The Court of Appeal has held in Kostal UK Ltd v Dunkley and others that an employer’s direct offer to individual employees when collective bargaining had broken down did not amount to an unlawful inducement contrary to section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992.
The employer in question entered into a recognition agreement with the trade union Unite. This provided that formal pay negotiations would take place annually, and that any proposed changes to terms and conditions of employment would be negotiated with the union.
When a package comprising a pay increase, a Christmas bonus and some detrimental changes to terms and conditions were rejected in a consultative ballot, the employer wrote to all employees directly offering the same package and posted a notice stating that if employees did not agree to the new terms, they would forfeit their Christmas bonus. The employer wrote again to employees who had not accepted the pay proposal, offering them a 4% pay increase and stating that dismissal might be a possible outcome if an agreement could not be reached. The claimants alleged that their rights under the aforementioned Act had been infringed.
The Court of Appeal dismissed the claims, noting that the offers had been made to the whole workforce and that they would continue to be represented by Unite under the collective agreement, irrespective of whether they accepted the offer or whether they were members of Unite or not. The offer did not have the prohibitive result of ceasing collective bargaining in the future.
This is helpful for employers that may be trying to settle a dispute with unions or circumvent an impasse in negotiations. A breach of Section 145B will only occur when an employer attempts to induce an employee to permanently surrender their collective bargaining arrangements; a one-off agreement will not be sufficient.
Rebecca McGuirk is an employment partner at Trowers and Hamlins