Many union members pay their trade union subscriptions (dues) by having them deducted from their pay by their employer and these dues are then passed on to the union (these arrangements are widely known as ‘check-off’). The Court of Appeal has recently considered whether a trade union could rely on the Contracts (Rights of Third Parties) Act 1999 to enforce these ‘check-off’ arrangements against the employer.
Historically, check-off arrangements applied for many civil service staff under collective agreements which were incorporated into staff contracts. Around 2014 – 2016, several government departments unilaterally removed the check-off mechanism for civil servants. Various civil servants brought claims for breach of contract against their government department employers supported by their trade union, and the union brought its own claim seeking damages for lost subscriptions. After those claims were upheld at first instance, the government departments appealed.
The Court of Appeal partially upheld the appeal. The Court unanimously held that the judges at first instance were not wrong to find that the employees had not waived or impliedly accepted the removal of check-off. The employers had not sought the employees’ consent to vary their contracts before removing the check-off arrangements, nor sought to clarify that the employees had accepted the change by continuing to work after their removal. The trade union had protested the removal of check-off before the variation was unilaterally implemented and there is no rule requiring the affected employees to individually notify the employer that they objected to the unilateral variation in their terms. Further, when employees individually or collectively object to a contractual variation, the mere passage of time will not, without more, turn an unequivocal rejection of the variation into an unequivocal acceptance.
However, by a majority, the Court went on to hold that the 1999 Act did not apply to the union because the parties did not intend the union to be able to enforce the right to check-off. The Court had to ask itself: what was the common intention of the parties on a proper construction of the contract? Objectively, the contractual term offered a check-off facility to the civil servants, rather than providing a benefit to a named third-party beneficiary. The union and the employer had agreed via a collective agreement that the benefit of check-off should be conferred on the employee. There was no intention for the union to be able to enforce the collective agreement and this was not altered by the fact that the collective agreement was incorporated into the contracts of employment.
Secretary of State for the Home Department & others -v- Cox & others [2023] EWCA Civ 551
For further information, please contact:
Fiona McLellan, Partner, Hill Dickinson
fiona.mclellan@hilldickinson.com
