Labour & European Law Review Weekly Issue 476 29 June 2016
In May 2015, the Department for Work and Pensions (DWP) ended their system of check-off for Public and Commercial Services union members' subscriptions. However, in Cavanagh and ors v Secretary of State for Work and Pensions, the High Court held that the department was in breach of two PCS members' contracts when it withdrew the system and that the union had the right to enforce the arrangements.
Thompsons were instructed by the PCS to act on behalf of its members.
Mr Cavanagh and Ms Williams joined the civil service in 1987 and 1991 respectively. After various machinery of government changes, the department in which they worked became the DWP. Their written particulars of employment stated that '[f]ull details of your conditions of service are contained on the Department's intranet site'. This included the department's salary policy, which stated that '[y]ou can choose to have voluntary deductions made for subscriptions and premiums to certain Treasury approved organisations, for example, Trade Union subscriptions'.
As part of its policy to get rid of check-off in the public sector over the last few years, the DWP ended the system in May 2015. Mr Cavanagh and Ms Williams asked the High Court to declare that they had a contractual right to the arrangement. They also argued that the union had the right to enforce the term under the Contracts (Rights of Third Parties) Act 1999 which allows third parties to enforce a term if it 'purports to confer a benefit' on that person. For its part, the DWP argued that the term was not contractual or that, even if it was, it could be withdrawn by giving reasonable notice.
High Court decision
The High Court held that the check-off provisions on the intranet were intended to be binding as they affected an aspect of the pay/work bargain (central to the contract of employment); they were certain in scope and sufficiently detailed; the associated check-off procedure was detailed and clear; and the provisions were workable. The term 'you can choose' meant that the employee was free to choose between a number of options and, having done so, the employer would comply with that choice. The arrangement was therefore binding on the DWP and could not be removed either unilaterally or by giving notice.
Although the DWP tried to persuade the Court that the Contracts (Rights of Third Parties) Act 1999 did not 'purport to confer a benefit' on PCS, the judge rejected the argument. Holding that the whole point of the provision was to enable PCS members to get the DWP to pay money from their salaries directly to the union which would then belong to the union, it was obvious that that constituted a benefit to the PCS. It also rejected the argument that the provision breached an exception to the Act in that it was effectively being enforced 'against' the employees. Instead the Court held that an employee could stop the arrangement at any time as there was no term in the contract of employment that obliged them to pay money to the PCS.
The Court therefore granted the declaration to the claimants. There will be a further hearing to establish what damages are payable.
Following the Government's climb down over check-off in the Trade Union Bill this case underlines that union members check-off arrangements may be contractual and so cannot be unilaterally withdrawn. Unions are advised to check carefully the documents concerning any check-off arrangements and how they interact with members' contracts of employment so that they are ready to deal with any attempts by employers to withdraw these arrangements.