England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
(MR JUSTICE HODGE)

		Royal Courts of Justice Strand London, WC2
		21st July 2005

1. LORD JUSTICE BUXTON: This appeal from Hodge J is another case about the statutory provisions for the recognition of trade unions by employers, as authorised and negotiated on behalf of workers in a bargaining unit, in respect of which the Trade Union and Labour Relations Act 1992 (as amended) provides that in default of agreement between employers and workers certain adjudicative and advisory functions should be performed by the Central Arbitration Committee ("the CAC"). I think it unlikely that anyone who is minded to read this judgment will not already be well aware of the role and functions of the CAC. However, for anyone who is not, a lucid account is to be found in paragraphs 5 to 10 of the judgment of Elias J, appended to the judgment of this court in R (Kwik-fit (GB) Ltd) v Central Arbitration Committee [2002] ICR 1212, 1221 to 1222. The judge there refers to Schedule A1 to the Act, which provides a detailed scheme in circumstances where the union is refused recognition by an employer. The union can then apply to the Central Arbitration Committee to decide whether that union has the support of the majority of workers in a bargaining unit. Perhaps should be mentioned, because it is marginally relevant to this case, that the requirement is for support of a majority of the workers. It is not necessary for the union to have a majority of membership within that unit.
2. We are concerned in this case with paragraph 35 of the scheme, which renders certain such applications inadmissible and therefore outwith the jurisdiction of the CAC. Paragraph 35(1) reads as follows:

"An application ... is not admissible if the CAC is satisfied that there is already in force a collective agreement under which a union is (or unions are) recognised as entitled to conduct collective bargaining on behalf of any workers falling within the relevant bargaining unit."

3. The facts of this case are very clearly set out in paragraphs 1 to 4 of the judgment of Hodge J:

"1. The National Union of Journalists (NUJ) has members who work for Mirror Group Newspapers (MGN). In the spring of 2003, it seemed likely that MGN would start publishing its Racing Post newspaper seven days a week. This would mean a change in the terms and conditions of journalists working in the Sports Division of MGN. The membership of the NUJ within the Division increased. No union was recognised by management to collectively bargain on behalf of staff within the Division. Discussions began between NUJ and MGN. They seemed to be going well. At the NUJ, the negotiators clearly thought a recognition agreement was to be signed with the union.

2. MGN has over 600 journalists working for its other titles. It has a recognition agreement with the British Association of Journalists (BAJ) for other national titles. That union has about 140 journalists in membership working in those other titles. BAJ was formed in the early 1990s. It was and is a breakaway union from the NUJ. BAJ is an independent trade union but is not affiliated to the TUC. It can be reasonably inferred from this case that the two unions do not get on. At the time of the hearing before the CAC the BAJ had at most one member who worked within the Sports Division of MGN. The NUJ had members representing probably more than half of the journalists working within that Division. But the NUJ has no recognition agreement of any sort with MGN in any of its national Divisions.

3. On 3rd July 2003 BAJ signed a recognition agreement with MGN under which BAJ obtained exclusive negotiating rights with MGN for journalists in the SportsDivision. No notice of this possibility had been given to the NUJ. The NUJ was shut out from negotiating with MGN. The NUJ was no doubt furious about this. The Central Arbitration Committee (CAC) to whom this issue was referred describes the treatment of the NUJ as shabby. It was certainly unsporting.

4. The CAC conducted a hearing and decided that the application for a recognition agreement made by the NUJ was not admissible. The NUJ challenges the lawfulness of that decision. MGN Ltd, as interested party, is the main respondent to this application. The BAJ did not appear and was not represented. The CAC appeared to address the court on human rights issues alone."

4. In considering the decision of the CAC and the apparently unusual outcome of it, it is relevant to remind ourselves of what the CAC said in paragraph 42 of its determination:

"We are comforted by two matters in reaching this negative conclusion on the question of support for the voluntarily recognised union. The first is that it coincides with the traditional understanding of voluntary recognition."

They then quote from Deakin and Morris Labour Law, 3rd edition, at page 765 in the following terms.

"A further, and less commented on, consequence of the voluntary nature of trade union recognition is that there is no mechanism to control the employer's choice of union. Thus, there is nothing to prevent an employer recognising a union which may have only minimal support among the workforce."

