Trade unions and unlawful inducement
The Employment Appeal Tribunal (EAT) has considered whether an employer's attempt to bypass a recognised trade union by negotiating directly with individual employees amounted to unlawful inducement contrary to Section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A) in Kostal UK Ltd v Dunkley and ors.
This is the first time s.145B has been considered at appellate level.
The employer entered into a recognition agreement with Unite to establish a framework for collective bargaining. The agreement 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 of pay increase, a Christmas bonus and some detrimental changes to terms and conditions was rejected in a consultative ballot the employer took the matter into their own hands.
They 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 then wrote again to the employees who had not accepted the pay proposal offering them a 4% pay increase and stating that dismissal might be a possible outcome if agreement could not be reached. A group of employees then brought claims in the employment tribunal alleging that their rights under section 145B TULR(C)A had been infringed on two separate occasions by the letters they received.
The EAT upheld the claims. Offers had been made directly to the claimants and these offers had the prohibited result (the purpose of the offers was to cease collective bargaining). The fact that the result is temporary (in the sense of being a one-off direct agreement) rather than permanent is irrelevant. There is nothing in section 145B that deals with the duration of the effect, or requires a permanent surrender of collective bargaining.
Take note: It's clear from the decision in Kostal that an employer does not have to induce an employee to permanently surrender their collective bargaining arrangements, and that a one-off direct agreement will still fall foul of section 145B. The EAT stated that where collective bargaining has broken down, there is nothing to prevent an employer making offers directly to workers provided that they have a genuine business purpose for doing so. In practice, any attempt to do this should be exercised with caution to avoid contravening section 145B and incurring a potentially large financial liability.
This article is taken from HR Law – January 2018.