79.     The statutory derecognition process set out in Part IV applies only where a declaration of recognition has been made by the CAC under Part I or III. Applications for derecognition may only be accepted three or more years after the CAC's original decision. In other circumstances, Part IV does not apply, but if a voluntarily-recognised union is derecognised it may then apply for recognition under Part I.

80.     Paragraph 96 provides that the derecognition procedure applies to a union recognised through a CAC declaration. Paragraph 97 provides that derecognition may not take place until three or more years after a CAC declaration was made.

81.     The statutory recognition procedure in Part I does not apply to an employer with fewer than 21 workers. If, at least three years after a CAC decision, an employer has fewer than 21 workers, it can notify the union that it will therefore be derecognised. The union may appeal to the CAC under paragraph 101 if it believes the request is unfounded.

82.     Paragraph 99 provides that if the employer employs an average of fewer than 21 workers (using the same definition as in paragraph 7) over a period of thirteen weeks, he may at the end of that period give notice to the union of the fact and state that the existing bargaining arrangements will not apply from a given date, which must be at least 35 working days after the union is notified.

83.     Paragraph 100 gives the CAC 10 working days from the date it receives an application from an employer under paragraph 99 in which to decide on its validity. If it finds that the employer's notification was not valid, the collective bargaining arrangements will remain in place; otherwise the CAC must notify the union and employer that the notification is valid and, under paragraph 101, the union then has 10 working days in which to make an application to the CAC disputing the employer's claim. If the notice is not challenged, or if the challenge is unsuccessful, the notice will take effect and the collective bargaining arrangements will end on the date specified in the notice. If the CAC rules under paragraph 102 that the employer's application is not correct, recognition continues.

84.     Paragraphs 104-111 apply if the employer requests the union to end the bargaining arrangements. (These paragraphs are broadly similar to paragraphs 10-12 and 15, which deal with a request for recognition.) If the union was recognised voluntarily, and the CAC did not impose a method for collective bargaining, then this procedure does not apply and the employer may derecognise at any time without going through the statutory procedure in this Part.

85.     Paragraph 104 has the effect that a request to end the bargaining arrangements may be made under this Part only once three or more years have passed since the union was recognised.

86.     Paragraph 105 provides that the derecognition procedure is to end if the parties agree to end the bargaining arrangements within ten working days of the request. If the union agrees to negotiate, then the parties have 20 working days, plus whatever remains of the initial ten working day period, to reach agreement. They can extend the period for negotiation by mutual consent. If the parties agree that the union should remain recognised, it is sufficient for them to take no further action. The CAC would not be asked to make a decision under paragraphs 106 or 107, and the bargaining arrangements would remain in force. Paragraph 105(5) is for the avoidance of doubt; there is no requirement to involve ACAS.

87.     Paragraph 106 provides that if the union either does not respond to or rejects the request before the end of the first (ten working day) period, the employer may apply to the CAC to hold a secret ballot to decide whether a majority of workers support derecognition.

88.     Paragraph 107 provides that if the employer and union fail to reach agreement by the end of the second period, the employer may apply to the CAC to hold a secret ballot to decide whether a majority of workers support derecognition. Paragraph 108 contains general procedural requirements for applications to the CAC. Paragraph 109 means the application must be rejected if the CAC accepted another application for derecognition under Part IV or V in the previous 3 years.

89.     Paragraph 110 provides that, if the CAC is to decide whether a union should be derecognised, it must first be satisfied that derecognition is likely to have sufficient support in the bargaining unit to make proceeding with the application worthwhile. The test for this is that at least 10% of the bargaining unit favour an end to the collective bargaining arrangements and a majority of the workers in the bargaining unit would be likely to do so. This is essentially the same test as in paragraph 20 or 36 for recognition applications.

90.     Paragraphs 112-116 apply to applications for derecognition by workers. The provisions apply equally if one or many workers in the bargaining unit formally request an end to collective bargaining arrangements. For simplicity these notes refer to applications by a single worker but such references should be read as covering applications by a group of workers as well.

91.     Paragraph 112 provides that three or more years after recognition, a worker may apply to the CAC to end the collective bargaining arrangements. Paragraph 113 means the application must be rejected if the CAC accepted another application for derecognition under Part IV or V in the previous 3 years. Paragraph 114 provides that the CAC may not proceed with an application unless at least 10% of the bargaining unit favour an end to the collective bargaining arrangements and a majority of the bargaining unit are likely to do so. (This is essentially the same test as in paragraph 110).

