University of Venice “Ca’ Foscari”

University of Venice “Ca’ Foscari”

Pierre de Gioia-Carabellese

Lecturer in Business Law

(Professore universitario di business law)

Heriot-Watt University

Solicitor & Notary Public - Avvocato

The Lecture

Collective bargaining in the UK: the legal status of a collective

agreement: epistemology of a concept in evolution?

Contents

The contract of employment in the UK

Interaction with a collective agreement

The collective agreement

The Contract of Employment

No formalities are required for the contract to be concluded

General rules those at common law Contract exists when at least one employee

starts work Written document (S. 1 of ERA) as merely

evidence of some contract terms

The Contract of Employment (cntd)

No specific form However exceptions

Sect. 180 Trade Union and Labour Relations (Consolidation)

Act 1992 A term in a collective agreement restricting an

employee’s right to take industrial action turns out to be incorporated only if the collective agreement is in writing and the contract of employment provides for the incorporation of the clause


No specific form However exceptions (cntd)

Merchant Shipping Act 1995 An agreement between the crew of merchant

vessels and the ship’s master in writing, before the vessel leaves a British port

Companies Act 2006 (Sect. 227) The contract between a director of a company

and the company itself


Companies Act 2006 (Sect. 227) “[..] a director’s “service contract”, in relation to a company,

means a contract under which- (a) a director of the company undertakes personally to

perform services (as director or otherwise) for the company, or for a subsidiary of the company, or

(b) services (as director or otherwise) that a director of the company undertakes personally to perform are made available by a third party to the company, or to a subsidiary of the company


Companies Act 2006 Sect. 228(1)

“A company must keep available for inspection –

(a) A copy of every director’s service contract with the company or with a subsidiary of the company, or

(b) If the contract is not in writing, a written memorandum setting out the terms of the contract.”

Sect. 228(2) “All the copies and memoranda must be kept available for inspection at-

(a) The company’s registered office;

(b) A place specified in regulations under section 1136.” Sect. 228(3)

“The copies and memoranda must be retained by the company for at least one year from the from the date of termination or expiry of the contract and must be kept available for inspection during that time.”


Contract (according to the theory of contract at common law): “an agreement between two parties having the capacity to

make it, in the form demanded by law, to perform on one side or both, acts which are not trifling, indeterminate, impossible or illegal, creating an obligation enforceable in a court of law”

Intention of the parties to create legal and binding obligations Social or moral obligations cannot create a legally binding

contract


Consideration? Price, that is to say wages in employment

In England and Wales, for a contract (or a promise) to be valid a consideration must be given

Otherwise there is no enforceability In Scotland

When a party provides services to another, it is presumed that they are provided in return of consideration

It is a rebuttable presumption• Thomson v Thomson’s (1889) 16R 333


Peculiarities It may be an implied contract

Definition of an implied contract of employment: A contract which has been entered into by

having regard to the conduct and behaviour of the parties


Taylor v Furness Ltd [1969] K.I.R. 488 Successful interview of the potential employee The employee received an identity card and a letter

of welcome He started working However dismissed without working immediately after Held

The parties had entered by implication a contract of employment

Taylor entitled to claim that the company had breached the contract by dismissing him without notice for no reason


Dacas v Brook Street Bureau (UK) Ltd [2004] I.R.L.R. 358 Dacas registered as a temporary worker with BSB Ltd, an

employment business, which assigned her to work exclusively as a cleaner at a mental health hostel (Drive) run by Wandsworth Council

The terms and conditions of the temporary worker’s agreement between Dacas and the employment business provided that the agreement “shall not give rise to a contract of employment”

Dacas worked exclusively for the Council for over four years until April 2001, when she was not employed any more

Dacas took the view that she has been an employee of either the Council or BSB Ltd, and presented a claim of unfair dismissal

The tribunal held that it was implied a contract between Dacas and the Council, the end-user.

The Contract of Employment and Written Statement of Particulars

Statutory requirement – employer must supply to each employee within 2 months of employment a statement of the main terms and conditions of their employment

It must cover the following: among other things– The parties– Place of work– Job description– When contract begins– Any continuous employment– Job title– Remuneration– Hours of work– Holidays– Sick pay– Pensions– Notice– Disciplinary procedure– Any contracting-out certificate– Any collective agreements in force

Interaction between WSP and Contract of Employment

Robertson v British Gas [1983] I.R.L.R. 302, CA The contract of employment allowed a bonus However, the WSP dictated that “bonus

conditions will apply according to the collective agreements”

The conditions relating to the bonus were set forth in a collective agreement that the employer later terminated

Held that the entitlement would continue also beyond the termination to the collective agreement

