Reviewed 29 April 2019
20th August 2018
It is unusual for a collective agreement to be a legally enforceable contract between a trade union and an employer. Such agreements are, generally, regarded as “binding in honour”. What is a Collective Agreement
The terms of a collective agreement dealing with an employee’s terms and conditions of employment (eg, pay) will be incorporated into his or her contract, and therefore, a unilateral change of such a term will be unlawful. The Effect on Individual Employment Contracts
Once a term of a collective agreement is incorporated into the contract of employment, the term is unaffected by the termination of the collective agreement. The Effect on Individual Employment Contracts
The terms of a collective agreement dealing with the terms that govern the relationship between the employer and the trade union (eg, a dispute procedure) will not be incorporated in the contract of employment. The Effect on Individual Employment Contracts
The terms of a collective agreement may be incorporated into an employment contract either expressly or implicitly. Express Incorporation
A term of a collective agreement may amount to unlawful discrimination. Collective Agreements and Discrimination
Where a TUPE transfer has taken place, the new employer is legally obliged to comply with the incorporated terms of the transferred employees’ contracts regardless of whether or not the agreement has been terminated. However, under a TUPE transfer, the new employer is not bound by ‘dynamic’ clauses in contracts of employment referring to collective agreements negotiated after the transfer where the transferee cannot participate in the negotiations.Collective Agreements and TUPE Transfers
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Ruling confirms that collective agreements cannot be used to reduce minimum holiday pay
Application of collective consultation requirements to employees on fixed-term contracts.
The employees in this case had contractual terms governed by collective agreements, negotiated at a national level. The employees transferred under the Tupe regulations to a private sector employer. A new national collective agreement increased rates of pay. The new employer refused to implement the new pay rates as it could not join in the negotiations. The employees claimed they were entitled to the pay increase.
Can a collective agreement justify disparities in pay?
Collective agreement not incorporated into individuals’ contracts.
Terms from a collective agreement were not incorporated into employee’s contract and so did not transfer.
In many industries, wage rates and employment terms are established by collective agreements negotiated by trade unions and employers (or employer associations). In the UK, collective agreements are generally presumed to be legally unenforceable, binding the parties “in honour only”. This topic looks at the legal definition of a collective agreement and how the terms of such an agreement may be incorporated into individual employment contracts. It also considers the effect of discrimination and TUPE legislation on collective agreements.