Pay, hours and holidays

The law requires employers to recognise trade unions for collective bargaining purposes in certain circumstances in respect of “pay, hours and holidays”. In BALPA v JET2.COM Ltd, however, the High Court ruled that even though the company was under a legal obligation to recognise BALPA, it dId not have to negotiate terms which were not core contractual terms “relating to pay, hours and holidays”.

Thompsons was instructed by the claimants’ union, BALPA, to act on behalf of its members.

Basic facts

The Central Arbitration Committee (CAC) decided in November 2010 that BALPA was entitled to be recognised by JET2.COM Ltd for collective bargaining purposes on behalf of its pilots in respect of their “pay, hours and holidays”.

As the parties could not agree on how to carry out the collective bargaining, however, the CAC specified a method in May 2011 which, to a large extent, followed the method set out in the Schedule to the Trade Union Recognition (Method of Collective Bargaining Order) 2000. This “specified method” operated as though it was part of a legally enforceable contract made by the parties.

The union claimed that the company had failed to comply with the method specified by the CAC in terms of the pilots’ rostering arrangements which, it argued, fell within “pay, hours and holidays” as different shifts attracted different payments and bonuses and dictated when the pilots could take their holidays. In addition, it claimed that the company breached the specified method in relation to pay by making announcements about pay increases to employees in advance of negotiations.

High Court decision

The High Court judge held that the specified method was only concerned with core, contractual terms affecting the pay, hours and holidays of workers in the bargaining unit. Although the phrase "negotiations relating to pay, hours and holidays” was ambiguous, it was clear from the Ministerial statement made during the Committee stage of the Employment Relations Act 1999 that it was Parliament's intention to limit the scope of statutory collective bargaining to the three main contractual terms of employment.

As the provisions of the Rostering and Crewing Policy were, in general, aspirational, they were not therefore “apt for incorporation”. The union’s suggestion of a Joint Monitoring Committee to respond to “operational circumstances” would not, if incorporated into individual contracts of employment, make "business sense”, not least because it would restrict the company’s flexibility in terms of rostering.

The judge also found that the company was not prohibited by the specified method from communicating directly with its pilots about proposed pay increases as it just required the company to discuss pay with the union before varying the employees’ contractual terms. Ultimately the parties' subjective intentions were irrelevant because the obligation to negotiate under the specified method did not impose any obligation on either of the parties “to come to negotiations with a particular state of mind about any particular issue”.