Kostal UK Ltd v Dunkley and ors – Court of Appeal overturned decision of the Employment Appeal Tribunal

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In our recent blog we look at the Kostal appeal case on Trade Union inducements.

Kostal UK Ltd v Dunkley and ors

Sadly the Court of Appeal has overturned the decision of the Employment Appeal Tribunal (EAT) in this case on unlawful inducements.

S.145B of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRA”) says that an employer must not offer an inducement to its workers with a view to persuading them to give up the right to bargain collectively.

Here the employer, Kostal, had fallen out with the recognised Union, Unite, about a pay package and a Christmas bonus.

When negotiations ground to a halt, Kostal decided to approach its workforce directly.  It wrote to employees twice, offering a deal and threatening consequences (including possible dismissal) if they turned it down.

In short, they went over the Union’s head.

EAT upheld a finding by the Employment Tribunal (ET) that this breached the prohibition in s.145B – it was the employer’s intention to do a deal direct, rather than collectively.  There was an inducement (more threat than bribe).

It was quite a Christmas present for the Unite members – over £7,000 each in compensation (since EAT said that they could make 2 awards of compensation, one for each of the inducements).  The total cost to Kostal ran into £100,000s.

But the Court of Appeal has disagreed.

They said this:  the point of s.145B is to prevent employers looking to move away from collective bargaining permanently.  Kostal was looking only to resolve a single issue.  It would return to the collective table once the pay deal was sorted out.

And that, unhappily for the members concerned, is that.

Kostal (the EAT decision) has been seized upon as a potentially significant addition to the armoury of the Unions – although caution has rightly been expressed about choosing the right cases to run.

Unless the Supreme Court can be persuaded to look at it, however, this looks like the end of the road for this particular argument.

Only an attempt to move permanently away from collective bargaining will permit us to invoke s.145B.

Take a look at our employment blog for more on this case.