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Building worker power

Essays on collective rights 20 years after the Wilson and Palmer case established the right to be represented by a trade union
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Research and reports
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The right to trade union representation: Kostal UK Ltd v Dunkley in the Supreme Court

By Michael Ford QC and Stuart Brittenden


Section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 was introduced by the Labour Government in 2004 in response to the 2002 ruling of the European Court of Human Rights (ECtHR) in Wilson and Palmer v United Kingdom.

The ECtHR had found that the United Kingdom was in breach of its positive obligation to ensure the effective enjoyment of the right to form and join trade unions, an aspect of freedom association protected under article 11 ECHR. At that time employers were able to offer inducements to workers to entice them to surrender their rights to have their terms negotiated by collective bargaining.

On the facts of Wilson, those who refused to surrender their rights did not receive the significant pay rise given to workers who agreed to accept personal contracts in place of collectively agreed terms. On UK law as it stood, neither they nor their unions had a remedy against this sort of tactic. Section 145B of the Act was intended to fill the gap in protection exposed by the ECtHR’s judgment.

To that end, where a trade union is recognised or is seeking recognition, section 145B gives union members the right not to receive offers from their employer which, if accepted, would have the result that any terms of their employment will not (or will no longer) be determined by collective bargaining. This is described as the “prohibited result”. In this context, an “offer” includes the unilateral imposition of a pay award, as established in Ineos Infrastructure Grangemouth Ltd v Jones & Ors. Liability will only be established if the employer’s sole or main purpose is to achieve that result.

Where a claim is upheld, an Employment Tribunal must make a prescribed award (currently £4,554 for each worker: s. 145E). The section is not particularly well drafted and employers have sought to exploit every potential loop-hole, in part because of the significant damages for breach.

A good illustration is the argument of the employers in Kostal v Dunkley that s.145B only protected against permanent and not temporary withdrawals from collective bargaining. That submission succeeded before the Court of Appeal (CA), whose judgment had the potential to make the protection in s.145B illusory. It was fortunately reversed by the Supreme Court in 2021.


During collective bargaining with Unite, Kostal offered a 2 per cent pay increase and a Christmas bonus, in return for reduced overtime and sick pay. Members rejected the offer in a ballot.

Before exhausting the collective dispute resolution procedures, the employer then made direct offers to staff, telling them that they would not receive the Christmas bonus if they did not accept.

By the time the parties had arrived at the final stage of the dispute resolution procedure, about 90 per cent of staff had accepted, with the result the union’s mandate was “destroyed”. 

Later, the company made a similar offer, without the bonus, warning that if it was not accepted it might lead to dismissal.

The Employment Tribunal and Employment Appeal Tribunal (by a majority) upheld the members’ claims under section 145B in respect of both offers. The total award was £421,800.

However, the Court of Appeal (CA) allowed the employer’s appeal. It held that the prohibited result only occurs where acceptance of the direct offers would have the effect of taking any term outside the sphere of collective bargaining on a permanent basis. It did not apply to offers which, if accepted, merely mean that the term was not determined by collective bargaining “on this occasion”.

This sparked consternation across the trade union movement as it had potential to undermine collective bargaining.

It meant employers could ignore recognition agreements and claim that, even if in this pay round they had not engaged in collective bargaining or had ignored the collective procedures, they had not decided to do so permanently.

Owing to the very serious detrimental implications of the CA’s judgment, Unite appealed to the Supreme Court (SC).

The Supreme Court’s judgment

The SC unanimously allowed the Unite’s appeal. Lord Leggatt delivered the speech for the majority (with whom Lords Briggs and Kitchin agreed). The SC reached the opposite view to the CA: where a trade union is recognised, the direct offer does not have to take the particular term(s) permanently outside the sphere of collective bargaining.

Lord Leggatt reasoned that “[t]here is no difference in principle between offering an inducement to trade union members to agree not to be represented by their union in collective bargaining indefinitely or for a long period or for a very short period of time…”. The prohibited result will still be achieved in either case, and s.145B is therefore engaged.

The reasoning of the majority was buttressed by reference to ECtHR cases on article 11, including Wilson. Lord Leggatt commented that it was: “… incompatible with article 11 to allow an employer simply to by-pass a trade union which has been recognised for the purpose of collective bargaining and enter into direct individual negotiation with its employees…”.

Where an employer refuses or fails to engage in any discussions or negotiations with a recognised union before making direct offers to workers, such conduct “denies the union its seat at the table and does not allow the union’s voice to be heard”.

This does not mean that an employer can never make direct offers to the workforce. There are of course limits. 

The majority considered that the question of when the prohibited result arises is one of causation. To achieve the prohibited result, there must be at least a “real possibility” that, if the offers were not made, the workers’ relevant terms of employment would have been determined by a new collective agreement reached for the period in question.

If there is no such possibility, then, according to the majority, it cannot be said that making the individual offers produces the prohibited result. The majority decided the parameters should be framed by reference to whatever bargaining procedure has been agreed between the employer and the union.

What this means is that an employer cannot make direct offers to its workforce in respect of any terms which fall within the scope of collective bargaining unless it “… has first followed, and exhausted, the agreed collective bargaining procedure…”.


The outcome in Kostal is very much welcomed because the CA judgment had blown a gaping hole in s.145B. But there remain potential limits on the scope of legal protection.

First, there is no legal duty to enter collective bargaining or to bargain in good faith: the right in article 11 is only a right for the union’s voice to be heard. An employer can sit across the table obdurately saying “no” and, so long as it does not block its ears, there is little the law can do.

Second, while the Kostal judgment shut one door on employers, it left another one half open. The causation test applied by the majority appears to permit an employer to make offers directly to individual workers, so long as the employer first follows and exhausts the procedural steps in any collectively-agreed procedure.

When it is properly interpreted in light article 11, we doubt s.145B permits an employer simply to go through the motions of following an agreed procedure or purporting to negotiate with a union when it never had any intention of trying to reach a deal.

But it will probably take further litigation to establish the point, and in the meantime employers will no doubt seek to exploit any potential gap in protection, illustrated by the very recent Ineos case.

For the moment, and when such points arise, unions can continue to rely on the Human Rights Act 1998 to ensure that the s.145B regime is interpreted harmoniously with article 11 and the judgments of the ECtHR, just as Unite did in Kostal. If the current Bill of Rights becomes law, their task will be much, much harder.

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