The UK’s highest court, the Supreme Court, has ruled in favour of trade union members employed by the transport company Nexus on the Tyne and Wear Metro in a judgment that clarifies the legal standing of collective agreements and the rights of employees to enforce them.
Thompsons Solicitors, acting on behalf of the RMT and Unite the Union, hailed today’s decision as a victory for trade union members’ rights in disputes over pay and conditions. The Supreme Court's decision also solidifies employee protections when employers attempt to reinterpret agreements retrospectively.
The Supreme Court’s judgment stems from a long-running dispute over Nexus’s interpretation of a 2012 agreement with Unite, RMT and other unions, in which a productivity bonus was incorporated into employees’ basic pay.
Employees argued that this adjustment should have increased their shift allowances, calculated with reference to basic pay. Nexus disagreed, leading to years of litigation.
In the initial employment tribunal, Nexus was found to have underpaid employees by not reflecting the increase in shift allowance, but Nexus subsequently sought to rectify the original agreement to avoid these liabilities.
This Supreme Court decision underscores that Nexus cannot use rectification of the 2012 agreement to avoid previously determined wage claims to deprive those Claimants of the decision in their favour.
Neil Guss, an employment lawyer at Thompsons Solicitors representing the unions, said:
“This is a crucial decision for all workers relying on collectively bargained terms. A promise to workers regarding their pay and conditions must be upheld and attempts to rewrite these promises will not stand.
“This decision provides security of employee pay and conditions under collective agreements. It prevents employers from unilaterally changing pay structures by retrospectively “correcting” agreements, which may disrupt workers' livelihoods.
“As the Supreme Court has highlighted in today’s judgment, collective agreements are binding once incorporated into individual contracts, ensuring workers’ rights cannot be easily rewritten.
“Thompsons is proud to have supported RMT and Unite in protecting their members' rights and financial security.”
Mick Lynch, RMT general secretary, said:
"This is a resounding victory for workers across the country, and it sends a clear message to employers who think they can ride roughshod over collective bargaining agreements.
"By ruling that collectively agreed terms, once embedded in individual contracts, cannot be altered without directly involving the affected employees, the Court has limited employers from doing what they want on a whim.
"Nexus tried to walk back on commitments it made to our members, but today’s decision proves that when we stand united, justice prevails.
"This outcome not only protects the livelihoods of our members on the Tyne and Wear Metro but also strengthens the foundation of collective bargaining for all workers.
"RMT will always stand firm against any attempt to undermine our members hard-won terms and conditions, wherever they work."
Unite general secretary Sharon Graham, commenting on the legal victory, said:
"This has been a complicated and long running legal dispute on behalf of Nexus workers. Our victory at the Supreme Court shows not only that we were right all along but that Unite will take the fight, on behalf of its members, all the way to the highest court in the land where necessary.
"This is a legal precedent that will be incredibly important to the wider union movement. This is a vindication for our members who would not allow their employer to pick their pockets."
Background
In 2012, Nexus and the unions, including RMT and Unite, reached a collective agreement that consolidated a bonus into employees’ basic pay. This agreement, however, raised disputes over its impact on shift allowances, as employees argued that the increased basic pay should proportionately increase their shift allowances because their employment terms provided for shift allowances to be calculated as a percentage of basic pay.
By 2015, a group of employees filed claims alleging that Nexus had underpaid them by failing to adjust shift allowances in line with the increase in basic pay. An employment tribunal ruled in favour of the employees, concluding that Nexus’s interpretation of the agreement was incorrect.
Following unsuccessful appeals, Nexus attempted to “rectify” the original agreement in 2020. It argued that the agreement had mistakenly recorded the terms and that the intention was not to increase shift allowances. Importantly, Nexus sought to make this change without involving the employees whose pay would be affected and instead pursued the claim for rectification against the RMT and Unite.
In 2024, the Supreme Court ruled that Nexus’s approach was procedurally flawed. The Court concluded that if Nexus wished to challenge the agreement’s impact on employee pay, it would need to do so against the affected employees rather than against the unions alone.
This ruling strengthens employee protections by confirming they are legally enforceable once collective terms are embedded in employment contracts. It assures employees that their agreed-upon terms cannot be altered retrospectively, securing entitlements and clarifying employers’ obligations.
This judgment underscores unions’ role in collective bargaining while protecting them from liability in cases where employers seek to alter terms embedded in employee contracts. Unions are not always the proper defendants in legal disputes over pay when those terms have been transferred to individual contracts.