92.     Paragraph 116 requires the CAC to help the employer, union and worker with a view either to the employer's and union's agreeing to end the bargaining arrangements or the worker's withdrawing the application in the 20 working days after the application is accepted. If an agreement is reached or the application is withdrawn, the CAC will take no further action. Otherwise, it must hold a ballot under the provisions of paragraphs 117-121.

93.     Paragraphs 117-121 make provision for the holding of ballots on applications for derecognition, mirroring the procedures for recognition ballots under paragraphs 25-29. Paragraph 121 provides that if the ending of bargaining arrangements is supported by a majority of those who vote and at least 40% of the workers constituting the bargaining unit, the CAC must declare that the bargaining arrangements will cease to have effect from a specified date; otherwise, the application must be refused and the union will remain recognised. The degree of support needed for derecognition may, like that needed for recognition, be altered by the Secretary of State by order subject to the affirmative resolution procedure.

Part V: Derecognition where recognition automatic

94.     Part V provides for a different derecognition process to apply in cases where unions have been 'automatically' recognised on the grounds of having greater than 50% membership of the bargaining unit (i.e. without a ballot). Applications for derecognition of an automatically-recognised union may be accepted only three or more years after recognition.

95.     Paragraphs 122-124 provide that the derecognition procedure applies to unions recognised as the result of a CAC declaration under paragraph 22 or 87 whether the method for collective bargaining is voluntarily agreed, imposed by the CAC or agreed as a variation on a CAC imposed method.

96.     Paragraph 125 provides that derecognition may not take place until three or more years after a CAC declaration of recognition was made.

97.     Paragraphs 127-133 provide for an employer to request a union to end bargaining arrangements on the grounds that fewer than half of the workers constituting the bargaining unit are members of the union. (These paragraphs are similar to paragraphs 104-111, which deal with a standard request for derecognition.)

98.     Paragraphs 127 and 129 contain general procedural requirements for applications to the CAC under this Part.

99.     Paragraph 128 provides that the derecognition procedure is to end if the parties agree to end the bargaining arrangements within ten working days of the request. If the union agrees to negotiate, then the parties can extend the ten working day negotiation period by mutual consent. If the parties agree that the union should remain recognised, it is sufficient for them to take no further action. The CAC would not be asked to hold a ballot under paragraph 106 or 107 (which are applied by reference), and the bargaining arrangements would remain in force. If the union either does not respond to or rejects the request before the end of the negotiation period, the employer may apply to the CAC to hold a secret ballot to decide whether the union should be derecognised.

100.     Paragraphs 130 and 131 provide that, if the CAC is to hold a ballot to decide whether a union should be derecognised, it must first be satisfied that a majority of the workers who make up the bargaining unit are not members of the recognised union, and that it had accepted no application for derecognition under Part IV or V in the previous 3 years. If a majority of the workers are union members, the automatic recognition will remain in force and the CAC will take no further action. The CAC has 10 working days in which to decide.

101.     Paragraph 133 provides that if a ballot is to be held on derecognition the same derecognition ballot procedure as in Part IV should be followed.

Part VI: Derecognition where union not independent

102.     Part VI provides that workers will be able to apply to the CAC for the derecognition of a union which does not have a certificate of independence and which has been (voluntarily) recognised by an employer.

103.     These provisions apply equally if one or many workers in the bargaining unit request an end to collective bargaining arrangements.

104.     Paragraphs 134 and 138 restrict the scope of this Part to unions which do not have a certificate of independence.

105.     Paragraph 137 provides that at any time after a non-independent union is recognised, a worker (or workers) may apply to the CAC to end the collective bargaining arrangements. Paragraph 139 provides that an application is not admissible unless at least 10% of the bargaining unit favour an end to the collective bargaining arrangements and a majority of the bargaining unit are likely to do so. (This is essentially the same test as in paragraph 110). Paragraphs 135 and 136 provide definitions for this Part of the Schedule.

106.     Paragraph 140 makes an application for derecognition under Part VI inadmissible if the union has applied for a certificate of independence under section 6 of the 1992 Act. Paragraph 141 requires the CAC to decide whether an application is admissible in terms of paragraphs 137-140, taking evidence from the employer, union and workers.

