Collective Bargaining Agreements and Direct Inducements to Employees

The ability of trade unions to negotiate effectively on their members’ behalf would be greatly diminished if employers were permitted to bypass collective bargaining agreements and offer inducements directly to employees. The Employment Appeal Tribunal (EAT) made that point in a ruling which stands as a warning to employers.

The case concerned sometimes acrimonious pay negotiations between employers on an industrial site and their unionised workforce. A collective bargaining agreement was in place but the employers asserted that an impasse had been reached and that their only option was unilaterally to make a direct pay award to employees.

Two of the employees subsequently launched proceedings under Section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992. That provision, in summary, grants trade union members the right not to have offers made to them which, if accepted, would have the prohibited result that terms of their employment would not be, or no longer be, determined by collective agreement.

The employees’ claims were upheld by an Employment Tribunal (ET) and the employers were ordered to pay each of them £3,830 in compensation. The maximum award available in such cases is currently £4,554.

In rejecting the employers’ challenge to that outcome, the EAT found that they had communicated an offer to employees that engaged Section 145B. Negotiations were not at an end when the offer was made and it was more likely than not that further collective bargaining would have resulted in agreement.

Although the employers had previously engaged in meaningful negotiations with the union, there was ample evidence that the sole or main purpose of the offer was to achieve the result prohibited by Section 145B. The ET made no error of law in ruling the employees’ complaints well-founded.