Deductions from wages – a recent case

Some trade union members have arrangements with their employers for their union subscriptions to be deducted directly out of their wages. These arrangements are commonly referred to as ‘check-off’. Clearly this is an arrangement favoured by unions as it makes it easier for subscriptions to be collected. However, it is generally regarded as optional for the employer as there is no legal obligation to agree to put in place check-off arrangements.

In a recent case the issue to be considered was whether the check-off arrangements were contractual, such that withdrawal of the facility to have the subscriptions deducted amounted to a breach of contract and if so, whether the employees had in any event accepted the breach by continuing to work for the employer and making alternative arrangements to continue paying the union subscriptions.

 

The Union was recognised for collective bargaining and check-off arrangements for member subscriptions had been in place for many years. It was referred to in a service code guide dating back to 1976.  A further code had been published in 1996 also referred to the arrangements.

 

In 2014 a communication set in motion the removal of the check-off facility citing that it was not desirable for the employer to provide “an unnecessary service on behalf of the Trade Unions and their members”. Despite union objections, the check-off was withdrawn on 1 December 2014.

A subsequent union grievance was rejected, and no legal challenge was taken in the High Court until 3 December 2019, by which time many union members had put in place alternative arrangements for paying their subscriptions.

 

A number of individual union members claimed that the removal of the check-off facility was a breach of the terms of their employment contracts. The High Court agreed.

 

It was held that the check-off arrangements had a contractual effect.The employers’ arguments that the changes had been accepted and that any breach had been waived was rejected.The employees continuing to work was not sufficient to show an implied agreement and the collective grievance raised by the union underlined this. Even if direct debits were set up as an alternative way to make payments, it was not considered to be evidence of acceptance.

 

This outcome highlights the importance of seeking employees’ express agreement to make changes to terms and conditions of employment. Simply imposing changes and trying to establish an employee’s implied agreement to the change will be difficult. Even though more than five years had passed since the changes in this case it was still not possible to establish implied acceptance.

 

Should you be considering changes to terms and conditions contact 121 HR Solutions for practical advice on 0800 9995 121.

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