England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		The Royal Courts of Justice Strand London WC2A 2LL
		Tuesday, 3 September 2013

1. MR JUSTICE POPPLEWELL:  The Claimants are employed by the Defendant in the Department for Communities and Local Government (DCLG).  The dispute before me is whether they have a contractual right to require DCLG to continue to deduct their union subscriptions from their salaries and pay them directly to the trade union.  The relevant trade union is the Public and Commercial Services Union (PCS).  Such an arrangement is commonly referred to as a check-off arrangement.
2. Check-off arrangements are very widely used in the public sector and also, although less widely, in the private sector. DCLG and its predecessor departments have operated a check-off system for at least 20 years, and every member of a recognised union who had requested to be included within such a system has been so included by the Department.  Some 94 per cent of the current PCS members employed by DCLG pay their subscriptions in this way by check-off.
3. In about March 2013, DCLG informally notified the recognised trade unions that it was intending to terminate check-off arrangements.  The unions protested and, in particular, at that stage sought to require a period of consultation over the issue.  On about 15 July 2013, DCLG notified the trade unions and individual staff of the intended termination of check-off arrangements with effect from 1 September.  It was confirmed at about the same time that only deductions of union subscriptions were to be terminated as opposed to other deductions made by DCLG from wages.
4. The Claimants issued proceedings on 1 August 2013 and there was an application for interim relief.  The matter came on before Swift J on 8 August 2013 with the Claimants pressing for a speedy trial or, in the alternative, interim declaratory relief.  Swift J ordered that there should be a speedy trial with all CPR requirements to be dispensed with, save for the filing and service of any further evidence and the filing and exchange of skeleton arguments.  There has been an exchange of witness statements and skeleton arguments and the matter came before me this morning for trial.
5. The relevant provision upon which the Claimants rely as conferring the entitlement is paragraph 12.5.9 of the Communities and Local Government Staff Handbook.  The Staff Handbook, which is a lengthy document running to more than 600 pages, is split into two parts.  It explains on its first page that part A contains terms and conditions of employment and that part B contains associated procedures and guidance.  Part A is identified on page 3 as containing the various provisions that comprise the contract of employment with the Crown.
6. Within Part 4, at page 5, paragraph 1.2.1 provides:

"The DCLG Staff Handbook, as applying to you, sets out many of your terms and conditions of contract.  It is the intention of the recognised Trade Unions (see paragraph 1.3.2) and of the Crown that all of the provisions of the DCLG Staff Handbook which apply to you and are apt for incorporation should be incorporated into your contract of employment."

7. Paragraph 1.2.2 provides:

"The DCLG Staff Handbook is in two parts:

a. Part A contains terms and conditions.  Without prejudice to the generality of paragraph 1.2.1, all of Part A and all annexes of Part A are apt for and are incorporated into your contract of employment with the exception of those provisions which are not highlighted ..."

8. The background to the Staff Handbook being in that form is that it was negotiated and agreed in about 2000 following the amalgamation of the Department of Transport and the Department of the Environment and one section of the Treasury Solicitor into a department which was DCLG's predecessor.  At that time, the Department and the trade unions were anxious that there should be clarity about which agreements constituted enforceable contractual rights incorporated into individual staff contracts of employment, and about which terms did not constitute such rights.  They accordingly sought to achieve that clarity by dividing up and selectively highlighting the handbook in the way that is indicated in its opening pages.
9. Chapter 12 is headed "Industrial Relations".  Chapter 12.5 is headed "Trade Union Membership" and contains ten sub-paragraphs, most but not all of which are highlighted.  Paragraph 12.5.9, which is highlighted, provides:

"If you are a member of one of the officially recognised trade unions, one method by which your union subscriptions can be paid is for you to ask the Department to deduct all or part of the subscription from your pay and to transfer this to the appropriate trade union (the system known as 'check-off') - your trade union can provide a suitable application form.  In the event of industrial action, and for the duration of that action, the Department may decide to withdraw - in whole or in part - from this arrangement in respect of those trade unions with members officially involved in industrial action.  In that event, you will be advised of the decision in writing."

PCS is identified as one of the officially recognised trade unions at paragraph 12.2.4(c).

