If an employer bypasses a recognised union by making a one-off offer directly to workers, is that an unlawful inducement to forego collective bargaining rights?
No, held the Court of Appeal in Kostal UK v Dunkley, overturning the EAT's judgment in the first appeal on s145B of TULR(C)A 1992.
The employer had made two pay offers directly to employees when collective bargaining broke down, leading to claims for the fixed compensation (then £3,800) per employee per offer for the 'prohibited result' of making an offer leading to terms of employment no longer being determined by the collective agreement.
The Court considered what was a 'prohibited result' for the purposes of S145B. holding that S145B was intended to prevent employers doing two things:
(i) Where an independent trade union is seeking recognition with an employer, and the employer makes an offer to workers where the sole or main purpose is to prevent the workers' terms of employment from being determined by collective bargaining.
(ii) Where an independent trade union is already recognised by the employer, and the employer makes an offer to workers so that overall terms of employment will no longer be determined by a collective agreement on a permanent basis.
S145B does not cover situations where the employer makes an offer where the sole or main purposes is that, on one occasion, one or more of the workers terms of employment will not be determined by a collective agreement. S145B should not be construed in a way that could give a union an effective veto over any changes to terms and conditions, however minor. In this case, the situation did not deprive union members of the right to ballot over an offer, or to require members to relinquish their right to union representation.
Thanks to Ed McFarlane of Deminos HR for preparing this case summary.