Unite’s new ‘strategic case unit’ set to defend landmark trade union law appeal, after tribunal orders South Yorkshire firm to pay Unite members £426,600

A South Yorkshire firm has been accused of ‘backsliding’ in appealing against an award of £426,600 to 56 Unite members, after bosses by-passed their recognised union and put a pay offer directly to individuals which included changes to their terms of employment.

Last Friday (24 February) Sheffield employment tribunal (ET) confirmed that Kostal UK Ltd, based near Rotherham, should pay the union members total damages of £426,600, including fees of £4,800. This follows an ET judgment in January, which found the company guilty of making unlawful inducements.

But Unite, the country’s largest union, said today (Friday 3 March) that the German-owned company, which had breached the 1992 Trade Union and Labour Relations (Consolidation) Act, was appealing against the judgment.

The union, which represented members in the unlawful inducement claims hearing, said that this decision to defy the award confirmed by the ET remedy hearing was ‘backsliding and spinning it out’.

This could mean that the 56 workers will have to wait months, or even longer, to receive the compensation they are due.

Unite regional officer, Simon Coop, said: “It was a landmark ruling by the employment tribunal that showed managements can’t play fast-and-loose with the law when there are collective bargaining arrangements with Unite.

“The award, of £426,600, was confirmed at a remedy hearing last Friday, but now Kostal UK has appealed to the employment appeal tribunal (EAT) which may take months to be heard. The judgment from the EAT could then be a further lengthy period of time.

“It is very disappointing that the company has adopted this hard line which could mean that our members not receiving the money owed to them this year and the company’s costs will only increase.

“This smacks of backsliding and spinning it out, and does nothing for the reputation of Kostal UK as an employer.” 

The case stems from November 2014 when the majority of the 700 workers at the company, which makes advanced electronic equipment for the car industry, voted in favour of Unite being their recognised union for collective bargaining purposes. A recognition agreement was then signed with the company.

In November 2015, a pay offer of two percent for the year 2016 and a £270 Christmas bonus was put to union members and rejected by a large margin of 80 per cent in a consultative ballot

Rather than continuing with the pay negotiations, as it should, the company wrote to individual employees urging them to accept the offer and change their terms of employment, otherwise they would lose their Christmas bonus of £270 each. This offer was repeated to those that did not accept in January 2016.

Unite Legal Services pursued claims on behalf of 56 members to whom the offer was made and the judgment, following the Sheffield hearing in November 2016, was received in January this year.

The company argued that because it was only seeking a temporary withdrawal from collective bargaining, their offers did not amount to unlawful inducements.

The tribunal rejected the company’s claim and, in the judgment, Employment Judge Little said: “We take the view that it is not permissible for an employer to abandon collective negotiation when it does not like the result of a ballot.

“If there is a recognition agreement, which includes collective bargaining, the employer cannot drop in and out of the collective process as and when it suits its purpose.” 

Unite assistant general secretary Howard Beckett said: “This is another important victory for Unite Legal Services. The decision is key to protecting workers and trade unions from underhand employer tactics that seek to break trade unions and reduce workers’ rights.

“The company’s appeal has been received during the week when the anti-worker Trade Union Act takes effect. However, the company and other bad employers should be under no illusion that Unite Legal Services will support our members in whatever legal action is necessary to protect their rights.

“This will be the first trade union law appeal case to be handled by our new strategic case unit.

“The unit has been set up to pursue the worst employers, including those who seek to shamelessly dodge worker rights with bogus self-employment and other precarious models and those who abuse trade union laws.

“Unite is ensuring that our members’ rights are protected and that they have first class legal support. Unite would like to thank Thompsons Solicitors for their representation, Thompsons continue to stand shoulder to shoulder with our movement."