University of Venice “Ca’ Foscari”

1. University of Venice “Ca’ Foscari” Pierre de Gioia-Carabellese Lecturer in Business Law (Professore universitario di business law) Heriot-Watt University Solicitor & Notary Public - Avvocato

2. The Lecture Collective bargaining in the UK: the legal status of a collective agreement: epistemology of a concept in evolution?

3. Contents The contract of employment in the UK Interaction with a collective agreement The collective agreement

4. The Contract of Employment • No formalities are required for the contract to be concluded • General rules those at common law • Contract exists when at least one employee starts work • Written document (S. 1 of ERA) as merely evidence of some contract terms

5. The Contract of Employment (cntd) No specific form However exceptions Sect. 180 Trade Union and Labour Relations (Consolidation) Act 1992 A term in a collective agreement restricting an employee’s right to take industrial action turns out to be incorporated only if the collective agreement is in writing and the contract of employment provides for the incorporation of the clause

6. The Contract of Employment (cntd) No specific form However exceptions (cntd) Merchant Shipping Act 1995 An agreement between the crew of merchant vessels and the ship’s master in writing, before the vessel leaves a British port Companies Act 2006 (Sect. 227) The contract between a director of a company and the company itself

7. The Contract of Employment (cntd) Companies Act 2006 (Sect. 227) “[..] a director’s “service contract”, in relation to a company, means a contract under which- (a) a director of the company undertakes personally to perform services (as director or otherwise) for the company, or for a subsidiary of the company, or (b) services (as director or otherwise) that a director of the company undertakes personally to perform are made available by a third party to the company, or to a subsidiary of the company

8. The Contract of Employment (cntd) Companies Act 2006 Sect. 228(1) “A company must keep available for inspection – A copy of every director’s service contract with the company or with a subsidiary of the company, or If the contract is not in writing, a written memorandum setting out the terms of the contract.” Sect. 228(2) “All the copies and memoranda must be kept available for inspection at- The company’s registered office; A place specified in regulations under section 1136.” Sect. 228(3) “The copies and memoranda must be retained by the company for at least one year from the from the date of termination or expiry of the contract and must be kept available for inspection during that time.”

9. The Contract of Employment (cntd) Contract (according to the theory of contract at common law): “an agreement between two parties having the capacity to make it, in the form demanded by law, to perform on one side or both, acts which are not trifling, indeterminate, impossible or illegal, creating an obligation enforceable in a court of law” Intention of the parties to create legal and binding obligations Social or moral obligations cannot create a legally binding contract

10. The Contract of Employment (cntd) Consideration? Price, that is to say wages in employment In England and Wales, for a contract (or a promise) to be valid a consideration must be given Otherwise there is no enforceability In Scotland When a party provides services to another, it is presumed that they are provided in return of consideration It is a rebuttable presumption Thomson v Thomson’s (1889) 16R 333

11. The Contract of Employment (cntd) Peculiarities It may be an implied contract Definition of an implied contract of employment: A contract which has been entered into by having regard to the conduct and behaviour of the parties

12. The Contract of Employment (cntd) Taylor v Furness Ltd [1969] K.I.R. 488 Successful interview of the potential employee The employee received an identity card and a letter of welcome He started working However dismissed without working immediately after Held The parties had entered by implication a contract of employment Taylor entitled to claim that the company had breached the contract by dismissing him without notice for no reason

13. The Contract of Employment (cntd) Dacas v Brook Street Bureau (UK) Ltd [2004] I.R.L.R. 358 Dacas registered as a temporary worker with BSB Ltd, an employment business, which assigned her to work exclusively as a cleaner at a mental health hostel (Drive) run by Wandsworth Council The terms and conditions of the temporary worker’s agreement between Dacas and the employment business provided that the agreement “shall not give rise to a contract of employment” Dacas worked exclusively for the Council for over four years until April 2001, when she was not employed any more Dacas took the view that she has been an employee of either the Council or BSB Ltd, and presented a claim of unfair dismissal The tribunal held that it was implied a contract between Dacas and the Council, the end-user.

