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TRADE UNION POLITICAL FUNDS a Guide for Trade Unions, Their Members and Others

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TRADE UNION POLITICAL FUNDS a Guide for Trade Unions, Their Members and Others TRADE UNION POLITICAL FUNDS A guide for trade unions, their members and others February 2018 Contents Introduction _______________________________________________________________ 3 Setting up a political fund _____________________________________________________ 5 Operating a political fund _____________________________________________________ 9 "Contracting out" of a political fund for existing members of a union political fund _________ 10 "Opting in" to a political fund for new members of a union political fund ________________ 12 Reviewing the political fund __________________________________________________ 14 Political fund expenditure and reporting to the Certification Officer ____________________ 16 Unlawful expenditure on political objects ________________________________________ 18 Independent scrutiny of political fund ballots _____________________________________ 19 The independent person ____________________________________________________ 23 Duty of confidentiality _______________________________________________________ 25 Appendix 1: General qualifying conditions _______________________________________ 26 Appendix 2: Certification Officer _______________________________________________ 27 2 Trade union political funds: a guide for trade unions, their members, and others Introduction A trade union (“union”) wishing to spend money on party political activities must set up a separate political fund for financing any such expenditure. Trade unions must comply with the statutory requirements set out in the Trade Union and Labour Relations (Consolidation) Act 1992 (“the 1992 Act”) as amended by the Trade Union Act 2016 (“the 2016 Act”) in setting up and running such funds and union members have certain rights in relation to these requirements. In particular, no member is obliged to contribute to a union's political fund should they not wish to do so. The provisions of the legislation on political funds apply to unincorporated employers’ associations as well as trade unions. However for the sake of simplicity this document refers throughout to trade unions only. This document gives general guidance only and is not a substitute for professional legal advice. Authoritative interpretations of the law can only be given by the courts. Changes made by the 2016 Act to trade union political funds The amendments made to the 1992 Act by the 2016 Act apply only to new members joining a union and to new political funds set up on or after 1 March 2018 (“new members”)1. Existing members of a union and existing political funds established before 1 March 2018 (“existing members”) will continue to be subject to the current provisions in the 1992 Act, which are not amended. For example, existing members can continue to automatically contribute to funds unless they choose to exempt themselves. Under the changes made by the 2016 Act, new members will be subject to the following. • A member will not be able to contribute to the political fund unless they have given notice of their willingness to contribute to that fund (an “opt-in” notice). • A member who has given an opt-in notice may withdraw the notice by giving a withdrawal notice at any time. • A withdrawal notice takes effect within one month of it being given to the union. • Opt-in and withdrawal notices may be delivered by post or by hand or using email or other electronic means, in accordance with instructions given by the trade union. • On or after 1 March 2018, unions must notify members on an annual basis of their right to submit a withdrawal notice. The notification must be given within 8 weeks of the date of the union’s annual return (AR21 form) to the Certification Officer for Trade Unions and Employers’ Associations (“Certification Officer”). It may be given with the annual statement to members (made under section 32A of the 1992 Act) or by any other means the union chooses to use to communicate with members on matters of importance. Good practice would also be to remind members of their right to withdraw in relevant communications. 1 The Trade Union Act 2016 (Political Funds) (Transition Period) Regulations 2017 which came into force on 1 March 2017 provides that the relevant provisions come into force after a transition period of 12 months which starts on 1 March 2017. 3 Trade union political funds: a guide for trade unions, their members, and others • The union shall send the Certification Officer a copy of the notification or a copy of each notification if they are different. If the Certification Officer finds, after giving the union an opportunity to make representations, that a union has failed to comply with this requirement they may make an enforcement order to remedy the failure as they think just under the circumstances. In due course in accordance with the changes to the Certification Officer’s powers, they will also be able to impose financial penalties in respect of the failure. • After 1 March 2018 a union’s application form for members joining a union with a political fund must include a statement to the effect that a member may choose to contribute to the political fund and that a member will not suffer any detriment should he choose not to contribute. 4 Trade union political funds: a guide for trade unions, their members, and others Setting up a political fund When does a union need a political fund? A trade union needs a political fund only if it wants to use its funds for what the law defines as "political objects". What are "political objects"? "Political objects" cover what can broadly be described as electoral or other party political activities. Section 72 of the 1992 Act defines political objects as the expenditure of money: a) on any contribution to the funds of, or on the payment of any expenses incurred directly or indirectly by, a political party; b) on the provision of any service or property for use by or on behalf of any political party; c) in connection with the registration of electors, the candidature of any person, the selection of any candidate or the holding of any ballot by a union in connection with any election to a political office (that is the office of Member of Parliament, Member of the Scottish Parliament, Member of the Welsh Assembly, Member of the European Parliament, or member of a local authority, or any position within a political party); d) on the maintenance of any holder of a political office (as defined above); e) on the holding of any conference or meeting by or on behalf of a political party or of any other meeting the main purpose of which is the transaction of business in connection with a political party (including any expenditure incurred in connection with the attendance of delegates or other participants); or f) on the production, publication or distribution of any literature, document, film, sound recording or advertisement the main purpose of which is to persuade people to vote or not to vote for a political party or candidate. Expenditure for any purpose not included on this list, but allowable under the union's own rules, may be made out of its general, or some other, fund. What must a union do if it wishes to set up a political fund? If a union wishes to establish a political fund its members must approve a resolution adopting the "political objects" as an object of the union in a secret ballot. The rules for conducting that ballot must be adopted as rules of the union and approved by the Certification Officer before the ballot takes place. The Certification Officer will give their approval only if the political fund ballot rules meet certain requirements. In particular: • entitlement to vote must be given to every member of the union; • the ballot must be held by post; and 5 Trade union political funds: a guide for trade unions, their members, and others • the ballot must be conducted and supervised by an independent scrutineer, in accordance with the requirements of the relevant law2. An information pack outlining the procedure to be followed and giving model rules is available from the Certification Officer (whose address and telephone number is provided in Appendix 2 of this document). What if the union fails to comply with the ballot rules approved by the Certification Officer? If a union member believes that a political fund ballot has been, or will be, held by his union in a way that does not comply with the rules for holding the ballot approved by the Certification Officer, the member may complain either to the Certification Officer or to the County Court (or Sheriff Court in Scotland)3. Section 17(3) and Schedule 2 of the 2016 Act amend the 1992 Act to enable the Certification Officer to exercise certain powers without an application or complaint by a member having to be made. In line with other changes brought in by the 2016 Act once it is fully implemented, the Certification Officer will be able to take action of their own accord, in relation to a potential breach of political fund requirements. Who can complain? A complaint can be made by any member of the union. Where the ballot has already been held, a person must also have been a member of the union at the time the ballot was taken. When can a complaint be made? A complaint about a political fund ballot which has already been held must be made within a year of its result having been announced by the union. What happens when a complaint is made? Whether a member complains to the Certification Officer or to the courts he will need to point to specific ways in which he believes the ballot did not comply, or would not comply, with the rules for that ballot approved by the Certification Officer. As we have said, the Certification Officer may also in future investigate a breach of their own accord. They will have the power to issue a declaration and/or enforcement order.
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