![[Basket]](images/basket.png){kind=small}
Your order![[cover image]](images/issue/BK201805.jpg)
Ban on inducements
[ch 5: pages 132-134]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 an independent trade union that is recognised or seeking recognition an inducement to stop or prevent their terms and conditions (or any of those terms) being determined by a collective agreement negotiated by a union (section 145B, TULRCA).
These provisions were enacted by the UK government to comply with Article 11 of the European Convention on Human Rights (see box on page 131), following a ruling by the European Court of Human Rights in the key case of Wilson and Palmer v The UK [2002] IRLR 568. The case concerned an unlawful offer of inducements to employees to opt out of collective bargaining arrangements.
Section 145B, TULRCA applies not only where an employer seeks to permanently end collective bargaining arrangements, but also where the employer wants to remove one or more terms from collective bargaining, either temporarily (for example, in one pay round), or permanently.
In other words, it is an unlawful breach of section 145B to make offers direct to the workforce, over the heads of union negotiators, during a negotiation, if the aim is to circumvent the collective bargaining process. This was established in this important ruling supported by general union Unite:
Fifty-six Unite members won compensation totalling £420,000 after management at car electronics company Kostal attempted to bypass the recognised union midway through a pay bargaining negotiation and put a pay offer direct to individuals that included changes to their contract terms.
Unite had won recognition at Kostal in November 2014, signing a Recognition and Procedural Agreement. A year later, a pay offer was put to members through a consultative ballot and 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 notice board and wrote twice to individual employees, in each case urging them to accept the offer and to agree the contract changes, or else forfeit their Christmas bonus. The second letter told recipients how many co-workers had already accepted the offer, referring explicitly to trade union members, and warned recipients that failure to accept could lead to dismissal. The tribunal concluded that Kostal contacted the workers direct in order to circumvent the collective bargaining process.
In evidence, the union negotiator said his mandate to negotiate was “blown away” by the management decision to write to the workers direct. The tribunal ruled in favour of the Unite members, commenting that “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”.
The EAT upheld the tribunal’s ruling and also confirmed that where, as here, multiple offers are made, a separate fixed sum of compensation must be paid to each affected employee for each separate offer.
Kostal UK Limited v Dunkley & Others [2017] EAT UKEAT/0108/17/RN
Unions have achieved other notable rulings following unlawful inducements in breach of section 145B, TULRCA:
• in 2006, supermarket chain Asda was ordered to pay £850,000 after 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 unlawfully 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 after it offered staff cash incentives to sign new contracts, taking them out of collective bargaining agreements. £200 each was offered to workers to sign new contracts moving 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.
Following changes to the Transfer of Undertaking (Protection of Employment) Regulations 2006 (TUPE) in January 2014, section 145B, TULRCA is of even greater potential significance. The changes to TUPE are intended to make it easier for employers to change collective terms after a TUPE transfer (see Chapter 12, page 444). 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, especially if the new employer refuses to recognise the union.
To succeed in a claim under section 145B, TULRCA, members must build a persuasive case that the employer’s sole or main intention when making the offer was to induce them to abandon one or more collective terms. The burden then shifts to the employer to show why it made the offer (section 145B(2), TULRCA). Section 145(D) lists some potentially relevant factors, including evidence of an employer’s negative attitude towards collective bargaining. In the Kostal case, the tribunal said that the employer’s decision to emphasise how many co-workers (especially union members) had already accepted its offer was clear evidence of the employer’s intention to circumvent the union negotiations, making the offer unlawful.
To breach section 145B, the offer must be made to more than one worker (section 145B(1)(a), TULRCA). The award payable by an employer to each worker offered an inducement is a fixed sum of £4,059 (April 2018). If multiple different offers are made, a separate award should be made for each offer (Kostal UK Limited v Dunkley & Others [2017] EAT UKEAT/0108/17/RN).