Decision

Bargaining Unit Decision

Updated 30 August 2023

Applies to England, Scotland and Wales

Case Number: TUR1/1331(2023)

30 August 2023

CENTRAL ARBITRATION COMMITTEE

TRADE UNION AND LABOUR RELATIONS (CONSOLIDATION) ACT 1992

SCHEDULE A1 - COLLECTIVE BARGAINING: RECOGNITION

DETERMINATION OF THE BARGAINING UNIT

The Parties:

Communication Workers Union

and

Cuckoo Internet Limited

1. Introduction

1) The Communication Workers Union (the Union) submitted an application to the Central Arbitration Committee (the CAC) dated 31 May 2023 that it should be recognised for collective bargaining purposes by Cuckoo Internet Limited (the Employer) in respect of a bargaining unit comprising “Customer Service Representatives, Onboarding Specialist and Customer Operations Team Leaders working in Customer Service.” The location of the bargaining unit was given as “no single location as they are all remote workers.” The application was received by the CAC on 31 May 2023 and the CAC gave both parties notice of receipt of the application by a letter of the same date. The Employer submitted a response to the CAC dated 12 June 2023 which was copied to the Union.

2) In accordance with section 263 of the Trade Union and Labour Relations (Consolidation) Act 1992 (the Act), the CAC Chair established a Panel to deal with the case. The Panel consisted of Mr Stuart Robertson, Panel Chair, and, as Members, Mr David Cadger and Mr Michael Clancy. For the purposes of the bargaining unit hearing, Ms Claire Sullivan replaced Mr Michael Clancy as a Panel Member. The Case Manager appointed to support the Panel was Joanne Curtis.

3) By a decision dated 6 July 2023 the Panel accepted the Union’s application. The parties then entered a period of negotiation in an attempt to reach agreement on the appropriate bargaining unit. As no agreement was reached, a bargaining unit hearing was arranged and the parties were invited to supply the Panel with, and to exchange, written submissions relating to the question of the determination of the appropriate bargaining unit.

2. Hearing

4) A hearing to determine the bargaining unit took place on 24 August 2023 at the Holiday Inn Hotel, Stevenage. Mr R Ellis, the Union’s Head of Recruitment, Organising and Membership Development, represented the Union. Mr P Howarth, solicitor, represented the Employer. Mr Ellis and Mr Howarth made oral submissions to supplement the parties’ written submissions and provided further information during the hearing for which the Panel was grateful. The parties did not provide the Panel with any documents apart from their written submissions.

3. Submissions from the Union

5) At the outset of the hearing Mr Ellis confirmed to the Panel that the proposed bargaining unit as set out in its application (see paragraph 1 of this decision) had not changed.

6) Mr Ellis explained that the proposed bargaining unit was comprised of non-managerial grades working for the Employer in Customer Service: Customer Service Representatives, Onboarding Specialists, and Customer Operations Team Leaders. The employees in the bargaining unit all worked from home. The Employer’s Customer Service function had a discrete management chain comprising a Chief Customer Officer and Customer Services Director. Mr Ellis said that the Union had met with the Employer twice to discuss recognition and whilst no agreement had been reached, on neither occasion had the Employer sought to argue that Customer Service was not a viable bargaining unit compatible with effective management.

7) The Union advised the Panel that since the application was submitted, the Employer had undertaken a voluntary redundancy exercise within the proposed bargaining unit and had told the remaining workers that their work was being outsourced to a third party. This reinforced the Union’s view that Customer Service was a discrete entity but, the Union accepted, raised a question as to the future of the bargaining unit. However, as matters stood, the Customer Service function remained a discrete entity with 10 workers falling within it which was clearly compatible with effective management. The Union noted that the Employer had not put forward an alternative bargaining unit. The proposed bargaining unit consisted of workers carrying out a specific customer service function and the viability of such a bargaining unit had never been questioned until the voluntary redundancy exercise.

8) The Union stated that seven out of the 10 remaining workers in the proposed bargaining unit were Union members. A meeting had taken place with six of those seven members within the last week.

