In January 2015, the Department for Environment, Food and Rural Affairs (DEFRA) ended their system of check-off for PCS union members’ subscriptions. In Crane and ors v Secretary of State for DEFRA, the High Court held that the right was contractual; that the department could not give reasonable notice that check-off was being withdrawn; and the union had the right to enforce the arrangements.
Thompsons were instructed by PCS to act on behalf of their members.
The three claimants, in this case, were civil servants employed by DEFRA who were also members of the civil service union, PCS. Up until the end of January 2015, their union subscriptions were collected by means of 'check-off' arrangements which meant that deductions were made directly from their salaries through the department’s payroll system and paid directly to the union. However, as part of a general government policy to get rid of check-off in the public sector, DEFRA took the decision to remove this facility in January 2015.
Three other government departments – Communities and Local Government; Work and Pensions (weekly LELR 476); and the Home Office – also removed the right to check-off around the same time the union brought complaints against those departments, arguing that it's members had a contractual right to the arrangement. The courts found in each case that the right to check-off was, indeed, contractual.
Issues for consideration
The High Court was asked in this case to consider whether the claimants had a contractual entitlement to check-off and if so, whether they had accepted a variation of their contracts to exclude it, or had waived the breach of contract when it was removed. It was also asked to consider whether PCS had an entitlement to bring a third-party claim against DEFRA under the Contracts (Rights of Third Parties) Act 1999 in respect of the subscriptions payable by check-off.
Decision of High Court
Having decided that the entitlement was contractual, the High Court held that there was no implied term giving DEFRA the right to give reasonable notice that check-off was being withdrawn. This was not a term “which is so obvious as to go without saying” as it was not necessary to ensure business efficacy. In any event, the department had not provided a reason - administrative, financial or otherwise – that would make it necessary for check-off to be terminated by giving notice.
The court also rejected the contention that the claimants had accepted the variation. The fact that they did not raise any objections to the variation themselves was not determinative of the issue as this was a case where those involved had the benefit of trade union membership in relation to a contractual benefit that was itself union-related. The court, therefore, concluded that it was “unsurprising that they would leave PCS to take the lead on registering any protest, which is what it did”.
As to the argument that the claimants had waived the breach of contract, the court held that the evidence provided by DEFRA fell far short of “establishing the kind of clear and unequivocal promise or representation not to act on one's strict legal rights that would be required before there could be a waiver”.
Finally, as the claimants had not accepted the variation of their contracts, the right to check-off remained. As such, PCS had the right under the Contracts (Rights of Third Parties) Act 1999 to enforce the right on its own behalf.
Inderjit Lota of Thompsons - who ran the case for PCS - commented: “This is the third time we have defeated the government on this issue – first against the DWP in 2018 and then again against the Home Office earlier this year.
“There are three more cases ongoing against other government departments and given the successful judgments so far, we are confident that we will win them all.
“It’s time the government admitted what it did in ending check-off was wrong, and stops wasting public funds trying to defend these cases."