COX and Ors v SECRETARY OF STATE FOR THE HOME DEPARTMENT [2022] EWHC 680 (QB)

“i. Under Article 5 of the Civil Service Order In Council 1969, the Minister for the Civil Service is empowered to make regulations for controlling the conduct of Her Majesty’s Home Civil Service. Instructions given in the exercise of this power are communicated to departments by the Civil Service Department as part of the consolidated Code. Such instructions stem mainly from two sources, legislation which binds the Crown or which, although not binding the Crown, Ministers have undertaken to apply as though it were so binding; and agreements reached in negotiation with the National Staff Side or with Staff Associations in accordance with custom and practice extending back over more than 60 years. Rules and guidance so issued are mandatory on employing departments. In some instances, the method of application of the rules is precisely defined; in others, the principles to be observed are defined and the method of application is left to departments. ii. Within the Civil Service, the employer/employee relationship exists between the individual civil servant and his employing department. For convenience of departments, this Code collects together the results of negotiations with employees’ representatives and the rules for their application, and all matters of pay and conditions of service which are handled by the Civil Service Department on behalf of all employing departments. It also contains a statement of accepted principles of conduct which have statutory backing or are based on expressed Government policy. Thus the Code forms the basis from which pay and conditions of service throughout the Civil Service derive but it needs amplification in respect of those matters which are settled by departments through their own negotiations with staff representatives or by management decision. It follows that individual civil servants should not approach the Civil Service Department directly on matters affecting their own pay and conditions of service.…”

“4051 A civil servant who wishes to authorise deductions from his pay for any of the purposes ororganisations listed in Annex 1 and 2 should obtain from the organisation concerned the standardform of authority approved by the Treasury, complete it and forward it to the organisation. Theorganisation will forward the completed forms … to the officer paying salary, wages or pension.… Deductions for union subscriptions will be made from the earliest date practicable after receiptof the authority. Notice of termination for authority should be given direct to the paying officer ofthe departments. However, this method of payment may be withdrawn in respect of unionsubscriptions in the circumstances described in paragraph 4100. … 4100. Subscriptions to nationally or departmentally recognised unions representing civil servantsmay be paid by means of deductions from the pay of members. However, in the event of officialindustrial action … and for the duration of such action, this method of payment may be withdrawnby the Official Side in whole or in part in respect of deductions payable to any unions with membersofficially involved in the industrial action. Staff will be advised by an office notice of any decisionto withdraw this method of payment (“check-off”).”

“When exercising the delegated powers permitted by this Code, departments and agencies should remember that existing rights cannot be altered arbitrarily.”

“The following paragraphs summarise or refer to your main terms and conditions of service as they apply at present and, together with the attached letter, constitute the written statement the Home Office is required to provide. These documents are issued in accordance with the requirements of sections 1-7 of the Employment Rights Act 1996. You will be told about any significant changes in Home Office Notices. Details of civil servants’ conditions of service are in the Civil Service Management Code (known as the ‘Code’), Home Office manuals (or, where they have yet to be issued, the Civil Service Pay and Conditions of Service Code), and in the Staff Handbook.”

“There are various Trade Unions which can support officer reasonable claims represent points of view. It is, of course a personal decision whether or not to join a trade union, but we encourage staff to join an appropriate trade union and to play an active part within it, making sure your views are represented.”

“Voluntary deductions from pay The SSC will, if you so authorise, make deductions from your salary for direct payment to the following organisations or other ‘approved’ organisation: • Trade union membership fee • Certain insurers and assurance societies and companies • Local hospital funds and hospital contributory schemes • Payroll donations to charity • The Home Office Sports and Social Association (HOSSA) lottery or similar • Civil Service organisations, including the Civil Service Sports Council (from which HOSSA derives most of its funds) • Additional Voluntary Pension Contributions (AVCs) If you are unsure whether an organisation is ‘approved’, check with the SSSC section. If you wish to authorise deductions from pay, you should obtain a standard form of authority from the organisation concerned and complete and forward the form back to that organisation. Once theauthorisation has been accepted SSC will forward the contributions due and: • make payments on the due date... • continue to make payments on this basis as instructed until you wish to cease makingpayments then you must notify the SSC direct in writing to the address above. You should also advise the organisation concerned.”