4. Submissions from the Employer

9) Mr Howarth told the Panel that the Employer had met with the Union during June and July and then again on 2 August to discuss its application for recognition and to understand more about how the Union thought it would work in practice if collective bargaining were in place. That process had not produced any agreement as to the bargaining unit.

10) Mr Howarth noted that the membership check on the Union’s proposed bargaining unit carried out on 22 June 2023 indicated that there were 41 workers in that unit at that time. The Employer had previously informed the CAC that it was undertaking a restructure of various functions, which included the potential for workers within the Union’s proposed bargaining unit to be impacted.

11) Mr Howarth stated that he was able to provide an update as to the restructure and, where possible, to provide information which might be relevant to the CAC’s considerations as to whether the proposed bargaining unit is appropriate.

12) Mr Howarth advised that as a result of pressures within the Employer’s market (which had seen significant headcount reduction in various technology companies in the past year), the Employer had made a business decision to leave the traditional broadband market and cease to sell such services to customers. This left the Customer Service function to deal with existing customers only. As a result of that, the Employer had offered voluntary redundancy or internal redeployment to employees. This process had had a material impact on the size and make up of the proposed bargaining unit, meaning that by 18 August 2023, the Employer had only 10 workers remaining in it, made up of eight Customer Service Representatives and two Customer Service Team Leaders. That remains the position as at the date of this hearing.

13) Mr Howarth submitted that a bargaining unit of only 10 people was too small to be viable or be compatible with effective management. He was unable to suggest any alternative bargaining unit.

14) Mr Howarth advised the Panel that following this exercise, the Employer had decided to contract out the Customer Service function to a third party provider, meaning that it was proposed that by 15 September 2023, the function would no longer exist within the Employer’s business. Further, if employees transferred to the third party provider, they would be required to work at the third party’s premises in Sheffield rather than from home. The Employer had offered voluntary redundancy terms to the workers in Customer Service and of those 10, eight had already agreed terms which were set out in formal settlement agreements.

15) In terms of paragraph 19B of Schedule A1to the 1992 Act, Mr Howarth submitted that a proposed bargaining unit of 10 workers was not compatible with effective management as it was too small. He said that the Employer has an existing employee forum which represents the entire workforce and which engages with workers on a range of issues (although he accepted that the Employer had not consulted the employee forum about the restructure or consequential redundancies). He contended that collective bargaining on pay, hours and holiday with such a small unit it would cause fragmentation of the exercise of engagement with staff about terms and conditions. It would also represent a disproportionate commitment on the part of the Employer to have a formal system of bargaining for a small number of workers. The process of collective bargaining with a small number of remote workers would be even harder. Finally, it was not clear to the Employer what job titles or activities will exist in the Union’s proposed bargaining unit following the transfer of functions to the third party. The Employer accepted that the proposed bargaining unit still existed as the roles still existed, but that position was likely to change. This was not a case of making tweaks to the proposed bargaining unit but was a wholescale change. Mr Howarth invited the Panel to look at Paragraph 19B and the fact that whether a bargaining unit is compatible with effective management is a forward looking exercise, as recognition would take place in the future.

5. Submissions from the Union in reply

16) Mr Ellis accepted that the Employer had explained in discussions about the proposed bargaining unit that it was undergoing a period of change, and this included the potential for impact on roles within the Union’s proposed bargaining unit. He accepted that there had been a programme of voluntary redundancies, but there was no collective consultation with the remaining workers in the Customer Service function about the proposed transfer to a third party. He agreed that workers had been offered voluntary redundancy terms in without prejudice communications and that if they accepted the terms, they would leave employment on 15 or 29 September 2023. He did not dispute that, as Mr Howarth had said, a number of workers had accepted the voluntary redundancy terms, but said that as at the date of the hearing, the proposed bargaining unit remained in existence and compatible with effective management. He contended that it remained unclear what Customer Service functions would remain after 15 September 2023 and did not accept the business reasons for contracting out the activities.