10. In my judgment, the starting point in resolving this dispute is to recognise that paragraph 12.5.9 is a highlighted term.  As such, the parties have expressly agreed that it is intended to have contractual effect, and that it is an apt provision to have contractual effect, in the contract of employment between the employer and the employee.  There is a deliberate and express agreement that paragraph 12.5.9 should create contractual rights, and in particular that it should confer contractual rights on the employees against the Defendant.
11. Against that background, the natural meaning of the words "subscriptions can be paid" is that they confer a contractual entitlement to pay the subscriptions in the way described.  The words "can be paid" mean that the employee is entitled to pay in that way if he asks to do so.  If the Department were entitled to discontinue the arrangement and to refuse to operate checking-off, the position would be that contrary to that language, the employee cannot pay in that way.
12. This construction is, in my view, supported by the second part of the paragraph.  The second part of the paragraph permits withdrawal from such an arrangement in defined and circumscribed circumstances.  The natural inference is that those are the only circumstances in which withdrawal from such an arrangement is permitted.  The language and structure of the clause is that it imposes an obligation on the Department, if so requested by the employee to act in a defined way subject to a limited exception, which is set out in the second part of the paragraph.
13. Mr Eadie QC, on behalf of the Defendant, submitted that the critical question was whether the paragraph imposed an obligation on the Department to maintain a check-off arrangement with the designated unions indefinitely and permanently.  He accepted that paragraph 12.5.9 had a contractual status as a term of each employee's contract of employment and he put forward two alternative constructions as to its content.
14. The first was that the paragraph confers no more than a right in the employee to ask for check-off but it gives no entitlement to have it provided even where there is a subsisting arrangement between the Department and the relevant union.  On this construction, the paragraph always leaves the Department with an unfettered discretion as to whether to accede to such a request by an employee.  That argument is, to my mind, untenable.  It ignores the words "can be paid".  It deprives the paragraph of any contractual content at all.  If the Department had an unfettered discretion to refuse a request for check-off, the paragraph would confer no contractual rights at all.  Moreover, such a construction would render the second part of the paragraph meaningless and without content.
15. That was not, however, Mr Eadie QC's primary submission as to the construction of the paragraph.  The alternative construction, which was his main submission, was that paragraph 12.5.9 is premised as a matter of fact on the continued existence of a check-off arrangement between the Department and the relevant union, but that it does not guarantee that any such arrangement will be in force in any particular form or for any particular period or indeed at all.  Paragraph 12.5.9 therefore, he submitted, confers an entitlement on the employees to have their subscriptions deducted only for so long as there is in place an arrangement between the Department and the relevant union to that effect.
16. He submitted that if it had been intended to impose an obligation to maintain check-off arrangements in a particular form or at all, the clause could easily have said so, but that the language is not apposite to do so.  He submitted that the construction for which he contended is the natural meaning of the language which is used, and he pointed to the permissive elements in the language including the words, "can", "ask" and "application".  He drew a contrast between the language of this paragraph and the language used elsewhere in the Staff Handbook when it was intended to create obligations or entitlement. 
17. He submitted that the natural reading of the clause in this way was reinforced by the fact that there is not any enforceable collective agreement directed between the Secretary of State and the union to maintain any such check-off arrangement.  He further submitted that it was natural to read the clause in this way because the checking-off system endures primarily for the benefit of the union and does not significantly affect the interest of the members in their capacity as employees.
18. Attractively though these arguments were presented, I am unable to accept them.  It is often of little assistance, when there is a disputed question of construction, to observe that if the parties intended the provision to mean one thing, they could have said so more clearly.  That is so in the present dispute.  The point can be made with equal force on each side that the other side's construction could have been achieved by expressing the paragraph in language which was different and clearer.
19. Nor do I derive any real assistance from the language used elsewhere in the Staff Handbook.  Mr Eadie was able to point to examples of where there was clear wording imposing obligations or creating entitlement.  Mr Segal, for the Claimants, was able to point to examples where there were clear words of a non-contractual discretion being conferred.
20. What was intended by paragraph 12.5.9 depends upon its own particular language.  The language of the first sentence of paragraph 12.5.9 does not make the entitlement conditional on whatever the Department has agreed with the unions.  It provides unequivocally that union subscriptions can be paid in a certain way.  That is the language of unqualified entitlement.
21. Moreover, the second half of the paragraph would be deprived of meaningful content if Mr Eadie QC's primary constructions were correct.  It provides that the Department may withdraw from particular arrangements with trade unions in particular and circumscribed circumstances.  It is, in my view, inconsistent with an unfettered discretion to modify or withdraw from such an arrangement in any circumstances.
22. The fact that there is no enforceable collective agreement in relation to the check-off arrangements between the Department and the union as such does not, to my mind, take the matter any further.  If the Claimants are right in their construction that paragraph 12.5.9 has that effect in the contract of employment, then there is no need for such a separate collective agreement.  It would not be surprising to find that there was no such separate collective agreement when paragraph 12.5.9 is itself enshrined in a staff handbook which was negotiated by the unions with the employer.
23. Nor is there anything inherently improbable or contrary to policy for any government department undertaking an obligation in the contract of employment to deduct union membership subscriptions from salary and pay them directly to the union.  I had my attention drawn to a government policy document which is on the Internet headed "Joining a Trade Union", which has a section headed "Paying by Check-Off", which says:

"Your employer isn't legally required to take union membership subs from your pay and send it to the union.  They can stop sending your membership subs unless your employment contract says they have to."

That recognises that there can be circumstances in which the contract of employment imposes that obligation.

24. I was not impressed by the argument that check-off is only or primarily for the benefit of the union as such, rather than for its members in their capacity as employees.  It seems to me that there is a real benefit to employees in the administrative convenience of not having to make their own arrangements for payments each month, or having to set up a direct debit or standing order and then change it or replace it from time to time as may be necessary.  Moreover, the benefit to the union in the arrangement consists in part in the savings in time and cost in not having to undertake the administrative exercise of collecting payments individually from members.  Any cost benefit to the union is necessarily a benefit to its members as such and in their capacity as employees.  It also seems to me that an efficient and secure system of subscription collection for a union is in the interest of all its members.  Each member benefits from the efficient and secure collection of dues from other members and check-off benefits each member in that way.
25. For all those reasons, I accept the argument advanced on behalf of the Claimants, and I conclude that the Claimants are entitled to continue to pay their PCS subscriptions by deduction from pay by way of check-off by reason of paragraph 12.5.9.