Third-party travel benefit was withdrawn in breach of contract
The EAT has found that an employer could not rely on an agreement with a third-party provider to withdraw a lifelong travel benefit from its employees without breaching their contracts.
The Facts
In Adekoya v Heathrow Express Operating Co Ltd [2024] EAT 72 the claimants were employees of Heathrow Express. They were entitled to discounted rail travel benefit which was provided by a third-party. Although the claimants' employment contracts did not explicitly refer to this benefit, a separate agreement outlined that employees with over five years of service would retain this benefit upon redundancy or retirement (Agreement). The Agreement allowed the third-party to curtail or withdraw the benefit and in 2019 the third-party notified the employer that the benefit would only be retained by employees who commenced employment before 31 March 1996 and who were made redundant or retired.
All of the claimants had over five years' service but commenced employment after 31 March 1996. They were made redundant, and the benefit was not provided. The claimants brought claims for breach of contract in the Employment Tribunal.
The Tribunal found that the terms of the Agreement (including its withdrawal provisions) were incorporated into the claimants' contracts of employment. On this basis, the Tribunal found that, therefore, the employer could withdraw the travel benefit without any breach of contract.
The claimants appealed to the Employment Appeal Tribunal.
EAT decision
The EAT allowed the appeal. It found that the terms of the Agreement had not been incorporated into the employees' contracts. It is theoretically possible for a contract to provide for the provision of a benefit to depend on the involvement of a third-party, and indeed the contract could provide for that benefit to be withdrawn by the third-party. However, the claimants' contracts contained no such terms and so the Agreement was not incorporated. The fact that the claimants were aware that the benefit was provided by a third-party provider did not alter this fact.
Learning points
This decision acts as a reminder of the importance of ensuring that the limits of any third-party provided contractual benefits are clearly expressed under the terms of the contract. Employers should not assume that employees are aware of or bound by terms in third-party agreements unless these terms are explicitly incorporated into their contracts of employment.