Kulvinder Kaur and MG Rover Group Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Keene,Lord Justice Jonathan Parker,Lord Justice Brooke |
| Judgment Date | 17 November 2004 |
| Neutral Citation | [2004] EWCA Civ 1507 |
| Court | Court of Appeal (Civil Division) |
| Date | 17 November 2004 |
| Docket Number | Case No: A3/2004/0194 |
[2004] EWCA Civ 1507
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
BIRMINGHAM DISTRICT REGISTRY
Her Honour Judge Alton
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Brooke
Vice President of The Court of Appeal, Civil Division
Lord Justice Jonathan Parker and
Lord Justice Keene
Case No: A3/2004/0194
James Goudie QC & Akhlaq Choudhury (instructed by Natalie Atkins and Dale Mochan, Phoenix Venture Holdings Limited Legal Department) for the Appellant
Brian Langstaff QC & Jason Galbraith-Marten (instructed by Rowley Ashworth, Birmingham B4 6JS) for the Respondent
This appeal and cross-appeal raise the issue of whether certain parts of collective agreements between an employer and trade unions were incorporated into and became terms of the contract of employment of the individual employee. The respondent, Mrs Kaur, is a staff grade employee of the appellant at its Longbridge site in the West Midlands, where it carries on a car manufacturing business and where another group company carries on an engine and gearbox manufacturing business. She had, when these proceedings began, been continuously employed by the appellant or its predecessors in business for over 14 years. But in March 2003 she was threatened with compulsory redundancy.
She claimed declarations that, on a proper construction of her contract of employment, the appellant was not entitled to make her compulsorily redundant. Her claim was that the provisions of two collective agreements had been incorporated into her contract of employment and that those provisions had the effect claimed. By the time of trial the threat of compulsory redundancy had been lifted for the respondent, but the issues raised remained highly relevant for many other employees and therefore, by agreement between the parties, the claim was pursued to judgment.
Her Honour Judge Alton, Designated Mercantile Judge, sitting as a Judge of the High Court at Birmingham, refused declaratory relief in respect of one of the two collective agreements but granted it in respect of the other and consequently declared that the respondent could not be made compulsorily redundant. Both sides now appeal against that decision.
The respondent was employed at the relevant time under a contract of employment concluded in December 2000. She had accepted terms of employment set out in a letter dated 12 December 2000 from the appellant, the first paragraph of which read as follows:
"I have pleasure in offering you the following appointment with MG Rover Group Limited. This document is a statement of the terms and conditions of your Employment Contract. The Standard Conditions of Employment included with this Employment Contract, as may be amended by the Company from time to time, apply except where specifically varied by the conditions set out in this letter."
The letter then went on to provide certain details of her employment, including her basic hours, her annual salary and her job title. The letter itself said nothing about termination of her employment.
The Standard Conditions of Employment, referred to in the opening paragraph of that letter, contained a number of provisions but of most relevance for present purposes are conditions 1 and 13. Condition 1 is headed "General" and the material part of it provides:
"Employment with the Company is in accordance with and, where appropriate, subject to:
•the specific and standard conditions of employment contained in this Employment Contract;
•collective agreements made from time to time with the recognised Trade Unions representing employees within the Company;
•current employment rules (contained in the Rover Group Associate's Code of Conduct) and those conditions specifically applying at your work location;
•the rules of the Rover Group Pension Scheme which is the subject of a contracting-out certificate issued under the Pensions Schemes Act 1993;
•relevant employment legislation;
•Company policies and procedures.
The collective agreements mentioned above provide details of rate of pay, method of calculating pay, benefits and conditions which are currently in force and relate to your job/classification."
It is the reference both in the second bullet point and in the final sentence quoted to "collective agreements" which is relied on by the respondent.
Condition 13 in these Standard Conditions of Employment is headed "Notice of Termination of Employment". It states:
"Should you wish to leave the Company you must give at least one month's notice.
Should the Company wish to terminate your employment, for any reason other than gross misconduct or repudiation of your Employment Contract, you will receive a period of notice not less than that specified below:"
There then follows a table, indicating various periods of notice, depending on the employee's length of continuous employment.
The two collective agreements relied on by the respondent are, first, a document entitled "Rover Tomorrow – The New Deal", which was agreed in late 1991/early 1992, and secondly a document entitled "Small and Medium Cars 'The Way Ahead' Partnership Agreement", which bears the date July 1997. For the sake of brevity I shall refer to these as "The New Deal" and "The Way Ahead". There was subsequently a further collective agreement in November 1997, known as the Consolidated Agreement, but for reasons to which I shall come it is unnecessary to deal with that in any detail.
Before looking at the detailed provisions of the New Deal and The Way Ahead, it is convenient to consider the legal principles applicable to the incorporation of another document or part thereof into a contract of employment. Both parties accept the summary of such principles to be found in the judgment of Hobhouse J in Alexander v. Standard Telephones and Cables Ltd (No. 2) [1991] IRLR 286, at paragraph 31:
"The principles to be applied can therefore be summarised. The relevant contract is that between the individual employee and his employer; it is the contractual intention of those two parties which must be ascertained. In so far as that intention is to be found in a written document, that document must be construed on ordinary contractual principles. In so far as there is no such document or that document is not complete or conclusive, their contractual intention has to be ascertained by inference from the other available material including collective agreements. The fact that another document is not itself contractual does not prevent it from being incorporated into the contract if that intention is shown as between the employer and the individual employee. Where a document is expressly incorporated by general words it is still necessary to consider, in conjunction with the words of incorporation, whether any particular part of that document is apt to be a term of the contract; if it is inapt, the correct construction of the contract may be that it is not a term of the contract. Where it is not a case of express incorporation, but a matter of inferring the contractual intent, the character of the document and the relevant part of it and whether it is apt to form part of the individual contract is central to the decision whether or not the inference should be drawn."
Mr Langstaff, Q.C., on behalf of the respondent makes the point that there was no express incorporation in that case, which distinguishes it from the present. I accept that, but even in cases of express incorporation of a document it is still necessary, in Hobhouse J's words, to consider whether any part of that document
"is apt to be a term of the contract."
When dealing with collective agreements made between an employer and trade unions, there may well be certain provisions which are clearly not intended to give rise to legally-enforceable contractual rights between the employer and the individual employee. As Scott J indicated in National Coal Board v. National Union of Mineworkers [1986] IRLR 439, such collective agreements may deal with the appropriate mechanisms for dealing with industrial disputes or for collective bargaining, matters patently not intended to be legally enforceable by the individual employee. One must therefore look at the content and the character of the relevant parts of the collective agreement to determine whether they are apt to be a term of the individual contract of employment.
With that criterion in mind, I turn to the details of the two collective agreements in issue in the present case. As the judge pointed out, the earlier document "The New Deal" is in two parts. One part is headed "Agreement between Rover Group Ltd (The Company) and the Trade Unions", and a number of unions are then identified. Its introductory clauses refer to the competitive pressures on Rover and to achieving "Success through People", adding that:
"The back cloth against which that success is to be generated is summarised in the principles of our new partnership which are set out in the document Rover Tomorrow – The New Deal – (Attachment 1)."
Clause 3 states:
" AGREEMENT
The Parties agree to the principles set out in Rover Tomorrow – The New Deal. In addition this Agreement details consequential amendments to terms and conditions of employment."
There then follow a number of provisions dealing with such matters as grading, holiday entitlement and sick pay. Clause 12 is entitled "Notice" and provides:
"12.1 With effect from 16 April 1992 the minimum notice period from the Company to the employee will be one month.
12.2. The...
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