“5.5 If you wish, Pay Service may make voluntary deductions from your salary in respect ofsubscriptions or contributions to: • Civil Service Trade Unions • certain insurance and assurance societies and companies • local hospital funds and hospital contributory schemes • payroll donations to charity (“Work Aid”) • the HOSSA lottery or similar • Civil Service organisations, including the Civil Service Sports Council (from which the Home Office Sports and Social Association derives most of its funds) If you are not sure whether an organisation is “approved”, Pay Service will be able to advise you. 5.6 If you take official industrial action as a non-industrial civil servant, payment of your unionsubscriptions by the method described above may be withdrawn, in whole or in part, while you takepart in the action. You will be advised by a Home Office Notice or other communication of any decision to do so. 5.7 If you wish to authorise deductions from pay you should obtain from the organisation concerned a standard form of authority approved by HM Treasury or the Home Office, complete it and forward it to the organisation. If, on the other hand, you wish to cease making the payments, you should notify Pay Service yourself in writing. You should also advise the organisation concerned.”

“11 Against that background, the natural meaning of the words ‘subscriptions can be paid’ is that they confer a contractual entitlement to pay the subscriptions in the way described. The words ‘can be paid’ mean that the employee is entitled to pay in that way if he asks to do so. If the department were entitled to discontinue the arrangement and to refuse to operate checking-off, the position would be that contrary to that language, the employee cannot pay in that way. 12 This construction is, in my view, supported by the second part of the paragraph. The second part of the paragraph permits withdrawal from such an arrangement in defined and circumscribed circumstances. The natural inference is that those are the only circumstances in which withdrawal from such an arrangement is permitted. The language and structure of the clause is that it imposes an obligation on the department, if so requested by the employee to act in a defined way subject to a limited exception, which is set out in the second part of the paragraph.”

“20 What was intended by para. 12.5.9 depends upon its own particular language. The language of the first sentence of para. 12.5.9 does not make the entitlement conditional on whatever the department has agreed with the unions. It provides unequivocally that union subscriptions can be paid in a certain way. That is the language of unqualified entitlement. 21 Moreover, the second half of the paragraph would be deprived of meaningful content if Mr Eadie QC’s primary constructions were correct. It provides that the department may withdraw from particular arrangements with trade unions in particular and circumscribed circumstances. It is, in my view, inconsistent with an unfettered discretion to modify or withdraw from such an arrangement in any circumstances.”

‘Part-year Appointments Policy: If you have a Part Year contract you can choose to have your salary paid either on an averaged basis or a paid for attendance basis. Deductions from Salary Policy – Compulsory and Voluntary: You can choose to have voluntary deductions made for subscriptions and premiums to certain Treasury approved organisations, for example, Trade Union subscriptions, repayment of loans from benevolent funds, and charitable donations.Compulsory deductions will be made for income tax, national insurance, superannuation, Child Support Agency Deduction of Earnings Orders and for any execution of debts. Advances from Salary Policy: You can request an advance of salary for a range of purchases or situations. Recoveries From Pay Policy: Overpayments will be recovered from your pay.’

“60 The question whether the check-off provision imposes a contractual obligation on the defendant depends, ultimately, on what the salary policy means, in its context. To understand what it means involves discovering what inferences can be drawn, from the available contractual and noncontractual materials, about whether the parties jointly intended the salary policy to have contractual effect. In the context of this case, I am not impressed by the defendant’s argument that it is significant that the staff intranet is not referred to in Mr Cavanagh’s and Ms Williams’s contractual documents as a potential source of contractual terms. First, the parties could not have foreseen when those documents were signed that there would ever be such a thing as a staff intranet. Second, it is clear from [Alexander v Standard Telephones & Cables Ltd [1991] IRLR 286] and from [Hussain v Surrey & Sussex Healthcare NHS Trust [2011] EWHC 1670 (QB)] that a document may have contractual effect even if it is not part of the materials to which the parties have expressly attached the label ‘contractual’. Third, the staff intranet is referred to in the current standard written particulars of employment as such a source, and those documents do not refer to staff handbooks and the like as such a source. 61 There are two main pointers to the correct interpretation of the relevant provisions. They are the historic contextual material about the check-off provision, and the decision in Hickey, which is a helpful guide to what the words of the salary policy might mean.”