107.     Paragraph 142(1) mirrors paragraph 116(1), and requires the CAC, during a 20 working day negotiation period, to help the employer, union and workers negotiate with the aim that either they agree to end the bargaining arrangements or the worker withdraws the application. If an agreement is reached or the application is withdrawn, the CAC will take no further action. Otherwise, it must hold a ballot under paragraph 147.

108.     If during the negotiation period in paragraph 142 the CAC becomes aware that the union applied for a certificate of independence before the application for derecognition was made, paragraph 143 requires it to suspend work on the workers' application for derecognition. If the Certification Officer (CO) decides that the union is independent, paragraph 144 has the effect of ending the application, and the union remains recognised. If the CO decides that the union is not independent, the application resumes, and a new 20 working day negotiation period begins. If the employer and union agree to end recognition or if the workers withdraw their application, the CAC will take no further action. If they cannot agree, it must hold a ballot under paragraph 147. If at any time before the CAC is informed of a ballot result under Part VI the union is awarded a certificate of independence - for example, as a result of an appeal against the CO - then paragraph 146 requires the CAC to ignore the workers' application for derecognition and the union remains recognised.

109.     Paragraph 148 deals with the situation where an application for derecognition under this Part has been successful but the employer has re-recognised the non-independent union for substantially the same bargaining unit. In this case, paragraph 35 allows an independent union to apply for statutory recognition under Part I within 3 years of the derecognition. If the independent union is declared to be recognised by the CAC then paragraph 148 provides that the non-independent union shall be derecognised. In this case statutory recognition under Part I replaces the voluntary recognition of the recently-derecognised non-independent union.

Part VII: Loss of independence

110.     The provisions for statutory recognition in Part I apply only to unions with a certificate of independence. Part VII of the schedule deals with the possibility that an independent union recognised under Part I might lose its certificate of independence. If this were to happen, the union would be treated as voluntarily recognised by the employer, but the statutory support for the bargaining arrangements would cease. Part VII also deals with unions which have made an agreement for recognition and for which a bargaining method is imposed via Part II; again, if such a union were to lose its certificate of independence the statutory support for the bargaining arrangements would cease.

111.     Paragraphs 149 and 150 provide that Part VII applies to unions recognised by a declaration of the CAC (under Part I or Part III) or which obtain a legally-binding bargaining procedure under Part II. Paragraph 152 means that the bargaining arrangements cease if the Certification Officer withdraws a certificate of independence from the union or, if more than one union is jointly recognised, from all the unions. Paragraph 153 provides for the bargaining arrangements to be restored if a union successfully appeals against the Certification Officer's decision to withdraw the certificate of independence.

112.     Paragraph 154 means that if the bargaining arrangements cease to have effect under this Part, then the employer can derecognise the union without having to go through the procedure in Part IV or Part V, or negotiate to change the bargaining unit without following the procedure in Part III. If the union appeals successfully against the loss of certificate, the original arrangements will come into force again.

113.     Paragraph 155 concerns the requirement to consult on training (section 5 of the Act). If the requirement lapses because a union loses its certificate of independence, but then resumes because the union appeals successfully, the first consultation meeting must be held within 6 months of the day on which the bargaining arrangements take effect again.

Part VIII: Detriment

114.     Detriment is action short of dismissal taken by an employer which is damaging to the worker. Paragraphs 156-160 set out provisions prohibiting such detriment in respect of a worker on the grounds relating to recognition or derecognition of a union listed in paragraph 156(2). Under section 146 of the 1992 Act, an employee currently has the right not to suffer detriment on grounds of membership, non-membership or taking part in the activities of a trade union. The Act extends this right so as to prohibit detriment in respect of the paragraph 156(2) grounds and gives employees the right to complain in respect of such detriment to an employment tribunal. Paragraphs 157-160 make provision for time limits and other procedural matters and in relation to the calculation of awards.

115.     Paragraph 161 provides that an employee's dismissal is unfair if it is on the grounds related to recognition or derecognition listed in paragraph 161(2); these are the same grounds as in paragraph 156(2). Paragraph 162 makes similar provision in respect of selection for redundancy. Paragraph 163 has the effect that dismissal which would be unfair under paragraphs 161 or 162 will still be unfair even if the dismissal consists of the expiry of a fixed term contract and the employee has waived the right to claim unfair dismissal on that expiry as permitted by section 197(1) of the 1996 Act. This provision is transitional in nature since such waivers will be prohibited by section 18 of the Act when it is brought into force.

