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Clerkin & Ors v Warrenpoint Harbour Authority  (Preliminary Issue)  (29 May 2003)
THE INDUSTRIAL TRIBUNALS 

CASE REF:3286/01-
3290/01

APPLICANTS:	Desmond Clerkin & Others		

RESPONDENT:	Warrenpoint Harbour Authority

DECISION

The unanimous decision of the tribunal is that the question posed to the tribunal by way of a Preliminary Issue in this matter be answered as follows – ‘Yes.  On 30 May 2001’.
Appearances:
The applicants were represented by Mr F O’Donoghue, QC instructed by Rosemary Conolly Solicitors.

The respondent was represented by Mr A Devlin, Barrister-at-Law instructed by Brangam Bagnall Solicitors.

EXTENDED REASONS

1.	This matter came before the Tribunal by way of a Preliminary Issue in order to determine the following question namely,

“Whether in the events which have happened, the changes in the terms and conditions of employment as negotiated and agreed between the respondent and SIPTU, on or about 23 May 2001, are incorporated into the applicant’s contract of employment, and if so, on what date?”

2.	There was no real dispute about the underlying facts.  Throughout the period of up to 25 years that the applicants had been employed at Warrenpoint Docks, the workforce had been unionised first through the ATGWU and subsequently through SIPTU.  The applicants were union members.  It was the practice for a review of terms and conditions, including, in particular, pay, to be put in train  at the end of the old year or the beginning of the new.  The union, according to a SIPTU full-time official, Mr McDaid, would put in a claim after consultation with the members and/or their shop stewards.  Negotiations would take place.  A final package would be agreed between the union and management and that package would then be put to the men in  general meeting.  It was open to the men to accept or reject the package.  If it was rejected, fresh negotiations would take place and a further package found which would again be put to the men in general meeting.  Once the men had voted to accept the package, the various provisions would be implemented and put into effect without any further ado.  There was no suggestion in the evidence that any further action had to be taken or any document signed by the men.

The negotiations covered a variety of matters, flexibility, life cover, sick pay and the like but, most regularly, pay.  Over the years, the usual nature of the package would have been for an increase in pay for all.  However, there were times when there were increases for some and a freeze for others (1995), when the percentage increases for different groups of workers were different (1999), and, on one occasion, when the rate at which a tonnage bonus was to be paid was halved (1993).  This last was a change more apparent than real since it was anticipated by both management and union that tonnage throughput would double thus producing the same amount of bonus at the end of the day.  

The evidence of both Mr McDaid and the two applicants who gave evidence, was that the voting at the meetings where the final package was to be accepted or rejected, was not always unanimous.  Indeed, Mr McDaid suggested that it was seldom unanimous.  According to Mr McDaid, if some men voted against they would abide by the decision of the majority.  This was confirmed by the applicants.  One of them said, in cross-examination, that there were occasions when the vote was not unanimous and usually the majority carried the day.  That, he said, “was the way it was” in previous years.  The majority carried the day and the proposal was implemented after a majority vote.  The other applicant who gave evidence agreed that when the votes were not unanimous the majority had carried the day.  He indicated that when he was in the majority he expected the minority to follow and vice versa.

The evidence of the applicants and of Mr McDaid was confirmed by the Respondent’s Chief Executive, Mr Goldie, who described the process outlined above as being the custom and procedure by way of which alterations to pay and/or conditions of employment were negotiated, agreed and subsequently implemented.

3.	In the year 2001, the same procedure was adopted.  The nature of the proposals from management on this occasion was more extensive and more detailed since it involved a restructuring of the pay arrangements.  Elements such as a standard basic weekly wage supplemented by individually assessed weekly skills allowances were to be introduced.  Also proposed were a variety of new benefits such as increased holiday arrangements, improved sick pay and an enhanced pension and death benefit scheme.  An increased number of meetings were held between the union and the men.  The union had consulted an economist and arrangements were made for advice to be given by the union solicitor.  Some of the men, including the five applicants, whose pay was going to be adversely affected, were unhappy about the proposals.  However, the stage was reached when the union concluded that nothing further could be obtained by way of negotiation and on 30 May 2001, a meeting of the men was held.  The meeting was first addressed by Mr Goldie who provided and handed out a letter and book to each man which set out the proposals in full.  After Mr Goldie left, there was a question and answer session between the full time SIPTU official and the men.  The possibility of a ballot about industrial action with the casual workers taking part was raised but this did not take place.  Some of the men, including the applicants,  were still unhappy.  The matter was put to the vote of all full time employees by show of hands in the usual way.  By 16 votes to 7 the package was accepted.

