Honouring Collective Bargaining
Yesterday’s unanimous Supreme Court judgment restored the decision of an Employment Tribunal by allowing an appeal against the Court of Appeal’s reversal of its and the Employment Appeals Tribunal decisions: Kostal UK Ltd v Dunkley [2021] UKSC 47 Lord Briggs, Lady Arden, Lord Kitchin, Lord Leggatt, Lord Burrows
Kostal’s actions in making direct offers to its employees after signing a (non-legally binding) Recognition and Procedural Agreement in 2015, contravened section 145B[1] of the Trade Union and Labour Relations (Consolidation) Act 1992.
Lord Leggatt (with whom Lord Briggs and Lord Kitchin agreed) considered that section 145B prohibited not an offer with a particular content, but one which, if accepted by all the workers to whom the offer was made, would have a particular result.
What was required was a causal connection between the presumed acceptance of the offers and the prohibited result specified in section 145B(2).
That requirement would not be satisfied unless there was at least a real possibility that, had the offer not been made and accepted, the workers’ relevant terms of employment for the period would have been determined by a new collective agreement.
On that interpretation there was nothing to prevent an employer from making an offer directly to its workers in relation to a matter which fell within the scope of a collective bargaining agreement provided that the employer had first followed, and exhausted, the agreed collective bargaining procedure.
If that had been done, it could not be said that, when the offers were made, there was a real possibility that the matter would have been determined by collective agreement if the offers had not been made and accepted.
What an employer could not do with impunity was what Kostal did: make a direct offer to its workers, including union members, before the collective bargaining process which the employer had agreed (albeit in honour only) to honour had been exhausted.
Although Lady Arden and Lord Burrows agreed that the appeal should be allowed, they did not consider that an employer could escape liability just because the collective bargaining process had been exhausted (as, for example, where the employer had been determined to frustrate the bargaining process).
In their judgment, where an offer was made directly, and not through collective bargaining, to workers who were trade union members which, if accepted, would change one or more terms of their employment, in order to avoid liability it was for the employer to establish that its sole or main purpose in making the offer was a genuine business purpose.
[1] S145B(1) 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. (2) 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. S145D(2): On a complaint made under section 145B it shall be for the employer to show what was his sole or main purpose in making the offers.