116.     Paragraph 164 has the effect that dismissal on the grounds listed in paragraph 161(2) is unfair even if the employee has not completed the qualifying period normally required for claiming unfair dismissal or has passed the upper age limit normally required for making a claim.

• The qualifying period for unfair dismissal is currently one year, as set out in section 108 of the 1996 Act (as amended by SI 1436/1999).

• The upper age limit is dealt with in section 109 of the 1996 Act.

Part IX: General

117.     Paragraph 166 provides that if the CAC represents to the Secretary of State that the automatic recognition procedure in paragraphs 22 or 87 has an unsatisfactory effect, the Secretary of State may amend it. The amendment need not be one proposed by the CAC, and must be made by statutory instrument subject to the affirmative resolution procedure. Paragraph 167 allows the Secretary of State to issue guidance to the CAC on how to exercise its functions under paragraphs 22 and 87, ie how to decide the three qualifying questions in paragraphs 22(4) and 87(4). The guidance is required to be laid before both Houses of Parliament and published

118.     Paragraph 168 provides that the Secretary of State may by order specify a method for conducting collective bargaining to be taken into account by the CAC when imposing a collective bargaining method under paragraphs 31(3) and 63(2). The Secretary of State must consult ACAS before providing the guidance, which is made by order subject to negative resolution procedure. The CAC must take the specified method into account in imposing a bargaining method, but may depart from it as circumstances require.

119.     Paragraph 169 allows the Secretary of State to make rules for how the CAC should treat competing applications for derecognition.

Section 2 and Schedule 2: Detriment related to trade union membership

120.     Existing law protects employees against positive acts to prevent or deter trade union membership, non-membership or activities but not against omissions on the same grounds. In other words, if an employer takes action which gives a benefit to non union members but omits to confer the same benefit to union members, the omission does not constitute action short of dismissal on grounds related to trade union membership under section 146 of the 1992 Act. This aspect of the law was brought to light in the cases Associated Newspapers v Wilson and Associated British Ports v Palmer [HL 1995] ICR 406, where the House of Lords held that the word "action" in section 146 did not extend to omissions to act.

121.     Section 2 gives effect to Schedule 2, which amends section 146 so as to prohibit this form of detriment by omission and makes consequential amendments to other related sections of the 1992 Act; section 147 on the time limit for applications to be made to employment tribunals; section 148 on the consideration of a complaint by tribunals; section 149 on the remedies which tribunals can award; and section 150 on awards against third parties.

122.     Paragraph 2 of Schedule 2 replaces references in sections 146(1), (3) and (4) of the 1992 Act to action short of dismissal on grounds related to trade union membership, non-membership or activities with references to a right not to be subjected to any detriment as an individual by an act or deliberate failure to act on the part of the employer for one of the prohibited purposes. Section 146(5), which sets out the ground on which an employee may present a complaint to an employment tribunal as action taken against him, is amended accordingly. Similarly, paragraphs 3 to 6 make consequential amendments to sections 147, 148, 149 and 150 of the 1992 Act, which deal respectively with the time limits for bringing complaints before an employment tribunal, the criteria to be applied by the tribunal in determining the purpose of an employer's action, the remedies available in the event that the tribunal find a complaint is well-founded and proceedings against third parties.

Section 3 : Blacklists

123.     Under sections 137 and 138 of the 1992 Act, refusal of employment or (in the case of employment agencies) refusal of service on grounds of trade union membership is unlawful. In the past, organisations have compiled and disseminated blacklists of supposed trade union activists. People on such lists could have difficulty finding work. Inclusion could be defamatory and unjustified but it was often impossible in practice to obtain a remedy. Although there is no evidence that blacklisting is widespread, the practice of blacklisting in the UK has been repeatedly criticised by the International Labour Organisation and in Fairness at Work the Government proposed to prohibit blacklisting of trade union members.

