An employer’s attempt to bypass a recognised Trade Union by negotiating directly with individual employees amounted to an unlawful inducement.
In Dunkley and Others v Kostal UK Limited ET 1800677/2016 an Employment Tribunal held that the employer’s action in negotiating directly with individual employees rather than the recognised Trade Union was unlawful.
When a package of pay increases, a Christmas bonus, and some detrimental changes to terms and conditions was rejected in a collective ballot, the company 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 the Christmas bonus. The notice also indicated how many employees had previously accepted the offer and expressly referred to the Trade Union Representatives and Union members who had accepted the terms during the ballot. The company sent a further letter to employees referring to dismissal as a possible outcome if agreement could not be reached.
The Tribunal found that both actions by the employer amounted to a “prohibited result” under section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), which states that an employer may not make offers to members of a recognised Trade Union where the purpose of the offer is to cease collective bargaining.
The Tribunal rejected the company’s argument that it was merely seeking a temporary solution to a breakdown in the collective bargaining negotiations so its actions were outside the reach of the legislation. The Tribunal held that it is not permissible for an employer to abandon collective negotiation when it does not like the result of a ballot and approach the employees directly to arrive at an agreement.
Section 145B of TULRCA prevents an employer from making offers to members of a recognised Trade Union where the purpose of the offer is to cease collective bargaining. The legislation describes this as a prohibited result.
If section 145B of TULRCA is breached each affected employee can claim an award from the Employment Tribunal, currently £3,830.00.
This provision was added to TULRCA in 2004 although there have been very few claims made under it to date. However as this case illustrates the cost of falling foul of this provision can be very high indeed. The employer in this case was found by a Tribunal to have breached the provisions twice in respect of 57 of its staff and therefore liable to pay total compensation of around £436,000.00.
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