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Ban on inducements
[ch 5: pages 147-149]In the UK, it is unlawful for an employer to offer any worker an inducement not to join (or to join) a union, take part in union activities, or use union services, or to join a union or any particular union(s) (section 145A, TULRCA).
It is also unlawful for an employer to offer a member of a trade union that is recognised or seeking recognition, an inducement to stop or prevent their terms and conditions being negotiated by a union through collective bargaining (section 145B, TULRCA). This law is of increasing importance to trade unionists, as these examples show (see also the latest example of a successful claim, brought by Unite members, in the box on page 149):
• In 2006, supermarket chain Asda was ordered to pay £850,000 for offering inducements to 340 members of the GMB general union to give up collective bargaining rights. Workers at its distribution depot in Washington, Tyne and Wear were offered a 10% pay rise if they agreed to end collective bargaining at the site.
• In 2014, Bromley Council was ordered to pay more than £64,000 to compensate 18 employees when it breached section 145B, TULRCA after an employment tribunal concluded that the Council offered its staff cash incentives to sign new contracts taking them out of collective bargaining agreements. £200 each was offered to workers to sign new contracts agreeing to a localised pay award in place of national and regional collective agreements. The case was brought by 18 UNISON members who did not sign the new contract, some of whom were dismissed and re-engaged on the new localised terms and conditions. Each claimant was awarded compensation of £3,600.
The law banning inducements has become even more relevant following changes to the Transfer of Undertaking (Protection of Employment) Regulations 2006 (TUPE) that became law in January 2014. These changes, explained in Chapter 12 (see page 481), aim to make it easier for employers to change collective terms after a TUPE transfer. Reps in a workplace where the employer wants to impose change after a TUPE transfer should take advice from their national union as soon as possible.
To succeed in a claim, members must establish an arguable case that the employer intended to induce workers to abandon their collective terms when making the offer. If they succeed, the burden shifts to the employer to prove that this was not its intention (section 145B(2), TULRCA). For example, in the Kostal case (box on page 149), the fact that Kostal, when making the offer, highlighted to those who had not yet accepted its offer precisely what percentage of co-workers (including trade union members) had already accepted, was clear evidence that they intended to circumvent the union negotiations, making the offer unlawful.
The award payable by an employer to each worker offered an inducement is £3,907 (from April 2017). If multiple offers are made (as in the Kostal example), a separate award should be made for each offer.
Unite wins compensation for unlawful inducements
In 2016, 56 Unite members won compensation after management at car electronics company Kostal UK Limited tried to bypass the recognised union and put a pay offer direct to individuals that included changes to their contract terms.
Unite won recognition at Kostal in November 2014, signing a Recognition and Procedural Agreement. A year later, a pay offer put to members through a consultative ballot was rejected by a large margin (78.4%, on an 80% turnout). The pay increase had been conditional on members accepting changes to rest breaks, overtime and sick pay, which they rejected.
Instead of continuing pay negotiations, Kostal pinned a “general notice” to the staff notice board and wrote twice to individual employees, in each case urging workers to accept the offer and agree the contract changes, or else forfeit their Christmas bonus. The second letter told recipients how many of their co-workers had already accepted the offer – including, explicitly, trade union members – and warned them that failure to accept could lead to dismissal.
In evidence, the union negotiator said his mandate to negotiate was “blown away” by the management decision to write to the workers direct. “That”, said the union, “was the mischief which the legislation was intended to prevent”.
The tribunal agreed: “It is not permissible for an employer to abandon collective negotiation when it does not like the result of a ballot, approach the employees individually with whom it strikes deals and then seek to show its commitment to collective bargaining by securing a collective agreement which is little more than window dressing – having destroyed the union’s mandate on the point in question in the meantime … “If there is a recognition agreement which includes collective bargaining, the employer cannot drop in and out of the collective process as and when it suits its purpose”.
This employment tribunal ruling is important because it shows that section 145B, TULRCA extends to situations where employers attempt to subvert a union’s bargaining position by making offers direct to the workforce during pay bargaining negotiations.
Dunkley and Others v Kostal UK Limited Case No. 1800677/2016 & Others, Sheffield ET, 30 December 2016