5. The CAC continued:

"Second, and more pertinent, is the emphasis placed in the White Paper which preceded the introduction of the statutory recognition procedure on the desirability of taking inter-union disputes outside the scope of the Panel's jurisdiction."

6. However, having said that, the CAC indicated that it was very far from satisfied about the outcome that its application of paragraph 35 had produced. It said this in paragraph 43 of its determination, immediately after the passage that I have just read:

"43. Nevertheless, we should like to put on record our firm belief that the exclusionary rule contained in paragraph 35 has not achieved justice in this case. The employer has been able to defeat what are in all probability the wishes of a majority of the relevant workforce by the simple expedient of concluding a voluntary recognition agreement with a wholly unrepresentative union. It may be said that the principle of avoiding CAC adjudication upon inter-union disputes was regarded by Parliament as more important than the principle of providing collective bargaining where a majority of the appropriate workforce desire it. Even accepting that, we think this case displays a lacuna in the legislation. Were the BAJ a non-independent trade union, which it is not, its recognition by the Company could be challenged under Part VI of the Schedule. Were the BAJ affiliated to the Trades Union Congress, which it is not, the NUJ could have recourse to the procedures of the TUC to bring about a resolution of the issues raised by the case. Since the BAJ is independent but not affiliated, the defeated majority union has no avenue of potential redress, once it is excluded from the statutory recognition process. This seems to us highly unsatisfactory."

7. But the nub of the matter, as the CAC recognised in those two passages, was that once the union with which the employer had concluded the agreement was indeed an independent union (as there is no doubt that the BAJ is), then the CAC had, and this court has, to apply the wording of the scheme including paragraph 35. Before the CAC and before the judge a range of matters were argued in relation to the proper construction of paragraph 35. But before us the argument came down to an argument about the meaning of the words "already in force" in that paragraph.
8. As to the agreement itself, it is not necessary to set out the whole of it. It starts with a number of, if I may be permitted say so, wholly proper, though possibly aspirational, intentions in the relationship between MGN and BAJ, and then comes in paragraph 4 to a paragraph headed "union recognition". It is necessary to set that out because it plays a part in the argument in this case:

"'By this agreement MGN formally recognises the rights of the BAJ union and no other organisation ..."

and then there is a series of bullet points, of which I need only read, I think, the first two:

"• to negotiate changes to pay, hours and holidays on behalf of the employees within scope

• to be informed and consulted about training plans and any other changes involving redundancies or the transfer of an undertaking affecting the employees within scope."

9. Clause 7(1) relates to negotiating procedure, harking back to the first of the bullet points just referred to, and says:

"7(1) The parties will negotiate on pay, hours and holidays within the scope of this agreement in an open and constructive manner and keeping with the spirit of this agreement

(2) The procedure for handling proposals from either party is set out at appendix B."

10. If we turn to appendix B we find a scheme for the creation of a Joint Negotiating Committee, with a chairman rotating between both sides and various other structural arrangements for the composition of the JNC which appear to be of a familiar nature.
11. Against that background I turn to the question of construction: what is meant by the agreement being "already in force"? As a matter of normal legal or contractual understanding, I would think that an agreement is "in force" when it can be shown to be binding on the parties to it. No one has been able to point to any authoritative, or indeed any, exposition of the meaning of this phrase in general contractual practice, nor have the court's own researches revealed anything of that sort. But that, in my estimation, is straightforwardly what contract lawyers would understand by the statement that an agreement was in force. Yet the NUJ as part of its case argued that since collective agreements are not legally binding, contractual analysis in a circumstance like this is inappropriate. But, for my part, I would think, first, that the understanding that collective agreements are not legally binding only applies to the enforcement of those agreements and not to their formation; and I am fortified in that view by it being the same as that of the expert CAC, as stated in paragraph 44 of its determination. Secondly, and in any event, contractual analysis must at least provide a strong analogy when one is looking at an agreement such as this, and indeed some of the submissions, and in particular the first submission of Mr Hendy QC for the NUJ, did draw on contractual theory.
12. The CAC itself accepted that the fact that the parties considered themselves to be bound was not conclusive as to whether the agreement was in force, but subject to that, as I would think, they agreed with the approach that I have just ventured to suggest. I draw that from paragraphs 47 and 48 of their determination, addressing in fact a submission by Mr Linden for MGN, which he will forgive me for not setting out. The CAC said this in paragraph 47:

"We think it must be open to a Panel to conclude in an appropriate case that the parties, by inaction, have abandoned a recognition agreement, even if they also convince the Panel that they believe otherwise. If actions speak louder than words, we think they (or rather inaction) also speak louder than beliefs, at least in some contexts."

