Supreme Court judgment considers scope of equitable rectification

On November 13, 2024, a Supreme Court judgment confirmed that the equitable remedy of “rectification” is available for collective agreements, even though they are usually not legally enforceable.

Rectification is an equitable remedy used to correct mistakes in legal documents so that they reflect the intentions of the parties. The remedy is available only if the original document inaccurately reflects the parties’ agreement. Rectification does not create new rights or obligations but allows the document to be amended to express the actual agreement.

In National Union of Rail, Maritime and Transport Workers v Tyne and Wear Passenger Transport Executive T/A Nexus [2024], the Supreme Court held that a collective bargaining agreement could be rectified even though it was not a legally enforceable contract. Rectification could, in principle, apply to a collective agreement if it affected the rights or obligations of others (such as employees) through incorporation into individual contracts of employment.

The Supreme Court’s decision that the Employment Tribunal, whilst it had no power to make a rectification order, could treat a document as having been rectified on the basis of the principle that "equity can treat as done that which ought to have been done".

This has potentially wide-ranging consequences for other statutory tribunals, including tax tribunals and the Pensions Ombudsman.