Bypassing collective bargaining

The Supreme Court has finally closed the long running case of Kostal UK Ltd v Dunkley and others. The case concerned, section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992, which prohibits employers from inducing their workers to bypass collective agreements in certain circumstances.

More details on the case can be found in our original ebriefing.

The Supreme Court has allowed the union’s appeal. Their Lordships ruled that what is prohibited under s145B is not the content of the offer but rather an offer which, if accepted, would have a particular result. This result must be a prohibited result as defined by s145B(1) – ‘the worker’s terms of employment or any of those terms, will not (or will no longer) be determined by collective agreement negotiated by or on behalf of the union’. There must be therefore a causal connection between the presumed acceptance of the offer and this prohibited result. There must be a real possibility that had the offer not been made and accepted by the employer then the workers’ terms would have been determined by a new collective agreement.

Following this logic, an employer could approach its workers with an offer directly, which falls within the collective bargaining agreement but only after they have followed and exhausted the collective bargaining route. If they have followed the latter route then the argument that without the offer and acceptance of the employer’s terms a collective agreement would have been negotiated falls away. What an employer cannot do is place an offer on the table, bypassing the collective agreement before any bargaining or negotiating process has been fully exhausted. Two of the judges, whilst agreeing that the appeal should be upheld, disagreed with the majority of the judge’s interpretation of s145B and s145D. They stated that where an offer is made directly and not through the collective bargaining procedure, which would change one or more terms of employment, then the employer must prove not that they have exhausted the collective bargaining route but rather that there is a genuine business purpose for the offer.

This case is a complex one but important for unionised organisations where collective bargaining plays a key part in the agreement of terms. What is clear is that employers will not be permitted to thwart negotiations with promises and inducements to workers to break any impasse in negotiations. Only once every avenue has been tried, will such offers be potentially lawful and then only if true efforts have been made and there has been no deliberate stalling of this process. 

For more information

If you would like specific advice on issues relating to collective bargaining within your organisation please do contact Matthew Wort.

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