S Shah and Others v Bank of Baroda UK Ltd: 3306622/2024 and Others S Shah and Others v Bank of Baroda UK Ltd: 3306622/2024 and Others
EMPLOYMENT TRIBUNALS
Case No 3306622/2024
Between
S Shah and OthersClaimantBank of Baroda UK LtdRespondent
Before
Employment Judge Isabel ManleyDate 18 July 2026
JUDGMENT
[1]The Recognition and Procedure agreement dated July 2023 (RPA) and Employment Security Agreement (ESA) dated November 1994 (ESA) were expressly incorporated into the claimants’ contracts of employment.[2]If there was no express incorporation, the ESA was impliedly incorporated into the claimants’ contracts of employment by reason of custom and practice.[3]The claimants were entitled to be paid the amount specified at paragraph 9 b) of ESA by way of enhanced redundancy pay, which was 4 times each year of service.[4]The matter will be listed for a case management preliminary hearing to discuss how to progress the claims.
REASONS
[1]This was a matter which was considered at a preliminary hearing on 24 November 2025 where all the claims were consolidated. In the summary of that preliminary hearing, a list of issues was included. There is a slight difference between those issues and those which were then agreed between the parties in January 2026 and handed in at the beginning of the hearing. It is sensible to include that now (save for the part that relates to remedy) as it gives a reasonable summary of the claims before the tribunal: “Introduction/background[1]The claimants are ex-employees of the respondent and were dismissed by reason of redundancy in 2024/2025 – Shah, 29 March 2024; Kishor, 30 April 2024; Goel, 30 April 2024; and Khatri, 31 March 2025.[2]The claimants all present the same claim; that the respondent has breached their contracts of employment by virtue of not paying enhanced redundancy pay at a particular level, namely at a level commensurate with an Employment Security Agreement dated 11 November 1994 (the 1994 Agreement). List of issues[3]Was the 1994 Agreement implied as a term of the claimants’ contracts of employment by way of custom and practice, such that in the event of a redundancy, the claimants would be entitled to an enhanced redundancy payment commensurate with it? The claimants will rely on the following:3.1 That 28 employees left the respondent under a voluntary redundancy scheme in 1999/2000 and were paid an enhanced redundancy payment commensurate with the terms of the 1994 Agreement.3.2 Any other previous custom or practice by the respondent to pay enhanced redundancy payments to staff (to be determined at disclosure).[4]Did the 1994 Agreement form part of the claimants’ contracts of employment at the time of the TUPE transfer from “Bank of Baroda in the UK” to the respondent, on or around 24 September 2018, such that it transferred to the respondent as part of the contracts of employment?[5]In the alternative, did the 1994 Agreement form part of the express terms of the claimants’ contracts of employment? The claimants will rely upon the following:5.1 That the Collective Agreement dated 22 July 1993 (and/or relevant parts of it - relating to enhanced redundancy) between the respondent and the Staff Association of the Bank of Baroda is expressly incorporated into the contracts of employment of the claimants (via express written agreement) and, by virtue of this, the 1994 Agreement also forms part of the employment contract; and5.2 That the 1994 Agreement was appended to a Personnel Policy dated November 2018 (or other staff handbooks/personal policies to be determined upon disclosure) which was approved by the respondent on 18 December 2018 (or any other date, to be determined upon disclosure).[6]Subject to the above when each claimant was made redundant by the respondent, and received an enhanced redundancy payment but one which was not commensurate with the enhanced terms of the 1994 Agreement, did the respondent breach the claimants’ contracts of employment?”[7]The amounts due to the claimants if they succeed, is between £18,000 and £25,000 for each of the four claimants.[8]Any question of whether TUPE has any impact on the issues seems to have disappeared so I am concentrating in this case on more direct question which is, in summary;- whether the claimants can rely on the 1994 Agreement (referred to as ESA later in this judgment) which provided, importantly, for a calculation of redundancy pay based on four weeks per year of service (rather than the statutory period which is either a week or one and a half weeks depending on the age of the employee).[9]This is a claim for breach of contract so I have to consider whether, when the claimants were paid their redundancy pay in 2024 and 2025 at an enhanced rate but less than that set out in ESA, there was a breach of contract. In order to decide that point, I must, of course, decide what the contractual arrangements were. As can be seen from the list of issues, the claimants argue that there was express incorporation of the terms set out in ESA, or, in the alternative, they argue custom and practice means it has been impliedly incorporated. Hearing[10]This was a case which primarily turned on a number of documents and some relatively limited oral evidence. The matter had been listed for four days and I was sent a number of documents before the hearing started. I had witness statements for the four claimants all of which were relatively short and noncontentious. The claimants were asked no questions by way of cross examination by Ms Moss for the respondent.[11]There was only one witness statement for the respondent and that was from Mr Aggarwal. Mr Aggarwal was the Deputy Chief Executive Officer of the respondent between October 2020 and September 2024. He was responsible for the redundancy arrangements for the respondent but also gave some evidence about what he had noticed from the documents before us. He did not have direct knowledge about anything before his appointment in 2020.[12]I also had a bundle of documents; this extended to 813 pages although it is true to say that not all of those needed to be considered but there were a significant number that were relevant and some of those were relatively detailed. To make it easier to understand the judgment, the central two documents, that is the Recognition and Procedure Agreement of 22 July 1993 and the Employment Security Agreement of 11 November 1994, are attached to this judgment as appendices.[13]All four claimants started working for the respondent and its predecessor on fixed-term contracts and I have seen those documents, although they were not particularly relevant for my determination. After that, they were then provided with very similar documents entitled “Employment letter and terms and conditions of employment” at the start of their “permanent” employment. Extracts of these will be referred to.[14]There were also a number of communications between the respondent, a business based in the UK, and its head office based in India, as well as a number of documents headed “Personnel Policy.”[15]There were a number of Settlement Agreements involving other employees which I did not look at in any detail and then a number of communications between Mr Aggarwal and the trade union around this particular redundancy. The documents headed “Personnel Policy” were dated between 2015 and 2019. Again, some extracts from those will be contained in the judgment.[16]The claimants gave their evidence first, although it was limited to them confirming that they were their statements and that they were true. Mr Aggarwal then gave his evidence which took some time and took us well into the second day of the hearing.