The Supreme Court made an important key decision in the case of Kostal UK Ltd vs Dunkley and others. It decided that that employer must not make a direct approach to employees before collective bargaining procedure has been completed.
The Supreme Courts view was that employers must follow the collective bargaining procedure and have a genuine understanding of the procedure to allow them to make an offer directly to their employees. This creates a duty on the employer involved with collective bargaining agreements to ensure they are confident that each step in the procedure has been followed to the end. This includes the stages for collective bargaining and dispute resolution.
Bargaining rights
The claimants in the case numbered 57 and were members of the Unite union and worked for Kostal UK Ltd. There existed an agreement between the Unite union and the employer. The agreement gave the Unite union the exclusive recognition and bargaining rights.
Negotiations took place with Unite and the employers in relation to an offer of a 2% wage increase and 2% Christmas bonus. The offer was subject to amendment over sick pay, breaks and over time. The Union rejected the offer on behalf of the members. The employer then took up the tactic of making the offer directly to the employees without the Unite unions involvement. The employer told the employee if they did not accept the conditions of the offer this would result in no Christmas bonus. Following this, 4 weeks later the employers made another offer to the employees offering a 4% wage and the employees rejected this offer. The employer told the employees if the terms were not agreed they would terminate contracts.
The employers defended the offers to the employee saying they were only a temporary measure. The claimants argue the direct offer breached Trade Union and Labour Relations (Consolidation) Act 1992. The legislation imposed financial penalties when employer made offers to employees who were also trade union members which if agreed would have affected the conditions of employment under collective bargaining negotiations. The employees argued the employers’ actions constituted such a breach of the legislation.
Employment tribunal decision
The Employment Tribunal decided in favour of the Unite union members and each member received an award of £3800. The employers appealed the decision to the Court of Appeal which upheld the appeal application, however the employees appealed to the Supreme Court who upheld the employees’ appeal. The Supreme Court held that it was a fact that offers were made when the collective barging process was in progress hence there a breach of the Trade Union and Labour Relations (Consolidation) Act 1992. The Supreme Court did state that an employer had the defence available if the offer was made and the employer had a genuine belief that the collective bargaining procedure had been completed.
This article us for guidance only and if you have any employment problems please speak to the Quest HR Advice Line on 01455 852028.
