Collective Agreements
Cases
Kenny v. An Post
[1988] I.R. 285
O’Hanlon J.
“It appears to be common case that the adoption of the fifteen minute break with full pay which was implemented from 1969/70 onwards was never made the subject of any formal, written agreement or – so far as the evidence goes – of any exchange of letters or other written communication between the employers and the employees or their representatives. Nor does it appear that the matter went higher than Mr. Kelly and Mr. Gray, who were superintendents on the floor at the sorting office, to receive formal sanction by the Department of Posts and Telegraphs. However, it is argued that the decision was implemented and continued over many years and must by implication be regarded as having become one of the terms of employment for the postal sorters in that particular office.
Chitty on Contracts, 24th ed. (1977), refers as follows at paras. 3524 and 3534 to the common practice in the modern industrial and commercial situation of having collective agreements rather than separate contracts with individual workers:
“Although [the general principles of the law of contract] are relevant, there is often no genuine bargaining between the parties to the individual contract of employment, since the terms are frequently settled by collective agreements or statutory regulation . . . It is nowadays often impossible to regard the employment of each individual worker as the result of a separate bargain struck between master and servant.
The only major decision on the legal status of a collective agreement ( Ford Motor Co. Ltd. v. A.U.E.F.W. [1969] 2 Q.B. 303) confirmed the majority opinion of those concerned with such agreements that they are not normally intended to create legal relations. This means that they are binding in honour only, and that their enforcement must depend on industrial and political pressure. . . The process by which collective agreements are made is known as”collective bargaining” rather than “contract” and the application to them of the ordinary rules of the law of contract could lead to great difficulties.”
I am of opinion that what took place in the present case is akin to the process of collective bargaining referred to by the authors of the work in question. Alteration of, and adjustment to, work practices may have to take place constantly in the sphere of employment where large numbers of people are working on the same premises and it seems to me that where a particular change in the terms of employment is intended to be regarded as binding contractually the parties should take some positive steps to achieve this object. The evidence has failed to satisfy me that Messrs. Gray and Kelly, the superintendents at the time, had authority from the Department of Posts and Telegraphs to change the contractual situation between the Department and the postal sorters, while I fully accept that they must be regarded as having authority to adapt the work practices in the sorting office to the particular needs of the work situation. In particular I would not be prepared to hold that they had authority to bring about change in the entitlement to remuneration for overtime on a contractual basis so that the employer was to be thenceforth bound to pay for time not worked by the employee.
It has been held that a promise to pay extra remuneration for services which are within the scope of the servant’s duty as defined by his subsisting contract of service is void for want of consideration and that it makes no difference that such extra remuneration is claimed under a usage. It is enforceable when the nature of the service has been changed entirely, or in a case where the servant undertakes increased responsibility or more work. Accordingly, even were I to hold that the parties embarked on a process designed to alter the contract of service in the 1969/70 period, I would tend to the view that there was no consideration for the additional benefit offered to the employees, as they were making no promise in return. If this is the correct view, then the alleged agreement would, on this ground also, be unenforceable at the instigation of the employee.”
Ardmore Studios (Ir.) Ltd. v. Lynch and Others.
[1965] I.R. 1
McLoughlin J.
“ Mr. Lynch said that there was an arrangement, mutually agreed between the Union and the Company, that the Company would employ members of his Union in accordance with the seniority list. The formation of this list had been discussed before the first agreement and workmen were kept available. The list had been compiled by the Company and the Union and the men were under an obligation to keep themselves free to be available if called upon by the Company. Mr. Lynch also stated that the same practice was adopted after the termination of the agreement of the 1st January, 1959. He stated that the last seniority list was settled in December, 1961, and he produced a photo-stat copy of that list. He always believed that there was a binding agreement that men would be supplied in accordance with that list. He said that if the agreement had been adhered to, the defendants Kelly, Hill, Doyle, Murphy, and Moloney, all of whom were on the seniority list, would have been employed on the production of the film, ‘Of Human Bondage,’ as electricians. He said that the list was checked on occasions and he said that the idea of having such a list was to compensate persons, who were willing to make themselves available for picture work at the studios, for loss which they might incur by reason of their agreement to make themselves available if and when called upon. He also said that up to February, 1963, electricians were always selected from the list. He also said that the existence of the list would not keep out English electricians provided they joined the Irish Union and that members of the Electrical Engineering Union could get on to the list.
On cross-examination Mr. Lynch agreed that the dispute was concerned with English workmen coming to Ardmore, but he added that the dispute was put on the basis that this was a breach of agreement because it ignored the existence of the seniority list.
…..
Taking all these facts into account, and bearing in mind the contents of the documents to which I have referred, I have no doubt that a seniority list was in existence. It is probable that it operated in some form from the year 1958 and crystallised about December, 1961, when it contained the names of twenty men, all of whom were members of the Electrical Trades Union (Ireland), though members of the Irish Engineering, Industrial, and Electrical Trades Union could also be on it. I have no doubt but that men of the Electrical Trades Union (Ireland) were drawn from that list from the time of the termination of the agreement to the time when the dispute took place.
There is a considerable volume of evidence which might very possibly enable a Court to conclude that there was an agreement between the Union and the Company that electricians were to be provided by the Union from the seniority list as required, and that men from that list would be available when required, and that the Company would not look elsewhere for men while there were a sufficient number of men available from that list.
Having regard to my decision on the legal aspect of this case, it is unnecessary for me to decide as a fact that a valid binding contract existed between the Union and the Company.
What I have to decide is: Was there a genuine belief on the part of the Union that such an agreement existed and were there reasonable grounds for that belief? Put in another way: Was the Union acting bona fide? Did the Union bona fide believe in the existence of an agreement that the men could be drawn from the list, whether right or wrong? Having regard to all the evidence I have formed the view that the Union did genuinely believe it had a binding agreement with the Company that men would be drawn from the seniority list and acted on that belief. There were men on the list ready to be sent to work. They were ascertainable persons, as the first nine men on the list. I believe that the Union was, at all times, acting on behalf of its members and that there was a dispute as to the non-employment of persons within the meaning of the Act. That being so, there was in my view a genuine trade dispute within the meaning of the Act which justified the Union in taking the action it did of placing a picket on the plaintiffs’ premises and the Union’s action was thus protected by the Trade Disputes Act, 1906.
“I accordingly refuse the declaration and injunction sought.”
Goulding Chemicals Ltd. v. Bolger
[1977] I.R. 211
S.C. O’Higgins C.J.
“The second ground of appeal put forward by the plaintiffs was based on the acceptance by all the unions concerned (including ITGWU of which the defendants are members) of the plaintiffs’ proposals for the closing of their plant. These proposals were designed to ensure that the closing would be accepted by the unions as being in the circumstances unavoidable and that satisfactory monetary compensation would be paid to all employees. It was of course implicit in the proposals and in their acceptance by the unions that there would be no trade dispute and, of course, no picketing. The six-point proposal or statement from the plaintiffs which was accepted by the unions was a business-like document and had all the appearances of being intended to create legal relations between the unions which accepted and the plaintiffs who proposed. I would regard the agreement resulting from the acceptance of these proposals as being similar in effect to that dealt with in Edwards v. Skyways Ltd. 58 and, there being nothing to suggest the contrary, in my view a valid contract was thereby created between these unions and the plaintiffs. However, this is not the point of this ground of appeal.
The plaintiffs’ contention is that this valid enforceable agreement has the effect of binding the defendants who are all members of one of the unions involved. This submission must be considered in the light of the evidence, which was uncontradicted, that the defendants at all times opposed the conclusion of any agreement with regard to the closing of the plant and made it abundantly clear, both inside the union and to the plaintiffs, that they would not accept any agreement to this effect. I find it hard to accept that in such circumstances the defendants can be bound by an agreement which they have expressly repudiated and opposed. It seems to me that to hold them bound would be contrary to all principle. The only basis put forward for suggesting that they should be bound was that they did not resign and continued to be members of their union. The rules of the union were not put in evidence but I would find it very difficult to accept that membership of an association like a union could bind all members individually in respect of union contracts merely because such had been made by the union. I cannot accept for these reasons that this ground of appeal is well founded.
Kenny J.
“The plaintiffs then argued that if the six-point statement and its acceptance by the unions created a contract the defendants, as members of the union, were bound by it because the majority of their co-members had accepted it. No authority to support this argument was cited and the rules of the union, which would show the authority of the majority, were not referred to or proved. I think that the contention is wrong in principle and that all the reported cases on this matter are against it. Membership of a corporate body or of an association does not have the consequence that every agreement made by that corporate body or association binds every member of it. None of the defendants are parties to the agreement and as they consistently opposed it, no question of their being bound by acquiescence can arise. In addition, there is the negative evidence against the contention provided by a section in the Industrial Relations Act, 1946. The two decisions that I have been able to find on this matter are against the plaintiffs’ contention.
In Holland v. London Society of Compositors 70 the plaintiff was a member of a provincial trade union which made an agreement with a London trade union that a member of the former union should, if he came to London, be admitted to membership of the latter union. The plaintiff was offered a position in London but was refused membership of the London union and, therefore, could not accept the position. He brought an action against the
London union for a declaration that he was entitled to membership of it and for an injunction. The court decided that the agreement was made not between the plaintiff and the London union but between the two trade unions only and that, as the plaintiff was neither directly nor indirectly a party to it, the action failed. In Young v. Canadian Northern Railway Co. 71 the defendants had entered into an employment agreement with a trade union and the plaintiff sought to rely on the terms of it when he was dismissed by the defendants. The Privy Council held that, having regard to the terms and nature of the agreement, it did not constitute a contract between any individual employee and his employer. There is in addition the negative argument that the Oireachtas assumed in 1946 that an employment agreement to which a trade union was a party did not bind the individual members of it. Section 30, sub-s. 1, of the Industrial Relations Act, 1946, reads:
“A registered employment agreement shall, so long as it continues to be registered, apply, for the purposes of this section, to every worker of the class, type or group to which it is expressed to apply, and his employer, notwithstanding that such worker or employer is not a party to the agreement or would not, apart from this subsection, be bound thereby.”
Therefore, I reject the plaintiffs’ argument that the defendants are bound by the six-point agreement or that there is any contractual relationship between the plaintiffs and them.”
