The first to fourth claimants (“the individual claimants”) were civil service employees who worked under terms and conditions found in the Civil Service Pay and Conditions of Service Code (“CSPCSC”), policies published on the employer’s intranet and in a staff handbook. The CSPCSC provided for voluntary deductions from pay, by way of “check-off” arrangements, for union subscriptions to nationally or departmentally recognised unions, subject only to withdrawal by the employer in the event of industrial action. For Inland Revenue employees (such as the first and second claimants) provision for check-off arrangements was also set out in para 109 of the Inland Revenue Handbook. For employees of Customs and Excise such as the third and fourth claimants, similar provision was made in guidance set out in the G3-1 pay and allowances policy. On the merger of the two departments to form a single Revenue and Customs department, the new staff handbook (“the Blue Book”) did not mention those arrangements although subsequent pay policy documents did. The individual claimants had opted for their subscriptions to the fifth claimant trade union to be paid by check-off directly to the union. The union also paid a service charge to Revenue and Customs for provision of the check-off service. When the defendant ended the check-off arrangements the trade union issued a statement that the right was contractual, requiring specific agreement to bring the check-off relationship to an end. The claimants brought a claim under CPR Pt 8, contending that employees had a contractual right to insist on the defendant continuing with the check-off arrangements, which right was also enforceable by the trade union under section 1 of the Contracts (Rights of Third Parties) Act 1999. The Secretary of State resisted the claim, including on the basis that by continuing to work without objection the claimants ought to be taken to have accepted the changes.
On the claim—
Held, claim allowed. (1) The claimants had a contractual right to have the deductions made from earnings to the trade union by their employer, the check-off related paragraphs in the staff handbook and policies having been intended to have contractual effect having regard to the fact that they (i) were mirrored in the applicable Civil Service codes which regulated the terms and conditions on which civil servants were employed, (ii) were expressed in language apt for incorporation in individual contracts of employment, (iii) formed part of a set of documents including provisions intended to have contractual force and (iv) created an arrangement which was of importance to the contractual relationship. Even if, and to the extent that, the check-off arrangements were contained in policy or procedural documents they were apt to be treated as contractual rights, there being no clear delineation between terms and conditions and policies and procedures. There had been no express or implied removal of the right to check-off in the arrangements of 2005 on the merger between the predecessor departments to Revenue and Customs. In particular, any argument that there was, at that stage, an all-encompassing and self-contained pay deal in the form of the Blue Book was refuted by the numerous documents in which the right to check-off was expressed in clear and unequivocal terms both before and after the merger. Accordingly, the individual claimants had a contractual right to check-off as a matter of the natural interpretation of Revenue and Customs’ handbooks and policies against the material industrial relations historical context (paras 46, 49, 124).
.(2) There was no basis for concluding that the employer had an implied right to terminate the check-off facility unilaterally. Such a term would be inconsistent with the fact that the staff handbooks/policies and/or the codes defined the circumstances in which the employer could withdraw check-off as limited to the occurrence of official industrial action. It was not necessary to imply such a term into the contract for business efficacy, since the contract did not lack commercial or practical coherence without it, nor was the implication necessary to make the contract work or to avoid absurdity. Accordingly, it was not open to the employer to remove check-off by giving reasonable notice (paras 58, 59, 61).
(3) The conduct of the individual claimants in continuing to work was not referable only to their having accepted the right to a deduction of the union dues as a change in their terms of employment. While they could have done more to indicate their lack of acceptance, the requirement to show unequivocal conduct or an omission was on the party seeking to prove the variation or waiver or the inability to enforce the contractual term, and no such conduct or omission had been demonstrated. Relevant factors in that regard were that (i) the removal of check-off was disadvantageous to the individual claimants which pointed away from an inference being drawn in relation to their conduct, (ii) the employer had not presented the removal of check-off as something which required agreement from individual employees, which again pointed away from an inference of acceptance being drawn, and (iii) once objections had been made by or on behalf of the claimants to the removal of check-off, the mere passage of time between such objections and a letter before action was equivocal, and might therefore be irrelevant. Accordingly, on the premise that there was a contractual right to check-off, there had not been an acceptance, let alone a clear and unequivocal acceptance, of the removal of the right. It followed that there had been no variation of the terms of the individual claimants’ employment contracts, or any of them, and nor was had there been an express or implied waiver or other circumstances precluding the right of check-off (para 85–88, 91–93, 96–98).
(4) None of the contracts or their terms on which the individual claimants were employed could be construed as negating the presumption of enforceability by the trade union as a third party under section 1 of the Contracts (Rights of Third Parties) Act 1999. Accordingly, section 1(2) of the 1999 Act had no application in the present case and the check-off provisions were enforceable pursuant to section 1(1) (paras 108, 110, 112, 118).
Oliver Segal KC and Darshan Patel (instructed by Thompsons Solicitors LLP) for the claimants.
Clive Sheldon KC and Jack Feeny (instructed by the Treasury Solicitor) for the employer.