Tyne & Wear Passenger Transport v National Union of Rail
| Jurisdiction | England & Wales |
| Judge | Lord Justice Underhill,Lord Justice Newey,Lord Justice Males |
| Judgment Date | 27 October 2022 |
| Neutral Citation | [2022] EWCA Civ 1408 |
| Docket Number | Case No: CA-2021-000704 & CA-2021-000703 |
| Court | Court of Appeal (Civil Division) |
[2022] EWCA Civ 1408
Lord Justice Underhill
(Vice-President of the Court of Appeal (Civil Division))
Lord Justice Newey
and
Lord Justice Males
Case No: CA-2021-000704 & CA-2021-000703
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (Ch D)
Stuart Isaacs QC sitting as a Deputy High Court Judge
[2021] EWHC 1388 (Ch)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Hendy KC and Madeline Stanley (instructed by Thompsons Solicitors LLP) for the Appellants
David Reade KC and Joseph Bryan (instructed by Addleshaw Goddard LLP) for the Respondent
Hearing dates: 19–20 July 2022
Approved Judgment
This judgment was handed down remotely at 10.30am on Thursday 27 th October 2022 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
INTRODUCTION
The Claimant in these proceedings is the Tyne and Wear Passenger Transport Executive, which trades as Nexus. It operates the Tyne and Wear Metro. The Defendants are the National Union of Rail, Maritime and Transport Workers (“the RMT”) and Unite the Union (“Unite”) (together, “the Unions”). Nexus recognises the Unions for collective bargaining purposes in relation to employees in its grades 1–3 (“the relevant employees”). The majority of the relevant employees are members of the RMT: Unite's membership is relatively very small. It is not known how many are members of neither union, but it is likely that there will be some. The contracts of employment of the relevant employees, whether or not they are members of either union, expressly incorporate the terms relating to pay and conditions negotiated under the collective bargaining procedures. The basic structure of those terms and conditions is contained in a collective agreement called “the Red Book”, but there has typically been an annual pay negotiation in which particular terms may be varied. The claim in these proceedings is for rectification of an agreement made as part of the 2012 pay round.
The proceedings are a sequel to an earlier claim brought against Nexus by a group of the relevant employees (“the Anderson proceedings”). I need to start with an outline of what was decided in that case:
(1) By a letter to the RMT (copied to Unite) dated 10 October 2012, sent as part of that year's pay round, Nexus offered to consolidate a pre-existing entitlement referred to (inaccurately) as a “productivity bonus” into the basic pay of the relevant employees. That offer was in due course accepted. The resulting agreement has been referred to in these proceedings as “the Letter Agreement” (although it might strictly be more accurate to refer to “the Red Book as amended by the Letter Agreement”).
(2) The Red Book provides that employees in grades 1–3 are entitled to shift allowances, which give a percentage uplift on basic pay paid for working shifts. The Unions claim that the effect of the Letter Agreement is that the uplift should be applied to the figure for basic pay as increased by the consolidation of the productivity bonus: I will refer to shift allowance calculated on that basis as “enhanced”. Nexus denies that the Letter Agreement confers, or in any event was intended to confer, any such entitlement and has continued to calculate shift allowances on the unenhanced basis. (I should add for completeness that any increase in the level of shift allowance has an impact on the calculation of holiday pay, but that gives rise to no distinct issue and is an irrelevant complication for our purposes.)
(3) On 19 June 2015 Mr Steven Anderson and 69 other members of the RMT in grades 1–3 presented a complaint against Nexus in the Employment Tribunal (“the ET”) under Part II of the Employment Rights Act 1996 claiming that the continuing payment of unenhanced shift allowance constituted an unlawful deduction of wages. The proceedings were funded by the RMT and in practice no doubt it had the direction of them: the claimants were represented by its solicitors, Thompsons Solicitors LLP. It is common ground that the claimants represented the majority of the relevant employees – probably about two-thirds.