[17]Some time was allowed before the representatives made submissions. I had already received a detailed skeleton argument from the claimants’ solicitor, Mr Street, which extended to 16 pages and 98 paragraphs and he had forwarded a bundle of authorities with extracts from them. There were 27 authorities on his list. He made further submissions in a document of 17 pages and 124 paragraphs and both Ms Moss and Mr Street made relatively detailed oral submissions. Ms Moss, for the respondent, also presented a detailed written document that extends to 12 pages and 28 paragraphs.[18]Given that this was a very relatively complex case, and that there were about 30 cases which were referred to, as well as needing to consider, in detail, the wording in some of the documents in the bundle, I decided to reserve judgment. We agreed that we would need, if the claimants succeeded, a short preliminary hearing to take matters forward. Facts[19]In this case there are not many facts which are seriously in dispute. The questions which arise relate to the interpretation of a series of documents and there was not a great deal of oral evidence that was of assistance with respect to that, although I will come to where Mr Aggarwal’s evidence might assist later.[20]A number of matters predate the claimants’ employment but I will first set out the dates for those for completeness;20.1 Ms Shah started working under a fixed term contract with the respondent’s predecessor on 13 June 2016, was given a permanent contract on 1 October 2018 and was given notice of termination of employment on 9 February 2024, expiring on 29 March 2024.20.2 Ms Goel started working with the predecessor of the respondent on a fixed term contract on 22 June 2015 and was given a permanent contract on 24 April 2018. She was given notice of termination of employment on 12 March 2024, expiring on 30 April 2024.20.3 Mr Kishor was offered a fixed term contract by the respondent’s predecessor on 23 April 2018, began working under a permanent contract on 1 July 2020, and was given notice of termination on 31 January 2024, expiring on 30 April 2024.20.4 Ms Khatri started working on a fixed term contract with the respondent’s predecessor on 15 February 2016, was given a permanent contract on 24 April 2018, and she was given notice of termination of employment on 12 March 2024, which eventually expired on 31 March 2025.[21]The respondent is part of a group of banking organisations based primarily in India. It was formerly known as the Bank of Baroda in the UK but became incorporated as a limited company in the UK in June 2017. The claimants were all transferred to the new entity.[22]Between 1993 and 2015 the trade union was the Staff Association of Bank of Baroda and that transferred to Unite the Union in 2015.[23]The Staff Association was an independent trade union. One of the important documents for this hearing was the Recognition and Procedure Agreement of 22 July 1993 (RPA) which was made between the Bank of Baroda in the UK and the Staff Association of the Bank of Baroda (European Operations). It appeared in the bundle between pages 228 and 235 and was considered in some detail at the hearing.[24]In the claimants’ permanent contracts of employment there is a specific reference to this document named as a “Collective Agreement” at paragraph 22.1 which reads: “The Collective Agreement dated 22 July 1993 between the Bank and the Staff Association Bank of Baroda (UK Region) would apply to you as an employee of the Bank.” The Recognition and Procedure Agreement (RPA)[25]The RPA provides some of the background to it being agreed. The first section deals with the intent in that both parties: “Affirm that they have a common objective in maintaining and improving the efficiency of the bank and its employees and in the promotion and maintenance of good industrial relations.”[26]The RPA goes on to recognise the Staff Association as the “sole negotiating body on behalf of its UK based permanent staff.” It says that the Agreement is “solemnly binding in honour but is not intended to give rise to any legal obligations.” It is accepted by the respondent this “binding in honour” section relates to the parties to the contract rather than the fact that it would prevent any individual employee relying on those parts of it which are apt to be incorporated and have been incorporated into contracts of employment.[27]Under the heading “General Principles” are various such principles between (a) to (g). It explains what the Staff Association representatives are; confirms the right of the staff to belong to the Staff Association and that no one should be compelled to become a member of the Association.[28]Under (d), the Staff Association recognised the: “sole right of the management of the Bank to conduct its business and manage its operations such a manner as it thinks fit. The Staff Association undertakes not to interfere with the normal functions and activities of management, subject to its rights under this Agreement. Without prejudice to the above position in particular the staff Association recognises the right of the Bank; i) - ii)- iii) To terminate the services of, or dismiss, individual employees in accordance with the terms of the individual contract of service entered into by both parties to the contract – subject to the rights of the staff under this Agreement.”[29]There are then sections that deal with grievances and the Bank agreeing to consult the Staff Association before introducing significant changes to the terms and conditions of employment. Finally, there is agreement not to institute any form of industrial action until procedures have been exhausted.[30]There is then a section on administrative arrangements under item 3. A section on negotiating grievance and consultative procedures under item 4. And, finally, under item 5, provisions for alteration by mutual agreement and a termination clause stating three months’ notice can be given to terminate. It is agreed by the parties at this hearing that there has been neither alterations nor termination under the terms of the RPA.[31]There is then set out in Appendix A, a number of matters between (a) and (h). At (f) the following is listed: “Principles of redundancy and the arrangements resulting therefrom.”[32]Appendix B sets out what might be thought to be a grievance procedure. Appendix C has a disciplinary procedure. Appendix D includes the arbitration procedure. Employment Security Agreement (ESA)[33]The next important document is the ESA. This is dated 11 November 1994 but I am asked to consider matters that preceded that as important background information.[34]A letter from the General Secretary of the Staff Association in August 1994 to the Chairman of the Bank (page 237) raises the issue of the signing of the Agreement which is said to have been “Inordinately delayed”. It goes on to mention that members were anxious and concerned and refers to them asking for “fair treatment which is exactly in line with the other Indian Banks including those which do not have a recognised union in the UK.”[35]The next statement is about referring the matters to ACAS and that they asked for time to resolve the issue but nothing has so far been achieved. The letter warns that members were united “unanimously in their resolve to resort to appropriate industrial action after seven days from the dates of this letter.”[36]The reply to that dated 22 September 1994 and appears at page 240. It states that the Bank has; “No reservations on entering into Employment Security Agreement with Staff Association on the lines on which it existed with BIFU provided voluntary early retirement scheme can also be negotiated and finalised simultaneously.”[37]It appeared that the agreement was that, if a voluntary early retirement scheme could be agreed, then the ESA could be signed.