Peter Morgan, director general, said further legislation was even more urgent in the wake of the General Agreement on Tariffs and Trade agreement to enable Britain to compete internationally.
In evidence to the House of Commons Employment Select Committee, the Institute argues that unions should be required to operate within the same legal framework as all other voluntary associations established for the benefit of their members.
Mr Morgan said: 'The competitiveness of British business and the economic recovery could be undermined by trade union immunities, which place them above the law and allow them to take damaging industrial action without collective responsibility for the consequences.'
Despite good industrial relations within the past few years, the economy could expect greater pressure for wage increases beyond what was dictated by productivity as the recovery gained momentum.
'Now more than ever, in the wake of the Gatt agreement, trade union law should be reformed to ensure that British business can remain competitive in global markets.'
The Government should introduce statutory limits on mass picketing, end centralised pay bargaining in the public sector and abolish government-sponsored pay review bodies.
The main points of the Institute's proposals were:
A statutory duty to maintain the supply of 'essential services' including health, gas, water, electricity, telephone, ambulance and fire services;
A legal obligation to provide compensation to customers when a statutory duty was not fulfilled;
The removal of all union immunities;
Compensation for the loss of the right to strike and provisions for binding arbitration over pay and conditions;
A statutory code restricting the number of pickets at any workplace entrance to six.Reuse content