14. The Contract of Employment and Written Statement of Particulars Statutory requirement – employer must supply to each employee within 2 months of employment a statement of the main terms and conditions of their employment It must cover the following: among other things The parties Place of work Job description When contract begins Any continuous employment Job title Remuneration Hours of work Holidays Sick pay Pensions Notice Disciplinary procedure Any contracting-out certificate Any collective agreements in force

15. Interaction between WSP and Contract of Employment Robertson v British Gas [1983] I.R.L.R. 302, CA The contract of employment allowed a bonus However, the WSP dictated that “bonus conditions will apply according to the collective agreements” The conditions relating to the bonus were set forth in a collective agreement that the employer later terminated Held that the entitlement would continue also beyond the termination to the collective agreement

16. Sources of Employment Contract • Express terms • Implied terms • Terms incorporated from a collective agreement

17. Terms incorporated from a collective agreement • What is a collective agreement? • The outcome of a collective bargaining between trade union and employer • Procedural elements – regulating collective bargaining process • Substantive elements – pay and terms & conditions of employment

18. Definition of Collective Agreement • Trade Union and Labour Relations (Consolidation) Act 1992 (Sect. 178) • “Any agreement between a union and employer relating to an industrial matter than can be the subject of a trade dispute”

19. Enforceability • Trade Union and Labour Relations (Consolidation) Act 1992 (Sect. 179) • Conclusively presumed not to be intended to be legally enforceable contract unless • In writing; and • Express provision intended to be legally enforceable contract

20. Non-enforceability of a Collective Bargain • The collective agreement is not a legally binding contract as between the signatory trade union and employers • Ford Motor Co v AUEF & TGWU [1969] 2 QB 303 • Ford sought an injunction against the two unions to prevent strike action being taken in breach of procedures set out in a collective agreement • Held that the company did not have any legal remedy because the collective agreements were not intended to be legally binding

21. The Incorporation • Substantive provisions of the collective agreement may be held to have become terms incorporated into the contracts of employment of individual workers • The incorporation may be • Express • Implied

22. Express Incorporation • Via the contract of employment • National Coal Board v Galley [1958] 1 WLR 16

23. Express Incorporation (cntd) National Coal Board v Galley [1958] 1 WLR 16 A contract of employment stated that he accepted employment on “terms negotiated from time to time with the trade unions” No mention of overtime Trade unions and the employer agreed overtime Mr Galley refused Held that this wording amounted to express incorporation of these collective agreements

24. Implied incorporation If there is an evidence of an intention by both parties that the collective agreement is to be incorporated into the employment contract Alexander v Standard Telephones and Cables (No 2) [1991] I.R.L.R. 286 Principle “Where it is not a case of express incorporation but a matter of inferring contractual intent, the character of the document and the relevant part of it and whether it is apt to form part of the individual contract, is central to the decision whether or not the inference should be drawn”

25. Implied incorporation and Procedural Aspects (Redundancy) Anderson v Pingle of Scotland Ltd [1998] I.R.L.R. 64 Terms and conditions of the employment according to the collective agreement Collective agreement containing a redundancy procedure (LIFO) A redundancy occurred, but the employer decided to adopt a selective scheme The employee sought an injunction He succeeded

26. Further Principles Gibbons v Associated British Ports [1985] I.R.L.R. 376 Collective provision remains in force until new collective agreement or until individual directly agrees otherwise with the employer

27. Further Principles Marley v Forward Trust Group Ltd [1986] I.R.L.R. 369 A clause of a collective agreement stated that “this agreement is binding in honour only” However, the employee and the employer expressly incorporated it Held that the clause was enforceable As a matter of principle: a term in a collective agreement which is expressly non binding between TU and employers’ association can become legally binding after incorporation

28. Further Principles Burroughs Machines v Timmoney 1978 Employer leaving its own federation does not mean that it is not bound any more by the CA

29. Further Principles Hamilton v Futura Floors Ltd [1990] I.R.L.R. 478 Employer joining a federation of employers after the conclusion of a collective agreement This does not mean that the collective agreement is incorporated by implication between the employer and the employee

30. Further Principles Scholars (Prof. Craig) Incorporation of a CA into an employee’s contract of employment does not depend upon the employee being a member of the trade union which negotiated that collective agreement Collective agreement becomes enforceable exclusively upon its incorporation

31. Prohibition S. 180 TULR(C)A 1992 Limitation of the incorporation of no-strike clauses into contracts of employment In this case the relevant clause must be in writing and make express provision for such incorporation and must also be reasonably accessible for consultation by workers during working hours The contract of employment must also expressly or impliedly incorporate the term

32. Conclusions In the UK the rule is that the terms and conditions of a contract of employment are negotiated between employer and employee (laissez-faire approach) The written statement of particulars is a further document merely for the purposes of the evidence However, the contract of employment interacts with the collective agreement through the “incorporation”

33. Conclusions At common law a collective agreement in itself is not enforceable between the parties However, the provisos encompassed by it may become enforceable between the employer and the employee through the “concept” of the incorporation The incorporation can be: Express Implied

34. Primary Sources Trade Union and Labour Relations (Consolidation) Act 1992 Employment Rights Act 1996

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