[38]After correspondence on the matter, it appears that there was an early retirement scheme and the ESA was signed, apparently after a threat of industrial action.[39]On 11 November 1994, the General Secretary of the Staff Association sent information to the members telling them that the ESA had been signed. (page 254)[40]Again, the ESA is a detailed document and appears as an appendix to this judgment. It is worth highlighting some of the clauses that we looked at in some detail during the hearing. It is not in dispute that there is no express reference directly to this document in the claimant’s contracts of employment. It is agreed that the ESA would cover the claimants under its scope provisions at paragraph 2 where it is said that it applies to “all staff employed in the Bank of Baroda in the UK up to and including Officers/Managers excluding those staff engaged on special projects”.[41]General principles are set out at paragraph 3, and provision of information at paragraph 4. There are some definitions at paragraph 5 and it includes under (c): “Redundancy means dismissal wholly or mainly attributable to the circumstances defined in section 81(2) and (3) of the Employment Protection (Consolidation) Act 1978 or any amendment thereof.”[42]There is then a heading about minimising or avoiding redundancy at clause 6. It sets out a number of steps which could be taken. Paragraph 6(c) suggests a number of ways of avoiding redundancy and the last sentence reads: “If the contract is terminated or the employee does not accept the offer of alternative employment then the redundancy payment in paragraph 9 will apply.”[43]Paragraph 7 then sets out details of redundancy scheme including consultation with the Staff Association, mentioning the measures in paragraph 6 to avoid redundancy. And at (e) says: “All employees covered by this Agreement between the Bank and the Staff Association are entitled to the benefits under this potential redundancy scheme regardless of length of service, age or hours worked per week.”[44]At (f) it says: “The period of notice of redundancy to the individual should be a minimum of two calendar months or such longer periods as may be required by law.”[45]Although we did not look at this in any detail during the hearing, Ms Moss did refer to paragraph 8 in her submissions. This reads: “Redundancy invitation to apply. Depending on the circumstances, including where staff cannot be reemployed, the Bank will consider inviting applications to staff to leave before the normal retirement age. The payment and terms, whether in circumstances of redundancy or not shall be those detailed in paragraph 9.”[46]Paragraph 9 is one which we spent some time looking at. It can be seen that at 9(a) there is a definition for redundancy pay remuneration to include “Basic salary, annual bonus payment, territory allowance, other allowances in payment, contractual overtime …”[47]Sub paragraph (b) reads as follows: “The amount of the redundancy payment will be 4 weeks remuneration (as defined in paragraph 9(a)) for each completed year of service, subject to a maximum of 78 weeks. This payment includes the individual’s statutory entitlement, if any, under the terms of the Employment Protection (Consolidation) Act 1978 as amended.”[48]Further clauses deal with an individual wishing to terminate prior to expiry of the notice or, indeed, people leaving before notice is given. Further details deal with housing loans and appeals procedures which do not appear to be relevant. Various employee exits between 1997 and 2015[49]I heard some evidence about what had occurred historically when the respondent bank introduced arrangements to reduce (or replace) its staff. They are as follows: March 1997[50]This was a Voluntary Early Retirement Scheme which, as I understand it, led to between three and six departures. No one could give direct evidence about what happened during this exercise but we extracted information from various documents. A document dated 6 March 1997 offers a “Voluntary Early Retirement Scheme for members of local staff working at UK branches offices.” Staff members had to be over 50 years of age and had to make a request in writing. It would be at the bank’s discretion whether to accept the application. The amount payable would be “The lower of A and B given below.” A was 70 per cent of likely aggregate basic pay payable from the date of voluntary retirement to the date of normal retirement for concerned staff member. B was a different calculation (page 260).[51]By a later letter sent from the UK territory to the Indian Headquarters in August 1999, this earlier scheme was described as being one of two schemes for achieving reductions in staff. One was this Voluntary Early Retirement Scheme of 1997 with the lump sums A and B as described.[52]The other, at page 277, states as follows: “2. Redundancies under the Employment Security Agreement signed with the Staff Association in 1994:- Under the Agreement which is signed by both management and the Staff Association, if a redundancy situation exists, the bank will consider inviting applications from staff to leave before the normal retirement age before resulting to compulsory redundancies. The amount of redundancy payment under the Agreement is 4 weeks remuneration (ie basic salary, annual bonus payment, territorial allowances and other allowances etc) for each completed year of service subject to maximum of 78 weeks.”[53]An even later document at pages 318 and 319 of the bundle, again from the UK bank to the Indian head office in 2015, describes this exercise (in 1997) with the same wording. It says that the “Year 1997 when the salient features were as per the Security Agreement with Staff Association in 1994 which inter alia reads as under…..” It then quotes the terms as in the paragraph above. This may not be an accurate description of the 1997 process. In any event, I have no clear evidence on what was paid under that Voluntary Early Retirement Scheme. Whether it was by reference to the A and B as set out in the offer or something different. November 1999[54]In June 1999 the Staff Association were told that management were of the view that a redundancy situation “still exists in our bank in the UK” and that they intended to recommend an improvement “in the compensation package for volunteers to a maximum of 78 weeks as provided in the Employment Security Agreement.”[55]The circular sent by the Staff Association to members included a number of matters and, in particular, under item 6 (page 268) said: “Improvement in EVR. The management has agreed to improve the existing EVR term with a maximum of 78 weeks gross pay and allowances similar to that of Employment Security Agreement plus a maximum of 12 weeks cash in lieu of the notice period to encourage more volunteers to avail the same.”[56]A later document dated 15 November 1999 by the respondent’s predecessor headed “Inviting applications for voluntary redundancy” (page 279), refers to “continuous consultations/negotiations with the Staff Association to overcome a redundancy situation in our bank”. It states: “In this connection, we invite reference to the Employment Security Agreement signed with the Staff Association in 1994, wherein there is a provision that if a redundancy situation continues to exist (as is the case at present) the bank will consider inviting applications from staff members to leave before the retirement age before resorting to compulsory redundancies. The amount of redundancy payment under the said Agreement is 4 weeks remuneration for each completed year of service subject to a maximum of 78 weeks with notice of two calendar months (8 weeks).” It goes on: “We are now pleased to inform that as per our recommendation, our higher authorities have authorised us to consider allowing increase in the notice period from 8 weeks to 12 weeks. They have also authorised us to consider allowing payment in lieu of notice period.”