“64 I appreciate that the CSMC does not of itself set out terms and conditions of service. Its significance, however, is that in a context where legislation permits terms to be imposed on civil servants, it sets out, in areas where departments and agencies are given discretion to determine terms and conditions, ‘the rules and principles which must be followed in the exercise of those discretions’. Paragraph 7.3.3 of the CSMC supports the view that what Departments are being authorised to do in relation to check-off, where they offer it, is to continue the historic position. I say that because of the continuing presence of the express permission to withdraw check-off when there is industrial action. I agree with Popplewell J’s analysis of the significance of that express permission. I also note that departments must get the approval of the Cabinet Office if check-off is withdrawn, and the general warning in paragraph 6 of the CSMC that departments ‘should remember that existing rights cannot be altered arbitrarily’. 65 Whether or not my theory about the transition from the Code to the staff intranet is correct, I consider that, applying the approach of Hobhouse J in Alexander and of Andrew Smith J in Hussain, there is nothing incongruous in finding that the staff intranet is a potential source of contractual terms. It is the obvious place for an employee to look for detailed terms and conditions if his written particulars expressly refer to it. But, in addition, given that none of the documents referred to in the contractual documents signed by Ms Williams or Mr Cavanagh is any longer available to be consulted, it is also the obvious place for them to look. They cannot be expected to engage in extensive if not impossible archival research in order to find out what their detailed terms and conditions are. 66 If, by whichever route, the staff intranet is a potential source of contractual terms, the next question is what the relevant parts of the salary policy mean. In ascertaining their meaning, I consider that the historical position is important. That is, that the parties to the original collective agreement which is reflected in paras. 4051 and 4100 of the Code intended the Crown to abide by those provisions. It would be surprising, if similar language is used in two sets of provisions, the first of which was intended by the parties to be binding, to conclude that the second is not. I also consider that Popplewell J’s analysis in Hickey supports this view. I appreciate that the parties in Hickey had expressly agreed that the relevant provisions were contractual, and the defendant had conceded as much. However it is perfectly clear from the two construction arguments which were advanced by the Department in that case that that concession was more apparent than real. Those two constructions aimed to deprive the provision of any binding effect. That was the context in which Popplewell J’s observations about the language of the provisions, and his conclusion that the provisions did impose real obligations on the Department, were made and reached. That is why they help me to construe the salary policy.”

“31. The principles to be applied can therefore be summarised. The relevant contract is that between the individual employee and his employer; it is the contractual intention of those two 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 the 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.”

“167 There is no single test as to whether an employer and employee intended to agree that provisions of an agreement such as the Practitioners Disciplinary Procedure should be contractual between them (rather than advisory or hortatory or an expression of aspiration), and if so which provisions. The indicia that a provision is to be taken to have contractual status which are, I think, of some relevance to this case include these: i) The importance of the provision to the contractual working relationship between the employer and the employee and its relationship to the contractual arrangements between them: as I understand it, it is common ground in this case that, because parts of the Practitioners Disciplinary Procedure are contractual, in some circumstances the Trust might exclude Dr Hussain or bring disciplinary proceedings for misconduct against her. The implication of this, as it seems to me, is that provisions important to implementing the agreement about exclusion and about conduct hearings are also apt to be contractual: the more important the provision to the structure of the procedures, the more likely it is that the parties intended it to be contractual. As Auld LJ said in Keeley v Fosroc International Ltd, [2006] IRLR 961 (which concerned whether provisions relating to enhanced redundancy payments in a Staff Handbook were enforceable as part of individual contracts of employment), “Highly relevant in any consideration, contextual or otherwise, of an “incorporated” provision in an employment contract, is the importance of the provision to the over-all bargain, here, the employee’s remuneration package – what he undertook to work for. A provision of that sort, even if couched in terms of information or explanation, or expressed in discretionary terms, may still be apt for construction as a terms of his contract … .”

“18 …It is often of little assistance, when there is a disputed question of construction, to observe that if the parties intended the provision to mean one thing, they could have said so more clearly. That is so in the present dispute. The point can be made with equal force on each side that the other side’s construction could have been achieved by expressing the paragraph in language which was different and clearer.”

“86. …The authorities illustrate some specific points about the proper approach to the question of when continuing to work may constitute acceptance. I briefly identify them as follows. 87. First and foremost, the inference must arise unequivocally. If the conduct of the employee in continuing to work is reasonably capable of a different explanation it cannot be treated as constituting acceptance of the new terms: that is why Elias J in the Solectron case [Solectron Scotland Ltd v Roper [2004] IRLR 4] used the phrase “ only referable to”

