Secretary of State for the Home Department v James Cox & Ors.
[2023] EWCA Civ 551
Secretary of State for the Department for Environment, Food and Rural Affairs v Public and Commercial Services Union
20 November 2024
[2024] UKSC 41
Supreme Court
A union's members had their union dues automatically deducted from their paychecks (check-off). The government stopped this, breaking its agreement with the employees. The union sued, arguing a law lets them collect these dues. The court sided with the union, saying the government's agreement with individual workers made their check-off system enforceable by the union, even though the initial union agreement with the government wasn't legally binding on its own. The government needed to explicitly state it didn't want the union to enforce this, which it didn't.
Key Facts
- •Three Government departments (respondents) unilaterally withdrew check-off arrangements for union subscriptions from employees' salaries, breaching their contracts.
- •The Public and Commercial Services Union (appellant) claimed under the Contracts (Rights of Third Parties) Act 1999 to enforce the check-off arrangements as a third party.
- •The High Court allowed the Union's claim, but the Court of Appeal reversed this decision.
- •The Supreme Court appeal focuses on whether the contract impliedly excluded the Union's right to enforce the check-off arrangements under section 1(2) of the 1999 Act.
Legal Principles
Privity of contract: Only parties to a contract can enforce its terms.
Common law
Contracts (Rights of Third Parties) Act 1999: Allows third parties to enforce contractual terms under certain conditions.
1999 Act
Section 1(2) of the 1999 Act: A third party cannot enforce a term if, on a proper construction of the contract, the parties did not intend the term to be enforceable by the third party.
1999 Act
Interpretation of contracts: Objective approach, considering the context and wording of the contract.
Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896; Wood v Capita Insurance Services Ltd [2017] UKSC 24; Arnold v Britton [2015] UKSC 36
Implied terms: Terms are implied into a contract only if necessary to give effect to the parties' presumed intentions.
Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72
Trade Union and Labour Relations (Consolidation) Act 1992, section 179: Collective agreements are conclusively presumed not to be legally enforceable unless in writing and stating otherwise.
TULRCA
Outcomes
The Supreme Court allowed the Union's appeal.
The Court of Appeal misinterpreted section 1(2) of the 1999 Act. The presumption in favour of third-party rights under the 1999 Act was not rebutted. The fact that the check-off arrangement originated in a non-enforceable collective agreement did not automatically mean that the parties to the individual contracts of employment did not intend it to be enforceable by the Union. There was no implied term in the contracts excluding the Union's right to enforce the check-off arrangement.
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