[57]That document invites applications for voluntary redundancy and states (page 280) “The redundancy payment will be as per existing Employment Security Agreement and it will be subject to statutory reductions”. It tells members how to apply. As I understand the position, around 27 people were finally paid under the scheme and accepted voluntary redundancy. What is said by the respondent is that there was a difference from the ESA with respect to notice. Employees were expected to work notice under ESA whereas, in this case, it was paid in lieu of notice.[58]There was a further suggestion of a scheme in April of 2012. This was again a Voluntary Early Retirement scheme and it was approved with the payment of four weeks salary to a maximum of 88 weeks, a notice period of 12 weeks or pay in lieu of notice. There was a requirement that volunteers had either reached 50 years old or had completed a minimum of 20 years’ service. This was never implemented.[59]Again, documents indicate that in 2015 there were suggestions made by the UK operation to the head office in India about what was called a “Voluntary Redundancy Scheme” and then referred to as “Voluntary Early Retirement” in 2012. This appeared to be connected to the abolition of the national retirement age of 65 in the UK. That letter suggested that a payment of 2.75 weeks of pay as against the earlier payment of 5 weeks (page 324) but required staff to have had a minimum service of 25 years. It was proposed that no age requirement should be mentioned to rule out possibilities of age discrimination. It appears that around 38 people may have made settlement agreements with respect to this exercise around 2015. This was offered to staff and to union representatives in late 2015.[60]In 2021 there was another proposed scheme for voluntary exists. The costings contained in a letter to the head office in India, appear to be on the basis of 2.75 weeks per year and there was also reference to the ESA at this time. This was called a Voluntary Early Retirement Scheme but also sometimes made reference to redundancy. The reference to the ESA is at page 388 and reads as follows: “We intend to invite applications from the staff members for voluntary redundancies under provisions of an Employment Security Agreement.”[61]The calculations do not appear to have been based on those contained within the ESA in that there was 2.75 weeks’ pay proposed and various conditions if they had completed 30 years’ service or more. I have no information as to whether anyone did exit on the basis of that arrangement. 2023 and onwards[62]This is the point at which the redundancies which affected the claimants began to start. A decision taken to close all the branches of the respondent in the UK. This was not to be a voluntary process and was to affect a little over 100 people. It was what Mr Aggarwal referred to as a “solvent wind down.” As indicated above, all the present claimants had started employment and were employed at the date of this redundancy exercise being commenced.[63]The documents appear to start with a “formal collective consultation meeting” on 1 August 2023. The attendees were Mr Aggarwal, Mr Mehta, who I understand to be in HR, and Mr Saunders, who was there from Unite the Union, which had taken over from the Staff Association as the recognised trade union in 2015. There were also three other people who appear to be employees. They discussed the wind down of the bank but, at the outset, seemed to suggest that the exercise could go on for some months if not years. There were discussions within that meeting about what sort of redundancy package might be available but there is no mention in that meeting about the ESA.[64]The second formal collective consultation meeting was held on 10 August with more discussions about the redundancy package. What was being offered was for the statutory cap not to be applied but that otherwise the package would reflect the statutory scheme. At page 395 Mr Aggarwal mentions that the Staff Association representative “wanted one month for each year of service and PILON to be paid to all staff being made redundant.” He went on to say that they would not be offering that. The union continued to negotiate but by email of 15 August 2023 (page 401) Mr Saunders drew attention to the Employment Security Agreement at items 9(a),(b),(c) and (d). He stated that they would be carrying out an indicative ballot with respect to industrial action.[65]It appears from the documents that, by October, the Unite the Union representative, Mr Saunders, was “awaiting directions from Unite the Union Legal Department on strike and lately waiting on solicitor response and the legality of the Employment Security Agreement” (page 441).[66]Mr Aggarwal’s evidence was that Mr Saunders, at some point, told him that the advice had been received and that it was to the effect that there were no prospect of the union succeeding in an argument based on the ESA. Mr Aggawal’s evidence was that the union accepted the offer although I can see no document to that effect.[67]In early 2024, the claimants in this case began to receive notices of termination by reason of redundancy and their employment did terminate on the dates above. These claimants referred the matter to ACAS on different dates during May etc and subsequently brought these claims. Ms Khatri’s employment terminated rather later and, similarly, referred the matter to ACAS and brought the claim. Company documents which might shed some light on the issues to be determined[68]There was some confusion during the tribunal hearing over other documents which the respondent says are likely to have been on the intranet. In the bundle of documents, provided during disclosure, a number of personnel policies appear. These start at pages 445 of the bundle and go through to 766. There are five policies dated:- August 2015, August 2016, April 2027, November 2018, and June 2019. These were the documents, it seemed at first, which were referred to in the letter of appointment by the phrase “Staff Handbook.” Indeed, Mr Aggarwal’s evidence is that is what he believed that was the case. This could be relevant because there was reference to the Staff Handbook in the letters of appointment at paragraphs 15 and 16 with respect to disciplinary and grievance procedures. A further reference also appears in those letters of appointment at paragraph 19.5 which reads “The terms and conditions herein will prevail over the Staff Handbook”. So, initially, we were proceeding on the basis of the personnel policies being the Staff Handbook referred to.[69]However, on the morning of the second day, the respondent told us that there were also documents called “Staff Handbooks” and copies of these were provided. They appear between pages 814-909 of the bundle and were made up of 3 versions, one dated October 2013, one undated but was either 2017 or 2018 and one dated October 2019. It was not clear from the evidence before me where these documents could be found at the respondent. It seems likely that the ones that were dated recently were on the intranet. In any event, Mr Aggarwal had no knowledge of these Staff Handbooks. I had no other witness evidence from either the respondent or the claimants about those documents.