ACAS suffers setback in dispute

Posted: 5th April 2019

Employment word cloudFew would fail to appreciate the irony of the Advisory, Conciliation and Arbitration Service (Acas) being embroiled in a dispute with a trade union representing its own employees.

However, the falling out provided the occasion for an important test case on the extent to which public employers are obliged to consult their staff.

The Public and Commercial Services Union complained that Acas had failed to consult its employees pursuant to a negotiated agreement.

The Central Arbitration Committee (CAC) ruled that it had jurisdiction to consider the complaint under the Information and Consultation of Employees Regulations 2004. Acas’s challenge to that decision was later rejected by an Employment Tribunal.

In challenging the latter ruling before the Employment Appeal Tribunal (EAT), Acas argued that it fell outside the ambit of the Regulations. It pointed out that it is largely funded by the Department of Business, Innovation and Skills and that, as a Crown Non-Departmental Public Body, it is entirely staffed by civil servants. It argued that its activities are governmental in nature, rather than economic or competitive, and that its position could be equated to that of a regulator.

In dismissing the appeal, however, the EAT noted that one of the roles performed by Acas is to advise employers on good employment practices, and that such services are paid for. Although that made up only a small part of Acas’s activities, it was nevertheless a remunerated provision of services to a customer. That economic activity was neither ancillary nor so small as to be irrelevant, and was sufficient to bring Acas within the Regulations.

The EAT noted that an economic activity, within the meaning of the Regulations, does not require that payment for goods or services be made by a consumer or end user. It therefore mattered not that Acas is largely dependent on government grants. The EAT also found that an economic activity may include the supply of goods and services by a monopoly in any given market.

The sole point on which the EAT differed from the CAC was in finding that the highly important conciliatory role performed by Acas under the Employment Tribunals Act 1996 is not an economic activity. That role was carried out in the exercise of public powers and thus fell outside the Regulations. That conclusion, however, did not affect the overall outcome of the appeal.