The employer had been negotiating an improved pay deal in exchange for employees agreeing to changes to their working hours through its recognised trade union, UNITE. When those changes were rejected, the company wrote to employees directly offering the same package. It made two direct offers to employees; one in December 2015 and one in January 2016.
The Employment Appeal Tribunal (EAT) confirmed that this attempt to bypass the recognised trade union by negotiating directly with individual employees amounted to unlawful inducement contrary to section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992. They said that if acceptance of the direct offers meant that at least one term of employment would be determined by direct agreement, and not through collective bargaining, that was sufficient to amount to a breach of the legislation. There is no requirement that the terms would not in future be determined collectively in order for there to be a breach.
The Employment Tribunal made two awards of £3,800 each to every employee who received the unlawful offers. The EAT agreed that the tribunal was entitled to make a separate award in respect of each of the two unlawful inducements, having found that the employer made two separate and distinct direct offers to employees.
Employers must not make direct offers to employees with the intention of restricting or bypassing an ongoing collective bargaining process. Even where collective bargaining has broken down completely and the employer considers that there is a proper and lawful reason for approaching employees directly, employers should consider their position carefully because of potential for substantial awards to be made against them if they get it wrong. In this case, the employer was made to total pay penalties of more than £400,000.
Kostal UK Ltd v Dunkley and others EAT/0108/17 & EAT/0109/17