Secretary of State for the Home Department v James Cox
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewis,Lord Justice Stuart-Smith,Lord Justice Underhill |
| Judgment Date | 19 May 2023 |
| Neutral Citation | [2023] EWCA Civ 551 |
| Docket Number | Case No: CA-2022-000689, CA-2022-001397, CA-2023-000010 |
| Court | Court of Appeal (Civil Division) |
[2023] EWCA Civ 551
Lord Justice Underhill
(VICE-PRESIDENT OF THE COURT OF APPEAL (CIVIL DIVISION))
Lord Justice Stuart-Smith
and
Lord Justice Lewis
Case No: CA-2022-000689, CA-2022-001397, CA-2023-000010
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
THE HONOURABLE MR JUSTICE CHOUDHURY
AND THE HONOURABLE MR JUSTICE CHOUDHURY
AND THE HONOURABLE MR JUSTICE FREEDMAN
Royal Courts of Justice
Strand, London, WC2A 2LL
Clive Sheldon KC and Jack Feeny (instructed by the Treasury Solicitor) for the Appellants in all three appeals
Oliver Segal KC and Darshan Patel (instructed by Thompsons) for the Respondents in all three appeals.
Hearing dates: 22 and 23 March 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on 19 May 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
INTRODUCTION
These are three appeals involving individual claimants who are employed either by the Home Office, the Department for Environment Food and Rural Affairs (“DEFRA”) or the Commissioners for H.M. Revenue and Customs (“HMRC”). The individual claimants are also members of a trade union, the Public and Commercial Services Union (“PCS”), which was also a claimant in all three cases.
In brief, the union subscriptions of the individual claimants were formerly collected by means of what were known as check-off arrangements, that is the employer offered a facility to individual employees whereby they could authorise the deduction of union subscriptions from their wages and the money was then paid to PCS. At various dates in 2014 and 2015, the check-off arrangements were withdrawn by the relevant government department or HMRC.
In each of the three cases, the High Court held that the check-off arrangements constituted a term of the individual employees' contracts of employment. Permission to appeal in relation to that matter has been refused.
The High Court also held in each case that the individual claimants had not accepted any variation of their contracts of employment by continuing to work after the change had been introduced and had not waived any prior breaches of their contractual rights. The High Court also held that PCS was entitled to enforce the contractual provision in the individual claimants' contracts of employment whereby the employer was required to offer employees the facility of having union dues deducted from salary and paid to the union by reason of section 1 of the Contracts (Rights of Third Parties) Act 1999 (“the 1999 Act”). It is these two matters which are at the heart of these three appeals. The Home Office, DEFRA and HMRC all appeal. Although phrased differently, the grounds of appeal essentially are that the judge in each case erred in finding that:
(1) the individual claimants had not varied their contracts of employment to exclude the check-off arrangements and had not waived any prior breach by their conduct in continuing to work after the check-off arrangements were withdrawn; and
(2) the parties to the contracts of employment did not intend the contractual term offering the facility for check-off arrangements to be enforceable by PCS.
In addition, in the Cox case, the Home Office appeals the finding that two claimants employed by the Home Office, Mr Davey and Ms Speakman, entered into new contracts on or after 11 May 2000 (as the 1999 Act applied to contracts entered into after that date) so that PCS was able to enforce the contractual term relating to the check off facility in relation to their contracts. Choudhury J. held that agreeing to a fundamental variation in the contracts of employment would amount to entering into a contract for the purpose of the 1999 Act. In the case of Mr Davey, a change in salary and a change to a new basis of calculating working hours (moving to annualised hours working) were fundamental changes such that Mr Davey had entered a new contract. In the case of Ms Speakman, a temporary promotion for a significant length of time and a change from part-time to full-time working were fundamental changes such that Ms Speakman had entered a new contract. Consequently, as these two claimants had entered into contracts after 11 May 2000, the 1999 Act applied to those contracts and PCS were able to rely on section 1 of the 1999 Act to enforce the term relating to check-off arrangements in respect of their contracts of employment. The Home Office appeals on the basis that Choudhury J. erred in law as the circumstances identified as amounting to entering into a new contract set the threshold too low.
