Kaur v MG Rover Group Ltd.

General words expressly incorporating a collective agreement into an employment contract do not necessarily incorporate every provision. Each provision must be considered in context to determine whether it is apt to create an individually enforceable contractual right. Collective objectives, aspirations and commitments dependent on workforce co-operation ordinarily lack that quality.

There is no general rule that an express right to terminate employment on notice prevails over every other express term concerning termination. The contract must be construed as a whole. An incorporated express restriction may therefore qualify a notice provision, although no such restriction arose where assurances against compulsory redundancy remained collective and aspirational.

An employee sought declarations that provisions in two collective agreements, “The New Deal” and “The Way Ahead”, had been incorporated into her employment contract and prevented her compulsory redundancy. Her written terms provided that employment was, where appropriate, subject to collective agreements.

The High Court rejected the claim under The New Deal but held that paragraph 2.1 of The Way Ahead was incorporated and contractually prohibited compulsory redundancy. The employer appealed against that declaration. The employee cross-appealed concerning The New Deal.

The central issues were whether the relevant assurances were apt for incorporation into an individual employment contract and, if incorporated, whether they could qualify the employer’s express right to terminate on notice.

1. Appeal allowed and cross-appeal dismissed. Keene LJ, with whom Jonathan Parker and Brooke LJJ agreed, held that neither collective agreement created an individually enforceable prohibition against compulsory redundancy.

2. Even where a contract expressly refers to collective agreements, the court must determine whether the particular provision is apt to become a term of the individual employment contract. Its language, content and character must be examined in context. Collective machinery, general aspirations and commitments addressed to the employer and unions may be unsuitable for individual enforcement.

3. The New Deal deliberately distinguished collectively agreed principles from the separate provisions implementing consequential amendments to individual terms and conditions. Its principles were overwhelmingly aspirational. The assurance concerning employees remaining with the employer was not included among the contractual amendments, while the agreement stated that other terms remained unchanged. It therefore imposed no contractual restriction on compulsory redundancy.

4. The Way Ahead could not be incorporated as a whole. The employee’s terms made employment subject to collective agreements only “where appropriate”, and parts of the document were plainly directed to collective commitments rather than individual rights.

5. Paragraph 2.1 of The Way Ahead was also inapt for incorporation. Its opening sentence expressly described job security as an objective. The assurance of no compulsory redundancy expressed the same objective and referred back to the non-contractual position under The New Deal. Paragraph 2.3 further made the avoidance of redundancies dependent on the co-operation of the workforce as a whole. Read together, the provisions were aspirational, vague and collective in character. Any commitment was made solely at the collective level.

6. If paragraph 2.1 had been incorporated, it could have operated compatibly with the express notice clause by restricting dismissal on notice for compulsory redundancy. There is no general rule that a notice clause prevails over another express term concerning termination. That question depends on construction of the particular contract. The statutory law of unfair dismissal under Part X of the Employment Rights Act 1996 did not determine the contractual issue.

7. The High Court’s declarations were set aside. Permission to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division): The employer’s appeal was allowed unanimously and the employee’s cross-appeal was dismissed. The declarations preventing compulsory redundancy were set aside. Permission to appeal to the House of Lords was refused.
• High Court, Queen’s Bench Division, Birmingham District Registry: HHJ Alton refused relief under The New Deal but declared that paragraph 2.1 of The Way Ahead was incorporated into the employee’s contract and prevented her compulsory redundancy. The order was made on 21 January 2004; no citation is stated.