I am currently subject to collective bargaining, but have been offered an individual contract of employment. What should I do?

First, it is important to consider why your employer is doing this.

In many sectors and occupations, negotiating through collective bargaining with a recognised union is well recognised as the best way to ensure decent wages and other terms and conditions such as pensions. In general, employers who make offers to substitute the existing collectively agreed terms with individual contracts do so because they want the freedom to cut terms and conditions, either immediately or in the long term.

Unions are better placed to protect wages and other terms because they can rely on strength in numbers, combined with the ability to back up their negotiating position with the threat of industrial action. This helps to offset the inequality of bargaining power in the employment relationship. By contrast, individual employees generally have no power to resist cuts to their wages, especially in a market where other good jobs are difficult to find.

If you opt to accept an individual employment contract that is not subject to collectively agreed terms, in the long term you are likely to lose the benefit of valuable collectively agreed terms such as any negotiated contractual redundancy payments.

Second, it is important to look at the legal position.

Your contract terms that derive from a collective agreement – for example as to wages, hours, holidays, redundancy pay and so on – have the same status as any other contract terms.

In other words, they can only be changed by agreement. This is the case even if the collective agreement has been terminated.

Also, under section 145B of the Trade Union and Labour Relations Consolidation Act 1992, a member of a trade union that is recognised or seeking recognition has the right not to be made an offer that is intended to result in some or all of their terms no longer being collectively bargained by a trade union.

An employer who tries to negotiate directly with employees to encourage them to abandon their collectively agreed terms is likely to be in breach of this section.  

The amount of compensation that must be paid by a employer to each employer who has been offered an inducement in breach of this section is £3,830 (from April 2016).

Take advice from your union as soon as possible, especially if your employment transfers under TUPE and your new employer wants to make cuts or changes to your collectively agreed terms, or tries to abandon the collective agreement.

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.