Edwards v Skyways Ltd
[1964] 1 All ER 494, [1964] 1 WLR 349
Megaw J
In the present case, the subject matter of the agreement is business relations’ not social or domestic matters. There was a meeting of minds – an intention to agree. There was admittedly, consideration for the company’s promise. I accept the proposition of counsel for the plaintiff that in a case of this nature the onus is on the party who asserts that no legal effect was intended, and the onus is a heavy one.’
James O’Rourke & Others v Talbot (Ireland) Ltd
Thomas White, James Masterson, Christopher Fitzsimons, Thomas McCarthy, Andrew Myler, Patrick O’Reilly, Michael Ryan and Noel Coleman v Talbot (Ireland) Ltd
1981 No. 4635 P
High Court
21 December 1983
[1984] I.L.R.M. 587
(Barrington J)
BARRINGTON J
delivered his judgment on 21 December 1983 saying: The background to this case is the decline of the motor assembly business in Ireland. The defendant is a well-known firm, formerly engaged in the assembly, and now engaged in the importation and distribution, of motor cars. The plaintiffs are nine foremen formerly employed by the defendants in their motor assembly business. All were senior men with from 12 to 28 years service when they were made redundant by the defendant on 26 September 1980. A strike which attracted considerable public notoriety took place at the defendant’s premises in the year 1981 so that it may be worthwhile to mention that this case has nothing to do with that strike, all of the plaintiffs having been made redundant in the previous year.
In their proceedings the plaintiffs claim a declaration that the defendant company is bound by a certain agreement dated 21 June 1979 as amended by another agreement dated 25 July 1979 whereby they allege the defendant company gave a guarantee that the plaintiffs would not be made redundant prior to 1984. The defendant, in its substantial defence to the proceedings argued before me, did not deny the existence of the said alleged agreements but pleaded that the said alleged agreements or agreement did not contemplate legal relations and do not entitle the plaintiffs to any relief in a court of law.
Each plaintiff, I am told, had a written contract of employment in standard terms. I have only seen that of the plaintiff Thomas McCarthy. This contains, at the side heading ‘notice of termination’, the following terms:
By employee:
One months/weeks notice in writing.
By employer:
Monthly Staff:
0 to 5 years service/1 month,
5 to 15 years service/2 months,
15 to 25 years service/3 months,
25 years plus/4 months.
Weekly Staff:
0 to 2 years service/1 week,
2 to 5 years service/2 weeks,
5 to 10 years service/4 weeks,
10 to 15 years service/6 weeks,
15 years plus/8 weeks.
I am told that all the plaintiffs had a contract in similar terms. Mr Geoghegan, however, on behalf of the plaintiffs, submits that the agreements hereinafter referred to in fact amended or over-rode the standard clause concerning notice of termination of the plaintiffs’ contracts of employment.
*589
BACKGROUND
In the year 1967 the government entered into an agreement with various firms carrying on the motor assembly business in Ireland under which the motor assemblers were given certain privileges in return for assurances given by them to retain places of business in Ireland. This agreement was not proved or produced in evidence in the hearing before me but several of the witnesses referred to it and its existence, if not its terms, were well-known to persons in the motor assembly industry in the 1970’s. It also appears to have formed the background for the system of registration of importers of motor vehicles contained in the Motor Vehicles (Registration of Importers) Act, 1968. This Act is in turn referred to in the 7th Protocol to the Treaty of Accession to the European Economic Community under which Ireland was authorised to retain, until 1 January 1985, the system applicable to assembly and import of motor vehicles applied in accordance with the provisions of the Motor Vehicles (Registration of Importers) Act, 1968. It was recognised that after 1984 motor assembly in Ireland would probably come to an end. But the Government and the assemblers apparently hoped that the intervening years would be used to enable the assemblers to diversify into other forms of manufacture without loss of jobs.
Workers at the Santry plant were organised by five different trade unions. The No. 2 branch of the Irish Transport and General Workers’ Union organised the production foremen. From time to time this branch entered into interim productivity agreements with management such as that which was to expire on 31 March 1979. Generally speaking, I am satisfied that these agreements did not contemplate legal relations, at any rate so far as all their clauses were concerned, but were meant to be binding in honour on the management and the trade union. It was standard practice for the trade union to insist that no worker would lose his job by reason of the implementation of a productivity agreement. I am satisfied therefore that clause 7 of the interim agreement referred to, which reads: ‘Nothing in this agreement affects the company’s guarantee of no redundancies’, means no mroe than that the productivity agreement referred to will not, of itself, cause redundancies. Some of the witnesses, however, took the view that this was a reference to the company’s assurance to the Government to maintain a place of business in Ireland, and, by implication, to maintain employment.
Apart from their trade union representatives the foremen at the Santry plant elected a committee of three men which, from time to time, negotiated with management and discussed problems of common interest. At the relevant date their committee consisted of the plaintiffs, Hugh O’Rourke, Andrew Myler and Noel Coleman. This committee met from time to time with the management committee which usually consisted of Mr Edward Gould, Mr S. W. Oakes and Mr J. T. Power. Mr Gould was a director and secretary of the company and was, at the time of the matters hereinafter discussed, acting as general manager. Mr Oakes was the personnel manager and Mr Power the plant manager.
*590
THE AGREEMENT
In 1979 the defendant company was running into difficulties. Costs were rising and sales and production were falling. Under these circumstances management were anxious to secure the agreement of the plaintiffs that foremen who had left car assembly, or were being re-deployed elsewhere in the defendants’ business, would not be replaced. The plaintiffs, on the other hand, were worried about their own jobs but were prepared to go along with management’s proposals provided they got some security in return.
A meeting was held between management and the foremen’s representatives on 20 June 1979. Mr Gould, Mr Power and Mr Oakes represented management while Mr O’Rourke, Mr Myler and Mr Coleman represented the foremen. The following extract from a memorandum from Mr Oakes, the personnel manager, to Mr Ronayne, the managing director of the defendant company, gives some insight into the problem with which management and foremen were concerned just prior to the meeting of 20 June. The memorandum is headed ‘Foremen’ and is dated 15 June 1979. It reads, in part, as follows:
At the foremen’s request Jim [i.e. Mr Power the production manager] and I met them on Wednesday to discuss problems which have a direct bearing on their attitudes and ultimately their behaviour.
They expressed grave concern on the future of the plant and ultimately on employment levels. This has been brought to a head by the departure of John Ryan (foreman) and the company indicating that there will be no replacement.
We explained in answer to their question, that for the level of production of 16 cars a day we had surplus foremen, a fact that we had indicated some time ago.
There is very little conflict about what happened at the meeting. The foremen’s representatives appeared to be of the opinion that virtually all issues were agreed, at least in principle, at the meeting of 20 June whereas the management representatives appeared to think that it took a number of meetings to reach agreement. Be that as it may I am quite satisfied that by the end of July the foremen and the management were in agreement on all outstanding points and that the foremen, in return for what they took to be a guarantee of job security, agreed that production foremen who retired or were transferred would not be replaced on the assembly line and that the remaining foremen would fill in for those who left and would work at any job to which they were assigned by management, including security work, provided they suffered no loss in pay. I am quite satisfied that the foremen, in return for agreeing to the management’s plans for the redeployment of supervisory staff, asked for an assurance that their jobs would be secure and asked to have this assurance, in writing, on company notepaper.
It is not clear whether a draft of the proposed assurance was produced at the meeting of 20 June but, on the following day, the foremen received a document on company notepaper signed by Mr Gould, Mr Power and Mr Oakes and which read as follows:
The company gives an assurance that compulsory redundancy will not be introduced among production supervisory grades should the market situation and other conditions affecting the company’s performance necessitate a realignment of manning and staffing arrangements.
*591
It will be noticed that this document contemplates changes in the ‘market situation and other conditions affecting the company’s performance’. Should such factors necessitate ‘a realignment of manning and staffing arrangements’ the company still gives an assurance that compulsory redundancy will not be introduced among production supervisory grades.
The foremen discussed this document either on the 21st or some later date and were not satisfied with it. They wanted something that would bind the company legally. Some of the foremen — and in particular Mr Coleman — did not like the word ‘assurance’. They wished to substitute the word ‘guarantee’ which they considered to be a better word from the legal point of view. They were also familiar with the term ‘guarantee’, in the sense of a legally binding warranty as to fitness, in the motor trade. I am quite satisfied — and indeed there is no controversy about it — that at some stage the foremen asked for a ‘guarantee’ instead of the ‘assurance’ contained in the document of 21 June. I am quite satisfied also that management created no difficulty about giving the guarantee. A meeting was held between representatives of management and representatives of the foremen on 25 July 1979. At some stage before this meeting draft minutes of the meeting were shown to the foremen’s representatives and agreed to by them. These minutes contain the following paragraphs:
The company gave a guarantee of no compulsory redundancy prior to 1984 and that surplus supervisors would be redeployed.
On re-location a supervisor would retain all his benefits as a ‘no worse off condition.
So far as the representatives of management were concerned I am quite satisfied that they negotiated with the foremen’s representatives in good faith. They were, at least, equally concerned about the future of the plant. They recognised that the foremen were senior men who had given the company loyal service. They always envisaged that if a particular foreman’s job became outdated that it would be possible to redeploy him in some other part of the company’s business. They acknowledged that the foremen had agreed to work in any capacity and that, as senior men, they should be secure on the principle of first in last out. But things did not work out that way. The company’s business deteriorated in 1980. There were five unions in the plant and it was not practicable to sack one man and replace him by a man from a different union. Neither was it practicable to have two men receiving different rates of pay for the one job. In September 1980 the company felt that it had to let all the plaintiffs go.
I think the truth of the matter is that the representatives of management did not think that they were entering into a legally binding arrangement with the foremen at all. They felt that they were entering into a productivity agreement of a kind binding in honour but not in law. Mr John Kane the secretary of the No. 2 Branch of the Irish Transport and General Workers’ Union, who gave evidence in the case, acknowledged that many agreements negotiated between employers and trade unions were regarded as falling into this category. Moreover, management were probably more conscious than the man of the importance of market forces and felt that no matter what was decided in *592 negotiations, market forces would ultimately decide what would happen to the plant and to the men’s jobs.