6. Considerations

17) The Panel begins with the statutory framework. The Panel is required, by paragraph 19(2) of the Schedule to the Act, to decide whether the proposed bargaining unit is appropriate and, if found not to be appropriate, to decide in accordance with paragraph 19(3) a bargaining unit which is appropriate. Paragraph 19B (1) and (2) state that, in making those decisions, the Panel must take into account the need for the unit to be compatible with effective management and the matters listed in paragraph 19B(3) of the Schedule so far as they do not conflict with that need. The matters listed in paragraph 19B (3) are:

(1) the views of the employer and the union;

(2) existing national and local bargaining arrangements;

(3) the desirability of avoiding small, fragmented bargaining units within an undertaking;

(4) the characteristics of workers falling within the bargaining unit under consideration and of any other employees of the employer whom the CAC considers relevant; and

(5) the location of workers.

Paragraph 19B(4) states that in taking an employer’s views into account for the purpose of deciding whether the proposed bargaining unit is appropriate, the CAC must consider any view the employer has about any other bargaining unit that it considers would be appropriate. The Panel must also have regard to paragraph 171 of the Schedule which provides that “In exercising functions under this Schedule in any particular case the CAC must have regard to the object of encouraging and promoting fair and efficient practices and arrangements in the workplace, so far as having regard to that object is consistent with applying other provisions of this Schedule in the case concerned.”

18) In reaching its decision the Panel has taken account of the views of the Union and the Employer as expressed in their written submissions, responses to questions and oral submissions during the hearing.

19) The Panel’s first responsibility is to decide, in accordance with paragraph 19(2) of the Schedule, whether the Union’s proposed bargaining unit is appropriate. That does not require the Panel to determine whether it is the most appropriate bargaining unit; only whether it is appropriate. This is the overriding requirement under 19B(2) and relates principally to the matters to be collectively bargained for under the statutory regime, namely pay, hours and holidays. The requirement is that the proposed bargaining unit would be compatible with effective management, not that it be compatible with the most effective management. Against the background of that overall responsibility the Panel has to consider the matters listed in paragraph 19B(3) of the Schedule, reminding itself that these matters must not conflict with the need for the unit to be compatible with effective management.

20) The Panel finds that the bargaining unit proposed by the Union is compatible with effective management. The Panel’s reasons are that first, the proposed bargaining unit consists of a discrete Customer Service function with its own dedicated management in respect of which bargaining can appropriately take place; second, there are no other national or local bargaining arrangements in existence and there is no evidence that the employee forum has a bargaining function; third, as no arrangements exist elsewhere within the Employer’s business, no question of fragmentation arises; and fourth, there is no good reason why the Union cannot consult a workforce of mainly remote workers by electronic means. Although the Panel recognises that a bargaining unit of 10 workers is much smaller than the unit of 41 workers when the CAC undertook the membership check, it remains a discrete Customer Service unit carrying out similar functions and there is no reason why collective bargaining with a small but discrete unit of 10 workers is incompatible with effective management. Finally, the Panel recognises the uncertainty about the future of the Customer Service function but the bargaining unit remains in existence as at the date of this hearing which is when the Panel determines its appropriateness. The Panel’s only function at this stage is to decide the appropriateness of the proposed bargaining unit, which it has done based on the circumstances which currently exist. Any later changes in the relevant circumstances can be considered, as appropriate, during the CAC’s process or, if recognition has been granted, by any applications the parties see fit to make.

7. Decision

21) The Panel’s decision is that the appropriate bargaining unit is that proposed by the Union, namely: “Customer Service Representatives, Onboarding Specialist and Customer Operations Team Leaders working in Customer Service.”.

Panel

Mr Stuart Robertson, Panel Chair

Mr David Cadger

Ms Claire Sullivan

30 August 2023

8. Appendix

Names of those who attended the hearing

For the Union

Ray Ellis - Head of Recruitment, Organising and Membership Development

For the Employer

Mr Patrick Howarth - solicitor, Foot Ainstey