“Failing agreement at Stage 3 the matter, by joint agreement, may be referred to ACAS for conciliation. … If the parties do not agree to refer the matter to ACAS the procedure is exhausted.”
“it is of the essence of the right to join a trade union for the protection of their interests that employees should be free to instruct or permit the union to make representations to their employer or to take action in support of their interests on their behalf. If workers are prevented from so doing, their freedom to belong to a trade union, for the protection of their interests, becomes illusory. It is the role of the State to ensure that trade union members are not prevented or restrained from using their union to represent them in attempts to regulate their relations with their employers.”
“the law should be amended to specify that the entering of individualised contracts would not constitute unlawful union discrimination against those union members not offered them, as long as there was no inducement to relinquish union representation and no pre-condition in the contracts to relinquish it.”
“… offers should be made unlawful whose main purpose is to induce a group of workers, who belong to a recognised union, to accept that their terms of employment should be determined outside collectively agreed procedures. The result is that it would be unlawful for an employer to offer an inducement to the union members in such a group to have their terms of employment determined outside the framework set by any existing collective bargaining arrangements. This limits the scope of employers to offer individualised contracts. To avoid inflexibility however, the law should allow employers to make offers where the sole or main purpose of the inducement is unconnected with the aim of undermining or narrowing the collective bargaining arrangements. In particular, the law should give room for employers and individuals to enter individualised contracts designed to reward or retain key workers.” (Emphasis in original)
“… (2) On a complaint under section 145B it shall be for the employer to show what was his sole or main purpose in making the offers. … (4) In determining whether an employer’s sole or main purpose in making offers was the purpose mentioned in section 145B(1), the matters taken into account must include any evidence - (a) that when the offers were made the employer had recently changed or sought to change, or did not wish to use, arrangements agreed with the union for collective bargaining, (b) that when the offers were made the employer did not wish to enter into arrangements proposed by the union for collective bargaining, or (c) that the offers were made only to particular workers, and were made with the sole or main purpose of rewarding those particular workers for their high level of performance or of retaining them because of their special value to the employer.”
“We consider that on a straightforward reading of the words of [subsection (2)], if as a matter of fact, acceptance of direct offers to workers means that at least one term of employment will or would as a consequence of acceptance be determined by direct agreement whenever that occurs, and not collectively (even if other terms continue to be determined collectively), that is sufficient. That term, if accepted, would no longer or would not be determined collectively, at least until a further change is negotiated, agreed or imposed. The fact that the result is temporary (in the sense of being a one-off direct agreement following acceptance of the offers) rather than permanent does not affect this question, as both sides agree.” (Emphasis added)
“In substance, [article 11] affords members of a trade union the right for their union to be heard with a view to protecting their interests and requires national law to enable trade unions, in conditions not at variance with article 11, to strive for the protection of their members’ interests. However, it does not guarantee them any particular treatment by the state …”
“[the employer] has by-passed the representative organisation and entered into direct individual negotiation with its employees, in a manner contrary to the principle that collective negotiation between employers and organisations of workers should be encouraged and promoted.”
“that when the offers were made the employer … did not wish to use, arrangements agreed with the union for collective bargaining.”
“7.1 Formal negotiations will take place between the parties on an annual basis. … 7.2 Negotiations will commence normally in October and with a normal effective date of 1 January. … 7.4 Any matters related to proposed change of terms and conditions of employment will be negotiated between the company and the union.”
“if this was not paid in December, it could not and would not be paid in 2016, therefore it would be lost to employees and they would be left with either the 2% on basic or 4% on basic depending on whether their basic salary was greater or less than£20K …”
“I am writing to inform you that I now intend to write to each and every individual employee at Kostal UK in order to offer the company pay increase and term and condition changes. I am doing this because otherwise we will run out of time to pay a ‘Christmas bonus’ prior to Christmas in December’s pay. Please be aware that any employee who rejects the pay offer will not receive the Christmas bonus and it cannot be paid at a later date even if we subsequently achieve an agreement between us.”
“Unfortunately, the above offer was rejected by a ballot of trade union members. Therefore, the company has made the decision to write to every individual employee of Kostal UK in order to offer the above to each person directly. We are doing this due to the short time frame in order to pay a Christmas bonus, which can and will only be paid in December’s pay. Therefore … failure to sign and return [by no later than18 December 2015 ] will lead to no Christmas bonus and no pay increase this year.”
“However, the company does wish to reward our employees for their efforts in 2015 and therefore wish to offer the pay increase to each individual employee.”
“You sent a letter out to all employees - you are bypassing the collective bargaining agreement.”
“he had distributed a letter … to all our employees because the pay offer had been rejected by trade union members …”
“we wanted to give the majority of employees the opportunity to be paid the Christmas bonus in their December pay. 77% of employees have already signed their acceptance including trade union representatives and members.”
“my final point is to quote the Unite letter - ‘Mr Johnson needs to listen to the voice of the workers’ - I believe that I have, and that 91% of them have spoken, perhaps the trade union should follow their own advice and listen to the majority and not the minority.”
