Tyne and Wear Passenger Transport Executive (trading as Nexus) v National Union of Rail, Maritime and Transport Workers & Anor.

Where a collective agreement is conclusively presumed non-contractual under the Trade Union and Labour Relations (Consolidation) Act 1992, it cannot itself be rectified. The legally operative target is the individual employment contract into which the agreed terms have been incorporated, and the employees who are parties to those contracts must be joined.

A potential mistake or rectification issue in an unlawful-deduction claim should be raised before the employment tribunal so that appropriate case management can occur. The judges differed on whether the tribunal could itself order rectification, but agreed that an employer could not later use rectification to undo liability already determined in earlier proceedings. Future deductions and claims by other employees require a fact-sensitive balance between finality and potential injustice.

Nexus operates the Tyne and Wear Metro. The RMT and Unite negotiate terms which are incorporated into the employment contracts of employees in grades 1–3. After earlier Employment Tribunal proceedings brought by employees succeeded on the construction of a 2012 Letter Agreement and enhanced shift allowances, Nexus brought proceedings against the unions seeking rectification for common or unilateral mistake.

The Deputy High Court Judge rejected the unions’ estoppel and strike-out or summary judgment arguments: [2021] EWHC 1388 (Ch). The unions appealed on whether the collective agreement could be rectified, whether Nexus was barred from raising mistake after the earlier proceedings, and whether the claim was an abuse of process.

Disposition. The appeal was allowed and the action was dismissed. All three judges agreed on the result, although they differed on the route by which the Employment Tribunal could have dealt with the rectification issue.

1. Under section 179(1) of the Trade Union and Labour Relations (Consolidation) Act 1992, a collective agreement is conclusively presumed not to be intended as a legally enforceable contract unless it is written and contains an express provision of legal enforceability. The Letter Agreement therefore had no legal effect as a collective agreement.
2. Rectification operates on a legally operative instrument. The Letter Agreement could not be rectified as such. The proper target would be the individual employment contracts into which its terms were incorporated, and the employees who were parties to those contracts should be parties to the proceedings. The action was consequently brought against the wrong defendants.
3. Underhill LJ considered that the mistake case could have been raised in the Employment Tribunal as a defence of rectifiability, relying on Mostyn v The West Mostyn Coal and Iron Company and Breslauer v Barwick. Males LJ considered that the tribunal could order rectification if necessary to determine an unlawful-deduction claim, applying the reasoning in Delaney v Staples and Agarwal v Cardiff University. Newey LJ preferred Males LJ’s reasoning but left the precise route open. The common conclusion was that Nexus should at least have raised the issue so that suitable case management could be considered.
4. The principles of res judicata and abuse of process required Nexus to raise the mistake case in the earlier proceedings if it could, with reasonable diligence, and should, in all the circumstances, have done so. Applying the broad merits-based approach in Johnson v Gore-Wood & Co, any attempt to use a later rectification claim to defeat the Anderson claimants’ liability for past deductions would be barred, at least as an abuse of process. The outstanding quantification of those deductions did not preserve the issue.
5. The position concerning post-complaint deductions, future deductions and employees who were not Anderson claimants was not finally determined. The court would need to balance the public and private interests in finality against the potential injustice of preventing rectification indefinitely. A temporal cut-off or terms attached to any rectification order might be appropriate.

Nexus was left to decide whether to bring fresh proceedings against the individual employees. It could not rely on rectification at the remedies stage to defeat the Anderson claimants’ claims for pre-complaint deductions.

• Court of Appeal (Civil Division): allowed the unions’ appeal and dismissed Nexus’s action.
• High Court of Justice, Business and Property Courts, Chancery Division: rejected the estoppel argument and dismissed the strike-out or summary judgment application: [2021] EWHC 1388 (Ch).