Augustine Clement

  • Collective Bargaining
  • Prohibited Result
  • Section 145B TULRCA

 Justices:

Lord Briggs, Lady Arden, Lord Kitchin, Lord Leggatt, Lord Burrows

Background:

The 57 claimants are members of unite the union (“Unite”) and are employed as shop floor or manual workers by the respondent, Kostal UK Ltd. The company entered into a recognition and procedural agreement with Unite on 16 February 2015. The purpose of this agreement was to establish trade union recognition and representation within the company and establish a framework for consultation and collective bargaining. The agreement gave Unite sole recognition and bargaining rights. Appended to the agreement was a procedure for dealing with collective bargaining issues and disputes.  Following the agreement, the company presented a pay offer in November 2015 which comprised of a 2% pay increase in basic pay, an additional 2% increase for those earning less than £20,000, which would be payable from April 2016; and a Christmas bonus to be paid in December equating to 2% of basic pay.

The offer was put to ballot and of the 80% union members who took part, 78.4% voted to reject the offer. The company proceeded to make direct offers to employees on 10 December 2015 and again on 29 January 2016, stipulating first that those who did not accept the offer would not receive the Christmas bonus and later that those who did not accept the second offer could have their contracts of employment terminated.

The Proceedings:      

In May 2016, Claimants presented complaints to the Employment Tribunal that the offers made directly to them by the company contravened s.145B of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”). The Tribunal found as a fact that the company had taken the conscious decision to bypass further meaningful negotiations and contact with the Union in favour of making direct offers to individual employees, thereby contriving s.145B of TULCA. The company appealed to the EAT, where the appeal was rejected.  The appeal to the Court of Appeal was however successful, hence the Claimants’ appeal to the Supreme Court.

The issue before the Supreme Court was whether the pay offers made by the company on 10 December 2015 and 29 January 2016 directly to workers who were members of Unite were offers which, if accepted by all the workers who received them, would have the prohibited result as defined in section 145B (2) of TULRCA. Under this section the “prohibited result” is defined as workers’ terms of employment, or any of those terms not being determined by collective agreement negotiated by or on behalf of the union. Section 145B (1) states a worker who is a member of an independent trade union which is recognised, or seeking to be recognised, by his employer 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 and (b) the employer’s sole or main purpose in making the offers is to achieve that result.

Section 145D (2) of TULRCA highlights that on a complaint under section 145B, it is the employer’s responsibility to show what their sole or main purpose was in making the offers and s.145D(4) specifies the evidence required for the matters considered when determining an employers sole or main purpose in making an offer.

Before the Court, both parties agreed that offers which, if accepted, would require workers who are trade union members to agree to forego or relinquish collective bargaining rights, either indefinitely or for any period, fall within s.145B.  The company invited the court to give a narrow interpretation to the section, arguing that only an offer which has such direct effect should fall within s.145B. The claimants argued for the wider interpretation accepted by the majority of the EAT whereby it is enough to bring an offer within s.145B that, if the offer is accepted, at least one term of employment would be directly and not collectively agreed, at least for the time being and until the term is subsequently varied or replaced by one negotiated through collective bargaining. On this interpretation, any offer made directly to workers who are trade union members to make any change which has not been collectively agreed to a term of their employment would fall within s.145B.

The Supreme Court allowed the appeal but rejected both parties’ proposed interpretation of s.145B. The court considered that both parties wrongly focused solely on the content of the employer’s offer. What s.145B prohibits is not an offer with a particular content but an offer which, if accepted by all the workers to whom the offer is made, would have a particular result. The focus must be on the potential practical consequences of the employer’s conduct, considered in the round. What is required is a causal connection between the presumed acceptance of the offers and the prohibited result specified in s.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. If there is no such possibility, then it cannot be said that making the individual offers has produced the result that the terms of employment have not been determined by collective agreement for that period. 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. If that has been done, it cannot be said that, when the offers were made, there was a real possibility that the matter would have been determined by collective agreement if the offers had not been made and accepted.

The court went further to conclude that what an employer cannot do is make a direct offer to its workers, including union members, before the collective bargaining process has been exhausted, which the company did in this case; hence the appeal was allowed.

