Adrian Stuart Greville Crabb & Ors v TUI Airways Limited

An incorporation term which brings a recognised union’s collective agreements, including later revisions, into individual employment contracts permits collectively agreed variations unless the contract clearly limits that mechanism. A clause preserving benefits already in payment following a change to an income-protection scheme was construed as limiting the employer’s unilateral power to alter the scheme. It did not prevent a variation agreed through collective bargaining.

A union does not act as employees’ agent in the strict legal sense. That does not alter the contractual distinction between a collectively agreed variation and unilateral employer action. A benefit intended to replace earnings lost through medical incapacity does not ordinarily continue after the age at which the employee could no longer earn those earnings.

Five airline pilots had received permanent health insurance benefits after losing their fitness to fly through medical incapacity. Their employment contracts incorporated the memorandum of agreement between their employer and the recognised union, BALPA, including later revisions.

In 2021, TUI and BALPA agreed a replacement income-protection scheme. It preserved the existing scheme for in-claim pilots until age 60, but thereafter substituted the new scheme. The pilots contended that a clause in the 2015 PHI Handbook protected benefits already being paid from that change. They also challenged the lower court’s alternative conclusion that PHI benefits could not extend beyond age 65.

HH Judge Graham Wood KC, sitting in the High Court, dismissed the claim: [2024] EWHC 2589 (KB). The central issue was whether the protected-benefit clause prevented the collectively agreed variation.

1. Appeal dismissed. The incorporation term unequivocally incorporated terms agreed by TUI and BALPA, including subsequent revisions. It contained no express or implied restriction preventing collectively agreed reductions in contractual benefits. The protection for employees was that the change required agreement with the recognised union rather than unilateral employer action.

2. The protected-benefit clause in paragraph 5.1 of the PHI Handbook had to be read with the preceding sentence. Its natural purpose was to qualify TUI’s reserved right unilaterally to modify, suspend or discontinue the PHI scheme. The reference to benefits continuing after “any such change” concerned a change under that unilateral power. It did not create an exception to the contractual incorporation of a later collective agreement.

3. The authorities concerning dismissal or “fire and rehire” to remove permanent or PHI benefits did not govern this case. The disadvantage resulted from an agreement made through collective bargaining, not from unilateral action by TUI. Although the judge had incorrectly described BALPA as the pilots’ agent, that error did not affect his analysis. A collectively agreed revision could properly be contrasted with unilateral action, even though a union does not ordinarily act as an agent in the strict legal sense.

4. The new Schedule B was apt for incorporation because it created defined individual rights to income-protection benefits. The aptness doctrine did not provide a separate obstacle to its incorporation.

5. The age-65 issue was unnecessary to the disposal. The court nevertheless agreed with the judge’s contextual construction: PHI was designed to replace salary lost while a pilot would otherwise have been permitted to fly commercially. It was not intended to provide benefits after age 65, when a pilot could not lawfully earn that salary.

• Court of Appeal (Civil Division): dismissed the pilots’ appeal: [2026] EWCA Civ 988 .
• High Court, King’s Bench Division: HH Judge Graham Wood KC dismissed the contractual claim, holding that the collectively agreed replacement scheme varied the pilots’ PHI rights and, alternatively, that PHI benefits did not continue beyond age 65: [2024] EWHC 2589 (KB) .