Trade unions and the contractual incorporation of collective agreements

Published on: 12/06/2019


It is well understood that a recognised trade union can negotiate terms and conditions of employment, and that the outcome of negotiations is recorded in a collective agreement applicable to all staff in the trade union’s bargaining unit. However, the EAT has held that the terms of a collective agreement need to cover the same factual circumstances in an employee’s contract in order to be successfully incorporated.

In the recent case of Lozaique v Tesco Stores Ltd, Mr Lozaique appealed against an employment tribunal decision dismissing his claim for unlawful deduction of wages. He argued that his contract of employment required him to do 20 hours of overtime per week and entitled him to be paid at time and half for this. The Respondent contended that negotiations with the relevant trade union had resulted in the rate of overtime being reduced from time and half to single time for 12 of the hours in question.

Allowing the appeal, the EAT held that while the collective agreement was expressly incorporated into the Appellant’s contract of employment, the revised term about overtime premiums was “not apt for incorporation”. Mr Lozaique had an obligation to complete 20 hours of overtime each week. The terms of the collective agreement which referred to overtime premiums did not apply, because these terms related to voluntary overtime.

The case shows that it cannot be assumed that all aspects of a collective agreement are incorporated into an employee’s contract – even where the collective agreement is stated as being expressly incorporated and the terms address the same subject matter. Each term of the collective agreement must be examined to see if its construction covers the same factual scenarios as the employee’s original contract. Only then will the collective agreement displace the original terms.


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