Rail workers whose union claimed Virgin Trains bypassed collective bargaining when the company made a pay offer directly to the workforce are in line to receive compensation totalling £4.8m.
An employment tribunal in Leeds found that the East Coast Main Line Company – which traded as Virgin Trains East Coast and formerly held the east coast main line rail franchise between London, Yorkshire, North East England and Scotland – decided to treat collective bargaining as at an end and told staff it would apply a pay award that had been rejected by the Rail, Maritime and Transport Union (RMT).
It found that this direct offer to RMT members by the company was an unlawful inducement and a contravention of section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992.
Section 145B gives workers who are members of recognised trade unions the right not to have offers made to them by their employer, if the purpose of such offers is that terms of employment will no longer be determined by collective agreement negotiated by their trade union.
The employees have since been transferred to LNER and Hitachi, who will become liable for some the compensation owed under TUPE regulations. Each respondent, including East Coast Mainline Company, has been ordered to pay each claimant £3,907 – there are more than 1,000 claimants.
The case, Ms N Jiwanji & others v East Coast Main Line Company & others, centred around pay negotiations that took place in 2017. The negotiations involved the RMT and other recognised unions including TSSA and Unite.
The company put forward an offer that was rejected by the unions’ joint negotiating committee, which subsequently made a counter offer. The counter offer was rejected and the unions were asked to put the original offer to their members. This offer was described as “full and final”.
Unite and TSSA rejected the offer after ballots, while the RMT’s executive council rejected it without a ballot. The unions advised the company about this in early October 2017.
Further negotiations took place, and meeting notes suggested that the unions would recommend acceptance of a revised offer, however this was disputed by the RMT.
RMT’s national executive committee decided to ballot members with a recommendation to reject the offer. This was communicated to the company. Later that month the TSSA and Unite accepted the offer, however the RMT announced on its website that it had rejected the offer.
On 13 November 2017, the company wrote to the workforce stating that the pay award would apply from December 2017. This was said to have breached section 145B.
It said: “However, if you’re an RMT member and do not wish to accept the two year pay award, please email [address omitted] by midday 24 November with the subject line “Pay Award Opt-out”. Alternatively you can send a letter to opt out of the award…Please think carefully before making a decision and bear in mind that if you opt out in the hope the deal will improve – it won’t.”
The employment tribunal had waited for the outcome of the Supreme Court Kostal v Dunkley before coming to a decision in the case.
The union had been appalled that the company had simply walked away from the negotiations when the members voted against the original proposal and sought to impose the offer, warning its members that they would not be afforded anything better if they did not do so.” – Mick Lynch, RMT
The judgment says that under the agreed procedures the decision should have been taken jointly by both the employer and the unions. It concluded that there was no impasse in the negotiations and the employer knew RMT had to seek the views of its members on the deal and there was no reason why talks could not have continued as a consequence of the proposal being rejected.
The tribunal concluded that the company’s purpose had been to avert further collective negotiations.
RMT general secretary Mick Lynch said: “This judgment illustrated the importance of parties adhering to the procedures that have been agreed to negotiate on pay and terms and conditions.
“The union had been appalled that the company had simply walked away from the negotiations when the members voted against the original proposal and sought to impose the offer, warning its members that they would not be afforded anything better if they did not do so. This was no way to treat loyal employees who have the right to be represented by their union throughout what is an agreed process.”
Neil Todd, a trade union law expert at Thompsons Solicitors, which represented the RMT, said: “This is yet another significant victory for trade union collective rights. The bedrock of good industrial relations is adherence to the collective agreements in place which have been negotiated over decades. The law requires these processes to be respected for good reason in that they provide vital industrial stability.
“The case law now makes very clear an employer cannot circumnavigate agreed structures to negotiate terms and conditions simply because it does not like the fact its proposals have been rejected.”
A spokesperson for LNER, said: “We are reviewing this ruling which relates to the period prior to our operation of the franchise.”
Hitachi has been contacted for a response.