I am satisfied, however, that not only were the men looking for something which was legally binding but that management knew this. Mr Oakes admitted in cross-examination that he knew the foremen were very happy with the assurance and guarantee because they appeared to feel that their jobs were protected. They were no longer relying on the general arrangements made between the motor assemblers and the Government which, while designed to maintain employment levels in the motor assembly industry, did not guarantee the particular job of any one man. They now had a further assurance which applied specifically to their jobs with the defendant company. He knew that the foremen thought they were getting more than other workers with the defendant company. The management company knew that the foremen were not getting more but did not consider it necessary to tell them.
Likewise Mr Power admitted that he knew that the plaintiffs were anxious to have a copper-fastened guarantee for the future. He knew this when they came back looking to have the word ‘guarantee’ substituted for the word ‘assurance’. His own view was that you could not offer such things and run a viable company. He felt that the document which the men had received was not ‘worth the paper it is written on’ but also knew that they, having received it, were content that they had a future. They may have taken the interpretation from it that they had a secure job until 1984 but he felt that in negotiation ‘you don’t point out the snags in your proposal’.
Mr John Kane the branch secretary of the No. 2 Branch of the Irish Transport and General Workers’ Union was not, initially, aware of the written assurance or guarantee which the foremen had received. He did not usually consider that agreements negotiated between trade unions and employers were legally binding though they might be binding in honour. He, however, regarded the document which the men had received as unique in his twenty years experience as a trade union official. He regarded it as giving cast iron and personal guarantees to each of the men concerned. He was accordingly dismayed when the guarantee was not honoured and he telephoned Mr Gould to tell him so. Mr Gould said that the document had been given in good faith and that he was sorry for what had happened. In the course of the same telephone call Mr Gould indicated that the company might be disposed to negotiate to buy back the guarantee but he could not recall if any specific sum of money was mentioned. I am satisfied that a sum of £20,000 was subsequently mentioned internally in management circles as a possible figure to redeem the assurance or guarantee, but I accept Mr Gould’s evidence that he did not mention any specific sum to Mr Kane on the telephone. I also accept that what happened between Mr Gould and Mr Kane is not to be taken as any form of admission of liability but is rather to be regarded as a ‘feeler’ put out by Mr Gould to see if what he regarded as yet another industrial problem could be resolved by the payment of money.
*593
THE LAW
The agreement in the present case was a commercial agreement. It is clear from the internal memo sent by Mr Oakes to Mr Ronayne that management knew that an offer of job security would influence the men’s attitude towards the scheme of redeployment in the company. It is also clear that the assurance given did influence their attitude and that the scheme of redeployment was implemented with the men’s agreement and co-operation because of the assurance given. It therefore appears to me that the presumption of law is that the parties intended to create legal relations. In these circumstances as Megaw J said in Edwards v Skyways Ltd [1964] 1 WLR 349, the onus is on the party who asserts that no legal effect was intended, and the onus is a heavy one.
In that case the plaintiff was an aircraft pilot employed by the defendant. At a meeting held between representatives of the defendant company and the plaintiff’s trade association it had been agreed that pilots declared redundant when leaving the defendant company would be given ‘an ex gratia payment’ equivalent to the defendant’s contributions to the pension fund. The plaintiff having retired, the defendant refused to make the ‘ex gratia payment’. Megaw J held that the agreement was a binding one and that the term ex gratia related to the position prevailing before the plaintiff carried out his end of the agreement and not afterwards.
At page 355 of the report the learned trial judge puts the matter as follows:
In the present case, the subject-matter of the agreement is business relations, not social or domestic matters. There was a meeting of minds — an intention to agree. There was, admittedly, consideration for the company’s promise. I accept the propositions of counsel for the plaintiff that in a case of this nature the onus is on the party who asserts that no legal effect was intended, and the onus is a heavy one.
Counsel for the plaintiff also submitted, with the support of the well-known textbooks on the law of contract, Anson and Cheshire and Fifoot, that the test of intention to create or not to create legal relations is ‘objective’. I am not sure that I know what that means in this context. I do, however, think that there are grave difficulties in trying to apply a test of the actual intention or understanding or knowledge of the parties: especially where the alleged agreement is arrived at between a limited liability company and a trade association; and especially where it is arrived at at a meeting attended by five or six representatives on each side. Whose knowledge, understanding or intention is relevant? But if it be the ‘objective’ test of the reasonable man, what background knowledge is to be imputed to the reasonable man, when the background knowledge of the ten or twelve persons who took part in arriving at the decision no doubt varied greatly between one and another?
The decision in Edwards v Skyways Ltd was cited with approval by the Chief Justice in a passage which appears at page 231 of the report in Gouldings Chemicals Ltd v Bolger [1977] IR 211. But one of the matters which influenced the Chief Justice in the view he expressed in the passage quoted was that the document under discussion in that case, though negotiated between employers and a trade union, was ‘a business-like document and had all the appearances of being intended to create legal relations’.
Mr Cooke says that the minute of the meeting of 25 July 1979 which contains, at paragraph 3, the guarantee of no compulsory redundancy prior to 1984, does not look like a business-like document or one intended to create legal relations. He points, for instance, to paragraph 2 which is as follows: *594
The company cannot anticipate plant lay-out or supervising requirements should diversification take place but supervising ratios will be fully discussed before implementation.
Mr Cooke relies strongly on the case of Ford Motors Co Ltd v A.E.F. [1969] 2 QB 303 where it was held that collective agreements negotiated between a large industrial company and various trade unions and containing many ‘aspirational’ clauses, were not intended to create legal relations. In the course of his jdugment in that case (at page 496) Lane J (as he then was) put the matter as follows:
Agreements such as these, composed largely of optimistic aspirations, presenting grave practical problems of enforcement and reached against a background of opinion adverse to enforceability, are, in my judgment, not contracts in the legal sense and are not enforceable at law.
In Goulding Chemicals Ltd v Bolger Kenny J, at page 237 of the report, expressed some reservations as to the correctness of the decision in the Ford Motor Co Ltd case but I do not consider it necessary to go into these matters for three reasons. Firstly, we are not here dealing with a trade union or a group of trade unions negotiating on behalf of all the men employed in a vast concern or a particular industry but with three foremen negotiating on behalf of not more than seventeen of their peers and referring back to their peers and getting authority from time to time. Secondly, a productivity agreement which might not be legally enforceable in all its terms can still amend particular provisions in a worker’s contract of employment e.g. his rate of pay. In the present case I have no doubt that the foremen made quite clear that they were looking for an alteration in their terms of employment. Finally, the plaintiffs in the present case carried out their side of the bargain and are standing over the authority of the agents who negotiated the agreement on their behalf.
As previously stated I accept the evidence of the management witnesses when they say that they did not intend to enter into legal relations with the foremen. Unfortunately, their attitude was never expressed or communicated to the foremen. The foremen’s representatives, on the other hand, by demanding an assurance in writing, on company notepaper, and by insisting on the substitution of the word ‘guarantee’ for the word ‘assurance’ made clear that they were looking, not for some pious aspiration or commitment in honour, but for a guarantee, peculiar to each foreman, against being made redundant prior to 1984. I am satisfied also that when the negotiations were completed the foremen thought they had received such a guarantee and, on the basis of it, co-operated in the company’s scheme of redeployment. I am satisfied also that the company, through its managers, knew that the workers thought they had received such a guarantee and did not disabuse them of the position. It therefore appears to me that the conditions of the ‘objective test’ referred to by Megaw J in Edwards v Skyways Ltd [1964] 1 WLR 349 are met and that the company cannot rebut the presumption that the agreement was one intended to create legal relations. Under these circumstances it appears to me *595 that the company was in breach of its agreement with the plaintiffs in making them redundant in September 1980 and that the plaintiffs are, accordingly, entitled to relief.
Michael Rafferty, Frank Ward and The National Bus and Rail Union Applicants v. BusEireann/Irish Bus,
[1997]
2 I.R. 424
[1996 No. 290 J.R.]
High Court 21st November 1996
Kelly J.
21st November 1996
Introduction
The Transport (Reorganisation of Coras IompairEireann ) Act, 1986 brought about major changes in public transport in this country. Prior to it, Coras IompairEireann (C.I.E.) had been responsible for public transport both by road and rail within the State. The Act required C.I.E. to form three new companies to be named respectively IarnrodEireann Irish Rail; BusEireann Irish Bus and Bus Ãtha Cliath Dublin Bus. As their names imply, Irish Rail was to be responsible for the provision of a railway service within the State and between the State and places outside it; Irish Bus was obliged to provide within the State and between the State and places outside it a passenger service by road except insofar as such a service was provided by the third company, namely, Dublin Bus. It is with the second of these companies, Irish Bus, the respondent, herein that this application is concerned.
The Act prescribed the principal objects of the respondent which had to be stated in its memorandum of association and required that such memorandum be approved by the Board of C.I.E. with the consent of the Minister for Finance and, where appropriate, the Minister for the Public Service. Similar statutory requirements were prescribed in respect of the articles of association.
Section 18 of the Act of 1986 provided for a statutory transfer to the respondent of all the rights and liabilities of C.I.E. arising by virtue of any contract or commitment (express or implied) entered into by C.I.E. before the vesting day in relation to functions assigned to the respondent.
It is with s. 14 of the Act of 1986 that this application is principally concerned. As various provisions of the section will feature during the course of this judgment, it is desirable that I should set it out in full. It reads as follows:
“(1) Each company shall appoint such officers and servants as the company thinks fit.
(2) An officer or servant of a company shall hold his office or employment on such terms and conditions as the company determines.
(3) There shall be paid by a company to its officers and servants such remuneration and allowances for expenses as the company thinks fit, subject to, in the case of its chief executive (whether that officer is so described or otherwise), the approval of the Minister given with the consent of the Minister for the Public Service.
(4) Every person who, immediately before the vesting day, is an officer or servant of the Board and who is designated by the Board for employment by a company shall, on the vesting day or with effect from such later day as the Board may, as the occasion requires, appoint in that behalf, become and be an officer or servant, as the case may be, of that company.
(5) Save in accordance with a collective agreement negotiated with any recognised trade union concerned, every person who, immediately before the vesting day, is an officer or servant of the Board shall not, while in the service of the Board or a company, as the case may be, receive a lesser scale of pay or be brought to less beneficial conditions of service than the scale of pay to which he was entitled and the conditions of service to which he was subject immediately before the vesting day.
