Rail workers were found to have been underpaid in the Court of Appeal
The Court of Appeal has confirmed that employees of a North East England rail operator were underpaid for their shift allowances because the company wrongly changed their collective agreement, following a multi-year dispute involving the RMT, Unite the union and Thompsons Solicitors.
Under collectively agreed terms and conditions, shift allowances at Nexus were calculated with reference to basic salary, and were a percentage of basic pay.
The pay issue dates back to 2012, when the Tyne and Wear rail operator Nexus made an offer to consolidate certain bonuses for staff at Grades 1-3 into basic pay. That offer was balloted upon and accepted by the unions in December 2012.
A consequence of consolidating the bonus into basic salary was that when basic pay increased, shift allowances also had to be increased because they were calculated as a percentage of basic pay. Nexus did not pay shift allowances calculated as a percentage of the increased basic pay, however, and continued to pay at the pre-agreement rate. When the unions found out this was happening, a claim that this was an unlawful deduction from wages was submitted to Newcastle Employment Tribunal. The RMT members succeeded in the tribunal in 2015, and successfully defended appeals challenging that decision.
In 2019, Nexus asked the RMT and Unite to agree to change the collective agreement, claiming it had been entered into by mistake. The unions and Thompsons disagreed. Nexus commenced proceedings in the High Court to rectify the agreement, bringing the claim against the unions. The unions and Thompsons applied to strike the claim out for a number of reasons including that a court has no power to rectify a collective agreement. The High Court found in favour of Nexus in 2021 and refused to strike out the claim. The unions and Thompsons appealed that decision to the Court of Appeal.
The latest Court of Appeal decision revoked the 2021 ruling and dismissed Nexus’ claim. The Court of Appeal confirmed that a court has no power to rectify a collective agreement against a union as a collective agreement is not in itself legally binding. The correct course of action would have been for Nexus to apply to rectify the contract of employment of the individual. Nexus had chosen not to do that and the claim was dismissed.
Nexus could have avoided years of litigation had it just paid its staff members properly in the first place. Unfortunately, it is just one of far too many examples of stubborn employers trying every trick in the book to avoid responsibility and save some money.
Neil Guss, employment law specialist
Neil Guss, an employment law specialist at Thompsons Solicitors, said: “Nexus could have avoided years of litigation had it just paid its staff members properly in the first place. Unfortunately, it is just one of far too many examples of stubborn employers trying every trick in the book to avoid responsibility and save some money.
“Hopefully this ruling finally puts an end to this over long saga and, most importantly will see the members finally get the compensation that they have been owed for a decade.”