Alexander v Standard Telephones (No.2) [1991] IRLR 286

• Plaintiffs were made compulsorily redundant, and claimed that this breached their contracts which incorporated a collective agreement that senior workers would be the last to be made redundant. 

• The court rejected a claim for damages for breach of this term on the grounds that the collective agreement was not expressly or impliedly incorporated into the agreement. 

Hobhouse J

• Where a contract isn’t itself conclusive on a point (as here re redundancy) alternative materials can be looked at to determine whether a document was impliedly incorporated, considering contractual intent. 

• The mere existence of a collective agreement does not incorporate it into contracts it affects: there must be some form of contractual intent.

• Gunton shows that damages for the wrongful termination of a contract are to be assessed by reference to the value of the contractual rights of the injured party, not his expectations.

  • Hence the damages suffered are the wages payable for the period between the unlawful sacking and the point at which the employer could most quickly have lawfully dismissed Plaintiff.

• Once it is appreciated that the general security of employment which an industrial employee enjoys under English law normally derives not from his contractual rights but from his statutory rights, it can be seen that there is nothing surprising in his contractual remedies for wrongful termination of the contract of employment being of limited value. 

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