Staffing Arrangements Not Incorporated Into Individual Contracts

Thu, 28 Oct 2010

In Malone and ors v British Airways Plc [2010] EWCA Civ 1225 the Court of Appeal rejects the contention that BA was in breach of contract in proposing to reduce staffing levels which had been previously agreed with the trade unions.
 
This case is part of the much publicised and long running dispute between BA and its cabin crews, who are represented by Unite, over staffing issues. On 6 October 2009, BA unilaterally reduced the crew complements on its aircraft which had been agreed through collective bargaining between BA and Unite. It was accepted that the collective agreement was binding in honour only (as there was no express agreement to the contrary as provided for by s.179 of the Trade Union and Labour Relations (Consolidation) Act 1992). It was also accepted that the Claimants’ employment particulars included a term which provided that her employment was to be governed by the agreements between BA and the employees’ side of the National Joint Council. Further, the particulars stated that NJC agreements from time to time in force are deemed to be incorporated into the individual employment contract and individuals were specifically referred to that agreement for terms relating to hours of work, periods of notice, paid holiday entitlement, sickness benefits and “general maters”. It was also accepted by Counsel that in principle terms relating to working conditions in that agreement were appropriate for incorporation into individual contracts and that minimum levels of staffing provided for by the Air Navigation Order 1989 would be so incorporated either expressly or impliedly as part of the employer’s duty of care. 
 
The issue was whether staffing levels (known as crew complements) beyond that level formed part of the Claimants’ working conditions and were thereby incorporated into their individual contracts. The Court of Appeal concluded that they were not but in so concluding it rejected the reasons given by the Trial Judge (Butterworth J). 
 
Referring to NCB v NUM [1986] IRLR 439 and Kaur v Rover Group Limited [2005] IRLR 40 the Court recognised that it had to distinguish between those terms “which are of their nature apt to become enforceable terms of an individual’s contract of employment and terms which of their nature inapt to be enforceable terms” and that “terms of collective agreements fixing rates of pay, or hours of work, would obviously fall into the first category. Terms which deal with procedure to be followed by an employer before dismissing an employee also would fall into the first category. But conciliation agreements setting up machinery designed to resolve by discussion …question arising within industry… fall… firmly in the second category”. The Court accepted that in principle working conditions could also fall within the first category but were persuaded that the parties could not have intended that the level of cabin crew complements were intended to be enforceable by each individual member of staff (even though they had some impact on working conditions) because this would give each individual the right to refuse to work if BA decided to or was obliged to fly an aircraft without the agreed complement. BA’s Counsel had argued that this would result in “anarchy” as an aircraft could be grounded at the will or one or two uncooperative members of staff. Smith LJ accepted that such consequences were “so serious as to be unthinkable” and that “objectively considered in the light of the factual matrix against which the agreement was made” the parties cannot have intended the terms that had been collectively agreed were enforceable by individual employees. Interestingly, the Court ruled that had it not reached this conclusion, it would have been open to the Claimants’ to seek to enforce those terms by way of an injunction as damages would have not been an adequate remedy since it would not have been realistic for the individuals to sue for damages in respect of a continuing breach. 
 
The issue of incorporation of terms is like to be of particular importance where, as in this case, the employer is seeking to change working practices. Where those practices form part of the contract, change will not be lawful without the employee’s agreement. Whilst, the individual claimants failed in the particular circumstances of the present case, this was very much a borderline case and the Court recognises the terms relating to working conditions may be appropriate for incorporation.
 

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