Unity is Strength

Thanks mainly to the efforts of the trade union movement, employees are now entitled to a whole range of different rights at work. These are usually set out in their individual contracts of employment (see LELR 108 for more details).

But they can also be found in collective agreements. These are agreements (or arrangements built up over the years from custom or practice) that trade unions negotiate, on their behalf, with employers

Although individual workers are not involved in the negotiations, they still benefit from the process. They cover union members, as well as any other workers in the bargaining units covered by the recognition agreements.

In this article, Joe O'Hara, a solicitor from Thompsons Employment Rights Unit in London, summarises the law on collective agreements and answers some frequently asked questions.

What is a collective agreement?

Section 178(2) of the Trade Union and Labour Relations (Consolidation) Act 1992 defines a collective agreement as "any agreement or arrangement made by or on behalf of one or more trade unions and one or more employers or employers' associations."

It has to be about one of the seven topics specified in the legislation:

To be legally binding in their own right, all collective agreements now have to be in writing (except for agreements reached before February 1974), and must state in black and white that the two sides intended it to be a legally enforceable contract.

It is very unusual for the terms of a collective agreement to be legally binding, but they can be enforced if they are "incorporated" into the contract of an individual worker. This is known as the "normative effect" of a collective agreement.

When this happens, only the individual employee can enforce the term. This is because the legal mechanism is not the collective agreement between the employer and the union, but the contract between the employer and the employee.

How does a term become incorporated?

In a number of ways, for instance, when the annual pay round or other negotiation results in a collective agreement for a percentage pay increase, each employee's contractual rate of pay is increased accordingly.

The usual route to incorporation, though, is when the contract of employment cross-refers to the collective agreement. Section 1(4)(j) of the Employment Rights Act 1996 requires written statements of particulars of employment to contain particulars of "any collective agreement which directly affects the terms and conditions of the employment including, where the employer is not a party, the persons by whom they were made".

So contracts or written statements should contain clauses such as:

"Your terms and conditions are set by agreement between [NAME OF EMPLOYER] and [NAME OF UNION]"

or

"Your terms and conditions are directly affected by collective agreements made by [NAME OF EMPLOYER] and [NAMES OF UNIONS]".

It can also be incorporated when the collective agreement actually says that one or more of its terms will be incorporated into the contracts of the employees to whom it applies; and when both the collective agreement and the individual contracts cross-refer.

It is very important to ensure that terms are incorporated, so union officials should make a point of checking the contracts (or written statements) of new starters, to ensure that they contain all the information required by the legislation, especially cross-references to collective agreements. However, not all terms are suitable for incorporation.

Which terms can be incorporated?

It is fairly obvious that rates of pay or pay increases are meant to be put into employees' contracts, otherwise they would be stuck on their original rates of pay for ever. The same applies to terms specifying hours, holidays and sick pay. As a rule of thumb, terms that are "individual" in nature will be incorporated into individual contracts.

But unless the two sides stipulate otherwise, terms that are "collective" in nature (such as collective disputes procedures and recognition agreements) are not usually incorporated and so cannot be enforced.

The union cannot enforce them because the collective agreement is not legally binding, but neither can the employee because the term is not part of their contract.

So if a union negotiates a term that is not obviously individual in nature, it needs to take care to get the wording right. Take Kaur v MG Rover Group Ltd (2004) as a good example. In this case, the workforce and the unions agreed full flexibility in exchange for a promise of "no compulsory redundancies".

However the Court of Appeal looked at where the key phrase appeared, decided it was collective and not individual in nature and so was not incorporated into the contracts of the individual MG Rover workers.

A similar problem can arise with facilities agreements for union officials, which are hybrid terms - they are usually found in the recognition agreement but are meant to benefit individual workers so long as they are accredited union representatives.

When concluding negotiations on a collective agreement, union officials should therefore make sure that they agree the right wording for terms that are not obviously individual in nature, but which they want to be incorporated into their members' contracts. This is important because collective agreements frequently contain a mix of both collective and individual terms.

Strictly speaking, each time a union finalises a collective agreement that directly impacts on contracts, the employer should issue what is called "a section 4 statement" updating the written particulars. In practice, they hardly ever do, but ensuring that these are issued is one way for unions to reduce any doubt about which terms are incorporated.

What about "No-Strike" Clasuses?

The 1992 Act contains a special provision to ensure that "no-strike" clauses (which are very rare anyway) are incorporated only with the full knowledge and intent of the union and the individual worker.

Section 180 says that the collective agreement must be reached with an independent trade union, be in writing and expressly state that the no-strike clause is incorporated into the contract.

The agreement must be reasonably accessible to the employee at their place of work and be available for them to consult during working hours. In addition, the employee's contract must expressly incorporate the no-strike clause.