  • Collective Bargaining
  • Prohibited Result
  • Section 145B TULRCA

 Justices:

Lord Briggs, Lady Arden, Lord Kitchin, Lord Leggatt, Lord Burrows

Background:

The 57 claimants are members of unite the union (“Unite”) and are employed as shop floor or manual workers by the respondent, Kostal UK Ltd. The company entered into a recognition and procedural agreement with Unite on 16 February 2015. The purpose of this agreement was to establish trade union recognition and representation within the company and establish a framework for consultation and collective bargaining. The agreement gave Unite sole recognition and bargaining rights. Appended to the agreement was a procedure for dealing with collective bargaining issues and disputes.  Following the agreement, the company presented a pay offer in November 2015 which comprised of a 2% pay increase in basic pay, an additional 2% increase for those earning less than £20,000, which would be payable from April 2016; and a Christmas bonus to be paid in December equating to 2% of basic pay.

The offer was put to ballot and of the 80% union members who took part, 78.4% voted to reject the offer. The company proceeded to make direct offers to employees on 10 December 2015 and again on 29 January 2016, stipulating first that those who did not accept the offer would not receive the Christmas bonus and later that those who did not accept the second offer could have their contracts of employment terminated.

The Proceedings:      

In May 2016, Claimants presented complaints to the Employment Tribunal that the offers made directly to them by the company contravened s.145B of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”). The Tribunal found as a fact that the company had taken the conscious decision to bypass further meaningful negotiations and contact with the Union in favour of making direct offers to individual employees, thereby contriving s.145B of TULCA. The company appealed to the EAT, where the appeal was rejected.  The appeal to the Court of Appeal was however successful, hence the Claimants’ appeal to the Supreme Court.

The issue before the Supreme Court was whether the pay offers made by the company on 10 December 2015 and 29 January 2016 directly to workers who were members of Unite were offers which, if accepted by all the workers who received them, would have the prohibited result as defined in section 145B (2) of TULRCA. Under this section the “prohibited result” is defined as workers’ terms of employment, or any of those terms not being determined by collective agreement negotiated by or on behalf of the union. Section 145B (1) states a worker who is a member of an independent trade union which is recognised, or seeking to be recognised, by his employer 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 and (b) the employer’s sole or main purpose in making the offers is to achieve that result.

Section 145D (2) of TULRCA highlights that on a complaint under section 145B, it is the employer’s responsibility to show what their sole or main purpose was in making the offers and s.145D(4) specifies the evidence required for the matters considered when determining an employers sole or main purpose in making an offer.

Before the Court, both parties agreed that offers which, if accepted, would require workers who are trade union members to agree to forego or relinquish collective bargaining rights, either indefinitely or for any period, fall within s.145B.  The company invited the court to give a narrow interpretation to the section, arguing that only an offer which has such direct effect should fall within s.145B. The claimants argued for the wider interpretation accepted by the majority of the EAT whereby it is enough to bring an offer within s.145B that, if the offer is accepted, at least one term of employment would be directly and not collectively agreed, at least for the time being and until the term is subsequently varied or replaced by one negotiated through collective bargaining. On this interpretation, any offer made directly to workers who are trade union members to make any change which has not been collectively agreed to a term of their employment would fall within s.145B.

The Supreme Court allowed the appeal but rejected both parties’ proposed interpretation of s.145B. The court considered that both parties wrongly focused solely on the content of the employer’s offer. What s.145B prohibits is not an offer with a particular content but an offer which, if accepted by all the workers to whom the offer is made, would have a particular result. The focus must be on the potential practical consequences of the employer’s conduct, considered in the round. What is required is a causal connection between the presumed acceptance of the offers and the prohibited result specified in s.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. If there is no such possibility, then it cannot be said that making the individual offers has produced the result that the terms of employment have not been determined by collective agreement for that period. 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. If that has been done, it cannot be said that, when the offers were made, there was a real possibility that the matter would have been determined by collective agreement if the offers had not been made and accepted.

The court went further to conclude that what an employer cannot do is make a direct offer to its workers, including union members, before the collective bargaining process has been exhausted, which the company did in this case; hence the appeal was allowed.