Harris v Richard Lawson Autologistics Ltd

A closed-shop arrangement and union membership do not automatically give a shop steward unlimited ostensible authority to vary individual employment contracts. The existence and limits of such authority are matters of mixed fact and law. The court must assess the representation created by words or conduct, the parties' established dealings, the steward's recognised role, any known limitations on consultation or approval, and what the employer reasonably understood. An employer may rely on ostensible authority where the circumstances reasonably indicate that a duly recognised steward negotiated and signed a variation with the members' approval. Contractual variation remains consensual, and employees may adopt terms negotiated by representatives through ratification or implied acceptance by continuing to work. Actual or implied authority may remain undecided.

The appellant, a lorry driver, was employed at a depot operated by the respondent under a closed-shop arrangement recognising the elected shop steward as the union's official representative. After the appellant volunteered for redundancy, his holiday pay was calculated under a variation agreement negotiated and signed by the shop steward in 1996. The appellant claimed that the agreement was not binding and sought an additional £4,290.63.

On a preliminary issue, His Honour Judge Poulton in the Canterbury County Court dismissed the claim on 16 July 2001. He held that the shop steward had implied and ostensible authority to negotiate the variation. The appeal concerned whether, on assumed facts favourable to the appellant, the shop steward had ostensible authority to bind the employees to the variation.

Lord Justice Kennedy delivered the principal judgment. Lord Justice Mantell and Sir Swinton Thomas agreed. The appeal was dismissed.

1. Statutory issue. The references to sections 178 and 179 of the Trade Union and Labour Relations Consolidation Act 1992 did not govern the dispute. The question was whether the 1996 agreement was binding through the shop steward's authority.
2. Ostensible authority. A closed-shop agreement and union membership do not automatically confer unlimited ostensible authority on a shop steward to alter individual employment contracts. The existence and limits of such authority are questions of mixed fact and law. They depend on the representation created by words or conduct and the circumstances known to the employer.
3. Application. The relevant circumstances included the steward's election and recognition, the established practice of shop stewards negotiating employment matters, the history of dealings at the depot, the issue being raised in June 1996, negotiations taking place in August, and the signed variation being returned in October. Although a steward could not ordinarily be assumed to have authority to agree a disadvantageous bargain without an opportunity for member approval, nothing known to the employer suggested that approval had not been obtained. The employer was therefore entitled to infer that the steward acted with the approval of those he represented.
4. Contractual variation. The court distinguished collective agreements from individual contracts. Individual employment contracts cannot be varied unilaterally, but revised terms may be negotiated through employee representatives and adopted by ratification or implied acceptance through continued work. Kennedy LJ regarded that as what had occurred here, referring to Alexander v Standard Telephones and Cables Ltd [1991] IRLR 287. The principle that agency must be supported by evidence in the particular case, rather than arising merely from union membership, was consistent with Burton Group v Smith [1977] IRLR 351.
5. The court did not determine whether the steward had actual or implied authority, since the evidence had not been called and tested on those issues. The preliminary issue was correctly resolved on ostensible authority.

Order: appeal dismissed, with costs assessed at £7,395.49.

• Court of Appeal (Civil Division): On 14 March 2002, the court dismissed the appeal and upheld the order below: [2002] EWCA Civ 442.
• Canterbury County Court: His Honour Judge Poulton, on 16 July 2001, dismissed the claimant's claim with costs after deciding the preliminary issue in favour of the respondent.