Kaur v MG Rover

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Last modified: 07/03/18 Author: In-house law team

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Kaur v MG Rover, [2005] IRLR 40

The effect of collective agreements on the construction of an individual employment contract.

Facts

An employee was threatened with compulsory redundancy by her employer. The employee applied to court for declaratory relief that the employer was not entitled to make her compulsorily redundant. She claimed that her individual contract of employment incorporated the provisions of two previous collective agreements that were reached between the employer and trade unions. The terms of the individual contract stipulated that employment was subject to ‘collective agreements’ made with trade unions. The employer argued that the collective agreements constituted mere promises and bargaining with the trade unions, rather than a legally-enforceable agreement.

Issue

The question arose as to whether each of the two collective agreements were intended to constitute legally-binding contracts, so as to be apt for incorporation into an individual contract of employment.

Held

The Court held that, in the case of collective agreements between employers and trade unions, there may be provisions that were intended or not intended to give rise to legally-enforceable contractual rights between an employer and individual employee. Accordingly, in order to determine the intention of the parties’ as to whether the collective agreements were legally-binding, the Court must interpret the words of the agreement within their surrounding context and content, in order to show that the words express a binding contractual term rather than a mere aspiration. On the facts, the Court held that both of the collective agreements were worded in the context of a bargain, with the trade unions to show a commitment to aspire to a collective objective of no compulsory redundancy. This was an aspiration of a collective rather than individual character, and was not a legally-binding agreement that was apt for incorporation in the individual employee contract.

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