(4) By a decision promulgated on 21 December 2015 Employment Judge Hunter held that on the true construction of the Letter Agreement shift allowance fell to be paid on the enhanced basis. It followed that Nexus's payments of unenhanced shift allowance constituted unlawful deductions. He did not, however, decide the amount of the deductions in the individual cases but adjourned the proceedings in order to allow the parties to try to reach agreement. The formal Judgment reads:
“The claim that the respondent has made unauthorised deductions from the wages of the claimants by underpaying them shift allowances and holiday pay is well founded.”
That was followed by an order directing the fixing of a “remedies hearing” if the parties had not reached agreement by 26 February 2016.
(5) In the event no agreement or decision about the amounts due in the individual cases has been made. Fixing of the remedies hearing was deferred, initially pending an appeal to the Employment Appeal Tribunal (“the EAT”) and then pending an appeal to this Court and an application for permission to appeal to the Supreme Court; and it has since been deferred further because of the present proceedings.
(6) The ET's decision was upheld by the EAT on 15 January 2018 and by this Court on 27 September 2018 (see [2018] EWCA Civ 2084, [2019] ICR 433): the appeal to this Court was heard with the appeal in Agarwal v Cardiff University, and the case is reported under that name. On 6 March 2019 the Supreme Court refused Nexus permission to appeal.
That outline is sufficient for our purposes, but more detail can be found in the judgment of this Court in Agarwal.
It is Nexus's case that, if – as it is now constrained to accept – the Letter Agreement on its true construction required the payment of enhanced shift allowance, that did not correspond to the common intention of the parties and it should accordingly be rectified for common mistake; alternatively, it contends that the Agreement did not correspond to its own intention, and that that was something which the Unions knew or ought to have known so that it should be rectified for unilateral mistake. I refer to both alternatives together as “the mistake case”. It is central to the issues in this appeal that no such case had been raised, or even adumbrated, at any stage in the Anderson proceedings.
On 8 January 2019 Nexus's solicitors, Addleshaw Goddard, wrote Thompsons a letter before action advancing the mistake case. Para. 2.1 of the letter identifies the appropriate defendants to the threatened proceedings as “all employees of our client to whom the 2012 collective agreement applies”.
On 21 May 2020, well over a year after the letter before action, Nexus issued the present proceedings not against any individual employees but against the Unions. The particulars of claim plead the mistake case: I need not give the details. The only substantive relief claimed is “rectification of the Letter Agreement to give effect to the true agreement that the consolidation of the productivity bonus would not consequently increase the shift allowance”. It is pleaded that that is to be effected by reading the Letter Agreement as including, after the provision for consolidation, the words:
“… save that it is expressly provided that the consolidation of the productivity bonus shall not operate so as to increase basic salary or pay for the purposes of calculating any shift allowance or other allowance, which will continue to be calculated by reference to basic salary or pay as if the productivity bonus had not been consolidated by this agreement”.
The Unions do not accept either that there was any common mistake as to the effect of the Letter Agreement as regards the calculation of shift allowance, or that they were or should have been aware of any mistake on the part of Nexus; but those issues have not yet been determined. We are at this stage concerned only with two preliminary matters which came before Mr Stuart Isaacs QC, sitting as a deputy High Court Judge, at a hearing on 12 May 2021. These were:
(a) the trial of a preliminary issue as to whether Nexus is estopped from pursuing its rectification claim – in short, the Unions say that since Nexus did not advance the mistake case in the Anderson proceedings it cannot do so now;
(b) the determination of an application by the Unions for the claim to be struck out, alternatively for summary judgment, on the basis (i) that, even if Nexus is not estopped from advancing the mistake case, it is an abuse of process for it to do so now when it was not raised or adumbrated in the Anderson proceedings and/or (ii) that the claim is barred by laches and/or (iii) that the Court has no power to order rectification of a collective agreement which has no effect in law.
The issues were tried on the basis of an agreed statement of facts and (in the case of the Unions application) written evidence in the form of witness statements.
By a judgment handed down on 28 May 2021 the Judge rejected the Unions' case that Nexus was estopped from pursuing its claim and dismissed the strike-out/summary judgment application on all three of the grounds advanced.
The Unions sought permission to appeal to this Court on five grounds. The Judge himself gave permission on ground 4, which challenged his conclusion that the Court had power to rectify a collective agreement. Lewison LJ gave permission on grounds 1–3, which challenged the Judge's conclusions on...
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