“The relevant circumstances are, in summary, that negotiations forming part of collective bargaining, reached stage 3 in December last year with no agreement. We have made it clear that our parent company in Germany insists that payment of any Christmas bonus happens in December, and cannot be carried over into the New Year. This has been the case for many years. Therefore, we decided to write to the employees directly, clarifying that if they did not sign to accept their new terms, they would not be able to take the benefit of a Christmas bonus … In my letter dated15 January 2015 , I made it clear that it was never the company’s intention to induce people to opt out of collective bargaining. The only reason for making the offer to members was so that the Christmas bonus would be payable before the end of the year. If it was not accepted, the bonus would not be payable at a later date. There was absolutely nothing in the offer to staff that stated, or even implied, that acceptance of the offer would involve an agreement that they would no longer be subject to collective bargaining.”
“Please be aware that the proposed changes will not be implemented without your express agreement and the consultation process will be full and open. However you should be aware that in the event that no agreement can be reached between the parties, this may lead to the company serving notice on your contract of employment.”
“In consideration for your agreement to the proposed changes, the company is willing to pay a 4% increase in your basic salary backdated to1 January 2016 .”
“save for the by then irrelevant issue of the Christmas bonus, the collective agreement endorsed the pay proposals which [Kostal] had put forward in November 2015 together with the three changes to terms and conditions.”
“Whilst there would ultimately be a collective pay agreement concluded in November 2016, in law that did not alter the fact that the individuals who had accepted one or other of the individual offers had already had their terms determined on the basis of the individual agreement rather than the considerably later collective agreement. That document was purporting to record a collective agreement in circumstances where the terms and conditions had for some time been governed by variations agreed individually. Although we still need to deal with [the] question of what the employer’s purpose was in making the offer, we take the view that it is not permissible for an employer to abandon collective negotiation when it does not like the result of a ballot, approach the employees individually with whom it strikes deals and then seek to show its commitment to collective bargaining by securing a collective agreement which is little more than window dressing - having destroyed the union’s mandate on the point in question in the meantime. In other words, if there is a Recognition Agreement which includes collective bargaining, the employer cannot drop in and out of the collective process as and when that suits its purpose.”
“On the facts before us it is plain that having found the ballot result ‘disappointing if not unexpected’ (Mr Johnson’s email to Mr Coop of9 December 2015 …) the respondent took the conscious decision to by-pass further meaningful negotiations and contact with the union in favour of a direct and conditional offer to individual employees …” (Emphasis added)
“Following the enactment of section 145B offers are less likely to state expressly what effect their acceptance would have on collective bargaining.” (para 54) (iv) The crucial determination of the employer’s main or sole purpose is a fact-sensitive enquiry. As regards the burden of proof, section 145D(2) lays down that “it shall be for the employer to show what was his sole or main purpose in making the offers”
“The burden of showing what the sole or main purpose is, is on the employer: section 145D(1) and (2). By analogy with Yewdall v Secretary of State for Work and Pensions[2005] All ER (D) 149 (EAT) and Serco Ltd v Dahou[2017] IRLR 81 , it is for the complainant to raise a prima facie case, and if that is made out, the employer must prove on balance of probabilities that it had an alternative, proper purpose which was either its only purpose, or at least an equally important purpose in making the offers.”
“There is an infinite spectrum of facts that might have to be considered in a section 145B case: at one end of the spectrum there may be cases where the employer has sought to change collective bargaining arrangements and then, without entering into collective negotiations or acting precipitately in the midst of such negotiations, and absent some pressing business aim, makes offers that would have the effect that all employment terms will be agreed directly if accepted. At the other end of the spectrum will be employers who have engaged in lengthy and meaningful collective consultation and reached an impasse before considering making direct offers; or who can demonstrate a strong history of operating collective bargaining arrangements with the union and/or have no wish to avoid entering into such arrangements when the offers are made; and there will be cases where employers can show genuine business reasons (unconnected with collective bargaining) for approaching workers directly outside the collective bargaining process. There may also be difficult cases in the middle where the employer has mixed aims or objectives it seeks to achieve, or the evidence is unclear. The question in each case is a question of fact and degree. As with other detriment cases, where an employer acts reasonably and rationally and has evidence of a genuine alternative purpose, tribunals are likely to be slower to infer an unlawful purpose than in cases where the employer acts unreasonably or irrationally or has no credible alternative purpose.” (v) This fact-sensitive approach, in which the employer must show that it has a proper purpose - “a genuine business purpose” (see para 62 set out below) - for making offers directly to workers, does not give trade unions a veto, whether legally or practically, over changes to terms. As Simler J expressed it at para 62: “Mr Burns complains about the risk an employer must take on this approach, in making direct offers to workers in circumstances where these arguments are open to the union. He submits that even if there is no veto as a matter of law, in effect the trade union has a practical veto. We disagree. Although inevitably in cases that depend on questions of fact and degree there is less certainty as to the outcome and more risk, we consider that employers who act reasonably and rationally for proper purposes and are able to demonstrate that their primary purpose in making individual offers is a genuine business purpose, retain the ability to make offers directly to their workforce without fear of contravening section 145B.” (vi) The ET had been perfectly entitled to make the findings of fact it did in relation to Kostal’s main purpose. It was entitled to reject the Christmas bonus explanation and it was entitled to make three further positive findings of particular relevance. These were as follows. First, the making of the first offers on10 December 2015 was an immediate reaction to the rejection at ballot of Kostal’s proposal. Secondly, Kostal’s true intentions could be gleaned from the general notices published which included the percentage of employees who had already signed acceptances, “including trade union representatives and members”, which must have been intended to weaken Unite’s negotiating position. Thirdly, Kostal took the conscious decision to bypass further meaningful negotiations or contact with the union in favour of a direct and conditional offer to individual employees. The EAT also drew attention to the contextual factors that this was the first collective negotiation process between this employer and this union and there was an ongoing collective negotiation process that was not proceeding in the way Kostal wished it to proceed. Simler J continued, at para 71: “The dispute resolution provisions in the Recognition Agreement had not been exhausted as they could have been. Instead, the respondent adopted direct approaches to individual workers in a way that the Tribunal plainly considered to be unreasonable and designed to undermine Unite’s mandate.”