(6) Until such time as the scales of pay and conditions of service of such officers or servants are varied by the Board or a company, as the case may be, following consultation and after agreement with recognised trade unions, the scales of pay to which they were entitled and the conditions of service, restrictions, requirements and obligations to which they were subject immediately before the vesting day shall continue to apply to them and may be exercised or imposed by the Board or the chief executive of the Board or by the board or chief executive of the relevant company, as the case may be, while they are in its service. As provided in subsection (5) no such variation shall operate to worsen the scales of pay and conditions of service applicable to such persons immediately before the vesting day, save in accordance with a collective agreement negotiated with any recognised trade union concerned.
(7) If any of the companies is wound up, the functions of the company shall be exercised by the Board, and the Board shall accept into its employment without interruption of service all officers and servants employed by the company in consequence of subsection (4). Such officers and servants shall resume their employment with the Board on the same conditions of service as applied before the vesting day unless otherwise provided for in a collective agreement negotiated with any recognised trade union concerned.
(8) For the purposes of the Worker Participation (State Enterprises) Act, 1977, an employee of any of the companies shall be deemed to be an employee of the Board.”
In accordance with the terms of the Act of 1986 the respondent was set up and the Minister for Communications fixed the 2nd February, 1987, as the vesting day for each of the three companies formed including the respondent.
The respondent has conducted its business since the vesting day. Its core commercial businesses are provincial city services, stage carriage services and what are called “expressway/supa bus” services. Unfortunately, the respondent has not been very successful, at least in recent times, from a fiscal point of view. The provincial city services lose over two million pounds annually. Stage carriage services fare no better. It is only the “expressway/supa bus” which is profitable; it makes in excess of two million pounds each year.
The respondent is projected to incur losses of 26 million pounds up to 1999 before state subvention. Furthermore, the traditional methods of covering losses by state grants will have to be discontinued under European Union law. Because of this unhappy situation, the respondent commissioned a firm called Somers & Associates to carry out a review of the company’s operations. That firm was asked to identify areas where costs savings could be achieved. It carried out its commission and produced a viability plan dated the 18th June, 1996. Somers & Associates is of the view that the respondent will lose 1.7 million pounds after state subvention in the current year and furthermore has indicated that unless there are significant improvements in the company’s cost base, such losses will increase substantially in the coming years.
The applicants accept the financial difficulty in which the respondent finds itself. They acknowledge the need for change. But they take issue with certain of the proposals contained in the viability plan, not because they are not justified from an economic or commercial point of view but because they say they infringe their legal rights.
The applicants
(a) Michael Rafferty
This applicant is 56 years of age. He is employed as a driver by the respondent. Prior to its formation, he was employed in the same capacity by C.I.E. having taken up his post in 1967. He resides in Monaghan town and he works a six-day week from Monday to Saturday. His roster of duties is, like all other rosters involving drivers, known as a “board”. He has been working the same board for the last 17 years. It consists of the following.
He begins work at 1.40 p.m. at the garage in Monaghan when he books on. He collects his ticket machine and tickets and makes his way to his bus which he inspects for roadworthiness. He then loads the passengers and luggage and departs for Letterkenny at 2.00 p.m. He arrives there at 4 p.m. where the passengers disembark. He then books off duty until 5.05 p.m. when he repeats the process in reverse arriving back in Monaghan at 7.45 p.m. He then cashes in his receipts, makes up his tickets and books off for the night at 9.00 p.m. On a Friday night, upon return from Donegal, he undertakes a return trip to Clones. On alternative weeks, from Monday to Friday, he also undertakes a return trip to the Regional College in Dundalk departing from Monaghan at 7.50 a.m. and returning at 10 a.m.
On the 23rd September, 1996, he was informed that his particular duty was being abolished but that he could apply for other duties. These other duties would have ensured that Monaghan could remain his base but he would be involved in driving different routes than theretofore. He declined to take up this offer.
On the 4th October, 1996, he was advised of a new board in Monaghan including a route to Dundalk together with additional driving duties which would ensure that his driving day would start and finish in Monaghan. The details of this new roster were issued on the 7th October, and would involve driving from Monaghan to Dundalk rather than to Letterkenny. This new board would involve the applicant commencing work at 7.50 a.m.. However, the respondent contends that the duties to be undertaken would involve a definite commencement and conclusion time and are appropriate to a bus driver in the service of the respondent. The applicant takes issue with this.
(b) Frank Ward
This applicant is 55 years of age. He has been a bus driver in the employment of the respondent and its predecessor, C.I.E., for the last 27 years. He lives in Limerick. For the first 17 years of his employment, he worked on the Limerick city routes. Prior to the Act coming into operation, he applied for the board which he has worked for the last 10 years. He works a six-day week. He begins duty at 11.05 a.m. when he books on at the Limerick garage. He then goes to the Limerick bus terminal where he takes over the bus which has arrived from Cork and departs at 11.32 a.m. for Galway. He books off there at 2 p.m. and remains so until 5.40 p.m. when he makes the return journey to Limerick, arriving home at 8 p.m. At 8.15 p.m., he departs on a return trip to Ennis and arrives back in Limerick at 10.15 p.m. The implementation of the viability plan will involve the elimination of this board. In September, 1996, the applicant was given the opportunity to apply for other boards in the Limerick area but did not do so. He has been assigned a rotating duty ex Limerick which will require him to drive a number of routes with Limerick as his starting and finishing point. This will involve working a five-day week. He will also be able to drive on Sundays and so avail himself of the premium remuneration rates which apply to Sunday work. the respondent contends that he will continue to perform duties appropriate to his position as a bus driver and that he was notified of his new assignments on the 7th October, 1996.
(c) National Bus and Rail Union
This applicant (the union) is a registered trade union and organises staff members of the respondent. Of the full-time drivers employed by the respondent, approximately 600 are members of this union. The remainder are members of S.I.P.T.U. The union presents this application in a representative capacity on behalf of all of its members employed in the respondent to whom the provisions of s. 14 of the Act of 1986 apply. That is to say, this application is promoted by the union on behalf of its bus driver members who were employed by C.I.E. prior to the coming into operation of s. 14 of the Act of 1986, on the 2nd February, 1987.
The union takes issue with the company on a number of aspects of the viability plan which the company sought to implement in the respondent on the 14th October, 1996. It contends that this viability plan will dramatically affect the terms and working conditions not merely of the first and second applicants but of all of the drivers in the respondent who are members of the union. It says that the viability plan, when implemented, will constitute a variation in the conditions of service of such drivers and that this is impermissible having regard to s. 14 of the Act of 1986. It contends that certain provisions of the viability plan, to which I will return in due course, are suggestive of these fundamental changes. Now that the company has issued new boards and by so doing has in effect put flesh upon the bones of the viability plan, the union contends that its fears in this regard have been borne out.
The viability plan
I have already alluded to the unhappy financial situation of the respondent which brought about the commissioning of the viability plan. The union, through its General Secretary, has sworn that it has recognised for some considerable time that there is a need for an extensive review of work practices within the respondent. The need for such a plan is manifest, not merely from the point of view of improving the commercial viability of the company, but also from considerations of common sense efficiency. The present situation where bus drivers, on average, spend only 72% of their time driving and are unoccupied for the bulk of the remainder of their working time, whilst being fully remunerated, speaks for itself.
The viability plan intends to achieve a minimum target of 85% driving time from all drivers. It seeks to do so in a number of ways. First, it speaks of full flexibility and interchangeability between staff in various grades being required. The existing network of depots, garages and administrative facilities will be examined under the terms of the plan and reappraised. Facilities surplus to business requirements will be vacated and resources reallocated to identified alternate locations. The route network and timetable will be changed where needed in order to cater for customer needs and to meet competitive threats and the demands of the market place. The plan envisages five day basic working weeks spread over seven days for all drivers. They will be required to report for duty at the book-on time at locations designated by the company. Revised boards will be compiled for all depots so as to provide for greater efficiency in operating services. The plan provides for basic rates of pay for drivers who operate large buses, to remain as at present. Shift allowances will also be paid, as will meal and lodging allowances and there is a minimum gross weekly pay guaranteed of £215 for working a five day, 39 hour week.
The part of the plan to which particular exception is taken is contained at paragraph 4.9. It reads as follows:
“Drivers performing other duties: Drivers will undertake other work, when required, during non-driving periods, e.g. issuing tickets, checking passengers, giving information, performing security/traffic control duties, luggage and parcel attendance, fuelling, washing, cleaning and shunting buses, surveys etc.”
In addition, the number of spare/relief drivers is to be determined by the level of activity and normal relief requirements. The days of work and times of attendance are also to be based on these criteria. The viability plan, having been published in June, 1996, was the subject of a number of meetings between the union and the respondent. The last of these meetings appears to have taken place on the 19th September, 1996, but did not result in any agreement being reached. At that meeting the respondent made it clear that unless the union was prepared to accept the viability plan, it would be implemented, in part at least, as and from the 14th October, 1996. Such implementation was to take effect without the agreement of the union. As part of this implementation, new boards were published. I have already referred to the boards which directly affect the first two applicants. However, a number of other boards have been published by the respondent which are not as yet applicable to individual named bus drivers but do, in my view, indicate quite clearly the respondent’s intention to implement these boards in respect of, as yet, unnamed bus drivers. A number of these contain the following legend:
“Spare duties to include stand-by for auxiliaries and/or other work including checking and loading passengers on all buses, giving information, performing security/traffic control duties, luggage and parcel attendance, surveys, sweeping and shunting buses etc.”
More explicit reference is made to what will be expected of drivers in a number of boards. Two in particular have been highlighted. One of these involving the Letterkenny to Ballybofey service, requires the driver to”assist office clerk at Letterkenny with parcels and inquiries”. Board No. 18 involving a Tralee driver requires him to “clean offices on Sundays between 11.45 a.m. and 2.05 p.m. and again on Mondays and Fridays between 10.50 a.m. and 1.50 p.m.”
The applicants contend that the respondent has no entitlement to implement what are alleged to be changes to the conditions of service of bus drivers in the manner in which it has sought to do or at all, save with the agreement of the union. This contention brings into focus the statutory provisions of s. 14 of the Act of 1986 which are pivotal to the issues which have to be resolved in this judicial review.
