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Court of Appeal hears key case on £420,000 compensation for breach of trade union rights

Today the Court of Appeal will consider the appeal by Kostal UK Limited against an employment appeal tribunal (EAT) decision to order the firm to pay 55 Unite members more than £420,000 in compensation after making ‘unlawful inducements’.

The EAT had dismissed in December 2017 the appeal by Kostal UK against the decision of a Sheffield employment tribunal (ET) in February 2017, which ordered the firm, based near Rotherham, to pay the workers the compensation.

Unite, Britain and Ireland’s largest union, which has represented the 55 workers throughout the case, said today that the case was ‘hugely significant’ as it is the first time the Court of Appeal is considering this important point of law concerning unlawful inducements to trade union members.

Unite assistant general secretary for legal services, Howard Beckett, said: “This hearing today is hugely significant for the trade union movement and working people as it is the first time the Court of Appeal has considered whether it is lawful for an employer to seek to bypass union representatives in order to undermine collective bargaining for pay and terms and conditions.

“The right for a union to bargain collectively goes to the heart of trade union recognition and is why trade union members enjoy higher wages and more paid holidays than workers who aren’t a member of a union.

“Unite Legal Services has supported our members throughout this case from its origins in 2015 and we will continue to do so to the maximum extent.”

The claims arose after Kostal sought to bypass union negotiations in the first pay talks since the majority of the company's 700 strong workforce voted in favour of Unite being recognised as their trade union.

In an attempt to break the union and divide members, who had voted strongly to reject the company's pay offer and proposed changes to terms and conditions, in December 2015 the company wrote to employees directly urging them to accept the offer individually and to change their terms of employment or risk losing a Christmas bonus of £270 each if they did not.

The offer was then repeated to those that did not accept it in January 2016, coupled that time with the threat of dismissal for any who did not accept.

The Sheffield ET ruled that both offers amounted to unlawful inducements, contrary to section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 and awarded Unite members over £420,000 in compensation.

This decision was then upheld by the EAT in December 2017 and became legally binding on employment tribunals across the country.

The Court of Appeal is set to determine the employer’s appeal at the Royal Courts of Justice in London today.