Trade unions and collective bargaining: landmark Supreme Court decision
Direct offer by employer
Case Kostal UK Ltd v Dunkley and others  UKSC 47, Supreme Court
Facts D and 56 other claimants are employed by K as shop floor or manual workers. That are members of the Unite trade union. In February 2015 K and Unite entered into a non legally binding recognition and procedural agreement. They started pay negotiations in October 2015. K made a pay offer to Unite which was rejected by D and others. K then made direct offers to employees who had rejected the first offer and threatened that rejection might result n the termination of their contracts of employment.
D and others complained to an employment tribunal (ET) that the direct offers were in breach of section 145B of the Trade Union and Labour Relations Act 1992. The ET upheld the complaints and awarded £3800 to each complainant. K appealed to the Employment Appeal Tribunal which dismissed the appeal. K then appealed further to the Court of Appeal which allowed the appeal. D and others then appealed to the Supreme Court.
Decision 1. The appeal was allowed.
2. Section 145B of the 1992 Act states that a worker who is a member of an independent trade union which is recognised, or seeking to be recognised, by his employer has the right not to have an offer made to him by his employer if – (a) acceptance of the offer, together with other workers’ acceptance of offers which the employer also makes to them, would have the prohibited result, and (b) the employer's sole or main purpose in making the offers is to achieve that result. The prohibited result is that the workers’ terms of employment, or any of those terms, will not (or will no longer) be determined by collective agreement negotiated by or on behalf of the union.
3. On a complaint under section 145B it is for the employer to show what was his sole or main purpose in making the offers.
4. What an employer cannot do with impunity is what K did, that is to make a direct offer to its workers, including union members, before the collective bargaining process which the employer has agreed to follow has been exhausted.
5. It did not necessarily follow that an employer could escape liability just because the collective bargaining process had been exhausted (as where, for example, the employer has been determined to thwart the bargaining process). 6. Where an offer is made directly, and not through collective bargaining, to workers who are trade union members which, if accepted, would change one or more terms of their employment, to avoid liability it is for the employer to establish that its sole or main purpose in making the offer was a genuine business purpose.