[70]Turning back then to the Personnel Policy documents. I was taken to page 611 of the bundle which is the Personnel Policy of 2017. There was some cross examination of Mr Aggarwal in relation to which, if any, of the items contained within the Personnel Policy might be said to be contractual in nature. His answer was to the effect that, for example, in the index at 622, the first relates to “Objectives”, the second to “Recruitment Policy”, and third is an item headed “Conditions of Employment”. Mr Aggarwal’s evidence was that this third item was one would include those things which are likely to be contractual.[71]There are then a number of matters about a Compensation Policy – Pay and Benefits, going through a number of allowances, reimbursements, and so on. There is then an item on leave which goes through the various sorts of leave up to a section which is headed at number 4, Career Development. Mr Aggarwal’s evidence is that those other matters, save for those under the section “Conditions of Employment”, would not be contractual in nature.[72]What might be of significance in the Personnel Policies, is what appears in the Index as being Contents at item 15. There is reference to an agreement between the Bank and Staff Association of 27 March 2008 (which I was not referred to). Then there is reference at annexure 11 to the Recognition and Procedure Agreement – (the RPA) and annexure 111 to the Employment Security Agreement – (the ESA). It was accepted by Mr Aggarwal that that is likely to mean that those documents would appear at the end of the personnel policies, although it was not included in those that were in the bundle. The document does go on for many pages giving many details about pay, leave, sick leave, arrangements for pay during various sorts of leave, items about loans and various other matters until we see the grievance procedure over some pages and then the disciplinary procedure. There are sections called “Work Environment; Equal Opportunities Policy” and various other things which are akin to policies. There is then a section on what is called “Exit Policy” that appears, for example in the 2018 personnel policy at page 664 and provides for various notice periods by employee and employer.[73]At page 665 appears a section entitled “Miscellaneous”. This starts with a sub heading under “Union Representation” and then sets out the recognition of the Staff Association Bank of Baroda (UK Region) which it was at the time (although probably it was Unite the Union at this time). It specifically references the: “Joint agreement with the Staff Association has been made as under: 1. Recognition of Procedure Agreement dated 22 July 1993 containing issues relating to administrative arrangements negotiating grievances and consultative procedures in respect of collective grievances, collective claims disciplinary procedures and arbitration procedures. Details of the Agreement are as per Annexure 11 enclosed. 2. Matters, which are not strictly as per terms and conditions of employment may be discussed with the Staff Association but the Bank retains the right to make its decisions. 3. Employment Security Agreement dated 11 November 1994 details are set out in the enclosed Annexure 111.” Other matters appear not to be relevant to my determination.[74]There follows a Code of Ethics, details on confidential information and so on. Mr Aggarwal was asked about these parts of the personnel policies and agreed that employees would be the stakeholders referred to but said he could not comment on what an employee reading the document would understand to be their redundancy pay entitlement. I believe the paragraphs above contain details of the facts which are relevant for my determination. Law and submissions[75]This is a matter which involved relatively substantial written and oral argument with respect to the central question of incorporation into the claimants’ individual contracts of employment. Mr Street, for the claimants, had produced a lengthy skeleton argument which had reference to a number of cases and had footnotes.[76]Ms Moss, for the respondent, produced a skeleton argument at the end of the hearing and referenced 3 further cases as well as relying on some of those cited by Mr Street. Both representatives made relatively lengthy oral submissions. I will do my best to summarise them later.[77]This is claim for breach of contract. I must therefore decide, where there is a dispute, what the relevant term of the claimants’ contract was. The first question for me was whether the 1994 ESA formed part of the claimants’ contracts of employments by express incorporation. Although this appears later in the list of issues than the custom and practice argument, it seems to be most sensible to outline the legal principles for that aspect first.[78]The initial consideration is to assess what the contracts of employment provide, in particular, on enhanced redundancy pay, which is the primary question before me. The starting point must be to consider which documents I need to look at to determine what made up the claimant’s contracts of employment.[79]There seems to be no dispute between the parties that I can look at one of the claimant’s documents in relation to this matter and that is because they all had the same, or access to, the same documents. In particular, I must consider what if anything, is said about enhanced redundancy pay. In this case, the relevant documents are the letters of appointment which are entitled “Appointment letter and terms and conditions of employment;” the Recognition and Procedure Agreement (RPA); the Employment Security Agreement (ESA) and the Personnel Policies. It may also be important to look at communications between the respondent and its employees at various points in the history as set out in the facts.[80]This is a case where the argument is that there was a collective agreement, which included the ESA, which was incorporated into the contracts of employment. That would be an express incorporation. In this case I am asked to decide that the part of the ESA which provides for enhanced redundancy payment at paragraph 9(b) is incorporated. The burden of proving that it is incorporated is on the claimants.[81]Several leading cases assist me in determining this issue and I consider the guidance contained within them, in the particular circumstances of this case and the facts as I have found above. One such case is Marley v Forward Trust Group Limited [1986] IRLR 369. This is a relatively short judgment of the Court of Appeal and contains this section from paragraph 11 by way of background: “There has been a long judicial history to the problem of incorporation of the terms of Collective Agreements into contracts of personal service. The judicial history goes back to the days when there were arguments as to whether Collective Agreements were enforceable in law.”[82]There is then some history referred to with respect to the Trade Union and Labour Relations Act 1974 and this statement:- “… The courts on a number of occasions have had to consider whether when there is an unenforceable Collective Agreement incorporated into a contract of personal service, the terms of it, or some of them, can be incorporated into that contract of personal service.”[83]In Marley, specific reference is made to Robertson v British Gas Corporation [1983] IRLR 302 which found: “That such terms can be incorporated into contracts of personal service and, when they are so incorporated, they are enforceable.”[84]In brief, it is not disputed between the parties that the Collective Agreement between the Staff Association (and later Unite the Union) and the respondent is not enforceable as between the union and the employer but might be where parts of it are incorporated into individual contracts of employment. It might be worth saying here that references to the RPA being “binding in honour only and not intended to give rise to legal obligations” as appears in the RPA in this case does not really affect this matter as it has to be considered in terms of incorporation into individual contracts.