“The Government also confirms that the law should explicitly prohibit inducements or bribes being made to trade union members to forego union rights. These were the particular employer behaviours that gave rise to the Wilson and Palmer case, and they should be made unlawful. The Government intends to make it unlawful for an employer to make an offer to an individual with the main purpose of inducing that person to relinquish rights to belong (or not to belong) to a union, rights to engage in trade union activities or the proposed right to use union services. In addition, offers should be made unlawful whose main purpose is to induce a group of workers, who belong to a recognised union, to accept that their terms of employment should be determined outside collectively agreed procedures. The result is that it would be unlawful for an employer to offer an inducement to the union members in such a group to have their terms of employment determined outside the framework set by any existing collective bargaining arrangements. This limits the scope of employers to offer individualised contracts. To avoid inflexibility however, the law should allow employers to make offers where the sole or main purpose of the inducement is unconnected with the aim of undermining or narrowing the collective bargaining arrangements. In particular, the law should give room for employers and individuals to enter individualised contracts designed to reward or retain key workers.”
“‘No longer’ clearly indicates a change taking the term or terms concerned outside the scope of collective bargaining on a permanent basis; and corresponds, in my view, to the ECtHR’s use of the word ‘surrender’ in para 48 of Wilson.”
“(1) because of the penal nature of section 145B, that construction gives a recognised trade union an effective veto over any direct offer to any employee concerning any term of the contract, major or minor, on any occasion; (2) such a veto would go far beyond curing the mischief identified by the ECtHR in Wilson; (3) in such a case the members of the union are not being asked to relinquish, even temporarily, their right to be represented by their union in the collective bargaining process. All that has happened is that the employer has gone directly to the workforce and asked them whether they will agree a particular term on this occasion.” (para 53) Bean LJ continued, at para 54: “Such an interpretation of the section does not render the union powerless. It remains open to them (for example) to ballot their members for industrial action, as Unite did in the present case in order to implement an overtime ban.”
“Everyone has the right to freedom of peaceful assembly and to freedom of association with others, including the right to form and to join trade unions for the protection of his interests.”
“The Government believes that the principle underlying the decision of the [European Court of Human Rights in Wilson and Palmer] extends beyond the facts in Wilson and Palmer and is applicable to a number of other comparable circumstances. The purpose of sections 29-32 [of theEmployment Relations Act 2004 , inserting sections 145A to 145F into theTrade Union and Labour Relations (Consolidation) Act 1992 and making some other amendments to the 1992 Act] is therefore to secure that these provisions deal not only with the facts in Wilson and Palmer but also with the other circumstances considered by the Government to be comparable.”
“a distinction between terms of a collective agreement which are of their nature apt to become enforceable terms of an individual’s contract of employment and terms which are of their nature inapt to become enforceable by individuals. Terms of collective agreements fixing rates of pay, or hours of work, would obviously fall into the first category.”
“As the factual findings of the Employment Tribunal in Kostal make clear, the collective negotiations were not exhausted in this case. … The employer issued the individual offers before a further meeting with the union during the collective negotiation process which took place on 14 December. The individual offers were also issued before the exhaustion of the parties’ own agreed dispute resolution procedure, the final stage of which provided for ACAS conciliation. In short, it is inconsistent with the tribunal’s findings of fact to describe the collective negotiations as ‘exhaustive’. They were not ‘exhaustive’ because they failed to exhaust the procedural steps provided for in the parties’ own recognition agreement. That the employer bypassed its own agreed procedures and issued individual offers during the collective bargaining process was critical to the reasoning of the ET and EAT that this constituted the statutory prohibited purpose.”