United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR PAUL DRAYCOTT (Representative) Free Representation Unit C/o Albion Chambers Broad Street Bristol BS1 1DR


 


MR JUSTICE MORISON (PRESIDENT): The purpose of this appeal has been to determine whether there is an arguable point of law arising from an Industrial Tribunal's decision given in extended reasons on 26th February 1997.

The background to the dispute between the parties can be shortly stated. The two applicants, Mr Pearson and Mr Taylor, who are the prospective appellants, were employed by a company which had won the contract for street cleaning in Portsmouth from the Portsmouth City Council. There was a change in contractor. The respondents to the complaints and the respondent to this appeal were the winners of the contract, and it was accepted by all concerned that the termination of the one contract and the creation of the second, was a transfer within the meaning of the 1981 Regulations.

Shortly before the transfer took place, various changes to the employees' terms and conditions were made. These changes were incorporated in a formal agreement, effective from 12th February 1996.

After the transfer took place, there were various discussions between the new company and the trades union, and various agreements were entered into. It will be assumed for the purposes of this judgment, that the changes which were then negotiated represented overall a reduction in the remuneration and benefits which the employees had previously enjoyed. But it is important to note, that the changes were changes agreed between the new company and the relevant trade union which was recognised for bargaining purposes.

The Industrial Tribunal, in relation to a complaint that the alterations to their rates of pay constituted unlawful deductions from their pay, concluded that there were no such deductions because:

"9. ... the "deductions" of which the applicants had complained resulted from a negotiated variation of the applicant's contracts and do not constitute unlawful deductions within Part 2 of the 1996 Act."

and accordingly, the applications failed.

By a Notice of Appeal, the appellants would wish to contend, firstly, that the Industrial Tribunal erred in law in concluding that the appellants had accepted the changes made to their contractual terms; or alternatively, that any such changes were without consideration and therefore unenforceable.

Mr Draycott on behalf of the appellants indicated, we think as he was bound to do in the light of the tribunal's decision, that the first part of the Notice of Appeal could not be sustained. In other words, the tribunal's conclusion that the appellants had accepted the changes to their contractual terms was not arguably erroneous.

That being so, we turn to the argument which he did maintain before us today, supported as it was by a 17 page skeleton argument. It was his contention that where an employee accepts a change to his contract of employment which is of less favourable terms and conditions than had previously the case, it is arguable that the employee is not bound to those changed terms and conditions. He referred to a number of authorities.

It is our judgment that the proposition for which Mr Draycott contends is unsustainable in law. Where there is an ongoing employment relationship between parties and there has been an agreement to accept new terms and conditions, it seems to us clear that there is consideration passing between the parties: namely the continuing to employ and provide work on the part of the employer, and the continuing to remain in employment and to do the work on the part of the employee. There is, thus, good consideration for an agreed variation, even if the parties have agreed to a reduction in the employees' wages.

It is common place in the industrial context that changes are negotiated in the way in which this occurred on this occasion, that is between the employer and the recognised trade union. Not all changes are, in objective terms, to the advantage of the employee. It may well be that the package which is negotiated is overall about the same or perhaps overall slightly better or overall slightly worse. It may be that the package will include some elements which are more favourable and some elements which are less favourable. But it seems to us that, in terms of consideration, there is always going to be consideration for an accepted variation of a contract of employment. If the parties do not wish to accept the variation, then of course it is open to them to work under protest and to indicate that they do not accept the variation. It would not have been possible for these appellants to have done that on the facts of this case, because, as we understand the position, they had agreed to be bound in their contracts of employment by any collective agreement entered into by the recognised trade union and their employer.

Accordingly we are quite satisfied that there is no arguable point of law fit for hearing before a full tribunal. And despite the ably presented argument of Mr Draycott, we must dismiss this appeal.