124.     Section 3(1) gives the Secretary of State the power to make regulations, subject to affirmative resolution (under section 42), to prohibit the compilation of lists containing information about individuals' trade union membership or activities with a view to their being used by employers or employment agencies for the purposes of discrimination in relation to recruitment or in relation to the treatment of workers already employed. Subsection (2) provides that the prohibition may extend to the use, sale or supply of such lists. Subsection (3) sets out particular provisions which may be included in Regulations made under subsection (1). They include provision:

• conferring jurisdiction on employment tribunals and the Employment Appeal Tribunal;

• empowering the courts and tribunals to grant and enforce specified remedies;

• for awarding compensation to individuals included on blacklists;

• relating to cases where an employee is dismissed or selected for dismissal because he is included on a blacklist;

• permitting trade unions to bring proceedings on behalf of their members;

• creating criminal offences, which may in specific circumstances extend to another person, for example to an accomplice or agent of the person who commits the offence, or to their employee or employer; and

• specifying obligations or offences which will not apply in specified circumstances.

The regulations may also include supplemental, incidental, consequential and transitional provisions, including provision amending Acts of Parliament, and may make different provisions in differing cases and circumstances. The Government intends to consult on draft regulations before they are made.

125.     Subsection (4) limits the penalties for criminal offences which might be created by regulations made under subsection 3. Subsection (4)(a) provides that offences may not be punishable by imprisonment. Subsections (4)(b)and (c) set out the maximum fines that can be imposed by the courts. Such fines may not exceed level 5 on the standard scale (£5,000) for an offence that is triable only summarily, or the statutory maximum for a summary conviction for a case triable either way. The penalties are based on analogous criminal sanctions in the Data Protection Act 1998.

126.     Subsection (5) is interpretative. It provides a wide definition for the type of list which can be prohibited by regulation. In particular, it is designed to cover information that may be stored and circulated electronically, and to cope with the future development of information technologies. It also provides that the term "worker" (which appears in subsection (1)(b)) has the wide definition given in section 13 of the Act, and so includes agency workers, homeworkers, persons in Crown employment and Parliamentary staff as well as those included in the definition of "worker" in section 230(3) of the 1996 Act.

127.     Subsection (6) provides that expressions used in section 3 (except for "worker" and "list") have the same meanings as in the 1992 Act.

Section 4 and Schedule 3: Ballots and Notices

128.     Sections 226 to 235 of the 1992 Act specify the law relating to industrial action ballots and notices. These provisions are complex. The Government invited suggestions in Fairness at Work to clarify and simplify the law in this area. A large number of responses to this invitation were received, especially from trade unions and legal bodies. Section 4 gives effect to Schedule 3, which draws on some of these suggestions and amends the law in the following areas.

Informing employers of the ballot result

129.     Section 231A of the 1992 Act requires unions to inform employers about the result of an industrial action ballot which involves their employees. In cases where a union ballots its members employed by different employers, the union must supply the information to each of the employers concerned. Under existing law, a failure to inform some, but not all, of the employers can make it unlawful for the union to induce any of its balloted members to take action. Paragraph 2(3) of Schedule 3 makes it lawful in these circumstances for a union to call on its members to take action where they are employed by an employer who was informed of the result. It will remain unlawful, however, for a union to induce its members to take action if their employer was not informed of the result.

Notices to employers of industrial action ballots and the taking of industrial action

130.     If a trade union decides to call on its members to take or continue industrial action, it has no immunity from legal liability unless it holds a properly conducted secret ballot in advance of the proposed action. Unions are required under the 1992 Act to give to the employers concerned advance notice in writing both of the ballot and of any official industrial action which may result. The ballot notice must describe, so that their employer can readily ascertain them, the employees who it is reasonable for the union to believe will be entitled to vote. Likewise, the notice of official industrial action must describe, so that their employer can readily ascertain them, the employees the union intends should take part in the action. The current law has been interpreted by the courts (most notably, in the case Blackpool and the Fylde College v National Association of Teachers in Further and Higher Education [1994] ICR, 648 Court of Appeal and 982 House of Lords) as requiring the union in certain circumstances to give to the employer the names of those employees which it is balloting or calling upon to take industrial action.

131.     Paragraph 3 amends the provisions of the 1992 Act which provide for a notice to be issued in advance of the ballot. It amends section 226A(2) to redefine the purpose for which the notice is required as being to enable the employer to make plans to deal with the consequences of any industrial action and to provide information to those employees who are being balloted. Sub-paragraph (3) inserts a new section 226A(3A) which sets out the type of information which is to be included in the notice in order to satisfy the new section 226A(2). It has the effect that a union is required to provide only information in its possession and that it is not required to name the employees concerned.

132.     Paragraphs 11(1) to 11(3) amend section 234A of the 1992 Act, which provides for a notice to be issued in advance of official industrial action, in similar terms.