Sources of Employment Contract

Express terms Implied terms

Terms incorporated from a collective agreement

Terms incorporated from a collective agreement

What is a collective agreement? The outcome of a collective bargaining

between trade union and employer Procedural elements – regulating

collective bargaining process Substantive elements – pay and terms &

conditions of employment

Definition of Collective Agreement

Trade Union and Labour Relations (Consolidation) Act 1992 (Sect. 178) “Any agreement between a union and

employer relating to an industrial matter than can be the subject of a trade dispute”

Enforceability

Trade Union and Labour Relations (Consolidation) Act 1992 (Sect. 179) Conclusively presumed not to be intended

to be legally enforceable contract unless In writing; and Express provision intended to be legally

enforceable contract

Non-enforceability of a Collective Bargain

The collective agreement is not a legally binding contract as between the signatory trade union and employers Ford Motor Co v AUEF & TGWU [1969] 2 QB 303

Ford sought an injunction against the two unions to prevent strike action being taken in breach of procedures set out in a collective agreement

Held that the company did not have any legal remedy because the collective agreements were not intended to be legally binding

The Incorporation

Substantive provisions of the collective agreement may be held to have become terms incorporated into the contracts of employment of individual workers

The incorporation may be Express Implied

Express Incorporation

Via the contract of employmentNational Coal Board v Galley [1958]

1 WLR 16

Express Incorporation (cntd)

National Coal Board v Galley [1958] 1 WLR 16 A contract of employment stated that he accepted

employment on “terms negotiated from time to time with the trade unions”

No mention of overtime Trade unions and the employer agreed overtime Mr Galley refused Held that this wording amounted to express incorporation of

these collective agreements

Implied incorporation

If there is an evidence of an intention by both parties that the collective agreement is to be incorporated into the employment contract Alexander v Standard Telephones and Cables

(No 2) [1991] I.R.L.R. 286• Principle• “Where it is not a case of express incorporation but a

matter of inferring contractual intent, the character of the document and the relevant part of it and whether it is apt to form part of the individual contract, is central to the decision whether or not the inference should be drawn”

Implied incorporation and Procedural Aspects (Redundancy) Anderson v Pingle of Scotland Ltd [1998] I.R.L.R. 64

Terms and conditions of the employment according to the collective agreement

Collective agreement containing a redundancy procedure (LIFO)

A redundancy occurred, but the employer decided to adopt a selective scheme

The employee sought an injunction He succeeded

Further Principles

Gibbons v Associated British Ports [1985] I.R.L.R. 376Collective provision remains in force

until new collective agreement or until individual directly agrees otherwise with the employer

Further Principles

Marley v Forward Trust Group Ltd [1986] I.R.L.R. 369 A clause of a collective agreement stated that

“this agreement is binding in honour only” However, the employee and the employer

expressly incorporated it Held that the clause was enforceable As a matter of principle: a term in a collective

agreement which is expressly non binding between TU and employers’ association can become legally binding after incorporation

Further Principles

Burroughs Machines v Timmoney 1978 Employer leaving its own federation does not

mean that it is not bound any more by the CA

Further Principles

Hamilton v Futura Floors Ltd [1990] I.R.L.R. 478 Employer joining a federation of employers after

the conclusion of a collective agreement This does not mean that the collective agreement

is incorporated by implication between the employer and the employee

Further Principles

Scholars (Prof. Craig) Incorporation of a CA into an employee’s contract

of employment does not depend upon the employee being a member of the trade union which negotiated that collective agreement

Collective agreement becomes enforceable exclusively upon its incorporation

Prohibition

S. 180 TULR(C)A 1992 Limitation of the incorporation of no-strike

clauses into contracts of employment In this case the relevant clause must be in

writing and make express provision for such incorporation and must also be reasonably accessible for consultation by workers during working hours

The contract of employment must also expressly or impliedly incorporate the term

Conclusions

In the UK the rule is that the terms and conditions of a contract of employment are negotiated between employer and employee (laissez-faire approach)

The written statement of particulars is a further document merely for the purposes of the evidence

However, the contract of employment interacts with the collective agreement through the “incorporation”

Conclusions

At common law a collective agreement in itself is not enforceable between the parties

However, the provisos encompassed by it may become enforceable between the employer and the employee through the “concept” of the incorporation

The incorporation can be: Express Implied

Primary Sources

Trade Union and Labour Relations (Consolidation) Act 1992

Employment Rights Act 1996

Secondary Sources

P de Gioia-Carabellese, University Lectures, Employment Law and Law of HR Management, Heriot-Watt University, Academic year 2011/2012

Documents

University of Venice “Ca’ Foscari”