Section 14 of the Act of 1986
I have already reproduced in full the provisions of the section. I turn now to what I believe to be the true construction to be given to sub-ss. 5 and 6 thereof.
Sub-section 5
In my view the true meaning of sub-s. 5 is that every person who was an officer or servant of C.I.E. before the 7th February, 1987, cannot receive a lesser scale of pay or be brought to less beneficial conditions of service than those to which he was entitled, prior to that date, unless a collective agreement has been negotiated, permitting such alterations. This sub-section has both positive and negative effects from an individual employee’s point of view. On the one hand it means that in the absence of a collective agreement, negotiated with a recognised trade union, an employee’s scale of pay or conditions of service may not be reduced or lessened. But on the other hand employees have to accept less beneficial conditions of service or rates of pay than that to which they were previously entitled, provided that such reductions are brought about by a collective agreement. So a diminution in pay or worsening in conditions of service can be brought about even against the wishes of an individual employee, provided that they are brought about by collective agreement.
In Ó Cearbhaill v. Bord TelecomEireann [1994] E.L.R. 54, the Supreme Court had to consider the provisions of s. 45, sub-s. 2 of the Postal and Telecommunications Services Act, 1983. That sub-section contained a provision almost identical in words and format to that of sub-s. 5 of the Act of 1986. It read:
“Save in accordance with a collective agreement negotiated with any recognised trade union or staff association concerned, a member of the staff of the Department of Post and Telegraphs who is transferred on the vesting day to either company, shall not, while in the service of the company, receive a lesser scale of pay or be brought to less beneficial conditions of service than the scale of pay to which he was entitled and the conditions of service to which he was subject immediately before the vesting day.”
In construing that sub-section, Blayney J. (with whom Finlay C.J. and Egan J. concurred) said at p. 57:
“In my opinion what this means is that the employees of the new companies may have to accept, by reason of a collective agreement of the type indicated, less beneficial conditions of service than they were previously entitled to. (As the case is not concerned with a lower scale of pay, I omit any reference to it). If the change is brought about by a collective agreement, it is in effect sanctioned by the sub-section. Accordingly, if the restructuring agreement which abolished the grade of engineering superintendent and put an end to the plaintiffs’ prospects of promotion to that grade, was a collective agreement made with a recognised trade union, the plaintiffs are precluded from bringing any claim against BTE even if the effect of the collective agreement was to bring them to less beneficial conditions of service.”
In my view s. 14, sub-s. 5 of the Act of 1986 falls to be construed in precisely the same manner as s. 45, sub-s. 2 of the Postal and Telecommunications Services Act, 1983, was construed by the Supreme Court.
Furthermore, I am of opinion that this sub-section, unlike the next one which I shall consider presently, has no temporal limitation but remains in force until such time as the last pre-1987 C.I.E. employee leaves the payroll.
Sub-section 6
This sub-section is clearly transitional in nature, unlike its immediate predecessor. It remains in force only until such time as scales of pay and conditions of service of officers or servants are varied. Once such variation takes place, the section ceases to have any practical effect. Until that variation occurs, however, the scales of pay and the conditions of service together with restrictions, requirements and obligations to which officers and servants were subject, before the vesting day, continue to apply to them. Not merely that, but such scales of pay, conditions of service, restrictions and requirements can be exercised or imposed by C.I.E. or its chief executive or by the board or chief executive of the respondent. But when the variation occurs, it may not worsen the scales of pay or conditions of service, except in accordance with a collective agreement.
The sub-section appears to me to have little practical effect insofar as this case is concerned. The applicants base their complaint, fairly and squarely, upon what they say is an attempt to introduce less beneficial conditions of service. It follows that if sub-s. 6 is exhausted because a variation has taken place already, the applicants are still entitled to rely upon the provisions of sub-section 5. If, however, sub-s. 6 is still in force because a variation has not taken place, it is clear that such a variation cannot operate to worsen the conditions of service, save in accordance with a collective agreement negotiated with a recognised trade union. Accordingly, in my view, sub-s. 6 has little practical effect upon this case since, insofar as conditions of service are concerned, it gives in effect the same protections as are contained in sub-section 5.
As the case developed it became clear that, apart from the question of the construction to be placed upon s. 14, sub-ss. 5 and 6 of the Act of 1986, the principal matter which falls to be determined in this case is whether or not the matters alluded to in paras. 4.5 and 4.9 of the viability plan, when carried into effect, will amount to the imposition of less beneficial conditions of service than were present prior to the vesting day. The applicants contend that they do. The respondent says that they amount to no more than a change in work practices which are to be distinguished from conditions of service. They say that at all times the respondent was entitled to change the work practices of bus drivers without the necessity of trade union agreement and that this did not amount to a breach of the protections afforded by s. 14 of the Act of 1986. Before I can even consider that question, however, I must adjudicate on a number of preliminary objections which were raised by counsel on behalf of the respondent. One deals with the procedure which was followed in this case and the other deals with the question of locus standi.
As far as the procedure is concerned, he argues that this is not a case which should have proceeded by way of judicial review. Insofar as locus standi is concerned, he accepts that the first two applicants can clearly come to court to make complaint of the matters ventilated by them. But he says that the union has no locus standi since it cannot be a beneficiary under the provisions of s. 14 and acts as a mere agent on behalf of its members who are principals. I will deal with each argument in turn.
Judicial review
Counsel for the respondent argues, quite rightly, that judicial review is a public law remedy. He contends that this is not a public law case. Rather, he says the relevant provisions of s. 14 have been incorporated as a statutory term in the contracts of employment of each pre-1987 employee of C.I.E. now employed by the respondent. If, therefore, they wish to seek redress in respect of such breach of contract, they must do so, not by means of judicial review, but rather by ordinary plenary proceedings.
In a moment I will turn to a consideration of the validity of this submission from a strictly legal point of view. From a practical point of view it has little to recommend it. These proceedings were commenced on the 7th October, 1996 and were heard as a full action over two days on the 15th and 16th October, 1996. Had they been commenced as a private action by plenary summons, counsel for the respondent accepts there could have been no question of a full trial having taken place within ten days of the proceedings being initiated. By adopting the judicial review route, it was possible to have a full hearing of the action, something that would have been impossible had the private law route been taken. The best that might have been achieved would have been an interlocutory bearing for injunctive relief. Indeed, it is significant that the possibility of having to seek interlocutory relief was certainly in contemplation of the parties, having regard to the documents which were exchanged and in particular the matter dealt with at para. 9 of the statement of opposition. So, by approaching the matter from a judicial review point of view, a speedy trial was ensured with the examination of all issues to be determined in a final and binding way rather than on an interlocutory basis. Of course, if counsel’s argument is well-founded as a matter of law, such practical common-sense considerations count for little.
In my view, his argument is not well-founded and I am glad to say that on one view of the matter there is a convergence in this regard between the practical and the legal.
In Geoghegan v. Institute of Chartered Accountants in Ireland [1995] 3 I.R. 86, O’Flaherty J. had this to say on the appropriateness of judicial review at p. 121:
“However, in my judgment the actual form of procedure used to judicially review an action by a body entrusted with great powers which can effect the livelihood of persons is of secondary importance. It may be that the most appropriate procedure in any given case is the one that gets the case on quickest: as Walsh J. observed in The State (Lynch) v. Cooney [1982] I.R. 337 at p. 373:
‘the quicker the procedure available the better for everyone’.”
If that be the appropriate criterion to apply, this submission of counsel for the respondent can have no legal validity.
However, I am by no means certain that that is the correct criterion and I note that this topic, when discussed by the Supreme Court, was dealt with in all of the judgments as obiter dicta with Hamilton C.J. declining to express any view on the topic.
The matter is dealt with in some detail by Denham J. but again on anobiter basis. She, however, sets out a number of factors she considers relevant when a question of the availability of judicial review is raised. In this regard I bear in mind, not merely that her statements are obiter, but that they do not appear to be in accord with the views of O’Flaherty J. and Blayney J. However, Egan J. agreed with her. The factors which she identifies are as follows at pp. 130 and 131. She said:
“(1) This case relates to a major profession, important in the community, with a special connection to the judicial organ of Government in the courts in areas such as receivership, liquidation, examinership as well as having special auditing responsibilities.
(2) The original source of the powers of the Institute is the Charter: through that and legislation and the procedure to alter and amend the bye-laws, the Institute has a nexus with two branches of the Government of the State.
(3) The functions of the Institute and its members come within the public domain of the State.
(4) The method by which the contractual relationship between the Institute and the applicant was created is an important factor as it was necessary for the individual to agree in a ‘form’ contract to the disciplinary process to gain entrance to membership of the Institute.
(5) The consequences of the domestic tribunal’s decision may be very serious for a member.
(6) The proceedings before the Disciplinary Committee must be fair and in accordance with the principles of natural justice, it must act judicially.”
Whilst Geoghegan v. Institute of Chartered Accountants in Ireland [1995] 3 I.R. 86 was dealing with matters entirely different to what I am dealing with in this action, nonetheless, I believe that a number of those factors identified by Denham J. are of relevance here. They are as follows:
1. This case relates to a major method of public transport and to persons employed in that operation. Public transport is important to the community. Disputes concerning persons employed therein which might give rise to industrial action have consequences of hardship, particularly for members of the community who are entirely dependant upon it.
2. The original provider of the service now being given by the respondent, was the statutory corporation, C.I.E. The respondent itself owes its existence to the Act of 1986. Furthermore, it is the Act which places restrictions upon it concerning its employees through section 14.
3. The functions of the respondent and its employees come within the public domain of the State. Although a company formed by registration, I cannot ignore its statutory genesis.
4. The method by which the contractual relationship between the respondent and its employees is regulated, is subject to the statutory intervention which is contained in s. 14 of the Act of 1986.
5. The consequences of an unlawful interference with the contractual rights of the respondent’s employees may be very serious for them.
These five considerations mirror, to a great extent, the matters identified by Denham J. in Geoghegan v. Institute of Chartered Accountants in Ireland [1995] 3 I.R. 86. In my view, they amply support the entitlement of these applicants to seek redress from this Court by means of judicial review rather than by plenary proceedings. This case does involve, in my opinion, a sufficient public law element to justify judicial review.
