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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
The Contract of Employment
(cntd)
 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
The Contract of Employment
(cntd)
 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
The Contract of Employment
(cntd)
 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.”
The Contract of Employment
(cntd)
 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
The Contract of Employment
(cntd)
 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
The Contract of Employment
(cntd)
 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
The Contract of Employment
(cntd)
 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
The Contract of Employment
(cntd)
 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 employment
National 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. 376
Collective 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