This interesting case was an appeal against a finding by a tribunal under the Trade Union and Labour Relations (Consolidation) Act 1992 (the equivalent legislation in NI is A. 77A of the Employment Rights (NI) Order 1996) that an employer had deliberately induced employees to bypass the collective bargaining arrangements with their trade union.

Put broadly the appropriate wording prohibits offers made to workers (who are members of a recognised trade union, or one seeking recognition) by their employer, if acceptance of the offer would have “the prohibited result” and the employer’s sole or main purpose in making the offers is to achieve that result. For these purposes “the prohibited result” is that the workers’ terms of employment, or any of those terms, “will not (or will no longer) be determined by collective agreement negotiated by or on behalf of the union”.

The employer had been trying to negotiate with the union about wages and terms and conditions of employment but talks had not been successful. The offer was for a 2% increase in basic pay, a lump sum of 2% of basic pay to be paid in December as a Christmas bonus, and an additional 2% for those earning less than £20,000 payable with effect from 1 April 2016. In return, the Respondent requested a reduction in sick pay for new starters, a reduction in Sunday overtime and consolidation of two individual 15-minute breaks into a single 30-minute break.

A ballot of the workforce was held and the offer was rejected. The employer then wrote to each employee individually in December stating they would not get the Christmas bonus if they did not accept the offer. This was seen as inducement number one by the employees and their union. The employer wrote a second letter in January, with a renewed offer and threatening to dismiss anyone who refused to accept this second offer. This was viewed as inducement number two by the employees and their union.

Notwithstanding that collective bargaining did not end and a collective agreement was ultimately reached on pay and terms of employment, the EAT rejected the employer's appeal that its purpose in making the offers was not to achieve the 'prohibited result'. There is nothing in the legislation, found the EAT by majority, that stops the 'prohibited result' being temporary i.e. to do with a specific negotiation:

"What the legislation seeks to prevent is an employer going over the heads of the union with direct offers to workers, in order to achieve the result that one or more terms will not be determined by collective agreement with the union if offers are accepted."

The EAT also (unanimously) found that the tribunal was correct to find that the two letters constituted two inducements to achieve a prohibited result. The first was about not getting a Christmas bonus and the second threatened dismissal if the renewed offer was rejected. They were not two letters repeating the same threat and, as such, an award of £3,830 compensation x 2, per affected employee was appropriate - the legislation makes no allowance for a tribunal to reduce the level of the award.

https://assets.publishing.service.gov.uk/media/5a313ebced915d2cef5dfef6/Kostal_UK_Ltd_v_Mr_D_Dunkley_and_Others_UKEAT_0108_17_RN.pdf