Curiously enough, none of the judgments in the Supreme Court in Geoghegan v. Institute of Chartered Accountants in Ireland [1995] 3 I.R. 86 refer to an earlier decision of that Court (nor was I referred to it in these proceedings) in which the question of the reach of judicial review was decided in a definitive way. It is Beirne v. Commissioner of An Garda Siochana [1993] I.L.R.M. 1. The views expressed by the majority of the Court in that case cannot be regarded as mere obiter dicta. The Court, through Finlay C.J., approved of the decision of Barr J. in Murphy v. The Turf Club [1989] I.R. 171. Two passages from the judgment of Finlay C.J. merit reproduction. He said at p. 2:
“The principle which, in general, excludes from the ambit of judicial review decisions made in the realm of private law by persons or tribunals whose authority derives from contract is, I am quite satisfied, confined to cases or instances where the duty being performed by the decision-making authority is manifestly a private duty and where his right to make it derives solely from contract or solely from consent or the agreement of the parties affected.
Where the duty being carried out by a decision-making authority, as occurs in this case, is of a nature which might ordinarily be seen as coming within the public domain, that decision can only be excluded from the reach of the jurisdiction in judicial review if it can be shown that it is solely and exclusively derived from an individual contract made in private law.”
In this case, I think there can be little doubt but that the respondent operates in the public rather than the private domain. Whilst the contracts of employment which form the subject of this action may originally have been private ones between employee and employer (albeit a public employer), they have been altered by statute and are given an express statutory protection which is not the case in an ordinary private contract. I am of the view that the relationship between the parties here is not derived solely from a private law contract.
In rejecting the respondent’s contention, I have not omitted consideration of the decision of the Court of Appeal in England in R. v. East Berkshire Health Authority, ex-parte Walsh , [1985] Q.B. 152. Beirne v. Commissioner of An Garda Siochana [1993] I.L.R.M. is binding on me and, even if it were not, I would prefer it and the, admittedly obiter,statements made by members of the Supreme Court in Geoghegan v. Institute of Chartered Accountants in Ireland [1995] 3 I.R. 86 to the views expressed by the Master of the Rolls.
Locus standi
The second preliminary objection raised by the respondent concerns the entitlement of the union to bring these proceedings at all. The argument runs as follows. The first two applicants are entitled to bring these proceedings because it is their contracts of employment which they say are being interfered with in an unlawful way. But the union has no contract of employment with the respondent. All it has is the statutory entitlement which is given to it in s. 14 of the Act of 1986 to enter into a collective agreement with the respondent which may alter scales of pay or the conditions of service of employees, even in a detrimental fashion. But in such event, it is the employees who are either benefited or damnified
and not the union. It is therefore contended that the union is nothing more than an agent of known and ascertained or ascertainable principals. Such being the case, it could have no locus standi to bring these proceedings.
I am by no means sure that the comparison which is made between the relationship of the union to its members and that of principal and agent, is an accurate one. But even if one assumes that it is, this argument, in my view, ignores the fact that the union brings these proceedings in a representative capacity as representing all of its members who are in the employment of the respondent and to whom the provisions of s. 14 of the Act of 1986 are applicable. It is perfectly entitled to bring an action in such capacity and leave was given to it so to do by Smyth J. on the 7th October, 1996. Bringing the action in that form rendered unnecessary the naming as individual applicants of all of the union’s 600 members. I am, therefore, satisfied that this argument has no substance and I reject it.
Even if the union was not suing in a representative capacity, I would be very slow to conclude that it could not maintain proceedings seeking to enjoin activities which it considered to be in breach of a statutory provision which prevented such activities taking place, save with its agreement. However, it is not necessary for me to decide this question since I am satisfied that the proceedings brought by the union in a representative capacity give it sufficient locus standi to maintain this action.
Conditions of service/work practices
I turn now to consider a topic which promoted a good deal of debate during the course of the hearing and in respect of which there does not appear to be any Irish decision to date. Is there a difference in law between conditions of service and work practices?
In Ó Cearbhaill v. Bord TelecomEireann [1994] E.L.R. 54 Blayney J. said this at p. 61:
“Neither of the parties was able to refer the Court to any case in which the question of what constitute conditions of service was considered. Kenny v. An Post [1988] I.R. 285 and O’Rourke v. Talbot (Ireland) Ltd. [1984] I.L.R.M. 587 were cited but neither of these cases really throws any light on the question so the matter must be approached on first principles. It seems to me that conditions of service are conditions which one would expect to find in a contract of employment between an employer and an employee. Any terms which it would be normal to include in such a contract would be entitled to be so described. And in considering what these terms might be, what has to be borne in mind is the nature of a contract of employment it is a contract between an employer and a single employee. Each employee has an individual contract, so the conditions of service would have to be appropriate to such a contract.
Would a term dealing with an employee’s prospects of promotion come into this category? In my opinion it would not. It does not concern the immediate relationship between the employer and employee as would, for example, the rate of pay, hours of work, length of holidays, sick leave, pension rights etc. It relates rather to the general manner in which the employer’s business is structured and managed. If an employer were to make it the subject of the contract of employment of individual employees he would be unable to change it without the consent of each of them. No employer would be prepared to restrict his freedom in this way. For this reason it seems to me that it would be wholly inappropriate to include a prospect of promotion in a contract of employment and so it could not be considered as being a condition of service. It is simply an incident of a person’s employment depending entirely on how the employer’s business is structured and subject to change since the employer is under no obligation not to alter the structure of his business.”
That quotation appears to me to make it quite clear that in the totality of the relationship between employer and employee, certain aspects of it may truly be described as conditions of service whereas other aspects are not. Even though these other aspects may have important implications for both employer and employee, they are nonetheless not to be regarded as conditions of service and in the present case would not fall to be protected under s. 14, sub-s. 5 of the Act of 1986. Accordingly there is a difference in law between conditions of service and work practices.
It is also clear from the quotation that when Blayney J. describes what are conditions of employment by reference to the rate of pay, hours of work, length of holidays, sick leave and pension rights, he is not setting forth an exhaustive list of what may be regarded as conditions of service. I would not wish to do so in the course of this judgment either. But I do think that there may be added to that list one other item which can be regarded as a condition of service. It is the basic job description applicable to a post. At common law an employee is not required to do a fundamentally different job from that contracted for.
An English decision is of assistance in illustrating the difference between conditions of service and work practices.
It is Cresswell v. Board of Inland Revenue [1984] 2 All E.R. 713. In that case the Inland Revenue in England wished to introduce a system of computer operation of the PAYE Scheme. This meant that calculations formerly done manually by tax officers would henceforth be done by computer. The effect for certain grades of revenue staff, namely, clerical assistants and tax officers, was that they would be required to enter relevant information into a computer via a visual display unit rather than onto individual cards. The plaintiffs objected to the introduction of a computerisation scheme on the ground that it would be a breach of their terms of service to introduce it without their consent. The Revenue told the plaintiffs that it was not prepared to continue with the old manual methods formerly used and that it would not pay the plaintiffs while they refused to operate the computerised system. The employer also made it clear that it was not putting an end to the plaintiffs’ contracts of employment or seeking to take disciplinary action against them and that they would be paid if they returned to full time work using the computerised system. The plaintiffs sought from the High Court a declaration that the Revenue was in breach of its contracts of employment in requiring them to operate or use the system and in suspending them without pay while they refused to operate it. They said that the introduction of the computerised system would be such a change in the method of performing the tasks for which they had been recruited as to amount to a change in the nature of their jobs and that they were therefore being asked to perform work under wholly different contracts without their consent.
In the High Court, Walton J. dismissed the plaintiffs’ claim. He took the view that an employee does not have a vested right to preserve his working obligations completely unchanged as from the moment he first began work. Rather an employee is expected to adapt himself to new methods and techniques introduced in the course of his employment. I agree. The effect of the Board’s computerised system was not that the plaintiffs would be doing a different job but merely that they would be doing recognisably the same job in a different way. That judge was of the view that the content of some of the jobs might be considerably affected but nonetheless it would not be altered enough to fall outside the original description of the plaintiffs’ proper functions since it could not be said that staff using the computerised system would be anything other than tax officers working for the P.A.Y.E. scheme.
I have already decided that the basic job description constitutes a condition of service. In order to decide whether that condition of service has or is likely to be altered in an unlawful fashion by the respondent I formulate the same test as was applied by Walton J. in Cresswell v. Board of Inland Revenue [1984] 2 All E.R. 713 and so I ask myself this question:”Is the effect of the changes promulgated by the respondent such as to result in the bus driver doing a different job or is it merely to bring about a situation where they will be doing recognisably the same job in a different way”? If it is the former and is less beneficial to the employee it is unlawful without the consent of the trade unions pursuant to s. 14, sub-s. 5 of the Act of 1986. If the latter, it is merely a change in work practice, does not attract the statutory protection and is lawful.
The present case
All parties to the proceedings accept that the essential conditions of service of drivers employed by the respondent are to be found in what is called the Road Passenger Agreement. That agreement was entered into as far back as 1947 but has been extensively modified and amended from time to time. I am satisfied that that agreement is not exhaustive. Two elements of it are, in my view, relevant to this case. The first is that under clause 26 thereof the agreement is terminable by three months notice on either side. No such notice has been served nor indeed does the respondent intend to terminate the agreement.
The second matter of note was omitted from the original exhibit in Mr. Bunting’s affidavit and pertains to the provisions of clause 2 of the agreement. I am satisfied that there was an amendment to that clause which envisages the furnishing of six days notice to the trade union of any proposed changes in a duty schedule. Under the terms of the amended clause 2 the trade union officials are to be given facilities to examine such changes. However there is no requirement that agreement must be obtained from the union or its members in respect of such changes of schedule. The existence of such a provision seems to suggest that scheduling arrangements, at least as far as city services were concerned, were matters in respect of which the company could make unilateral alterations. This amendment to clause 2 long antedated the Act of 1986 and suggests to me that conditions of service which existed when the Act came into force included one whereby the company could alter schedules without consent on the part of the union or the employees. In any event even if there was not such provision it appears to me that the scheduling of drivers per se can only be regarded as a question of work practice rather than a condition of service.
I turn now to consider each of the applicants by reference to the alterations which are sought to be brought about.
