Trade union negotiations end with illegal action by business

Case Study

The case

When negotiating with a trade union representing employees, organisations are required to comply with the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).

Union members at Ineos had been represented by Unite, campaigning for improvements to pay.

After several months of negotiation, Ineos offered a 2.8% pay increase. The union (Unite) presented the offer to their members, who instructed Unite to seek an increased offer. In response, Ineos contacted all staff to inform them that it was unilaterally imposing the 2.8% pay increase. Ineos also announced that it was terminating collective bargaining with Unite.

Subsequently, the affected employees brought claims for unlawful inducement.

Case Study

The outcome

Section 145B of TULRCA prohibits employers from inducing workers to bypass ongoing collective bargaining.

The Employment Tribunal decided that Ineos had breached section 145B. The employer appealed, arguing that imposing the offer where negotiations had ended was lawful. The EAT dismissed Ineos’ appeal, finding that the negotiations had not yet ended and the parties had been close to reaching an agreement. The EAT held that the employer was inducing staff to cease collective bargaining by imposing the pay increase prior to pay negotiations ending.

The Employment Appeal Tribunal (“EAT”) confirmed that by implementing a pay award before completing negotiations with the Trade Union, an employer had breached TULRCA.

Compensation of £3,830 per Unite member at the company was ordered.

When undertaking collective bargaining or implementing changes to terms and conditions of employment, it is essential for employers to be wary of regulations and employee rights.

A previous case known as Kostal (Kostal UK Ltd v Dunkley and others [2021] UKSC 47) also established that employers can move away from collective bargaining and offers be made, but only if the collective bargaining process has been properly concluded, and even then, employers should not purposefully thwart the collective bargaining process (as this may still have the effect of indirectly bypassing collective bargaining).

Here are some important questions to ask before implementing a new pay offer after trade union negotiations:

Are the negotiations truly terminated, with both sides in agreement that they are terminated?
Have the employees had an ample opportunity to review and consider the new offer?
Is the employer confident that it has not taken any indirect steps that could be perceived as thwarting collective bargaining?

Trade union negotiations end with illegal action by business

The case

The outcome

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