“101. … I have not found this part of the appeal entirely easy. It is a great pity that neither the unions nor their members stated unequivocally at the moment of implementation that they did not accept the proposed cut and that their continuing to work was without prejudice to that position. In the end, however, I believe that the judge's decision was one to which he was entitled to come. There are three points that seem to me particularly important. 102. First, the proposed variation was wholly disadvantageous to the employees. Sometimes pay cuts are proposed as part of a package of measures some of which are (at least arguably) to the employees’ benefit. If the employees continue to work without protest following implementation, taking the good parts as well as the bad, it is usually easy to infer that they have accepted the package in its entirety. But where that is not the case it is more difficult to say that they are not simply putting up with a breach of contract because they are not prepared to take positive steps to remedy it, whether by taking industrial action or by bringing proceedings. Mr Laddie would say that this was, in substance, a package case because the employees were relieved of the risk of redundancy. But that is not the same: the council was not asked to, and did not, make any contractual promise not to make redundancies. 103. Secondly, the matter was not, on the employment tribunal's findings, put to the employees as something on which their agreement was required. Indeed, given that pay was negotiated collectively, it was not something on which employees would normally be expected to take individual decisions: although that route had had to be resorted to for the introduction of single status it was wholly exceptional. No doubt when the freeze was first proposed the council tried to get the unions’ consent; but when that was not forthcoming it was imposed unilaterally, and the council's position was that it was contractually entitled to take that course. That is in my view important: see para 99 above. Although I have been critical of the unions for not statingtheir position explicitly, or encouraging their members to do so, the same criticism can be advanced of the council. It would have been open to it to tell the employees in terms that if they continued to work after 1 April 2011 they would be taken to have agreed to the proposed freeze (without prejudice to whether their agreement was legally required): I do not say that continuing to work in the face of a *1456 unilateral ultimatum of that kind would automatically have constituted acceptance, but it would have made the council's position clear and made the argument for an acceptance by conduct much stronger. There was equivocality on both sides. 104. Thirdly, there was strenuous protest on the part of the unions not only up to but beyond the date of the implementation of the freeze on 1 April 2011: see para 70.2 of the employment tribunal's reasons. At that date they were in the course, or on the cusp, of consulting their members about the possibility of industrial action, and the results of that consultation did not become known until about the middle of the month: see paras 70.5 and 70.6. Mr Laddie confirmed in his oral submissions that it was his case that the variation took effect from the first pay-day after 1 April 2011: I did not understand him to rule out the possibility that it took effect at some later date, but he did not propose any such alternative or advance any argument about how it might be identified. We do not know precisely when during the month the pay-day fell; but even assuming in the council's favour that it was at the end of the month, after the results of the ballot were known, I find it hard to see how the claimants’ continuing to work as from that date could be taken as an unequivocal acceptance of a variation which might have been the subject of industrial action until days before. A decision not to take industrial action is not the same as a decision to accept a variation (as is illustrated by the facts of Rigby v Ferodo Ltd —see para 71 above), and there is no suggestion that the unions made it clear that they would take no further steps, still less that they would now reluctantly agree to the freeze— …”

“If [ the source of the check-off] was a collective agreement, it is not clear why the union’s claim [in Cavanagh] could succeed in the light of TULRCA 1992, section 179 (collective agreements presumed not to be legal binding unless expressly rebutted), having regard to the Contracts (Rights of Third Parties) Act 1999, section 1(2) (no third party right where evidence of intention that the parties did not intend the term to be enforceable by a third party).”

“10.— Short title, commencement and extent. (1) This Act may be cited as the Contracts (Rights of Third Parties) Act 1999. (2) This Act comes into force on the day on which it is passed but, subject to subsection (3), does notapply in relation to a contract entered into before the end of the period of six months beginning withthat day. …”

“44. I also cannot accept Mr. Broatch’s submission that a fresh contract of insurance was entered into on 31st August 2000 within the meaning of the Contracts (Rights of Third Parties) Act 1999. All that then happened was the re-issuance of the policy Table showing a correction of the renewal date to reflect what had been originally agreed both in January and also, in so far as relevant, March/April 2000; and an alteration to the benefit escalation rate. The latter was at most a minor variation to the contract entered into on 19th January 2000 (alternatively 10th March 2000). It was not the entering into of a new or fresh contract of insurance. A different analysis might apply if the alteration to the original contract of insurance were fundamental in some way. However, the alteration effected on 31st August 2000 was extremely minor and it would, in my judgment, be wrong to think that an amendment (if such it was) of that nature to an existing contract was intended by parliament to constitute the entering into of a new contract for the purposes of the Contracts (Rights of Third Parties) Act 1999.”

“50… I consider that, in the relevant period in 2000, they were equating renewal with the beginning of a new Policy Year under an existing and continuing contract of insurance, and that they were not thinking in terms of the entering into of a new contract. This is in contrast with the position on renewal in October 2001 when a rate review took place; a new unit rate was quoted by Swiss Life and guaranteed for two years from 1st October 2001; and Norton Rose expressly notified Swiss Life through Mercer that it had decided to remain insured with Swiss Life. What happened in 2001 was redolent of a fresh contract being entered into. What happened in October 2000 was not.”