Crabb v TUI Airways: Court of Appeal upholds pilots' income protection changes

The Court of Appeal has dismissed a claim brought by five TUI Airways pilots seeking to preserve their entitlements under a legacy permanent health insurance scheme, confirming that terms agreed through collective bargaining with their trade union were validly incorporated into their contracts of employment even though the changes left them worse off.

The judgement, handed down on 29 July 2026 by Sir Nicholas Underhill, with whom Lady Justice Elisabeth Laing and Lord Justice Moylan agreed, upholds a decision of HH Judge Graham Wood KC in the King's Bench Division. The claimants were pilots who had lost their certification to fly for medical reasons between 2017 and 2019 and were receiving benefits under a PHI scheme that, among other things, provided a top-up "proportionate benefit" for those taking suitable alternative employment and an automatic five per cent annual increase.

Facing sharply rising insurance premiums following tightened fitness-to-fly regulation after the Germanwings disaster, TUI negotiated a replacement arrangement with the British Airline Pilots Association, eventually agreed in 2021 as the Pilots' Income Protection scheme. Under the resulting amendment to the parties' Memorandum of Agreement, pilots already in claim before the change kept their PHI benefits only until age 60, after which they transferred to the less generous PIP arrangement, losing both proportionate benefit and the annual escalation.

The pilots argued that a clause in the PHI Handbook, which stated that benefit already in payment would not be affected by "any such change" to the scheme, operated as a standalone protection against any variation, however achieved. TUI's position, accepted by the trial judge, was that this protection applied only where TUI itself exercised a unilateral right to modify or discontinue the scheme, and did not constrain changes reached through collective bargaining with the union, which the pilots' contracts separately and unconditionally incorporated.

Sir Nicholas agreed with that analysis, finding that the protected benefit clause read naturally as a qualification of the immediately preceding sentence conferring the unilateral right, and that nothing in the surrounding contractual scheme supported treating it as a general bar on collectively agreed variation. He accepted that the trial judge had erred in describing the union as acting as the pilots' agent, since collective bargaining does not operate as agency in the strict legal sense, but held the error immaterial to the substantive reasoning. The court distinguished the Supreme Court's recent decision in Tesco Stores v USDAW, noting that case turned on an express mutual consent clause requiring individual employee agreement, a safeguard absent from the TUI arrangements, and that Tesco in any event concerned unilateral employer action to circumvent a permanent benefit rather than a change reached through union agreement.

The court also addressed, on a contingent basis, a separate dispute over whether PHI benefits should have continued until state pension age rather than a pilot's 65th birthday, given handbook wording literally providing for the higher of the two. Sir Nicholas agreed with the trial judge that this reading could not reflect the parties' intentions, since pilots are prohibited from flying commercially beyond 65 in any event, and the scheme's plain purpose was to replace income lost specifically because of an inability to fly, not to provide a windfall extending beyond that age.

The appeal was dismissed on both issues, leaving the PIP arrangements agreed between TUI and BALPA in 2021 intact as against the claimant pilots.