New Judgment: Kostal UK Ltd v Dunkley and others [2021] UKSC 47

On appeal from: [2019] EWCA Civ 1009

The Appellant and 56 others are all members of the trade union “Unite” and are employed by the Respondent. They began formal annual pay negotiations and the Respondent made a pay offer. Union members were balloted and rejected the offer. The Respondent then made the same offer to its employees directly, bypassing Unite, also saying that if no agreement was reached “this may lead to the company serving notice on your contract of employment”.

In May 2016, the claimants complained to an employment tribunal that the direct offers made to them by the Respondent contravened section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992. The tribunal upheld the complaints and made the statutory award of £3,800 to each claimant for each offer made to him. The Respondent appealed to the Employment Appeal Tribunal which, by a majority, dismissed the appeal. They then appealed to the Court of Appeal, which allowed the appeal and set aside the decisions of the tribunal and the EAT. The claimants were given permission to appeal to the Supreme Court.

 

HELD – appeal allowed and the awards made by the tribunal are restored. It held that the direct offers to workers who were Unite members breached section 145B(2) of the 1992 Act.

 

The key provisions of the 1992 Act provide: section 145B (1) A worker who is a member of an independent trade union … has the right not to have an offer made to him by his employer if – (a) acceptance of the offer, together with other workers’ acceptance of offers which the employer also makes to them, would have the prohibited result. (2) The prohibited result is that the workers’ 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.

The Court held that what section 145B prohibits is not an offer with a particular content (as argued by the parties) but an offer which, if accepted by all the workers to whom the offer is made, would have a particular result. What is required is a causal connection between the presumed acceptance of the offers and the prohibited result specified in section 145B(2). That requirement will not be satisfied unless there is at least a real possibility that, had the offer not been made and accepted, the workers’ relevant terms of employment for the period would have been determined by a new collective agreement. On this interpretation there is nothing to prevent an employer from making an offer directly to its workers in relation to a matter which falls within the scope of a collective bargaining agreement provided that the employer has first followed, and exhausted, the agreed collective bargaining procedure. What an employer cannot do with impunity is what the Respondent did here: make a direct offer to its workers, including union members, before the collective bargaining process which the employer has agreed to follow has been exhausted.

 

For a PDF version of the judgment, please see: Judgment (PDF)

For the Press Summary, please see: Press summary (HTML version)

For a non-PDF version of the judgment, please see: Judgment on BAILII (HTML version)

 

Watch hearing

18 May 2021
Morning session
Afternoon session

 

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