Govia Gtr Railway Ltd v The Associated Society of Locomotive Engineers and Firemen
| Jurisdiction | England & Wales |
| Judge | Lord Justice Elias |
| Judgment Date | 20 December 2016 |
| Neutral Citation | [2016] EWCA Civ 1309 |
| Docket Number | Case No: 2016/4560 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 December 2016 |
[2016] EWCA Civ 1309
Lord Justice Elias
Lord Justice Lewison
and
Lord Justice Lloyd Jones
Case No: 2016/4560
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
COMMERCIAL COURT
SIR MICHAEL BURTON sitting as a Judge of the High Court
CL-2016-000744
Royal Courts of Justice
Strand, London, WC2A 2LL
Hugh Mercer QC, John Cavanagh QC, Iain Quirk and Jennifer MacLeod (instructed by Eversheds LLP) for the Appellant
Oliver Segal QC, Katherine Apps, Stuart Brittenden and Nadia Motraghi (instructed by Thompsons LLP) for the Respondent
Hearing date: 12 December 2016
Approved Judgment
This is the judgment of the Court to which all members have contributed.
On Thursday 8 December Sir Michael Burton heard an application by GTR, who own the franchise to run Southern Rail, for an interlocutory injunction to prevent ASLEF, the train drivers' union ("the union"), from calling strike action called for a number of days in December 2016 and January 2017. He refused the application. An appeal was lodged late on the following day, Friday 9 December, and given that the first three days of the strike had been called for the 13, 14 and 16 of December, a court was urgently convened to hear the appeal on Monday 12 December. We rejected the appeal and therefore refused to grant the injunction, and we notified the parties of our decision immediately after the hearing. We said we would give our reasons later, and this we now do.
The dispute is over the use of Driver Only Operated (Passenger) Trains (DOOP). These are already in widespread use by other train companies and indeed are currently used on more than 50% of Southern Rail routes. The company wishes to expand the procedure to all its routes which have trains with up to twelve carriages and which have in-cab CCTV installed. The DOOP procedure means that the doors of the carriages can be closed by the driver using the technology instead of having to employ a conductor specifically to carry out that task. The union has set its face against this extension and indeed seeks to reverse the practice on the routes where it is already established. It also wishes to establish the right to veto any new introduction of technology.
The employers contend that the strike is unnecessary, unjustified and grossly disproportionate. They point to the fact that DOOP has been employed extensively already; that the company has guaranteed that there will be no job losses; that for reasons spelt out in some detail by the judge below but which we will not repeat, extensive testing has disclosed no safety problems with DOOP; and that there has been widespread consultation over many months but that the union has set its face against any settlement, irrespective of the arguments put to it. Even if all safety concerns were satisfied, they have indicated that they would still take industrial action.
The company submits that the action will have very damaging effects on their business and the travelling public. They estimate that over 600,000 journeys will be affected every day and that other parts of the operating network will be overwhelmed. The estimate of their own loss is in the region of £20 million, quite apart from serious reputational damage.
In the context of this legal action, a particularly important aspect is the impact on Gatwick Airport. Although the Gatwick Express drivers are not called out (as a result of a term of a settlement in earlier industrial action) and the union has given an assurance that they will not be called upon to refuse to cross picket lines, there will undoubtedly be some real impact on the operation of the Gatwick Express line. Sir Michael Burton estimated that some 50% of Gatwick Express services would have to be cancelled with corresponding disruption to the travel arrangements of those using the airport for flights abroad, whether for leisure or professional reasons. Some 37% of travellers at Gatwick Airport travel by rail, and 90% of those use GTR services. The company submits that it is inevitable that passengers will miss their flights or give up the unequal struggle and choose not to travel, or postpone their trips until normal service returns.
The appellant floated in the course of the hearing the suggestion that the action may in part be designed to help a fellow union, the RMT, in its separate dispute with the claimant, and that it is also in part being pursued for political reasons. The union has made no secret of its hostility to private providers and Southern Rail in particular, and supports nationalisation of the railways. These submissions do not sit happily with the appellant's concession (at least for the purposes of this application) that the strike is in furtherance and contemplation of a trade dispute, however, since sympathy action and strikes with a political objective are not protected in law. In the circumstances, and since none of this is pleaded, we are not prepared to make the assumption that these may be other factors influencing the decision to call the strike. We do not think that it is legitimate for us to have regard to these considerations in our assessment of the case.
One may quibble with the accuracy of some of these estimated effects, and the union does, but the judge was surely right when he said that there would be a massive disruption of services as a result of this action. It is beyond argument, as the news reports graphically demonstrate, there has been and will be, substantial inconvenience to many thousands of commuters.
The union strongly disputes that the new system of door closing is as safe as the old, and it says the DOOP procedure is a very stressful one for drivers. It strongly disputes that it has been recalcitrant in negotiations and submits that strike action was the only effective way to achieve its legitimate industrial aim. It says that the DOOP system puts considerable pressure on drivers and places passengers at risk. It also points out that its sister union, the RMT whose members include the train guards, has held strikes and a series of overtime bans on the same issue without any success. Accordingly, it submits that strike action was the only rational way left for it to achieve its industrial objective.
The legal basis of the claims
The case is atypical for labour injunction cases. It is not alleged that the strike would be in breach of domestic law considered independently of EU law. It is accepted that the industrial action is in furtherance of a trade dispute and that a proper and lawful strike ballot has been held in which the members have voted overwhelmingly to strike. Over 75% of the members voted and almost 90% of those favoured the strike.
The case against the union is that it is acting in breach of certain provisions of EU law which have been incorporated into English law. More specifically, it is said that the strike constitutes an unlawful interference with the right of establishment conferred by article 49 of the Treaty on the Functioning of the European Union ("TFEU") and the right to provide and receive services pursuant to article 56. The statutory immunities given to trade unions taking action in contemplation or furtherance of a trade dispute do not, and could not in a manner compatible with EU law, extend to infringements of EU law. Accordingly, if the industrial action contravenes EU law as alleged, the employer would be entitled to an injunction. At this stage we are not of course concerned with the question whether a final injunction should be granted, but only whether it should be granted as an interlocutory measure pending trial.
It is not suggested that English law in any way discriminates against other EU business enterprises in the way its strike laws are drafted. The appellant therefore accepts that the logic of its argument is that a UK company which has the necessary cross border element would have a claim in respect of industrial action in circumstances where a company wholly owned by UK shareholders would not. That preferential treatment is, it submits, simply a consequence of the way EU law is framed and in particular, the need to protect the freedom of establishment and the freedom to provide services across the EU.
Article 49 makes it unlawful for a state to impose restrictions on the freedom of nationals of one member state to establish themselves in the territory of another member state. It includes situations where a business seeks to set up a subsidiary or branch of a parent company. The reason article 49 of the TFEU is potentially engaged here is that a French company, Keolis SA, owns 35% of the claimant's shares and plays an active part in its decision making. It is conceded by the union that this is enough to attract the application of the article. The unusual feature of this case is that it is not the state itself but a private body, the trade union, which is alleged to have imposed the relevant restriction. The authorities we discuss below show that in an appropriate case they can be subject to both article 49 and article 56.
The submission relating to article 56 is now advanced on a narrower basis than it was below. It was then argued that there was an interference with the provision and receipt of transport services by GTR itself which contravened article 56. That was always a difficult argument because article 58 provides that the provision of services in the field of transport services is governed by Title VI of the TFEU. Directive 2012/34/EU, made pursuant to article 91, establishes a single European Railway area. It was common ground below that GTR could only succeed under this head by relying on certain provisions in the Directive. The judge was not persuaded that...
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