Michael Rafferty
I have already set out in some detail the board or roster which this applicant worked for the past seventeen years and the new one which is proposed for him. It is to be noted that his new roster or board does not contain what was referred to as the standard phrase identified by para. 11 of Mr. Bunting’s first affidavit.
In my view the alterations which the respondent seeks to effect to the first applicant’s board amount to a change in work practice rather than a change in conditions of service. He continues to be a bus driver. The duties which he will do are broadly the same as those undertaken heretofore. He will continue to operate from his original base. It does not appear to me that the alterations which the respondent wished to make in his case constitute a breach of the provisions of s. 14 of the Act of 1986 and consequently the application in respect of this applicant will be dismissed.
Frank Ward
Again in the case of this applicant it appears to me that the new board which will govern his working week constitutes a change in work practice rather than a change in his conditions of service. He still continues to carry out the duties of a bus driver who will be working a five day week. There is no complaint concerning any drop in his basic remuneration. In these circumstances it appears to me that although the new board will bring about alterations to his work, they do not approach anything like the form of alteration which would be required in order to amount to a change of his basic job description and therefore a change of a condition of his service. Accordingly in his case also this application will be dismissed.
National Bus and Rail Union
The union has put in evidence the viability plan and has drawn my attention to the particular part of it to which it takes exception. That is clause 4.9. I have already reproduced that in this judgment. The union has also demonstrated the way in which the respondent has sought to implement that clause by reference to the standard phrase which has been incorporated into most of the new boards. I have also reproduced that earlier in this judgment. A number of specific boards have then been called to my attention.
So, for example (as already pointed out), on the Letterkenny / Ballybofey service (Board No. 29A) a driver will be required to “assist office clerk at Letterkenny with parcels and inquiries”. Board No. 18 dealing with Tralee requires the driver to “clean offices on Sundays between specified times and to do likewise on Mondays between specified times”.
In his supplemental affidavit Mr. Bunting exhibits some further boards which require drivers on occasions to “sweep and clean yard or any other duties as are required by inspector”. Another roster requires a driver to “sweep main hall and empty bins”. In that particular roster it is said that it is contemplated that the driver concerned will have to undertake these duties for an hour and twenty-five minutes of each of five working days. In a further roster which is exhibited it is contemplated that the driver will assist the traffic inspector regulating buses etc.
Whilst these rosters have not yet been applied to any specific individual I think it likely that were it not for this judicial review application the respondent would have attempted to do so. These boards go a good deal further in the alterations which they propose than those which are applicable in the case of the first two applicants. They require the drivers concerned to undertake duties which were not formerly done by them. Indeed in the case of the sweeping duties involving yard cleaning, Mr. Paul Keely in the supplemental affidavit which he swore on behalf of the respondent accepted that these duties were new. But he went on to point out that they would only be done at a time when the drivers involved would otherwise be idle.
Other elements involved in the new boards are less clear on the question of novelty. For example it appears to be the case that bus drivers were always involved in a certain amount of duties involving the checking and loading of passengers or the giving of information or work involving luggage and parcels. However, most of this work appears to have been referable to passengers and luggage travelling on the particular bus which was the responsibility of the individual driver. Under the new regime, work of this nature may have to be carried out in respect of other buses.
I readily accept that under the Road Transport Rule Book which has been exhibited before me drivers are required to perform a considerable range of duties apart from actual driving. For example, they are responsible to ensure the safety of passengers; they have heretofore been involved in the provision of information; they have also been involved in keeping the interior of their own buses clean where passenger safety or comfort could be compromised by the accumulation of debris. All of these tasks appear to be consistent with the role of a bus driver. The extension of these tasks to buses other than the one for which the individual driver is responsible appears to me to be permissible and not amount to other than a change in work practice. That is so provided of course that the principal occupation of the driver remains that of driving. Both under the viability plan (clause 4.9) and the new boards this is so.
The position therefore is that in my view the respondent is correct in saying that the changes which it seeks to bring about are ones which involve work practices rather than changes in conditions of service. These alterations do not affect the rate of pay, hours of work, length of holidays, sick leave or pension rights. Neither do they in my view alter the basic or core work of a bus driver. These altered duties will only fall to be executed at times where drivers would otherwise be idle and yet remunerated. In each case these duties will constitute a small part of the overall work which will remain bus driving.
I therefore conclude that the proposed alterations relate to work practices rather than conditions of service. Such alterations are not protected by section 14.
If I am wrong in this conclusion and the proposed alterations amount to a change in conditions of service that of itself does not trigger s. 14, sub-s. 5 of the Act of 1986. That provision does not prohibit an alteration or change in conditions of service unless it brings about a worsening in the employee’s position. The change must be less beneficial to the employee before s. 14 of the Act applies.
What worsening is brought about here? Can an employee complain that his conditions of service are worsened when his employer re-orders his working arrangements so as to ensure that the employee is not idle whilst being paid. That is what these changes hope to achieve in an ailing company.
I do not believe that any such complaint would be legitimate. The position would of course be different if the respondent sought to require the drivers to receive a lesser scale of pay or to carry out work during times when they would not be paid. But merely to require them to work during a time when they are being paid cannot give rise to a legitimate claim under s. 14 on the grounds that formerly they did not have to work during such times.
It follows that even if the proposed changes are ones which alter conditions of service rather than work practices, they do not give rise to a complaint under s. 14 since they do not worsen the drivers’ conditions of service.
Indeed on one view these changes will enhance the driver’s position since, if implemented, they ought to improve the company’s viability and therefore the prospects of continued employment.
This application is dismissed
Kilraine v Lion Academy Trust
[2020] EWCA Civ 551 (18 February 2020)
LORD JUSTICE UNDERHILL:
The claimant, who is the appellant before us, was employed as a teacher at the Thomas Gamuel Primary School in Walthamstow under the terms of a letter signed by her and her employer engaging her on what was described as a fixed-term contract starting on 1 September 2013 and ending on 31 August 2014, in other words for a full year. On 10 July 2014, she was told that her contract would not be renewed or extended at the expiry of that period, which was at that point some seven weeks away. The issue on this appeal is whether she was entitled to a period of three months’ notice of termination in accordance with the terms of a collective agreement colloquially known as “the Burgundy Book” (August 2000 edn). An employment tribunal sitting in East London chaired by Employment Judge Jones held that she was. The Employment Appeal Tribunal (Lavender J sitting alone) held that she was not.
That issue was in fact only a small part of what the ET had to decide. In particular, the claimant also brought claims that she had been unfairly dismissed and subjected to a large number of detriments contrary to the “whistleblower” provisions of the Employment Rights Act 1996. Those claims were dismissed, and the claimant’s appeal in that regard was dismissed. She was refused permission to appeal to this Court in that regard. I can accordingly proceed directly to the contractual documents.
The engagement letter was sent by the head teacher of the school on 22 April 2013. It will be noted that that is some months before the employment was due to start, but the claimant was already working at the school on an agency basis. It was signed by her by way of acceptance on 18 September. It offered her the post of key stage 2 teacher, “with effect from 1 September 2013 fixed-term until 31 August 2014.” Apart from identifying the applicable pay scale, the letter says nothing else about any terms and conditions. At the time that the contract commenced the school was still formally a local authority school, although the respondent Trust had apparently already taken over the management; but the claimant became employed by the respondent under TUPE with effect from 1 January 2014. Rather surprisingly, no fuller contract or statutory statement of terms appears to have been before the employment tribunal, though even if such a document existed it is unlikely that it would have contained anything relevant to the issue before us.
I should mention, because it is referred to by the EAT, that at or around the time of the start of the employment someone in the school office prepared a “starter and leaver form,” which contained some details of the claimant’s employment. There was a box for “contract type” giving the alternatives “permanent”, “fixed-term” and “temporary/casual”. “Fixed-term” was ringed, and the end date was given as 31 August 2014. The ET found that this document was sent to the claimant. I do not believe, however, that that finding adds anything of substance to what appears from the signed engagement letter.
The ET found that the terms and conditions set out in the August 2000 edition of the Burgundy Book – that is, formally, the Conditions of Service for School Teachers in England and Wales, agreed between the Local Government Association and a number of trade unions – were incorporated into the claimant’s contract of employment. That conclusion was not challenged in the EAT. The terms with which we are primarily concerned are in section 3 of the Burgundy Book which is entitled “Appointment: Resignation: Retirement”. Part 4 of section 3 is headed “Period of Notice and Termination of Contract.” There are four paragraphs, 4.1 to 4.4. I need only read 4.1 and 4.4:
“4.1. All teachers shall be under a minimum of two months’ notice and in the summer term three months’, terminating at the end of a school term as defined in paragraph 1 above.
…
4.4. The provisions of paragraphs 4.1 to 4.3 apply to the termination of a teacher’s contract for any reason other than gross misconduct including dismissal for ill-health and redundancy.”
The term “teacher” is defined in paragraph 1.1 of section 2. I need not set out the definition since it is common ground that the appellant falls within its terms. The terms are there defined as “the summer term from May 1 to August 31, the autumn term from September 1 to December 31, the spring term from January 1 to April 30.” Those of course are terms for contractual and pay purposes rather than the actual teaching terms.
It may also be relevant to note that in part 2 of section 3, which is headed “Teachers Resigning their Appointments”, paragraph 2.2 requires teachers who resign “to give notice in accordance with the periods specified in paragraph 4” – that is, paragraph 4.1. In other words, as is usual though not invariable, employees and employers are subject to the same notice obligations.
I should mention for completeness that the Burgundy Book also incorporates a “joint commentary” by the National Employers’ Organisation for School Teachers, but it was not suggested that this sheds any light on the issues which we will have to consider.
The school’s letter of 10 July 2014 to which I have referred is headed “Notification of the non-renewal of your fixed-term contract.” I need only quote the final sentence which says, “I am writing to notify you that your current fixed-term contract at Thomas Gamuel Primary School will end on 31 August 2014.” It goes on to notify the claimant of her rights of appeal and to assure her that “the decision not to renew your fixed-term contract” was unrelated to an ongoing grievance which she had raised.
