Hay & Ors v Gilgrove Ltd & Anor

When a collective agreement is incorporated into employment contracts, its terms must be construed in the commercial and factual circumstances to which they apply. A description identifying the only qualifying workers when the agreement was made does not necessarily remain a qualification for payment after working conditions change. Where unregistered workers can lawfully perform the same work, it is irrational to construe a porterage-sharing provision as giving registered workers money earned by the unregistered workers. Construction is a question of law, so an appellate tribunal may correct the interpretation without trespassing on findings of fact.

The claimants were registered porters employed by two businesses at New Covent Garden Market. A collective agreement made in 1974 had been incorporated into their employment contracts. It provided for porterage to be shared between the foreman, porters and temporary porters, but did not define whether porter meant only a registered porter.

After the agreement was terminated, the employers employed unregistered porters who received fixed wages and no separate porterage share. The Employment Tribunal upheld claims under section 13 of the Employment Rights Act 1996. The Employment Appeal Tribunal, in UKEAT/0571/11/SM, allowed the employers’ appeal and dismissed the claims. The central issue was the proper construction of the collective agreement in changed circumstances.

The appeal was dismissed unanimously. Lord Justice Rimer gave the judgment. Lord Justice Moore-Bick and the President of the Queen’s Bench Division agreed.

1. The proposed argument that the unregistered porters’ contracts had not been shown to give them a right to porterage was irrelevant. The claimants’ entitlement could be determined by construing their own contracts and deciding whether they had received the porterage to which they were entitled. The pay entitlement of another employee did not require examination.
2. The construction of the 1974 agreement was a question of law. The Employment Appeal Tribunal had not interfered with a factual finding when it rejected the Employment Tribunal’s interpretation. The Employment Tribunal’s conclusion as to the meaning of porter was a legal conclusion, while the absence of any later variation was a factual finding.
3. The agreement was made when registered porters were the only porters known to work at the Market. Its references to registration therefore described the qualification then required to perform porter work. They did not impose a continuing condition that only registered porters could share porterage after the conditions of employment had changed.
4. It would be irrational and unfair to construe the agreement as requiring porterage earned by unregistered porters to be shared exclusively among registered porters. The agreement was to be read as providing for the sharing of total porterage among the porters performing the relevant work. Registered porters were therefore entitled only to their pro rata share of the total porterage earned by all porters.
5. The Employment Appeal Tribunal had reached the correct conclusion. The appeal was dismissed and the claims remained dismissed.

• Court of Appeal (Civil Division): [2013] EWCA Civ 412 dismissed the claimants’ appeal.
• Employment Appeal Tribunal: In UKEAT/0571/11/SM, the appeal against the Employment Tribunal was allowed and the claimants’ claims were dismissed.
• London South Employment Tribunal: The judgment sent on 12 July 2011 upheld the claims for unauthorised deductions from wages and directed a remedies hearing.