Ibekwe & Ors v Transport & General Workers Union

Where an alleged breach of a trade union’s contract causes less favourable employment terms to be imposed, employees establish a prima facie loss by showing the reduction in remuneration. They need not prove that an alternative bidder would have succeeded or offered better terms where that is not their case. The union must show why the apparent loss is not the true loss. An appellate court should not stop the claim at the close of the employees’ evidence on that basis without determining liability. The court left open whether a claim likely to yield only nominal damages may be stopped under the Civil Procedure Rules and the overriding objective.

Ibekwe & Ors v Transport & General Workers Union arose from the privatisation of a London bus company. Bus workers alleged that their recognised trade union breached its contract with them by supporting a management employee buy-out and entering into a framework agreement which reduced holiday entitlement and increased working hours.

The Central London County Court dismissed the claims at the close of the claimants’ case. The recorder held that the claimants had failed to prove that they would have retained their original terms or that an alternative bidder would have offered more favourable terms. The appeal concerned the burden of proving loss and whether the claim was prematurely dismissed.

1. Appeal allowed. The recorder’s order was set aside and the case was returned to the county court, with costs awarded to the appellants.
2. The appellants’ case was that the union should have provided information about the competing bids and secured a ballot. It was not their case that the Grampian bid ought to have succeeded. The recorder therefore approached the claim on an incorrect factual and legal basis.
3. A contract of employment could not be varied without the employee’s consent. The change in ownership of LGTS did not itself alter that position. Assuming that the union had breached its contract with its members by entering into the framework agreement and that LGTS had consequently imposed different pay rates, the appellants had established a prima facie loss measured by the difference between their remuneration before and after implementation.
4. The burden then lay on the union to show why that apparent loss was not the true loss. The appellants were not required to prove that Grampian would have succeeded or would have offered better terms. If the appellants had approved the Grampian bid and accepted varied terms, that consent might have affected the amount recoverable. Without consent, they would have remained entitled to payment under their pre-privatisation contracts.
5. The recorder’s general observations that privatisation would cause disruption and that any bidder would consider wage costs were speculation, not findings that the employment terms would necessarily have changed. Dismissing the claim before making findings on liability was therefore an error of law.
6. Lord Justice Peter Gibson expressed doubt about the separate argument that nominal damages should be available, but left the issue open. It might be within the court’s discretion under the Civil Procedure Rules and overriding objective to stop a claim which, even if successful on liability, could yield only nominal damages.

• Court of Appeal (Civil Division): appeal allowed; the recorder’s order was set aside and the case was returned to the county court.
• Central London County Court: the assistant recorder dismissed the claims at the close of the claimants’ evidence on the ground that loss had not been proved.