Union subs collection: a contractual requirement?

A recent High Court ruling highlights the importance of getting the employees’ express agreement to changes to conditions of employment, as Andrew Macmillan explains

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Some trade union members have arrangements with their employers for their union subscriptions to be deducted directly out of their wages. These arrangements are commonly referred to as ‘check-off’. Clearly this is an arrangement favoured by unions as it makes it easier for subscriptions to be collected. However, it is generally regarded as optional for the employer as there is no legal obligation to agree to put in place check-off arrangements. 

In Cox v Secretary of State for the Home Department the issue was whether the check-off arrangements had contractual effect so that withdrawal of the facility amounted to a breach of contract and if so, whether the employees had in any event accepted the breach by continuing to work for the employer and making alternative arrangements to continue paying the union subscriptions. 

The Public and Commercial Services Union was recognised for collective bargaining and check-off arrangements for member subscriptions had been in place for many years. It was referred to in the Civil Service Pay and Conditions Service Code which had been in place since 1976. This stated that deductions from wages could be made once a standard form of authority was received and that deductions could be suspended only for the duration of any industrial action. 

The Civil Service Management Code that had been published in 1996 also referred to the arrangements and again suggested that withdrawal of the facility may only be possible where industrial action was being taken.

In 2014 a communication from the Cabinet Office set in motion the removal of the check-off facility citing that it was not desirable for Civil Service employers to provide “an unnecessary service on behalf of the Trade Unions and their members”. Despite union objections, the check-off was withdrawn on 1 December 2014. 

A subsequent union grievance was rejected, and no legal challenge was taken in the High Court until 3 December 2019, by which time many union members had put in place alternative arrangements for paying their subscriptions.

A number of individual union members had together with the union claimed that the removal of the check-off facility was a breach of the terms of their employment contracts. The High Court agreed. 

It was held that the check-off arrangements had contractual effect taking into account the references to check-off arrangements in the Codes. The fact the Codes might not be contractual did not prevent terms from them being incorporated into the employees’ contracts of employment.

The employers’ arguments that the changes had been accepted and that any breach had been waived was rejected.

The employees’ continuation of work was not sufficient to show implied agreement and there had been a collective grievance raised by the union to take into account. Even if direct debits were set up to make payments it was not evidence of acceptance.

Key points

The decision highlights the importance of getting the employees’ express agreement to changes to terms and conditions of employment. Simply imposing changes and trying to establish an employee’s implied agreement to the change will be difficult. Even though more than five years had passed since the changes in this case it was still not possible to establish implied acceptance. 

While check-off arrangements will not always be found to have contractual effect, where they are it should also be taken into account that the union may be able to take action to enforce terms of this nature under the Contracts (Rights of Third Parties) Act 1999 as the check-off provisions confer a benefit on it.

Andrew Macmillan is a partner and group head of the employment, pensions and private client team at Gateley Legal