Contracts of employment
Limitation Periods: Offers; Repudiation
SBHA Ltd attempted to negotiate changes to terms and conditions of employment with the recognized trade unions over a two-year period. As agreement could not be reached, SBHA Ltd arranged meetings with employees. On 18 September 2019, it wrote a letter to employees giving them the opportunity to agree to the amended terms. The letter explained the effect of the proposed changes and set out each employee’s new pay grade and salary. Employees were invited to indicate their acceptance by signing and returning a copy of the revised terms and conditions by 21 October 2019. 96 out of 104 employees agreed to the variation. On 13 December 2019, SBHA Ltd sent a further letter to those who had not returned a signed copy of the revised terms, which stated that the new terms and conditions would come into effect on 16 January 2020. A number of employees who refused the new terms submitted claims to an employment tribunal on 28 January 2020, asserting that the offer of new terms constituted an unlawful inducement relating to collective bargaining under S.145B TULR(C)A. S.145C provides that an employment tribunal shall not consider a complaint under S.145B unless it is presented before the end of the period of three months beginning with the date when the offer was made or, where the offer is part of a series of similar offers to the complainant, the date when the last of them was made, or where the tribunal is satisfied that it was not reasonably practicable for the complaint to be presented before the end of that period, within such further period as it considers reasonable. The parties accepted that if the letter of 13 December did not constitute an offer, the claims were out of time.
An employment tribunal accepted that the claims were in time. It was satisfied that the letter of 13 December should be treated as an offer since the proposed change could still be accepted or rejected. It considered that the letter of 13 December followed on from the letter of 18 September. It related to the same proposed change to terms and conditions. Therefore, both letters formed part of a series of similar offers to the claimants for the purposes of S.145C and the date of the last offer in that series was 13 December. SBHA Ltd appealed to the EAT. It argued that the letter of 13 December communicated SBHA Ltd’s intention to impose the change irrespective of the claimants’ rejection of the offer. Thus, while the claimants could still have changed their mind and fallen in with the offer made, the letter made it clear that, irrespective of possible changes of heart, SBHA Ltd had decided to impose the changes whether they were accepted or not. The consequence of the letter of 13 December was that SBHA Ltd was in anticipatory breach of contract such that the claimants would have a potential claim under S.13 of the Employment Rights Act 1996 if it could be demonstrated that they had suffered a loss through the change to the contract of employment.
The EAT accepted SBHA Ltd’s submissions. The letter of 13 December was not a contractual offer. It intimated SBHA Ltd’s intention to impose new terms and constituted an anticipatory breach of contract. An employer that intimates its determination to unilaterally impose new terms cannot be said to offer new terms under S.145B. The employment tribunal had proceeded on the basis that the letter should be construed according to its terms and nothing had been said to persuade the EAT that the tribunal had relied on the evidence led by SBHA Ltd in reaching its conclusion. There was no evidence which indicated that, despite its terms, the letter of 13 December should be understood as an offer, and no indication that the tribunal approached the issue of construction on any evidence other than the terms of the letter. The EAT concluded that the claimants should have lodged their claims within three months of the letter of 18 September. It therefore allowed the appeal and dismissed the claimants’ claims as out of time.
The three-month time limit for presenting an unlawful inducement claim starts to run from the date the employer makes the offer of the new terms and conditions, not on any later date when the employer indicates its intention to impose the new terms on employees who have refused the offer. Communication of an employer’s intention to impose revised terms on all those who have not accepted the offer of new terms and conditions does not constitute an offer of new terms for the purposes of Ss.145B and 145C of the Trade Union and Labour Relations (Consolidation) Act 1992, even though the employees could still change their minds and accept the revised terms.