A summer of significant decisions from the world of trade union law

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A summer of significant decisions from the world of trade union law

The summer of 2019 has produced two significant decisions from the world of trade union law.

Raising the hurdle of employee inducement claims

In June 2019, the Court of Appeal gave its long awaited decision in the case of Kostal UK Ltd v Dunkley. This concerned 'unlawful inducements' which covers situations in which employers have a collective bargaining agreement with a recognised trade union, but go outside of this to make direct offers on pay and other benefits to staff. Offers of this nature can be held as an 'unlawful inducement' if a tribunal finds that the purpose of the offer was to undermine collective bargaining. There is a high penalty for this as the mandatory award in these cases is £3,907 per affected employee, so the cumulative award in a large workplace can easily reach six figures.

In Dunkley, the employer had been negotiating with the recognised trade union in October 2015 and had proposed a deal which included pay increases but also detrimental changes to terms and conditions in relation to sick pay and breaks. The offer was rejected by a large majority of staff in a trade union ballot in December 2015. Immediately after this, the employer wrote directly to staff to offer them the same package and suggested that their Christmas bonus was conditional upon their acceptance.

In January 2016, there was a further letter to those who hadn't accepted suggesting that they may be dismissed and re-engaged if they were not prepared to accept the package. The matter was ultimately resolved through a collective agreement with the union in November 2016. However, a large number of employees then brought unlawful inducement claims based upon the two letters they had received in December 15 and January 16.

The claims succeeded at first instance tribunal and in the Employment Appeal Tribunal as both courts found that the offers made by the employer (with particular reference to the Christmas bonus) were intended to undermine collective bargaining. However, these decisions have now been over-turned by the Court of Appeal who found that the letters did not constitute unlawful inducements.

The logic of the decision seems to be that there was no evidence of any long-term intent by the employer to undermine collective bargaining and a collective agreement was actually agreed with the union later in 2016. The court was also concerned with public policy suggesting that to regard any direct approach to staff as unlawful would give disproportionate power to trade unions in the collective bargaining process, and that this could not have been intended by parliament.

Dunkley drastically reduces the scope of unlawful inducement claims and is likely to be appealed to the Supreme Court. However, if the judgement is taken at face value it suggests that employers will be able to make pay proposals directly to staff, providing that their purpose in doing so is not to undermine collective bargaining. This will be a high hurdle for trade union members to overcome.  

Salary and benefits due to employee union organisers

Meanwhile, at first instance in the case of Fleming v North Bristol NHS Trust, Bristol Employment Tribunal has considered the issue of what trade union officials should be paid for working on union duties. The case concerned a union convener who had previously worked unsocial hours in his role as a Porter, but was moving to undertake union duties paid by the employer during a conventional 9-5 working day.

The employer had argued that he was no longer entitled to shift and weekend working enhancements as these had been paid to compensate him for the inconvenience of working unsocial shifts. The claimant argued he was a low paid staff member and would not be able to take on the union role if it entailed a drop in pay. He also raised an individual detriment claim as he was known as an effective organiser and argued that the employer's stance was personal towards him rather than based upon any more general principle.  

The tribunal found with the Claimant on both counts, he was entitled to his 'normal pay' in his trade union role and the employer's actions had been a detriment towards him as an individual. The case suggests that as general principle employers should pay union organisers based upon what they were earning in the period before they took on union duties and should only depart from this principle if there is clear evidence that an alternative arrangement has been agreed.  

For more information, please contact Claire or Mark in our employment team. 

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