Kostal UK Ltd (Respondent) v Dunkley and others (Appellants)

In this case, the UK Supreme Court held that making offers to employees which, if accepted, would result in one or more terms of their employment not being determined by collective bargaining, and making the offer with the intention to produce this outcome, is contrary to section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 (the Act).

In 2015, the recognised union for collective bargaining (Unite the Union) and the company (Kostal) entered into pay negotiations. A pay offer tabled by the company was put to a ballot of union members and 78% of voters rejected the offer. Following the rejection, Kostal wrote to its employees to make the same offer to them directly. In 2016, by which point over 97% of employees had accepted Kostal’s individual offers, a collective agreement between the company and the trade union was reached for 2015.

This appeal concerns the interpretation of section 145B of the Act, which ensures that employees have the right not to receive offers such as those made by Kostal. This particular section was introduced following the decision of the ECtHR in Wilson/Palmer v United Kingdom [2002] IRLR 568 concerning the right to Freedom of assembly and association as enshrined in Article 11 of the European Convention on Human Rights (ECHR).

The Court found in favour of the employees and established in its judgement that offers made by employers to workers before the collective bargaining process has been exhausted with the intention of undermining the terms of employment resulting from the collective agreement will be in contravention of section 145B of the Act.