It was the claimant’s case in the ET that paragraph 4.1 of the Burgundy Book applied to the ending of her employment and that its effect was that she was entitled to notice expiring on 31 December 2014, that is at the end of the autumn term. The tribunal held that she was indeed entitled to further notice but that that should only be a three-month period from the date of the letter of 11 July, i.e. expiring on 10 October. At paragraph 196 of its reasons, it set out the terms of paragraph 4.1. It then said:
“Paragraph 4.4 states that the provisions of paragraphs 4.1 to 4.3 applied to the termination of a teacher’s contract for any reason other than gross misconduct, including dismissal for ill health and redundancy. We find that it would therefore apply to the ending of a fixed-term contract.”
At paragraph 298 it applied the conclusion in the last sentence of that passage to the claimant’s claim. It said:
“Even though the contract stated that it would end on 31 August, as there is always a possibility of contracts being extended or a new one being issued, the respondent as an employer has to give an employee formal notice of the contract coming to an end. The requirement under the Burgundy Book is for three months’ notice and no exemption in it is made for fixed-term contracts.”
That conclusion meant that she was entitled to compensation for lost notice in the sum of just over £3,000 net.
The claimant appealed to the EAT against various aspects of the ET’s decision. For our purposes the only ground that matters is that she contended that the tribunal should have held that the notice to which she was entitled expired at the end of the year. I note in passing that it was common ground before us that if she was indeed entitled to notice under paragraph 4.1 that contention was correct. However, the premise for that argument was challenged by a cross-appeal on the part of the respondent. It argued that paragraph 4.1 of the Burgundy Book had no application to the case of the expiry of a fixed-term contract.
Lavender J upheld the cross-appeal. The relevant passage of his judgment reads as follows:
“12. However, the respondent has cross-appealed. The respondent contends that the tribunal erred in that it ought to have found that the claimant was not entitled to notice of a fixed-term contract, alternatively that adequate notice was given when she was informed at the outset of the terms of her contract, including that it was for a fixed-term expiring on 31 August 2014.
13. In my judgment, on its true construction, paragraph 4.1 of the Burgundy Book was inapplicable to the facts of the present case. Part 2 of section 3 of the Burgundy Book concerned the termination of a teacher’s employment by his or her decision to resign. Part 4 of section 3 of the Burgundy Book concerned termination of a teacher’s employment contract by notice given by his or her employer. Neither of them dealt with the situation where the teacher and the employer agreed when the employment should come to an end. In this case, the claimant’s contract was not terminated by the respondent. It expired in accordance with its terms as agreed by the claimant and her employer.
14. Moreover, paragraph 4.1 of the Burgundy Book was plainly not intended to convert a fixed-term contract into an open-ended contract, yet that is, in effect, what the claims contends. She agreed to a fixed-term contract ending on 31 August 2014, but she says that the one-year fixed-term was really only a minimum term and that the claimant was obliged to employ her beyond that date unless and until it gave her three months’ notice of termination. Much clearer provisions will be required to demonstrate that the parties intended to bring about that result. The parties’ agreement that this was to be a fixed-term contract was contained in a brief letter which both the claimant and her employer signed. It would be an unusual thing for general provisions contained in another document to override the parties’ express and specific agreement.
15. Alternatively, if notice was required, it was given when the claimant’s employer wrote to her on 28 April 2013 and /or gave her the starter and leaver form on 19 September 2013. Both of those documents notified the claimant that her fixed-term contract would expire on 31 August 2014. The tribunal erred in considering this point.”
I should also quote paragraph 4 of his judgment, where he referred to the judgment of Wall LJ in this court in Department for Work and Pensions v Webley [2004] EWCA Civ 1745, [2005] IRLR 288. He said at paragraph 4 (p. 47):
“Wall LJ said as follows about a fixed-term contract:
(1) ‘It is of the essence of a fixed-term contract that it comes to an end at the expiry of the fixed-term’ (paragraph 36);
(2) ‘The termination of the contract is an inevitable consequence of it being for a fixed-term’ (paragraph 37).
Wall LJ also referred to ‘the termination of such a contract by the simple effluxion of time.'”
Lewison LJ gave the appellant permission to appeal as regards this aspect of the EAT’s decision. At the stage that the claimant’s grounds of appeal were drafted she was unrepresented, but she has been represented before us by Ijeoma Omambala of counsel acting under the auspices of Advocate (formerly the Bar Pro Bono Unit). The court is very grateful to her, as I am sure the claimant is also, for providing her services pro bono. (The claimant also had the benefit of representation by pro bono counsel in the EAT. In the ET she represented herself, albeit with some assistance from a trade union representative.)
Ms Omambala submitted that Lavender J was wrong to overturn the ET’s conclusion that paragraph 4.1 applied in the claimant’s case. She submitted that the effect of paragraph 4.4 in particular was that the requirements of paragraph 4.1 should apply to any means by which a contract came to an end, including the expiry of a fixed term. It was, she submitted, perfectly natural to use the word “termination” in that sense. She pointed out that Wall LJ in fact did so in paragraph 37 of his judgment in Webley to which the EAT had referred. She encouraged us also to construe part 4 in its factual matrix. In that connection she referred to the centrality of the ends of the school terms, as defined in paragraph 1.1 of section 3, to the way in which teachers are employed and recruited, and she submitted that that made it particularly important that teachers on fixed-term contracts whose terms are not to be renewed should have good notice that that was going to be the case.
Attractively though Ms Omambala developed those submissions, I was unpersuaded by them, and we did not need to hear submissions from Ms Elaine Banton of counsel for the respondent.
The starting point has to be the express and quite unambiguous statement of the engagement letter that the claimant was being engaged on a “fixed term until 31 August 2014.” As Wall LJ said in Webley, “it is of the essence of a fixed-term contract that it comes to an end at the expiry of the term by the simple effluxion of time.” There is no requirement for notice of any kind. Another way of putting it might be to say, as Lavender J did at paragraph 15 of his judgment, that the notice was given at the start of the employment by the specification of its end-date, but that seems to me to be rather artificial: it is simpler to say, as is plainly the case, that a fixed-term contract expires at the end of its term without the need for any notice of termination.
The claimant’s case depends on the proposition that the clear effect of the primary contractual documents providing for a fixed-term contract was modified – indeed, frankly, reversed – by a provision in the applicable collective agreement. A fixed-term contract would be converted into a contract terminable only on notice. When that was put to Ms Omambala, she was anxious to clarify that it was no part of her client’s case that the contract could not have ended on 31 August, but only that three months’ prior notice of termination had to be given. I accept that, but it remains the case that the nature of the contract provided for in the primary contractual documents would have been wholly changed.
It would, as Lavender J noted at paragraph 14 of his judgment, be unusual for such a change to the terms specifically agreed between the individual parties to be changed by reference to the terms of the collective agreement. I do not believe that that that is the effect of paragraph 4.1 of the Burgundy Book. In my view it is concerned only with the amount of notice which the employer has to give in the case of what are generally called “permanent” contracts – that is, contracts which are terminable only on notice. It is not intended to apply in cases where notice is not required in the first place, whether because the contract is for a fixed-term or, I might add, because the parties have agreed to its termination on no notice or on less notice than would otherwise be required. That is what I understand Lavender J to be saying at paragraph 13 of his judgement and I agree with him. As regards Ms Omambala’s emphasis on the word “termination”, I do not believe that the use of that term in paragraph 4.4, and indeed in the title to part 4, suggests anything different. “Termination” is a word that can be used in more than one sense and it needs to be understood in the particular context in which it is used. Although it can, as Ms Omambala says, be used in a general way so as to refer to any circumstances in which a contract comes to an end, it can also be used more specifically so as to refer to a positive act of termination by one or other party. That seems to me to be clearly the meaning here.
I can see nothing in the factual matrix relied on by Ms Omambala to cast doubt on that reading. A fixed-term contract can be framed so as to expire at the end of a school term (in the sense defined in the Burgundy Book), as indeed happened in this case and is in no doubt the practice in all or most cases in which fixed-term contracts are employed. No doubt employees on such contracts will wish to know well in advance whether the contract is going to be renewed or extended, and no doubt that will normally happen: we can in fact see here that the claimant was notified of the non-renewal of her contract about seven weeks before it expired. However, the fact that that may be good practice does not justify building in a formal notice obligation, in the absence of which the contract would presumably be deemed simply to continue. That appears to have been the approach taken by the ET at paragraph 298 of its reasons. It is with all respect impermissible.
I would add one further point. As noted at para. 7 above, the Burgundy Book equates the notice obligations of teachers and their employers. It would be surprising if a teacher who was on a fixed-term contract and who wished to resign was obliged, despite the fact that the contract had a set expiry date, to give notice two or three months before its expiry.
For those reasons I would dismiss this appeal.
HENDERSON LJ:
I agree.
(After further submissions)
UNDERHILL LJ:
We are not persuaded that there is anything in the circumstances relied on by Ms Omambala that would justify our departing from the starting point that as the losing party she should pay the respondent’s costs, still less in circumstances where she rejected an offer made over a year ago to walk away on a drop-hands basis. The fact that the case was said, on the basis advanced by the claimant herself, to raise a point of general public interest does not seem to me to be a sufficient justification. Nor does what we were told about her having been unwell at some stages in the run-up to the appeal, including at the time when she received the settlement offer. Even if we had evidence of that, which we do not, it does not seem to me to be a matter which in justice to the respondent would justify our departing from the normal starting point.
As regards quantum, we will of course conduct a summary assessment. The sum claimed inclusive of VAT is £28,579.20. There is nothing that could possibly be objected to in counsel’s fees for the hearing. As regards the prior stages, the schedule submitted makes clear that there was more than the usual amount of work required as a result in particular of various unfounded applications made by the claimant which also involved a certain amount of work by counsel. We do have to say that one element in that work does seem to us to require to be disallowed, that is to say advice and correspondence in relation to the application for permission to appeal to the Supreme Court for which it was plain that the court had no jurisdiction. It is impossible to identify the precise amount attributable to that. There may be a slight element of unnecessary, even if in human terms understandable, work in connection with the other applications. We are not in a position in the summary assessment to attach precise figures to these elements, but it seems to us that justice will be done if we award a total figure of £25,000 inclusive of VAT. Unless anyone wants to argue with it, it seems to us that we would simply make the usual order that that be payable within 14 days.
The appellant will pay the respondent’s costs in the sum summarily assessed at £25,000 inclusive of VAT within 14 days.
Order: Appeal dismissed. Appellant will pay respondent’s costs of £25,000 inclusive of VAT within 14 days.