Can an employer engaged in collective bargaining, having had its ‘final’ offer rejected, simply treat collective bargaining as over, and so avoid the provisions of s145B Trade Union Labour Relations Consolidation Act - which prohibits offers to forego collective bargaining rights?
No, held the EAT in Ineos Infrastructure Grangemouth v Jones & ors, dismissing two employers’ appeal against a tribunal's finding of breaches of s145B, as per the Supreme Court’s decision in Kostal.
Following ‘acrimonious’ collective bargaining, the employers made the union a ‘final and best’ pay offer, which was rejected, although they weren’t far apart. The employers then unilaterally announced a pay rise and terminated the collective bargaining arrangements. The employers argued that, in Scots contract law (unlike English law), the pay rise was simply an enforceable ‘unilateral promise’, not an ‘offer’ breaching s145B; collective bargaining had ended, their purpose was not by-passing collective bargaining.
The EAT upheld the tribunal’s findings of a breach of s145B. There had been an ‘offer’ which had the ‘prohibited result’ of bypassing collective bargaining; the parties had been close to agreement; the purpose of the offer was to get rid of the union (as an email showed). The tribunal’s judgment was in line with the Supreme Court decision. Collective bargaining does not end simply because an offer said to be ‘final’ is rejected, the proper approach is to objectively ascertain whether negotiations are at an end. S145B requires a purposive interpretation to give effect to Article 11 rights – here, to union representation.
For completeness, the EAT held (obiter) that with changes to fundamental terms of employment (e.g. pay), there is no scope for a unilateral promise in Scots law as opposed to offer and acceptance, here the law was identical north and south of the Border.
Thanks to Ed McFarlane of Worknest LAW for preparing this case summary.