13. The CAC, however, went on to say that that was not this case. They said this in paragraph 48:

"We think that in this case the normal rule applies and that the recognition agreement came into force on July 3, upon the signatures of Mr Turner on behalf of the BAJ and Mr Budd and Mr Reed, who signed on behalf of MGN."

14. The CAC then went on say that Mr Hendy had submitted before them that there were features of this particular recognition agreement which made its coming into force dependent on the satisfaction of certain conditions which have not in fact been fulfilled. They were under the impression that Mr Hendy had not developed those submissions. He assures us that he indeed did so, and whatever the rights and wrongs of that he has certainly been free to and has developed those submissions before this court. It is to those that I must now turn.
15. The first submission, which was related to the main argument but was not the same as it, was that the creation and indeed coming into operation of the Joint Negotiating Committee was a condition precedent to the coming into force of the agreement. I cannot agree. Firstly, that is not what the agreement says or can be interpreted as saying. That is not my view only, but also that of the CAC, who said at the end of paragraph 48, in relation to Mr Hendy's arguments sketched out at least before them:

"... we have not be able to read the recognition agreement in the way suggested [by counsel]."

Nor, with respect, can I.

16. Secondly, and in any event, such an interpretation would be extremely unlikely in an industrial relation context, because it would potentially produce uncertainty and conflicts if an agreement was made between the parties, but then said not to be in force until some step was taken. The CAC addressed the industrial relations realities of such a situation in paragraph 45 of its determination. True it is that there it was addressing an argument advanced by Mr Hendy somewhat different from that which I am dealing with at the moment; that is to say, that implementation of the agreement at large had to take place before it could be said to be "in force". But the practical force of the condition precedent argument is just the same as the practical force of Mr Hendy's implementation argument that he raised before the CAC but not before us. The CAC said of that:

"We think that the employer ... would receive short shrift from the union it recognised in March if it recognised a different union in April and justified its actions to the first union on the grounds that the first union's recognition agreement was not in force when it was signed."

That, if I may say so, seems self-evident. The condition precedent argument therefore does not, in my judgement, run.

17. Mr Hendy, however, put the case in a different way before this court in particular in paragraphs 25 and 26 of his skeleton argument which I will venture to set out:

"25. It is not submitted that such an entitlement [that is to say the entitlement to negotiate] needs to have been exercised in order to satisfy the CAC that the agreement is already in force. However, if the entitlement has not yet been exercised, it is submitted that it is then incumbent on the CAC to consider whether:

(a) there is a real and genuine intention on the part of both parties that the entitlement to negotiate will be exercised; and

(b) the entitlement to negotiate is reasonably capable of being exercised; and

(c) there is a real prospect that the entitlement to negotiate will be exercised on a reasonably certain future date or on the happening of a specified likely event; and, in any case, in the reasonably near future.

