In response to today's coverage, a spokesperson at Anthony Collins Solicitors said:
What can an employer do when its negotiations with a recognised union break down, and they cannot collectively agree on changes to terms?
Where there is a breakdown in negotiations with a recognised union over collectively agreed terms, what many employers would look to do would be to seek to negotiate and agree on changes in the terms directly with its workforce. In the case of Kostal UK Limited v Dunkley and Others, the EAT considered whether a direct approach was an unlawful inducement with the result that a workers terms of employment, or any of those terms, will no longer be determined by collective agreement.
Kostal UK Limited had agreed that annual formal negotiations on pay would take place with is recognised union and that they would negotiate any changes in pay with the union. Kostal was proposing a 2% increase in basic pay and 2% of basic pay to be paid in a lump sum as a bonus, amongst other changes. In return, they were seeking a reduction in sick pay, changes to overtime arrangements and break arrangements.
The unions balloted their members on the proposed changes, resulting in a rejection of the new package of terms (only 21% voting in favour). Kostal then indicated it would write to all employees individually to offer the same package and stated that a failure to agree would lead to no Christmas bonus and no pay increase for the year. Employees were urged to agree on the changes within a limited period. Kostal argued that the reason it would make the direct approach was that it wanted the staff to have the opportunity to receive a Christmas bonus. The union alleged Kostal was seeking to induce staff to opt out of collective bargaining. Whilst a collective agreement was eventually reached, a large number of the employees brought claims in the Employment Tribunal alleging that their rights not to be induced out of collective bargaining rights had been infringed. The claims were successful in the Employment Tribunal, and that led to mandatory awards of £3,800 per employee.
Kostal argued that they were only prohibited from making an offer that would take future negotiations out of the collective agreement altogether. The employer appealed to the Employment Appeal Tribunal who accepted the reasoning of the Employment Tribunal and found that even temporary changes that did not remove all collective bargaining for the future were barred. They felt the purpose of the legislation was to seek to prevent an employer going over the heads of the union with direct officers offers to workers.
This case appears to make it difficult for an employer to agree terms where negotiations with a recognised trade union have broken down. The EAT was clear in saying that where an employer has a “proper purpose” for making offers directly to workers, there is nothing to prevent such offers being made. The EAT decision suggests that where negotiations have reached a genuine impasse, it may still be possible to go directly to staff. Taking such an approach can be high-risk given the potential liabilities. In this case, the total award to the Claimant group was around £425,000. Any employer who is contemplating making offers directly to staff that would change collectively agreed terms (even if the union will be able to renegotiate at a later date) will need to be sure that they have exhausted the agreed negotiation procedures with the union, and any dispute provisions, so they can evidence a genuine impasse before considering a direct approach to staff based on business need.
For more information
If you require assistance with your working arrangements, please get in touch with your usual contact in our Employment Team or speak to Matt Wort. You can find out more about our employment and data protection work on our website.
In the first of a series, this article examines the impact of the Derby case on how local authorities should apply and charities can claim business rate relief.
“Monitoring the Mental Health Act in 2018/19” published by the CQC, has found that although improvements have been made, healthcare services need to do more to comply with their human rights duties.
The IPPR North report says that this Parliament must be the “Devolution Parliament” to truly “level up” the country.
On 20 January 2020, the Ministry of Housing, Communities and Local Government (MHCLG) issued Advice for Building Owners of Multi-storey, Multi-occupied Residential Buildings.
The Society for Computers and Law (SCL) has introduced an Adjudication Scheme for IT Projects and Services.
The board of a housing services company was reportedly dismissed in December 2019 following the discovery of a variety of safety and hygiene issues in the properties they manage.
The Heat Network (Metering and Billing) Regulations 2014 (the Regulations) place certain responsibilities on anyone supplying and charging for heating, cooling or hot water (the heat supplier).
In our latest Company Secretary Update, we focus on the Queen’s Speech over Christmas and the recommendations and commitments in relation to housing.
So after two days of legal argument, the Supreme Court have now retired to reach their decision in the joined cases of Tomlinson-Blake v the Royal Mencap Society and Shannon v Rampersad.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.