[85]Where the individual contracts or letters of appointment do not specifically refer to a clause such as the enhanced redundancy pay clause, I would need to consider what other statements made or clauses in other documents would be “apt” for incorporation. This becomes particularly relevant when I look at the personnel policies and may be relevant for the custom and practice point (See Keeley v Fosroc International Limited [2006] IRLR 961).[86]As stated in Alexander v Standard Telephones and Cables Ltd No.(2) [1991] IRLR 286 (see page 58 of the bundle of authorities) “The relevant contract is that between the individual employee and his employer; it is the contractual intention of those parties which must be ascertained. In so far as that intention is to be found in a written document, that document must be construed on ordinary contractual principles. In so far as there is no such document or that document is not complete or conclusive, their contractual intention has to be ascertained by inference from the other available material including Collective Agreements. The fact that another document is not itself contractual does not prevent it from being incorporated into the contract if that intention is shown as between the employer and individual employee. Where a document is expressly incorporated by general words it is still necessary to consider, in conjunction with the words of incorporation, whether any particular part of that document is apt to be a term of the contract; if it is inapt, the correct construction of the contract may be that it is not a term of the contract. Where it is not a case of express incorporation, but a matter of inferring the contractual intent, the character of the document and the relevant part of it and whether it is apt to form part of the individual contract is central to the decision whether or not the inference should be drawn.”[87]One of the questions is in accordance with Chartbrook Limited v Persimmon Homes Limited [2009] UJHL 38 the question is whether a reasonable person, having all the background knowledge available to the parties, would have understood the language in the contract to be conferring benefit of redundancy payments.[88]Kaur v MG Rover Group Limited [2005] IRLR 40 gives further guidance with respect to matters which would not be apt for incorporation. There the question was whether a statement to the effect that “there will be no compulsory redundancy” was apt for incorporation and, in that case, it was found not to be as it was found to be “an aspiration rather than a binding contractual term”.[89]Keeley (above) has helpful guidance with respect to this. The headnote states: “Provision for redundancy, notwithstanding statutory entitlement, is now a widely accepted feature of an employee’s remuneration package and, as such, is particularly apt for incorporation by reference.”[90]Lord Justice Auld, giving the judgment in the Court of Appeal, makes several statements which may seem relevant in this case, particularly in paragraphs 33 and 34 with respect to the wording in a staff handbook and at paragraph 35:- “If put in clear terms of entitlement, it may have a life of its own, not to be snubbed out by context immediate or distant in the document of which it forms part. Where the wording of the provision read on its own, is clearly of a contractual nature and not contradicted by any of the provision in the documentary material constituting the contract, context is not all.”[91]And at paragraph 41:- “The fact that the enhanced redundancy payment provision is incorporated in the statement of employment terms, the primary contractual document, by reference rather than set out in it, and that the formula may change from time to time are not arguments against contractual effect. They are in favour of it, where the machinery, as here, by express reference in the staff handbook to ‘an enhanced redundancy payment’ identifies and enables recourse to the formula in force at the time when the need to calculate such payment arises”.[92]What is of considerable importance in a case such as this where a number of documents have to be considered, some of them perhaps inconsistent with others, is the language used. That is likely to assist me in considering what the intentions of the parties were with respect to the individual contracts of employment.[93]The case of Park Cakes Ltd v Shumba [2013] EWCA Civ 974 also contains useful guidance. Here the Court of Appeal suggested various factors that should be taken into account. First, there was reference to Albion Automotive Ltd v Walker [2002] EWCA Civ 946, which found that the enhanced redundancy terms had become part of those claimants’ contracts of employment by custom and practice. At paragraph 30, counsel for the employees suggested a number of relevant factors; and then at paragraph 36 these were suggested by Underhill LJ. He says that he does: “…not propose to attempt a comprehensive list of the circumstances which may be relevant, but in a case concerning enhanced redundancy benefits they will typically include the following –(a) On how many occasions and over how long a period the benefits in question have been paid. Obviously, but subject to the other considerations identified below, the more often the enhanced benefits have been paid, and the longer the period over which they have been paid, the more likely it is that employees will reasonably understand then to be paid as of right.(b) Whether the benefits are always the same. If, while an employer may invariably make enhanced redundancy payments, he nevertheless varies the amounts or the terms of payment, that is inconsistent with an acknowledgment of legal obligation; if there is a leal right it must in principle be certain. Of course, a late departure from a practice which has already become contractual cannot affect legal rights (see Solectron) but any inconsistency during the period relied on as establishing the custom is likely to be fatal. It is, however, possible, that in a particular case the evidence may show that the employer has bound himself to a minimum level of benefit even though he has from time to time paid more on a discretionary basis.(c) The extent to which the enhanced benefits are publicised generally. Where the availability of enhanced redundancy benefits is published to the workforce generally, that will tend to convey that they are paid as a matter of obligation, though I am not to be taken as saying that is conclusive, and much will depend on the circumstances and on how the employer expresses himself. It should also be borne in mind that “publication” may take many forms. In some circumstances publication to a trade union, or perhaps to a large group of employees, may constitute publication to the workforce as a whole. Employment tribunals should be able to judge whether, as a matter of industrial reality, the employer has conducted himself so as to create, in Leveson L.J’s words “widespread knowledge and understanding” on the part of employees that they are legally entitled to the enhanced benefits.(d) How the terms are described. If an employer clearly and consistently describes his enhanced redundancy terms in language that makes clear that they are offered as a matter of discretion – eg by describing them as “ex gratia” – it is hard to see how the employees or their representatives could reasonably understand them to be contractual, however regularly they may be paid. A statement that the payments are made as a matter of “policy” may, though again much depends on the context, point in the same direction. Conversely the language of “entitlement” points to legal obligation.