Is the collective term “apt” for incorporation?

Courts and tribunals have developed a variety of different tests to help them decide whether a collectively agreed term is apt (i.e. suitable) for incorporation as a binding contract term, entitling the affected employee to sue for damages for contract breach. Here are some of the most important tests used:

• choice of language and statements of intention: words that suggest an intention to create legal obligations, such as “the employer will pay”, are likely to create binding obligations. Aspirational wording such as “should” or “ought” is much less likely to do this;

• certainty: The words chosen must not be too vague for a court to work out what the parties must have intended to agree;

• workability: Courts often test collective terms by asking how they would work in practice as a binding individual obligation. For example:

◊ in Malone and Others v British Airways PLC [2010] EWCA Civ 1225, the court decided that a promise in a collective agreement that the BA flight crew complement would never drop below a fixed number was not intended as a legally enforceable obligation, as this would have given individual crew members the legal right to ground the plane by refusing to fly, even if the crew complement met minimum safety standards.

◊ in George v Ministry of Justice [2013] EWCA Civ 324, a court decided that a promise in a collective agreement that prison officers could take time off in lieu (TOIL) within five days of performing any extra hours was not intended to be legally enforceable, because it would give individual officers the legal right to insist on taking TOIL even in an emergency or regardless of cover. The parties could not have intended this result, the court said.

• who was the promise made to? For example, in Malone and Others v British Airways PLC [2010] EWCA Civ 1225, the court decided that BA’s commitment on crew complement was made to the cabin crew workforce as a group, but that it was not intended to be legally enforceable by individual crew members;

• collective process or individual right? Sometimes the stages of a collectively negotiated process — for example, a job evaluation procedure — will be held not be legally enforceable, whereas the end result of that process — a higher grade and/or back pay — will create a binding contractual right (see, for example, Simpson v Hackney and others [2012] UKEAT/0104/12/DM);

• consequences: The more serious the consequences of a procedure for employees affected, the more likely it is to be contractual. For example, in Sparks and Others v Department for Transport [2015] EWCH 181, trigger points under a new absence management procedure (number of days’ absence) automatically resulted in formal action with potential disciplinary consequences. The court ruled that the part of the procedure setting trigger points for disciplinary intervention was contractual. By contrast, earlier stages of the procedure with no disciplinary consequences were probably not contractual;

• work rules: Work rules regulating day-to-day working practices are not normally legally binding. For example, in Dryden v Greater Glasgow Health Board [1992] IRLR 469, a new smoking ban was not a change to Mr Dryden’s contract terms. Instead, it was a change to a non-contractual working practice. This meant that when he resigned in protest, his claim for constructive dismissal failed because there was no breach of contract on which to base his claim (see page 278);

• importance: The more important a promise to the overall “work/wage” bargain, the more likely it is to be legally enforceable. In Keeley v Fosroc International Limited [2006] EWCA Civ 1277, the court commented that a promise to pay enhanced redundancy is an important part of anyone’s remuneration package and particularly suitable for incorporation. In Allen v TRW Systems [2013] UKEAT 2013/0083, the EAT described a commitment to pay enhanced redundancy as especially suitable for incorporation, as a widely accepted feature of the remuneration package;

• context within the collective agreement: A term that is surrounded by other terms that are obviously intended to be legally enforceable is more likely to be viewed as contractual and vice versa. However, as always, everything depends on the individual context of the case.

Once collectively agreed terms are incorporated into the employment contract, changes to those terms that are agreed in negotiations normally bind all the employees in the bargaining unit whose contracts contain the relevant term, even if they might not like what has been negotiated, especially if there is a substantial delay before they voice their objections (Henry v London General Transport Services [2002] IRLR 472).

The position is more complicated in the case of post-transfer changes to collective terms, following changes to TUPE made in 2014. For more information on contract changes after a TUPE transfer see page 399, Chapter 12.

If a workplace rep has apparent authority to negotiate, the employer can reach a deal at workplace level even if the procedures say that a full-time official should be informed of any deals concluded (Harris v Richard Lawson Autologistics [2002] IRLR 476). However, if a change has not been agreed by all recognised unions, the term may not be universally incorporated:

Once a change is incorporated into an employee’s contract, it becomes a binding contractual term. Neither side can revert to the previous contractual arrangement without further agreement. The contract term continues to exist independently of the collective agreement even after the collective agreement has fallen away (Gibbons v Associated Ports [1985] IRLR 376).

It is a breach of section 145B of the Trade Union and Labour Relations Consolidation Act 1992, to offer employees an inducement (such as a one-off payment) in return for giving up collectively agreed terms (see page 112).