Manufacturer faces £400,000 fine after employment tribunal

Rotherham manufacturer Kostal UK is facing a £425,000 fine after an employment tribunal found that it had breached trade union legislation.

Unite said bosses tried to bypass the union and put a pay offer directly to individuals which included changes to their terms of employment.

56 union members at Kostal are set to receive ‘compensation’ payments of up to £7,600 each according to Unite.

It said that a pay offer of 2% for 2016 was offered back in November 2015, as well as a £270 Christmas bonus. It was apparently rejected by a large margin of 80% in a consultative ballot

The union then said that rather than continuing with the pay negotiations, the company wrote to individual employees urging them to accept the offer. It alleged that Kostal threatened to retract the £270 Christmas bonus if workers did not agree. This offer was repeated in January 2016.

Unite Legal Services brought claims on behalf of 57 members at a hearing in November 2016.

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 regional officer Simon Coop said: “This is a landmark ruling that shows that managements can’t play fast-and-loose with the law when there are collective bargaining arrangements with Unite.

“It was disappointing that we had to bring these claims to the employment tribunal in the first place, but we felt it was essential that we defended the collective bargaining process. I am delighted that the tribunal accepted our arguments and agreed with us that the employer had crossed a line.”

Unite said it has contacted the company seeking pay-out of the award, but if agreement can’t be reached the employment tribunal will meet on 24 February to arbitrate.

The business, which is part of independent family company Kostal Group founded in 1912 in Lüdenscheid, posted pre-tax profits of £6.1m and turnover of £100.4m for the year to 31 December 2015.

Kostal UK has been contacted for comment.