Trade unions views on ‘unnecessary’ legislation dismissed by Govt

The government has published its response to the consultation on the Certification Officers’ proposed levy to be paid by trade unions and employers’ organisations.

It appears the government has ignored the views expressed by unions and employment rights experts that this legislation is totally unnecessary and is purely punitive against trade unions.

The government says it intends to prepare draft regulations to bring in the levy to be laid before Parliament in December 2021. The levy will apply from April 2022 and will be charged from the final quarter of the 2022 – 2023 financial year.

A three-tier approach

The government has proposed a three-tier approach, which is a variation on a two-tier structure floated in its original 2017 consultation paper. A basic levy will cover the Certification Officers’ (Cos) functions relating to all organisations (such as maintaining the list of organisations) which amounts to around half the CO’s activities.

This will be divided equally among unions, union federations and employer organisations. Those for whom the basic levy would exceed 2.5% of their annual income will be exempted. An additional levy will cover costs relating to the 50% of the time that the Certification Officer spends on trade unions, such as dealing with complaints (spurious or otherwise) or political fund ballots.

This will be paid by trade unions alone (but not trade union federations). Unions exempted from the basic levy are also exempt from this. As are those for whom the additional plus basic levy exceeds 2.5% of a trade union’s annual income.

‘Enhanced levy’ to cover shortfalls

There is also an ‘enhanced levy’ to cover the shortfall caused by exemptions. This will be paid by all the trade union federations and employer associations who pay the basic levy and those trade unions who pay the basic and additional levies. If the enhanced levy takes the total levy to more than 2.5% of an organisation’s annual income they will be exempted.

Employers’ bodies pass more costs to trade unions

It also appears that employers’ bodies and organisations have been successful in to passing more costs onto trade unions.

Additionally, the Certification Officer will get new ‘investigatory powers’ allowing third parties to lay complaints about a trade union which, will be brought into effect by commencement regulations in April 2022.

The Certification Officer has estimated that she is likely to need a budget of £1,150,000 from April 2022 – far in excess of the current budget.

The fact is that the Certification Officer has received few complaints about trade unions – and it is clear that this is an attempt to try to ramp up complaints and encourage ‘fishing’ expeditions, spurious and time wasting claims designed to tie up trade union’s time and finances.

Professor Keith Ewing Professor of Public Law at King’s College London and one of the UK’s foremost employment law experts slammed the Governments proposals saying:

“It is surely very unusual – if not unique to impose taxes of this kind:

•       Are MPs taxed to pay for the standards’ watchdog?
•       Are companies taxed to pay for Companies House or the Competition Commission?
•       Are data processors taxed to pay for the Information Commissioner?
•       Are broadcasters taxed to pay for OFCOM?

Do any other organisations enjoy the doubtful benefit of being taxed to pay to be regulated?

Questions raised of ECHR compatibility

If not, this must surely raise questions of compatibility with the ECHR, Articles 11 and 14 (protection from discrimination in relation to freedom of association). The government cites the example of the levy imposed by the Grocery Code Adjudicator.  At the moment the levy is just under £2 million split equally between 13 retailers.

**This article was first hosted on Left Foot Forward on the 26th of November 2021.**