Mr G Finella v The Kent, Surrey and Sussex Community Rehabilitation Company Ltd (England and Wales : Breach of Contract)

Factual and Procedural Background

The Plaintiff was employed by the Sussex Probation Board beginning 6 May 2008 and subsequently transferred to the Defendant, a Community Rehabilitation Company, following organisational changes in the probation service. The Plaintiff was made redundant effective 3 March 2017, receiving payment in lieu of notice and statutory redundancy pay without the statutory cap applied. The Plaintiff claimed entitlement to a larger redundancy payment under a collective agreement and alleged that the Defendant failed to comply with notification obligations to recognised trade unions regarding proposed redundancies. The Defendant denied these claims. The Employment Tribunal heard the case on 2 November 2017 and dismissed the claims.

Legal Issues Presented

1. Whether the Plaintiff was entitled to an enhanced redundancy payment under the terms of a collective agreement incorporated into his contract of employment.
2. Whether the Defendant breached procedural obligations under the collective agreement relating to consultation and notification to recognised trade unions in the redundancy process.
3. Whether the Plaintiff could enforce provisions of the collective agreement or a related commercial agreement to which he was not a party.

Arguments of the Parties

Plaintiff's Arguments

• The Defendant deliberately failed to notify the National Negotiating Council (NNC) Joint Secretaries and recognised unions in a timely manner, rendering the redundancy process invalid.
• The Defendant failed to agree the redundancy process with the unions as required by the collective agreement.
• The Defendant did not offer Enhanced Voluntary Redundancy (EVR) payments at the appropriate rates under the collective agreement.
• The Defendant ignored agreed procedures set out in the collective agreement and followed its own approach.
• The Plaintiff relied on a letter dated 22 April 2015 concerning redundancy entitlements in similar organisations.

Defendant's Arguments

• The Management of Change Protocol in the collective agreement is not binding on the Defendant and the Plaintiff has no enforceable right under it.
• The Plaintiff suffered no loss due to alleged procedural failures.
• The Plaintiff was not a party to the Commercial Agreement containing enhanced redundancy terms, which excludes third party rights.
• The Plaintiff was compulsorily made redundant and did not volunteer for redundancy, thus not qualifying for voluntary redundancy payments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Department of Transport v. Sparks [2016] ICR 695 CA	Determining whether provisions of a collective agreement are apt for incorporation into individual contracts of employment.	The court applied the principle that only provisions appropriate to be terms of an individual contract are incorporated, concluding that procedural provisions in the collective agreement were not incorporated into the Plaintiff's contract.
Alexander v Standard Telephones & Cables Ltd (No 2) [1991] IRLR 286	Contractual intention and incorporation of collective agreement terms into contracts of employment.	Referenced to support the approach to contractual construction and incorporation of collective agreement terms.
Wandsworth London Borough Council v D'Silva [1998] IRLR 193	Contractual intention in incorporation of collective agreements.	Approved the approach in Alexander, guiding the court’s analysis on incorporation of collective agreement provisions.

Court's Reasoning and Analysis

The court began by emphasising that the claims were purely legal questions concerning contractual and procedural rights. The Plaintiff’s contract incorporated terms from the National Negotiating Council (NNC) collective agreement, but only those provisions apt for inclusion in an individual contract. The court found that procedural provisions such as the Management of Change Protocol, described as a framework and declarations of intent, were not incorporated and thus not enforceable by the Plaintiff.

Regarding the enhanced redundancy payment claim, the court noted that voluntary redundancy decisions rested at the employer’s absolute discretion and the Plaintiff was made compulsorily redundant, not voluntarily. Therefore, no entitlement to enhanced voluntary redundancy pay arose.

The Commercial Agreement between the Secretary of State and the Defendant was not a contract to which the Plaintiff was party and expressly excluded third party rights, precluding the Plaintiff from enforcing its terms. The April 2015 letter relied upon by the Plaintiff was a summary of existing agreements relating to a different company and did not create enforceable rights against the Defendant.

The court dismissed the Plaintiff’s claims, concluding no breach of contract or entitlement to additional redundancy pay existed.

Holding and Implications

The claims are dismissed.

The direct effect of this decision is that the Plaintiff is not entitled to enhanced redundancy payments beyond statutory entitlements nor to damages for procedural breaches under the collective agreement. No new legal precedent was established; the decision reaffirms established principles regarding incorporation of collective agreement terms, the discretionary nature of voluntary redundancy, and the limits of third party enforcement of commercial agreements.