When will a term agreed through a collective process be binding on individual employees?

A term agreed through a collective process will be binding on individual employees where there is a collective agreement between the employer (or employer's association) and the trade union that has been incorporated into the individuals' employment contracts, either expressly or impliedly.

Where there is no express incorporation of the collective agreement into an individual employment contract, it is possible (although difficult) to imply that the agreement has been incorporated by custom and practice. In Henry and others v London General Transport Services Ltd [2002] IRLR 472 CA, the Court of Appeal confirmed that it was possible to imply a term incorporating a collective agreement if the custom was reasonable, certain and notorious.

The collective agreement must be suitable for incorporation into the employment contract. For example, provisions relating to pay, hours, disciplinary procedures and sickness procedures are suitable for incorporation, but provisions relating to the relationship between the union and employer, such as a collective grievance procedure, are not.

Where a collective agreement has been incorporated, the individual employment contract will change automatically if a term is varied by agreement between the employer and the union. The individual consent of each employee is not required and it does not matter that an employee does not want the new terms to apply to them. Such changes will bind both union and non-union members.