THE FACTUAL BACKGROUND
The check-off arrangements
Historically, the terms and conditions of service for Government employees were determined centrally and were largely uniform. The Treasury was responsible for negotiating terms and conditions with the relevant unions. The check-off arrangements originated in collective agreements reached between the Government and the relevant trade unions in the 1960s. The terms were included in the Civil Service Pay and Conditions of Service Code (“the Code”). The 1987 version of the Code contained a section on “Voluntary Deductions from Pay” which included the following:
“4040. This section sets out the arrangements relating to the voluntary authorisation of deductions from the pay or pension of civil servants.
…..
4051. A civil servant who wishes to authorise deductions from his pay for any of the purposes or organisations listed in Annex 1 and 2 should obtain from the organisation concerned the standard form of authority approved by the Treasury, complete it and forward it to the organisation. The organisation will forward the completed forms … to the officer paying salary, wages or pension … Deductions for union subscriptions will be made from the earliest date practicable after receipt of the authority. Notice of termination for authority should be given direct to the paying officer of the departments. However, this method of payment may be withdrawn in respect of union subscriptions in the circumstances described in para 4100 …”
Paragraph 4100 provided for the withdrawal of this method of payment of union subscriptions during any period of industrial action. Annex 1 set out a list of organisations where deductions could be made free of charge. Annex 2 set out a list of organisations, principally insurance companies, where deductions could be made but a collection charge would be levied. Annex 1 is in the following terms:
“LIST OF ORGANISATIONS FOR WHICH DEDUCTIONS MAY BE MADE FREE OF CHARGE”
“Deductions may be made from salaries, wages or pensions free of charge for the payment of premiums and subscriptions to the following:
Civil Service SAYE Scheme
National Savings Bank Clubs
Civil Service Medical Aid Association
Civil Service Retirement Fellowship
Hospital Saving Association
Hospital Saturday Fund
Post Office and Civil Service Sanitorium Society
Local Hospital Funds, Hospital Contributory Scheme and Provident Funds
Civil Service Benevolent Fund
United Kingdom Civil Service Benefit Society
Departmental Benevolent Funds ….
Civil Service Insurance Society ….
Post Office Insurance Society
Civil Service Sports Council
Department Sports Association ….
Nationally or departmentally recognised unions representing civil servants.”
“”
Subsequent developments are described in detail at paragraphs 6 to 11 in the judgment of Choudhury J. in Cox. In brief, from 1 April 1996, the Treasury ceased to have responsibility for pay negotiation. Responsibility for determining terms and conditions of service was delegated to the Ministers in the various departments in accordance with the Transfer of Functions (Treasury and Minister for the Civil Service) Order 1995. Terms and conditions of service had to comply with the provisions of the Civil Service Management Code (“the CSMC”). Paragraph 7.3 of the CSMC deals with voluntary deductions from pay and is in the following terms:
“ Voluntary Deductions from Pay
7.3.1 Where departments and agencies have arrangements for voluntary deductions from pay to be offered to staff, the following conditions apply.
Conditions
7.3.2. Departments and agencies must ensure that:
a. no liability is to be attached to the department, agency or pension-paying authority in the event of default by a member of staff or recipient organisation. Legal advice should be taken if necessary; and
b. in providing such facilities, they offer no assurance of the soundness or integrity of recipient organisations.
Trade Union Subscriptions
7.3.3. Where departments and agencies offer arrangements for deducting subscriptions to trade unions, they must ensure that:
“a. they comply with the relevant statutory provisions (including those concerned with political levies, where appropriate);
“b. they recover the costs of the provision of the facility from the trade unions concerned; and
“c. subscriptions deducted during the quarter in which an officer ceases to be a subscriber will be paid to the relevant trade union.
“In the event of official industrial action by non-industrial civil servants, departments and agencies may withdraw the facility, in whole or in part, in respect of deductions payable...
To continue reading
Request your trial