Is the collective term “apt” for incorporation?

Tribunals have developed a series of tests to decide whether a collectively agreed term is “apt” i.e. “suitable” for incorporation as a legally binding contract term, enforceable by an individual employee, as follows:

• choice of language: A collectively agreed term is more likely to be “apt” for incorporation if it uses the language of individual obligation, as opposed to aspiration or guidance;

• workability: Courts often test the collective term hypothetically, to see how it 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 collectively agreed promise that a BA flight crew complement would never fall below a fixed number could not have been intended as a legally enforceable obligation because this would have given individual crew members the legal right to refuse to fly, grounding the plane even if the crew complement met minimum safety standards. Similarly, 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 within five days of performing extra hours could not have been intended to be legally enforceable, since 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 possibly have intended this result, said the court;

• who was the promise made to? If it was made collectively to employees as a group, it is less likely to be regarded as individually enforceable than if it was made to each employee. 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 whole, without intending it to be legally enforceable by individual crew members;

• importance: How important is the term to the overall bargain? The more important it is, the more likely it is to be legally enforceable. For example, in Keeley v Fosroc International Limited [2006] EWCA Civ 1277, a case about enhanced redundancy pay, the court noted that a redundancy payment is an important part of the remuneration package, making a promise to pay particularly “apt” for incorporation. In Allen v TRW Systems [2013] UKEAT 2013/0083, the EAT commented that an enhanced redundancy package is especially likely to be apt for incorporation because it has become a widely accepted feature of an employee’s remuneration package.

• certainty: The language used must not be too vague for a court to be able to interpret what the parties must have intended;

• context: Where the term sits within the whole collective agreement can be important. A term surrounded by other terms that are obviously intended to be individually enforceable is more likely to be viewed as contractual. In George v Ministry of Justice [2013] EWCA Civ 324, the fact that a commitment about taking TOIL was surrounded by other “aspirational” statements helped the court conclude that the parties did not intend the collective term to be contractual;

• is it about an individual right or a collective process? In general, collective terms promising an individual benefit, such as pay, holiday or hours, are much more likely to be interpreted as binding individual contract terms than collective terms about processes or procedures. For example, in Simpson v Hackney and others [2012] UKEAT/0104/12/DM, collectively agreed job evaluation procedures were found to amount to joint non-legally binding advice, whereas a collective term promising back-dated pay to successful applicants for job evaluation was incorporated as a binding contract term;

• 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 newly introduced smoking ban was not a change to Mr Dryden’s contract terms. Instead, it was a change to a non-contractual working practice, so that when he resigned, his claim for constructive dismissal failed. Similarly, in Wandsworth London Borough Council v D’Silva [1998] IRLR 193, when a council changed its sickness absence procedure to cut the number of trigger absences, the Court of Appeal concluded that the procedure was meant to work flexibly and informally as a statement of good practice rather than creating individual contractual rights.

Changes agreed in negotiations are binding on all employees, even if they might not like what has been negotiated, particularly where a considerable amount of time has passed before they voice their objections (Henry v London General Transport Services [2002] IRLR 472).

If a workplace rep has apparent authority to negotiate, the employer can reach a deal at that 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, it 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 a further agreement.

For information on resisting changes to contract terms in the context of TUPE, see Chapter 12.