The trade union Unite has been in the news over the last few days in the context of the forthcoming strike at British Airways which has in turn led to a lot of noise being made about the way in which the union funds the Labour party.
While slightly off my usual beaten track of employment law, the rules governing union funds were something I wrote about quite a lot when I was a writer on IDS Brief and so I thought it might be worth summarizing the rules on political donations from trade unions. It turns out that union funding is about the most well regulated and democratic kind of political donation you could wish for.
The first point to make is that a union is not permitted to spend any money out of its general funds for ‘political objects’ which include, among other things, any donations to a political party or funding of a holder of political office. Any such expenditure must be made from a specially set up political fund (to avoid getting bogged down I don’t intend to refer to individual statutory provisions after each point, but those keen enough can turn to Sections 71-96 of the Trade Union and Labour Relations (Consolidation) Act 1992).
To set up a political fund, the union must pass a ‘political resolution’ which must be passed through a fully postal ballot of the entire membership of the union. That ballot must be conducted by post and is subject to independent scrutiny. Once the political resolution is passed the union can then set up the political fund which must be kept separate from the general fund. Money paid in to the fund must represent contributions by individual members or outside organisations and cannot include payments made from other sources of union income.
The union must inform all of its members that they have the right to be exempt from contributing to the political fund and any member that chooses to be so has the right not to be victimized as a result. To ensure that exempt members do not pay into the fund the union must either operate a separate political fund levy from which members can be exempt or give exempt members a discount on their union membership subscription. If the latter, the union must make it clear what proportion of the membership subscription represents a payment to the political fund.
Under changes introduced by the Trade Union Act 1984 a political fund will lapse automatically after 10 years if it is not renewed in a fresh ballot of all union members. Again the rules of the ballot are strict requiring a fully postal balloting process and being subject to independent scrutiny. All members are entitled to a vote in the ballot – including those who are exempt from contributing to the fund in the first place
To summarise, a union can only donate to a political party if the majority of its members have voted to allow a political fund to be set up within the previous ten years. Even if the ballot approves the political fund, individual union members have an absolute right to opt out of it. If the rules are breached, the Certification Officer has the power to intervene and require the union to remedy the situation.
Whatever your view of the Labour movement, it is difficult to see how anyone could regard payments made under this system as being at all problematic, much less ‘dodgy’. What influence a union then has over the Labour Party is of course a separate matter but – bit of politics here – at least that influence is open. The Labour party and the unions are, after all, part of the same movement (the clue is in the name) though that has never seemed to stop them coming to blows when Labour is in power.
As for the British Airways strike, I shall remain aloof – unless the dispute drags on until June when I’m due to fly to Seattle.
0 Responses to “Trade unions funding the labour party”