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Law Report: Selective pay offer was lawful

Associated Newspapers Ltd v Wilson; Associated British Ports v Palmer, House of Lords
Associated Newspapers Ltd v Wilson; Associated British Ports v Palmer, House of Lords (Lord Keith of Kinkel, Lord Bridge of Harwich, Lord Browne-Wilkinson, Lord Slynn of Hadley and Lord Lloyd of Berwick) 16 March 1995

Giving a higher salary to employees who gave up collective pay bargaining and signed personal contracts did not by itself amount to action by the employer to deter union membership.

The House of Lords allowed appeals by the employers and dismissed claims that the employers had infringed the employees' rights under section 23(1)(a) of the Employment Protection (Consolidation) Act 1978.

The employers wished to enter individual contracts with their employees. In the first case they terminated the house agreement and offered a pay increase to those who signed individual contracts before a certain date. In the second case employees were offered the alternative of individual contracts or continuing with collective bargaining, but those who chose individual contracts achieved greater pay increases. In both cases the employees retained the right to membership of a trade union.

The employees who refused to sign individual agreements claimed that action (short of dismissal) had been taken against them by the employer for the purpose of preventing or deterring them from being a member of an union or penalising him for doing so, in contravention of section 23(1)(a).

Two issues arose: (1) whether "action" within section 23 should be construed to include omission; (2) whether the employers' purpose was to deter union membership.

Nicholas Underhill QC and Brian Napier (Farrer & Co) for ANL; John Hendy QC and Jennifer Eady (Stephens Innocent) for ANL's employees; Patrick Elias QC and Nigel Griffin (RV Pearce) for ABP; Jeffrey Burke QC and Peter Clark (Pattinson & Brewer) for ABP's employees.

LORD BRIDGE said that the courts below were bound by the decision in National Coal Board v Ridgway [1987] ICR 641 to accept the proposition that, under section 23(1) construed with section 153(1), if an employer conferred a benefit on employee A which he withheld from employee B, the omission to confer the benefit on B might amount to "action (short of dismissal) taken against" B.

A close examination of the legislative history refuted the submission that the policy of the relevant employment legislation consistently outlawed discrimination in any form against employees on account of their union membership.

It was impossible to hold that withholding from the employees to the appeals the benefits conferred on some of their fellow employees was capable of amounting to a contravention of section 23(1). The decision in National Coal Board v Ridgway would be overruled.

There was no evidence to suggest the employers were seeking to induce the employees to give up their membership. It could not be said that the service of collective bargaining was an essential union service or that membership of a union unable to offer that service was valueless or insignificant.

LORD BROWNE-WILKINSON agreed with the construction of "action" but expressed no view on the purpose issue.

LORD SLYNN dissented on the construction of "action" and would have read section 23(1)(a) as including omission, but agreed the relevant purpose was not established.

LORD LLOYD dissented on the construction of "action" but agreed there was no evidence that the employers' purpose was to prevent or deter union membership. LORD KEITH agreed with LORD BRIDGE.

Ying Hui Tan, Barrister