26. It is submitted that on the facts of the present case none of the three conditions specified could be fulfilled."

18. Expanding on or possibly summarising those submissions, Mr Hendy said to us that "in force" meant more than that there was simply an agreement. That agreement must be reasonably capable of being operated and have reasonable prospects of being so operated.
19. That formulation and the points listed in Mr Hendy's skeleton argument, to which he said the CAC should have had regard, comes in my view very close, at least in this case, to suggesting that the agreement was in fact a sham. When pressed on that point I did not understand Mr Hendy to resile from such a contention, at least in the sense of saying that it was known that the agreement would never work.
20. But whatever arguments that were or were not put to them, it is clear that the CAC were very unenthusiastic indeed about this agreement, and alert to the possibilities of paragraphs 35 being misused. They heard evidence from the people who made the agreement, and they were best placed to determine (and I have no doubt that if they thought it justified would have determined) whether or not that agreement was a sham. There is no basis on which this court can make such a finding or come near to doing so.
21. Once it is agreed, or at least accepted, that the agreement is genuine, albeit being used to an end that paragraph 35 did not envisage, the additional requirements argued for by Mr Hendy simply cannot stand up. As the CAC held, there may come a time when failure to act or impossibility cause the agreement to collapse or force a tribunal to say that it has collapsed. But unless the possibility of the agreement operating is simply not believed in by the parties to it, and as we have seen the CAC did not so find, it is wrong as a matter of contract, or indeed as a matter of logic, to say that an agreement does not come into present force simply on the basis of doubts about its future viability.
22. That makes it strictly unnecessary to go on to the dispute between the parties as to whether this agreement had in fact been operative. That question is, however, relevant because if the agreement is being operated, it must follow as a matter of necessity that it is "in force", whatever the understanding of that expression might be.
23. The CAC heard some evidence about this and made some findings about it. They said in paragraph 50 of their determination:

"The heart of the July agreement is contained in its clause 4, where the 'MGN formally recognises the rights of the BAJ union and no other organisation' to negotiate on a list of matters, including changes to pay, hours and holidays and proposed redundancies. Mr Turner of the BAJ has sought recently to deal on behalf of the Sports Division journalists in respect of two matters falling within that list (the proposed redundancies and the move to seven-day publication) and MGN has discussed these matters with him - and, just as important, has refused to discuss them with the NUJ. This seems to us to be evidence of attempts to make the July agreement work, albeit in a halting way, rather than evidence of abandonment or suspension."

That on its face was evidence that the CAC was entitled to accept which went against any suggestion that the agreement was a mere shell or something that nobody was going to take any notice of.

24. Mr Hendy argued that the evidence was irrelevant. As I understood it, the submission was this. Paragraph 35 requires a "collective agreement" for collective bargaining to be in force. Section 178 of the Act refers to specific matters that are covered by a collective agreement and by the bargaining process. The only part of the agreement in this case that referred to bargaining was the first limb of clause 4(1). The second limb of clause 4(1), apparently dealing with redundancy, did not extend to bargaining or negotiation. No bargaining or negotiation had taken place between MGN and BUJ on the matters referred to in the first limb of clause 4(1); that is to say, pay and holidays.
25. I fear I have to say that I think that that objection is too refined. All that the CAC was looking for, and all that it needed to look for, was an earnest desire to work within the agreement; not evidence that any of its specific provisions had in fact been carried out. Granted that the agreement was in existence, the evidence that the parties had dealt according to any of its terms, even if those were not the terms that gave it its status as a collective agreement, was in my judgement sufficient to show that the written agreement, genuinely signed up to, was not merely a piece of paper.
26. I would therefore uphold the CAC and the judge on this part of the case. I turn to the arguments raised on the European Convention on Human Rights.
27. Before the CAC and the judge, the NUJ asserted its rights of association under Article 11 of the Convention and said that they were being interfered with by the refusal of MGN to negotiate with them, and the fact that MGN were able to use paragraph 35 to that end.
28. The only case that was relied on for the proposition that that situation fell under Article 11 was Wilson v United Kingdom (2002) 35 EHRR 513. Mr Hendy relied on paragraph 42 of that determination, and in particular the words:

"A trade union must thus be free to strive for the protection of its members' interests, and the individual members have a right, in order to protect their interests, that the trade union should be heard ..."

29. That, it was said, demonstrated that a right to negotiate on the part of the trade union was part of the Article 11 rights of its members. That was plainly not what the court thought. It went on in that very paragraph to say:

"Article 11 does not, however, secure any particular treatment of trade unions or their members and leaved each State a free choice of the means to be used to secure that right to be heard ..."

30. It then went on in paragraphs 43 and 44 to expand on that view, and in particular said in paragraph 44:

"The Court has not yet been prepared to hold that the freedom of a trade union to make its voice heard expends to imposing on an employer an obligation to recognise a trade union."

