UK: Collective Bargaining
Authors: Ruth Bonino, Corinna Harris and Sophie Jackson
Employers are prohibited from inducing their workers who are members of a recognised trade union to bypass collective bargaining in certain circumstances.[1] A recent decision of the Supreme Court determined that a one-off direct offer to employees concerning pay, bypassing stalled collective bargaining, constituted an unlawful inducement (Kostal UK Ltd v Dunkley [2021]).
In the current case, which is the first reported EAT decision on this issue since the Supreme Court’s decision in Kostal, the EAT upheld claims from two employees that a pay increase, which was unilaterally implemented by their employers when collective bargaining with the trade union reached an impasse, was an unlawful inducement to bypass collective bargaining.
The EAT found that the unilateral pay increase was an offer, which the employees accepted by continuing to work. That offer had the result that the workers’ terms of employment as to pay were not determined by collective bargaining with the union, when it was likely that agreement would have been reached had further collective bargaining taken place. As the employment tribunal had noted, at the point the offer was made, the collective bargaining process had not come to an end and the parties were not that far apart in their negotiating positions. The EAT also concluded that the employer’s sole or main purpose in making the offer had been to achieve the prohibited result, i.e., to bypass collective bargaining.
Key Action Points for Human Resources and In-house Counsel
The decision is a further reminder of the need for employers to tread carefully whilst in the process of negotiating pay awards or other terms and conditions with trade unions. If an employer wishes to make any offers to its employees direct, it should consider carefully whether the collective bargaining process has been completely exhausted and ensure that there is a thorough paper trail to demonstrate that the process has been complied with.
Employers should review their recognition agreements to check there is a clearly defined collective bargaining process which has an easily identifiable end point and is not ambiguous over how and when the process should end.
[1] Section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA)
