Secretary of State for the Home Department v James Cox & Ors.
[2023] EWCA Civ 551
National Union of Rail, Maritime and Transport Workers and another v Tyne and Wear Passenger Transport Executive T/A Nexus
13 November 2024
[2024] UKSC 37
Supreme Court
A company tried to fix a mistake in an agreement with a union by suing the union, but the court said they should have sued the employees affected by the mistake. The court also said it was too late to change the result of the previous successful employee lawsuits.
Key Facts
- •Nexus (Tyne and Wear Passenger Transport Executive) and two trade unions (RMT and Unite) had a collective agreement in 2012 to consolidate a productivity bonus into basic salary.
- •A dispute arose over whether the shift allowance should also increase proportionally.
- •Employees (Anderson et al.) successfully claimed underpayment in an employment tribunal, upheld by the EAT and Court of Appeal.
- •Nexus then sued the unions for rectification of the collective agreement, arguing it didn't reflect the common intention.
- •The High Court dismissed the unions' preliminary objections.
- •The Court of Appeal allowed the unions' appeal, holding that Nexus sued the wrong defendants (should have been the employees).
Legal Principles
Collective agreements are not legally enforceable contracts unless expressly stated; however, their terms can be incorporated into individual employment contracts.
Introduction, para 1
Rectification is available to correct mistakes in documents recording transactions, not mistakes in the transactions themselves.
Nature of rectification, paras 26-32
Rectification is not confined to legally binding contracts, but it must not be futile (i.e., it must alter legal rights).
Is the letter agreement rectifiable?, paras 46-52
A court can treat a document as rectified without a formal order if the conditions for rectification are met.
Can the employment tribunal rectify?, paras 75-82
The proper parties to an action are those whose legal rights will be determined by the court.
Who are the proper defendants?, paras 54-60
It is an abuse of process to bring a claim that could and should have been raised earlier.
Can Nexus raise rectification now against the Anderson claimants?, paras 85-91
Outcomes
The Supreme Court dismissed Nexus' appeal.
Nexus sued the wrong defendants; the claim should have been against the employees whose pay would be affected, not the unions. The Court of Appeal correctly dismissed the action.
Rectification of a non-legally binding collective agreement is possible if it alters legal rights.
While the collective agreement itself is not enforceable, its terms, when incorporated into individual contracts, create legal rights. Rectifying the agreement would alter these rights.
Employment contracts are not a proper target for rectification in this case.
The employees did not make a mistake; the union acted as principal, not agent for the employees.
It would be an abuse of process for Nexus to challenge the Anderson proceedings' outcome via rectification.
Nexus could and should have raised the rectification issue in the Anderson proceedings.
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