Section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) prohibits an employer from making offers to members of a recognised trade union where acceptance could result in changes to the worker's terms that have not been decided by collective agreement (Prohibited Result).
In this case the trade union Unite, which was recognised by Kostal UK Ltd (KUK) for the purposes of collective bargaining, was involved in pay negotiations which took place at the end of 2015. An offer was put forward by KUK which included a 2% increase in basic pay as well as a bonus at Christmas, in exchange for a reduction in sick pay for new starters and a reduction in Sunday overtime. Unite did not feel it could recommend the offers to its members and in the ballot which followed the majority voted to reject the proposal.
KUK subsequently sent out a letter to all employees in which the company set out the pay offer once again and explained if it was not accepted by 18 December then employees would not be eligible to receive the Christmas bonus. Whilst some employees accepted this offer, others did not and KUK went on to send another letter in January offering a 4% increase in basic pay if they agreed to the proposed changes. The letter threatened dismissal for employees who did not agree to the proposals.
A group of 57 employees brought employment tribunal claims against KUK on the basis that the letters amounted to an unlawful inducement attempting to prevent workers' terms of employment being determined by collective agreement. The claim was upheld by the tribunal but was then appealed by KUK who contended that it did not intend to prohibit collective bargaining.
The appeal was dismissed by the EAT which held that if, as a result of the offer, even just one of the terms of employment will no longer be determined by collective bargaining then this will amount to an unlawful inducement.