Subsequent to the meeting of 30 May 2001, the applicants discussed the unions failure to hold a ballot on industrial action or to take a vote including casual labourers since they felt that, had this been done, the vote might have gone the other way.  They did not, however, pursue the matter in writing or make a formal complaint.

4.	The documents which had been distributed by Mr Goldie at the meeting of 30 May 2001 included details of the revised wage structure and revised benefits together with a letter addressed to each employee.  These letters purported to ‘offer’ employment.  They concluded with a section headed ‘acceptance of contract’ requesting an indication of acceptance of the offer by signature of the relevant employee. This section went on to indicate acknowledgement of receipt of the statement of the terms of employment and confirmation that the employees had read them and the various documents which set out the principal rules, policies and procedures relating thereto.  It had been requested that these documents be returned by 15 June 2001.  In a schedule of progress on wage negotiations for 2001, created by the respondent, a note dated 22 June 2001 relating to new contracts returned, refers to seven people, including the applicants, ‘who are holding out’.  It made  clear that no documents had been returned by these men.  A further note dated 25 June refers to a meeting between management and union at which a request was made by the union for improved terms for the seven men who had not yet signed up.  The note went on to record that management had re-stated the position that the terms had been fully negotiated after eight months consultation;  that the men concerned had refused to address the issues at any previous joint meeting and had failed to turn up at a pre-arranged meeting called by the union in the past;  and that the Respondent had given twenty eight days notice of change in  the terms on the basis of economic circumstances.  The revised terms were introduced on 1st  July 2001.

5.	The question posed to the Tribunal was ‘whether in the events which had happened, the changes in the terms and conditions of employment as negotiated and agreed between the Respondent and SIPTU, on or about 23 May 2001, are incorporated into the applicants contract of employment and if so on what date’.  The first issue which seemed to be raised for the Tribunal to deal with during the course of the presentation of the applicants case was whether any alteration in a workers contract which had the effect of reducing his wages could be achieved without the workers prior consent in writing.  However, in the applicants written submissions to the Tribunal on the relevant law it was accepted that an employer can lawfully deduct wages on foot of a written consent ‘or alternatively by pointing to a relevant provision in the employees contract…’.  This statement of the position accords with the Tribunals own view and leads directly to the question posed, namely, whether the terms agreed in this case between management and union and accepted by majority vote formed part of the contract of employment of each of the applicants.

Collective agreements do not automatically bind individual employees even when those employees are members, as they were in this case, of the union which negotiated the agreement.  However, there can be a contractual term that such collective agreements will be binding;  that term can be expressed or implied;  and if implied, it can be by way of custom and practice.  There is clearly no express agreement in this case.  There were no written contracts of employment.  According to one of the applicants, there were no documents or even  a series of documents.  If the terms of the collective agreement were to be incorporated in the applicants’ contracts of employment it would have to be by way of an implied term.  The only way in which such a term could be implied, on the evidence, was by way of custom and practice.  That, indeed, was the respondent’s case.

