's right to put before Parliament issues of national policy, but it points out that the independent and impartial machinery chosen by the Government to settle disputes must be established "in such a manner as to ensure the confidence of the parties involved". Moreover, the Committee has always stressed the importance of the principle that where procedures such as conciliation and arbitration are used, the awards made should be binding on both parties. It accordingly hopes that the Government will exercise its right to refer any arbitration award to the House of Commons only if convinced that this is required on grounds of overriding national policy.
10. 140. Lastly, as concerns the long-term situation for determining civil service pay increases, the Committee notes the establishment of an independent Inquiry under the chairmanship of a retired Lord Justice of Appeal to report on the principles and the system to be applied by the summer of 1982. In particular, it notes the Government's statement that the civil service unions have welcomed the Inquiry and have been invited to contribute their views to it. The Committee hopes that this Inquiry will report in the shortest possible time and will recommend arrangements, satisfactory to all parties in view of what has been stated above in regard to Articles 7 and 8 of Convention No. 151, so as to avoid any future tensions in this particular sector.

The Committee's recommendations

• The recommendations of the Committee
  141. 141 In these circumstances, the Committee recommends the Governing Body to approve this report, in particular the following conclusions:
• The Committee considers that the allegation relating to the lack of elucidation of the Government's announcement to review arrangements for determining civil service pay increases does not call for further examination.
• As regards the alleged breach of Article 7 of Convention No. 151, the Committee notes that continuous negotiations took place resulting in a settlement of the 1981 pay increases, but also notes that the independent data which should have been reported to the negotiating parties under the terms of the 1974 Pay Agreement, as long as this Agreement was in force, and which had been relied on previously in negotiating pay settlements was not made available, and that the unions may accordingly have been placed in a weaker position than they would have been in normally during the negotiations. The Committee also notes that the Government unilaterally suspended the 1974 Pay Agreement and subsequently withdrew from it without giving the full six months' notice as stipulated in the Pay Agreement.
• As regards the alleged breach of Article 8 of Convention No. 151, the Committee, noting the interpretation of this Article accepted by the Conference Committee in 1978, considers that the Government's choice to negotiate the dispute does not appear to conflict with this Article, but also considers that it appears clear from the evidence in the present case that the form of settling the dispute imposed by the Government did not have the confidence of the trade unions, a situation which might have been avoided had the Government accepted recourse to arbitration as it has agreed to do in the event of disagreement in the 1982 pay negotiations.
• Regarding the arrangements for the 1982 pay increases, the Committee notes that the Government has agreed to arbitration on the understanding that it can ask the Parliament to set aside the Arbitration Tribunal's award. While not challenging this right, the Committee would draw the Government's attention to the principle that arbitration awards should be binding on both parties to the dispute and that such procedures should have the confidence of the parties involved (Article 8 of Convention No. 151). It hopes that the Government will exercise its right to refer any arbitration award to the House of Commons only if convinced that this is required on grounds of overriding national policy.
• Lastly, as concerns the long-term situation for determining civil service pay increases, the Committee notes the setting up of an independent Inquiry into the principles and system to be utilised and hopes that it will report in the shortest possible time and will recommend arrangements, satisfactory to all parties, so as to avoid any future tensions in this sector.