Employers have to wait to hear a decision in Court of Appeal Trade Union ‘unlawful inducements’ case

The Court of Appeal has reserved its decision in a crucial case in trade union legislation.

Kostal UK Ltd v Dunkley & Others concerns collective bargaining and the use of inducements.  Section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) prohibits an employer from making offers to members of a recognised trade union (or one seeking to be recognised), where the purpose of the offer is to cease collective bargaining.

Kostal UK Ltd. made an offer directly to employees when they failed to reach agreement with the recognised trade union. In a ground-breaking case,  the Employment Appeal Tribunal upheld the decision of the Sheffield Employment Tribunal in holding the employer had  breached the legislation, and was liable to pay a fixed penalty (currently fixed at £4193.00) to each affected employee. The offer did not have to include the permanent surrender of collective bargaining terms

Kostal appealed and the case was heard by the Court of Appeal on 22^nd May 2019. The decision is eagerly awaited by unions and unionised employers’ alike.. 

Angela Brumpton of gunnercooke, who acts for Kostal UK  Limited, commented:

“This case is a very important one for employers faced with a situation where collective bargaining has reached an impasse, and they wish to approach employees directly. As the law currently stands,  employment tribunals can order employers to pay a fixed award of over £4,000 to each claimant, meaning that the financial ramifications can be serious enough to inhibit the employer from making any changes the union doesn’t agree with.”