For terms to be implied through custom and practice, that custom and practice must be ‘reasonable, certain and notorious’.  In this case, there was clear evidence of a very long standing tradition of collective bargaining in relation to pay and conditions between the management and the union.  Indeed, this arrangement had been in place throughout the applicants employment with the respondent.  There was no other way, or none about which evidence was given, in which pay, terms or conditions had been or were negotiated.  Given Mr Goldie’s evidence that the ATGWU and subsequently SIPTU had been the unions recognised by the Respondent from the date of its inception as holding the exclusive bargaining and negotiating right on behalf of the employees this is not surprising.  As one of the applicants said in cross-examination  “it worked well for both us and the company”.  The evidence on all sides was wholly in agreement.  Everyone knew what the procedure was.  Everyone knew there would be negotiations.  Everyone knew that a deal would be reached.  Everyone knew that that deal would then be accepted or rejected by the men in general meeting and that the result of that meeting would be decided by majority vote.  The Tribunal is satisfied that all parties fully recognised that the agreement negotiated between the management and the union, once accepted by the men by majority vote in general meeting, would be implemented and would thus become terms and conditions of employment without any further action or formality.  

It is difficult to see how, in the case of a fully unionised work force being accorded proper union representation by a union which operates on proper democratic principles, this could be regarded as unreasonable.  The arrangement was clear and simple and it was well known.  In the Tribunal’s view, the threefold test is satisfied and, consequently, the question posed to the Tribunal must be answered on the basis that the terms were incorporated into the contracts of employment of the applicants on 30 May 2001.

6.	It was argued on behalf of the applicants that they did not, individually, ever accept the new pay structure.  That is not the point.  Their individual acceptance was not required.  They were bound by the collective agreement once endorsed by majority vote.

It was further argued that custom and practice could only relate to circumstances, so far as pay was concerned, such as those which had prevailed in the past, when the worst which had been proposed for some members was a pay freeze.  The Tribunal rejects this argument.  While it is true that, for the most part, pay increases would have been recommended there had been occasions when some members of the work force had suffered by comparison with others when, as the applicants themselves agreed, the minority was expected to follow the majority and accept the decision.  Furthermore, there had been an occasion when a decision which could potentially have had a significantly damaging affect on bonus payments had been the subject of the customary procedure.  The Tribunal considers that the evidence shows that the arrangement was, as has been set out above, that negotiations regarding pay and conditions were entered into on a collective basis and included all pay and conditions whether beneficial or detrimental.

Finally, it was argued on behalf of the applicants that there could not be a term arising by way of custom and practice since the respondent did not consider themselves bound as evidenced by the terms of the letter delivered to the men on 30 May 2001 and further, by the terms of the schedule of progress prepared by the respondent and containing a reference to ‘holding out’.  

The evidence of Mr Goldie  was that the letters handed out were in similar terms to pro forma letters which had been issued to newer employees at the time they had been taken on.  The Tribunal accepts this evidence.  The letter itself is clearly not wholly appropriate for employees such as the respondents and seems to be designed for new employees.  At its commencement it purports to offer employment to the named employee, a position inappropriate to the applicants who had a minimum of 15 and a maximum of 25 years service respectively.  While the end of the letter refers to the acceptance of terms and conditions it also constitutes an acknowledgement of receipt of the statement of the terms and conditions.  Mr Goldie’s evidence, which the Tribunal accepted, was that the applicants had no written contracts but new employees had signed to show receipt of details of their terms and conditions and he wanted a similar note accepted by the remaining employees.  The note referring to ‘holding out’ is followed by a reference to a future meeting when the union was seeking improved terms for those ‘holding out’ and being told there was no question of any such improved terms and indeed that notice of change had already been issued.  While the letter and schedule suggest, at first glance, some uncertainty about the respondent’s position they were explained by Mr Goldie’s evidence and by their context and the Tribunal is satisfied that at all times the respondent considered itself bound by the majority decision of the men reached on 30 May 2001, in the customary manner.

7.	As the Tribunal has decided that the changes in the terms and conditions of employment as agreed between management and union and accepted by the men were incorporated into the applicants contract of employment it is unnecessary for the Tribunal to consider whether the 
applicants, by their conduct subsequent to the introduction of the revised terms, had impliedly accepted the revisions and waived any breaches.

Chairman:

Date and place of hearing: 29 & 30 May 2003 and 31 July 2003, Belfast.

Date decision recorded in register and issued to parties:

3286-01-3290-01-mol				(32)