London North Eastern Railway v Jiwanji: EAT upholds section 145B finding over direct pay offer to RMT members

An employer that decides it no longer wishes to use agreed collective bargaining arrangements cannot escape liability under section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 by pointing to the commercial reasons behind that decision, the Employment Appeal Tribunal has held.

In London North Eastern Railway Ltd and Hitachi Rail Ltd v Jiwanji and others [2026] EAT 102, handed down on 16 July 2026, Mr Justice Coppel, sitting with Mr Harminder Singh and Mr Nick Aziz, dismissed an appeal against an award of £3,907 to each of approximately 1,250 employees.

The claim arose from the 2017 pay round at Virgin Trains East Coast, whose employees later transferred to the appellants. After five negotiating meetings, TSSA and Unite members accepted the offer. RMT members rejected it, following a volte-face by their negotiator, who had agreed to recommend acceptance before urging members to reject what he called an insult of an offer. On the day the ballot result came through, VTEC wrote directly to the entire workforce announcing the award would be paid in December, with an opt-out for RMT members who did not wish to accept.

Applying Kostal UK Ltd v Dunkley, the tribunal found a real possibility that the terms would have been collectively agreed had the offer not been made, and that VTEC's purpose was to achieve the prohibited result.

The appellants, represented by John Bowers KC and Jason Galbraith-Marten KC, instructed by Eversheds Sutherland, argued the agreed procedure had been exhausted once the three unions' representatives agreed to recommend the proposals, or at latest once two of the three accepted. Mr Bowers accepted this followed from no particular term of the agreement but contended it was dictated by its shape.

The EAT held the short answer lay in the tribunal's unchallenged finding of fact that a realistic chance of collective bargaining remained. The finding was neither perverse nor surprising, given that VTEC re-engaged with the RMT shortly after the offer and collective agreement on the 2017 award was ultimately reached, on terms the RMT negotiated and from which TSSA and Unite members also benefited.

Distinguishing Kostal, where the procedure was prescriptive and included a four-stage dispute resolution mechanism culminating in ACAS referral, the EAT found the applicable agreement unstructured and flexible. It specified only that the procedure was exhausted once negotiations within the Joint Committee had concluded, while expressly contemplating further discussions between management and a full-time official thereafter. Practice bore out that flexibility: the Joint Committee operated without ASLEF, and negotiations with ASLEF outside the Committee were accepted as attracting section 145B protection.

The tribunal was therefore right to follow Ineos Infrastructure Grangemouth v Jones and ask objectively whether negotiations were in fact at an end. The EAT added that the less structured the agreed process, the less assistance the exhaustion question offers in answering the central causation issue.

On purpose, the panel rejected an argument advanced orally by Mr Galbraith-Marten that the tribunal should have treated VTEC's reasons for abandoning bargaining, including a desire to deliver back pay before Christmas and frustration at the RMT's conduct, as its purpose. The point was procedurally improper, having never been pleaded, put to the tribunal, or covered by permission. It was also wrong in substance. As Oliver Segal KC, instructed by Thompson Solicitors for the claimants, submitted, an employer will always have a business reason for bypassing collective bargaining, and treating those reasons as determinative would mean section 145B could never be contravened. Discrimination authorities such as Ahmed v Amnesty International were not a helpful analogy, drawn as they are from different statutes with different purposes.

Where there is evidence that an employer decided it did not wish to use the agreed arrangements, section 145D(4)(a) makes that a matter tending to show the prohibited purpose, not merely a starting point.