Take it away - continuing to work did not mean employees agreed to contractual change

What happened

Employees in various government departments had a contractual right to have trade union subscriptions and certain other payments deducted automatically from their pay and paid direct to the relevant third party. These were referred to as check-off arrangements.

In 2015 several departments, including the Home Office, unilaterally withdrew the check-off facility. The Public and Commercial Services Union (PCS), which represented employees, protested before the change was implemented and subsequently took successful legal action against the Department for Work and Pensions in 2016. However, neither it nor the employees took any further steps in relation to the other government departments until 2020. At that point the PCS and a few individual employees issued further proceedings, alleging that withdrawing check-off was a breach of the employees’ contracts of employment.

The Home Office argued that employees had accepted the variation to their terms and conditions by continuing to work without protest for over five years after it withdrew check-off. They had also waived any earlier breach. It also argued that the PCS could not enforce the right to check-off because the parties did not intend the right to be enforced by someone who was not a party to the employment contract.

The Home Office appealed after the High Court upheld the employee and union claims.

The Court of Appeal's decision

The Court of Appeal accepted that an employee may accept a variation of contract by continuing to work without protest. However, this will depend on the inferences that a court can draw from all the circumstances of the case. A court or tribunal will be reluctant to infer unequivocal acceptance if there is some other reasonable explanation for why an employee has continued to work. A collective protest, for example by a union, may also make it more difficult to infer acceptance.

There were several factors that indicated that employees had not accepted the withdrawal of check-off despite the fact that they had continued to work:

• The PCS protested to the employer before the change and tried to begin a collective grievance on behalf of employees. Even though the PCS did not pursue the grievance, it showed that it had not withdrawn its objections;
• It had initiated legal action against one government department, the outcome of which was likely to be relevant to other departments. This was a strong pointer that the union and its members had not accepted the contractual variation; and
• The Home Office had not presented the change as a contractual variation, nor made it clear to employees that continuing to work would be treated as acceptance of the variation.

The High Court was entitled to find that the evidence did not establish that employees had unequivocally accepted the variation to their terms, despite the lengthy period between the change and the ultimate litigation.

However, by a majority the Court of Appeal agreed that the parties did not intend the PCS, or any other recipient of payments deducted from employee pay, to be able to enforce the right to check-off. 

Next steps

It is often unattractive both for legal and employee relations reasons for an employer to dismiss and re-engage employees to effect a change to their terms and conditions of employment. However, this case demonstrates the risks of imposing a change unilaterally and arguing that employees have accepted the change simply by continuing to work without protest.

We will be discussing the options for employers who want to change employee terms during a lunchtime webinar on 6 July 2023. Please contact Elsa Paixao or Jessica Clavin for further information.

Authored by Jo Broadbent, Alice Whitehead and Stefan Martin.