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Ghosts of Christmas Past: using Christmas bonus to bypass collective bargaining comes back to haunt employer

22 December 2017 #Employment Tribunals

Earlier this year we reported on the Tribunal decision in Dunkley and others v Kostal UK Ltd, involving an attempt to induce staff to give up their collective bargaining rights by informing them directly that failure to agree terms would lead to “no Christmas bonus”. Subsequently a second letter was sent in January threatening termination of employment contracts if no agreement was reached.

57 employees brought claims alleging a breach of section 145B of TULRCA, the penalty per breach is £3,800 for each claimant and they claimed that both offers were separate breaches. The Tribunal agreed. Facing compensation of approximately £425,000, Kostal appealed the decision.

The EAT, dealing with its first appeal under this law, agreed with the ET that when the offer is made it does not need to be accepted to be a breach. An employer can make an offer directly to employees when talks have broken down completely but the Tribunal found this was not the case here and the purpose of each offer was to evade collective bargaining. On the amount of compensation, this was fixed by law and the Tribunal had no discretion to reduce the award.

Therefore the £425,000 compensation still stands. To avoid costly mistakes when negotiating with unions please contact our employment team.

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Michael Hibberd

Michael Hibberd
Senior Solicitor

E: mhibberd@clarkslegal.com
T: 0118 953 3905
M: 0779 900 7511