31. That the court has still not been prepared to take that step is demonstrated by the admissibility case of Popov v Bulgaria, application number 48047/99, drawn to our attention by the industry of Mr Coppel who represents the Secretary of State. In that case, on page 15 of the ruling, the court said this:

"The court notes that the Convention does not per se guarantee to trade unions the right to collective bargaining."

and for that point it quoted Wilson v National Union of Journalists.

32. It is clear to me, as I believe it to have been clear to the constitution of this court that gave permission for this appeal, that the right to be recognised for the purposes of collective bargaining does not fall within the rights guaranteed by Article 11.
33. Before us, however, the Convention was deployed in a different way, to say that the NUJ might be able to take advantage of a combination of their rights under Article 11 and Article 14, the prohibition against discrimination. This point was not raised either before the CAC or before the judge below, and therefore we have the disadvantage of not enjoying their considered view on it; the argument being, in brief terms, that it was discriminatory to afford the rights of negotiation to the BAJ but not to the NUJ.
34. Both MGN and the CAC were prepared to concede, and did concede, that the facts of this case fell within the "ambit" of Article 11 for the purposes of the application of Article 14. That may have been a generous concession. The question of what is meant by the ambit of a particular Article of the Convention is far from clear, at least in the jurisprudence of this jurisdiction. It had been hoped that the House of Lords in the case of Ghaidan v Mendoza [2004] 2 AC 557 would find itself impelled to give guidance on that subject, but in the events that occurred it did not need to do so.
35. It does at least seem clear, though not actually decided by anybody, that the optimistic view of the "ambit" of a Convention right that was adopted by at least one of the judges in this court in Ghaidan is not correct. But what the right answer is is not at the moment clear, and one is bound to say that there is some paradox in saying that a factual situation that has been authoritatively held not to fall under Article 11, nonetheless comes within the ambit of Article 11. However, be that as it may, that concession was made and we of course respect it.
36. The obvious difficulty facing the NUJ in this case is to point to any action by the state that has discriminated against them. They may well say that they have been discriminated against by MGN, but MGN is not the state or a state-supported body.
37. Mr Hendy at the end of his submissions therefore reformulated the case in this way:

"By precluding a representative trade union from using the statutory procedure, the legislature is actively impeding the right of the employees to be heard through the negotiating procedure. The State has permitted that state of affairs through the terms of paragraph 35."

38. I have to say that I find that formulation and that description of this case wholly artificial. This case is completely different from the only case that comes even remotely near to it, the closed shop case of Young and others v United Kingdom. In that case, once the European Court of Human Rights had managed to find a right of non-association lurking within Article 11 it had no difficulty in holding that the state was responsible for legislation that allowed, and some would say encouraged, the punishment of workers for their exercise of that right. But in this case paragraph 35 is not limiting or punitive, or aimed at a particular category of workers, but it is even-handed in according primacy to existing voluntary agreements.
39. I would venture respectfully to adopt in that respect paragraph 35 of the skeleton argument of Miss Dinah Rose, on behalf of the CAC, which read as follows:

"Even if there were a difference in treatment, the appellant has failed to identify any ground for that difference in treatment which falls within the ambit of Article 14. The reason why the NUJ is denied access to the statutory recognition procedure in paragraph 35, is not because of any particular feature or status of the NUJ to which the legislation is hostile. It is merely because another union has already entered into an agreement with the employer. The result would be identical if it were the NUJ which had entered into an agreement and the BAJ was seeking statutory recognition. This treatment does not disclose any discrimination within the ambit of Article 14."

40. In my view, all that can be said, and indeed is said, is that the state should take positive steps to prevent the use of paragraph 35 in the way in which MGN has used it in this case. But there are at least two objections to that. First, it is inconsistent with the guidance given in the Wilson case as to the obligations of the state with regard to collective bargaining. Secondly, a failure to take that general step cannot possibly be characterised as an act of discrimination by the state against the National Union of Journalists, and it is that, and not some general issue of the character of the scheme as a whole, that has to be established under Article 14.
41. I would dismiss this appeal.
42. LORD JUSTICE LATHAM: I agree.
43. SIR MARTIN NOURSE: I also agree.

ORDER: Appeal dismissed with costs to be agreed; any item of disagreement will be submitted in the first instance to Buxton LJ for the purpose of consideration of summary assessment.

(Order not part of approved judgment) ______________________________