In a landmark judgment being hailed as the most significant trade union rights case in a decade, Thompsons won a judgment in the Supreme Court last week in the case of Kostal UK Ltd v Dunkley and ors.
In it, the Court held that the company had made offers to Unite members which, if accepted, would mean that some of their terms and conditions would not be determined by collective bargaining and were therefore unlawful.
It also held that the right of unions to collective bargaining must be meaningful and that employers cannot bypass bargaining procedures, even on a single occasion.
After recognising Unite for collective bargaining purposes, Kostal made a pay offer to the union through the agreed collective bargaining procedure. This covered basic pay, a Christmas bonus and other terms and conditions. The offer was rejected by over 80 per cent of the membership in a ballot.
After it was rejected, the company wrote to all its employees (not just union members) making the offer directly to them and explaining that, if it was not accepted by a certain date, they would not receive the Christmas bonus element of it. Further (inconclusive) pay negotiations followed, after which the vast majority of employees accepted the offer. The company then wrote to those employees who had still not accepted informing them that they could be dismissed. Alternatively, if they agreed they would receive a four per cent pay increase. A collective agreement was subsequently reached with Unite.
Backed by Unite, a group of union members brought claims for unlawful inducements in relation to collectively bargained terms and conditions in breach of section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA). This states that employers are prohibited from making offers to workers of recognised trade unions if acceptance of the offers would have the result that the workers’ terms (or any of them) will not (or will no longer) be determined by collective bargaining (the 'prohibited result'). But this only applies if the employer’s 'sole or main purpose' in making the offers is to achieve the 'prohibited result'.
All five Supreme Court Justices upheld Unite’s appeal. The ruling means that the ‘prohibited result’ can occur when a term – even on a single occasion – is not collectively bargained, unless the employer has completed the bargaining procedures in good faith before making the offer. They ruled that the words 'will not' and 'will no longer' both applied to situations where the union was already recognised.
If the 'prohibited result' occurs, the next step is to consider the employer’s purpose in making the offers. Given that the tribunal had already found in favour of the claimants in this case, the appeal was upheld and the Unite members will be entitled to the compensation awarded to them by the original tribunal.
To read the judgment in full, click here.