(e) What is said in the express contract. As a matter of ordinary contractual principles, no term should be implied, whether by custom or otherwise, which is inconsistent with the express term of the contract, at last unless an intention to vary can be understood.(f) Equivocalness. The burden of establishing that a practice has become contractual in on the employee, and he will not be able to discharge it if the employer’s practice has been pursued as a matter of discretion rather than a legal obligation. That is the point made by Elias J at para 22 in Solectron. Submissions[94]As indicated, the written and oral submissions were relatively lengthy and were of assistance to me as I deliberated. I cannot include everything that was said within this judgment but I will do my best to summarise the main points.[95]Ms Moss, for the respondent, in written submissions, said that the claimant’s arguments are misconceived and reminded me of guidance in Alexander and Chartbrook (above). She pointed out that there is no mention of ESA in the claimants’ letters of appointment and there is no evidence they were aware of it. Mention of the RPA is not sufficient as it does not include a reference to redundancy pay. She submitted that the guidance in Robertson does not assist the claimants as, in that case, the bonus scheme was mentioned in the letter of appointment. Ms Moss also submitted that there can be no express incorporation through the personnel policies, not least because it is the staff handbook that is referred to in the letter of appointment. She submitted that the personnel policy is not contractual and the reference to the ESA is provided as an example of an agreement between the bank and the staff association. She does not agree that incorporation by custom and practice can apply here, citing Sagar v Ridehalgh [1931] 1Ch 310 which states the custom must be “reasonable, notorious and certain” and that it must be a general rule rather than the exception (Ropner & Co v Stoate Hosegood & Co [1905] 92 LT 328). She cited, in particular, the claimants’ lack of knowledge of either of the agreements or personnel policies.[96]In oral submissions, she said she could not understand the claimants’ arguments that there was express incorporation of the ESA as it was only the RPA that was referred to and that the use of the word “rights” in the RPA did not include redundancy pay. She submitted that the facts of Marley meant that it was distinguishable. There was no evidence that the claimants were aware of the personnel policy and although some aspects might be apt for incorporation, there is nothing in the “Conditions of Employment” section about enhanced redundancy pay. She reminded me of Park Cakes at paragraph 36 (above) which contained useful guidance on implied incorporation.[97]Mr Street, for the claimants, reminded me of parts of Mr Aggarwal’s evidence and the documents. He submitted that the ESA entitlement to 4 weeks’ pay for every year of employment as set out in paragraph 9, was incorporated by express incorporation (either through the contract and the RPA or by reference in the personnel policies) or implied incorporation through custom and practice. He reminded me of many of the principles from case law, some of which is cited above, including referring me to Lord Hoffman’s five principles from Investors Compensation Scheme v West Bromwich Building Society (see para 62 page 187 of the authorities bundle). The express incorporation question is the starting point and then the question of whether there is implied incorporation should be decided. He submitted that there was clear incorporation of the RPA in the letters of appointment and that the claimants’ signatures amount to acceptance of those terms. The “rights” referred to in the RPA are then contained in the ESA. He submitted that the respondent has conceded that the personnel policies are contractual in part and the annexation of the RPA and ESA must mean they are apt for incorporation and are, in fact, incorporated.[98]In oral submissions, Mr Street, submitted that there was clear express incorporation and that a reasonable person would consider the enhanced redundancy pay clause apt for incorporation. In summary, he submitted that the links were in place for express incorporation under Marley. Mr Street submitted that there was implied incorporation through custom and practice and said there was sufficient notoriety because of the mention of the ESA through the various exits. In particular, I was reminded of the 1999 exit but that other exits did not appear to be strictly redundancy situations. In the only true redundancy situation in 1999 the ESA terms were followed. He disputed that the claims were misconceived and submitted they are supported by several of the authorities.
Conclusions
[99]In order to reach my conclusions on this matter, I need to remind myself of the facts as set out above. In particular, I look again at the letter of appointment which would to a degree at least, suggest what the contractual terms are. Of course, as has been noted, there is nothing in the appointment letter which says anything about redundancy situations. It does make reference to a staff handbook but that has not been particularly helpful as the staff handbooks do not seem to be particularly relevant. I find that the reference to staff handbooks includes the personnel policies, not least because that appears to have been the respondent’s position in Mr Aggarwal’s evidence and in preparation for this hearing.[100]I concentrate my attention on clause 22 in the appointment letter which I repeat here for completeness: “The Collective Agreement dated 22 July 1993 between the Bank and the Staff Association of Bank of Baroda (UK region) would apply to you as an employee of the Bank.[101]That, in my view amounts to express incorporation of the RPA of 1993. What is said in that document relates directly to the claimants and their terms and conditions.[102]The respondent’s case, as I understand it, is that the collective agreement referred to there is the RPA and it is only a document which deals with recognition and procedures; that is the intention to recognise the Staff Association as the negotiating body on behalf of the employees.[103]I am asked to consider that which appears under General Principles in the RPA at number 2 item (d) 3, which includes this matter: “To terminate the services of, or dismiss, individual employees in accordance with the terms of the individual contract of service entered into by both parties to the contract – subject to the rights of the staff under this Agreement.”[104]The phrase the “rights of staff”, say the respondent, refers to the rights of staff with respect to having a Staff Association to represent them and to be able to be members or not of that association.[105]But there is more than that. Under paragraph 4 of the RPA “Negotiating, Grievance and Consultative Procedures” reference is made to subjects which would be matters for consultation and negotiation as set out in Appendix A. As set out above, Appendix A has a number of matters including rates of pay, overtime and so on. And, as quoted above, at item (f), “principles of redundancy and the arrangements resulting therefrom.” At the point that the RPA was agreed in 1993, there appears to be no other document which deals with redundancy. That, of course, comes later in the ESA of 1994 but, in my view, there is a direct link between the RPA and the ESA as the RPA clearly anticipates such an agreement.