Constructive dismissal and collective agreements

EAT decision

The EAT dismissed the appeal, finding that whilst collectively agreed terms may be incorporated into individual employment contracts (most commonly, terms which regulate matters such as pay, holiday entitlement and hours of work), Tribunals must consider whether such terms are apt for incorporation.

Terms that are truly collective in nature (such as agreements as to redundancy procedures) cannot generate enforceable individual rights. In this case, the term’s vagueness, and lack of specificity as to when it could be invoked by employees, clearly demonstrated that it was not the intention of the clause to confer individual rights, but rather, was a broad statement of agreement as to what was expected to happen in a surplus situation.

The EAT further found that there was no breach of the implied term of mutual trust and confidence, as the respondent both acted in good faith and had reasonable and justifiable grounds for advertising the post. Therefore, there was no breach of contract, either explicit or implied, and the claimant’s appeal was dismissed.