Kostal UK Ltd v Dunkley & Ors

Appellants

Oliver Segal QC

Stuart Brittenden

(Instructed by Thompsons Solicitors (Leeds))

Respondent

Andrew Burns QC

Georgina Hirsch

(Instructed by Gunnercooke LLP (Manchester))

LORD LEGGATT: (with whom Lord Briggs and Lord Kitchin agree)

Introduction

1. This case is the first occasion on which appeal courts have had to consider the proper interpretation of section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 (the “1992 Act”), one of a group of provisions added to the 1992 Act by amendment in 2004. Its object, broadly stated, is to penalise offers made by employers to workers who are trade union members which, if accepted, would have the result that one or more terms of their employment will not (or will no longer) be determined by collective bargaining.
2. Pursuant to section 145B(5), a worker (or former worker) may present a complaint to an employment tribunal on the ground that their employer has made an offer in contravention of section 145B. The complaint must normally be presented within three months from when the offer was made or, where the offer is part of a series of similar offers to the complainant, the date when the last of them was made: see section 145C(1) of the 1992 Act. If the tribunal finds that the complaint is well-founded, the worker is entitled to be paid a lump sum award by the employer in respect of the offer complained of: see section 145E(1)-(3). At the time of the offers made in this case, the amount of the award was fixed at £3,800.

Relevant facts

3. The 57 claimants (and appellants) are members of Unite the Union (“Unite”) and are employed as shop floor or manual workers by the respondent, Kostal UK Ltd (which I will refer to as “the Company”). The Company manufactures electromechanical and electronic products for the automotive industry.

The Recognition Agreement

4. Following a ballot of workers in November 2014 which showed significant support in favour of recognising Unite for the purpose of collective bargaining, the Company and Unite entered into a Recognition and Procedural Agreement on 16 February 2015. The stated purpose of this agreement was to establish trade union recognition and representation within the Company and establish a framework for consultation and collective bargaining (clause 1.2). The agreement gave Unite “sole recognition and bargaining rights” (clause 2.1). By clause 3.1, the Company and Unite accepted that “the terms of this agreement are binding in honour upon them but do not constitute a legally binding agreement”.
5. Clauses 7.1 and 7.2 of the Recognition Agreement stated that formal negotiations would take place between the parties on an annual basis and that negotiations would commence normally in October “with a normal effective date of 1st January”. Clause 7.4 stated that “any matters related to proposed change of terms and conditions of employment will be negotiated between the Company and the Union”. Appendix 1 outlined a procedure that “will be followed in order to deal with collective issues which if not resolved, could lead to a dispute…