[106]The ESA, as set out above, has a number of features. The respondent’s case is that the amount of redundancy pay as set out at item 9(b), which provided for four weeks remuneration per each year of service, following on as it does from clause 8, is only in the circumstances where the bank has invited applications from staff. I reject that argument. It is clear on the plain reading of the document that the enhanced redundancy payment is for any redundancy situation. The definition of redundancy appears at 5(c) and mirrors that contained in the Employment Protection (Consolidation) Act 1978 which, of course, has been replicated in the Employment Rights Act 1996. Item 6(c) indicates that paragraph 9 will apply and I have no difficulty with deciding that paragraph 9 was meant to set out what payments would be made in any redundancy situation. That was certainly the intention in 1994 as set out in the ESA.[107]The question for me therefore is whether, at the date that these claimants received an appointment letter which purported to set out their rights and which referred to a 1993 document, whether that document and the Employment Security Agreement which followed on were expressly incorporated. I find that it was. There is there a clear line between the RPA and the ESA in that one refers to a redundancy situation and the second sets out the detail of that. The ESA predates the letters of appointment provided to the claimants. The fact makes no direct reference to the Employment Support Agreement does not mean that it is not incorporated into their contracts of employment. The clause is clearly apt for incorporation.[108]In support of my finding that the ESA was expressly incorporated into the claimants’ employment, I note that the personnel policies between 2015-2019 attached that document, which included the enhanced redundancy payment, as well as making specific reference to the RPA. The RPA and ESA having been expressly incorporated means that they are part of the contractual terms and there has been a breach of contract by the respondent when the redundancy payments were not calculated in accordance with clause 9b).[109]Strictly speaking, I do not need to decide the question of whether the enhanced redundancy payment, as set out in the ESA, has been incorporated by custom and practice. But I go on to consider those points in case I am wrong about express incorporation. To some extent, this is more difficult for the claimants because of the guidance in cases that for incorporation by custom and practice to apply, it needs to be reasonable, notorious, and certain. As Ms Moss rightly points out, it appears the claimants had no knowledge of the ESA or, if they did, they made no comment about it during the redundancy process. It is also true to say that the Unite the Union representative, although he mentioned it, did not pursue that aspect in the negotiations. I do not know what legal advice either party got in respect of that aspect.[110]I do not think there is any question about the enhanced redundancy pay clause being “reasonable”. The respondent had agreed to pay enhanced redundancy pay at that level and, of course, as some of the facts show, it had from time to time either paid or offered to pay at that level. The question remains as to whether the clause was “notorious” and that is difficult in the circumstances of having very little evidence. The claimants’ witness statements, and they were not cross examined, do not tell us whether they had even heard of the clause. That seems to suggest that they did not. Mr Aggarwal was the only witness for the respondent. He was, of course, aware of the ESA and that particular clause; if not before, certainly by the time the trade union officer mentioned it, and he sought legal advice upon it. It is a “certain” clause. It is clearly set out as being four weeks for every complete year of service. There are some minor differences in what should happen about notice pay but I do not think that is of significance as compared to the question of calculation of the sum due to employees being made redundant.[111]When I look at the guidance in Park Cakes as set out above, there are some difficulties here with the suggested consideration in paragraph 36 a) because there have been no other compulsory redundancies in the time before this one. The 1999 process was the only one which was a pure redundancy. In my view, the other processes were early retirement schemes and although they may cause me to consider what the respondent believed was its responsibilities (because they refer to the ESA on most occasions) they do not really help me with whether the enhanced redundancy clause was being applied. The 1999 Scheme did pay around 27 people at the rate of four weeks per complete year of service but other aspects were a little different in that notice pay was paid (rather than being needed to be worked) and, as I understand it, it did not include overtime. In any event, that was a voluntary scheme. On the facts before me therefore, it appears that there was no other compulsory redundancy. The only situation where the ESA was applied, perhaps not fully, was 1999.[112]The Park Cakes guidance at paragraph 36 b) suggests that I consider where benefits were always the same, and, of course, the facts indicate that there were different levels of payment. Many of the schemes were Early Retirement Schemes and therefore not directly comparable.[113]The extent to which the enhanced benefits were publicised is a factor at paragraph 36 c). It is clear that they were publicised with the personnel policies as appendices. The fact that it appears in a miscellaneous section does not really matter. That seems to me to be publication in the ordinary sense of the word, albeit that it appears that these claimants did not look at them in any detail or did not pursue them.[114]Looking then at how the terms are described as suggested by paragraph 36 d), I cannot see that there is any suggestion here that these are to be ex-gratia payments. So, for instance, the wording of 9(b) is quite clear. It uses the words “will be” rather than “may be” or any other suggestions of discretion. I am asked to consider whether there is any inconsistency with the express contractual terms. There is nothing said in the letter of appointment, or, indeed, with the RPA which conflicts with this clause.[115]Finally, at the final part of the guidance under paragraph 36 (f), I consider equivocalness. That is whether the employer’s practice, viewed objectively, is explicable as being a matter of discretion rather than legal obligation. The difficulty with this is because the employer has not undertaken any compulsory redundancies it is difficult to see this. The 1999 redundancy was made by way of offer but again, reference is made to the ESA which indicates a consideration by the employer that it considered it was bound by that document.[116]On the balance of probabilities with the burden of proof resting on the claimants, they have satisfied me that, if the enhanced redundancy payment term was not incorporated expressly, (which I found it was), it was incorporated by custom and practice. This I because of the many references to the Employment Support Agreement in both communications to the employees and as between the UK subsidiary (the respondent), and the head office in India. I cannot think why, if the bank did not believe it was relevant or that it was bound by it, that it was mentioned at all. If it was being suggested as “guidance” or “ex-gratia” or some other discretionary kind of payment, I would expect the respondent to say that explicitly.[117]The claimants’ claims must therefore succeed and, as discussed at the end of the hearing, a short preliminary hearing will be arranged to decide how to take matters forward. Approved by: