Decision

Bargaining Unit Decision

Updated 27 October 2023

Applies to England, Scotland and Wales

Case Number: TUR1/1314(2023)

7 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:

GMB

and

Don-Bur (Bodies & Trailers) Ltd

1. Introduction

1) GMB (the Union) submitted an application to the CAC dated 29 March 2023 that it should be recognised for collective bargaining by Don-Bur (Bodies & Trailers) Ltd (the Employer) for a bargaining unit comprising “All hourly paid direct and indirect employees at Mossfield Road, Stoke-on-Trent ST3 5BW”. The CAC gave both parties notice of receipt of the application on 30 March 2023. The Employer submitted a response to the CAC dated 5 April 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 Mrs Lisa Gettins, Chair of the Panel and, as Members, Mr David Cadger and Mr Ian Hanson. The Case Manager appointed to support the Panel was Kaniza Bibi.

3) By a decision dated 23 May 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, 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 was held on 18 July 2023 in Birmingham and the names of those who attended the hearing are appended to this decision. Both parties provided written submissions prior to the hearing together with supporting documentation. The Panel would like to thank the parties for answering the questions raised during the hearing. The information they provided was very helpful to the Panel.

5) At the outset of the hearing the Panel clarified the issues with the parties. The Union confirmed its submission would be that the bargaining unit set out in its application was appropriate. The Employer confirmed its submissions were that the bargaining unit set out by the Union was not appropriate as it consisted only of staff based at one site. The Panel reminded the parties of the legal test it would apply in deciding the appropriateness of the bargaining unit and the parties were invited to make their submissions.

3. Summary of the submissions made by the Union

6) The Union stated that following a request for support from its members, it began to recruit on the Mossfield Rd site and membership grew from 14 in January 2023 to 110 members at the time of writing. The Union confirmed that growth in membership in such a short period of time, demonstrated the depth of feeling across the workforce for union recognition even with what they asserted was significant intimidation from management. The Union believed that the driver for this was the introduction of additional contractual hours by management in January from 41 hours per week to 43 hours without meaningful consultation or negotiation as well as Health & Safety concerns and bullying by senior management. The Union stated that the drivers for the application for recognition existed only at the Mossfield Road site and the bargaining unit proposed was: All hourly paid direct and indirect employees at Mossfield Road, Stoke on Trent ST3 SBW”. The Union clarified that direct and indirect employees were terms used widely in the manufacturing sector to describe those that add value to a component or product (direct) and those that, within the operations function or supporting the operations function, do not add value to a component or product (indirect). The Union confirmed that for absolute clarity, a welder or paint sprayer was a direct employee whereas a Forklift Truck driver or Quality inspector was an indirect employee. The Union stated that the proposed bargaining unit was chosen because it was made up of all hourly paid employees below management level and made industrial common sense. It was located on a single site that did not impact any existing national or local bargaining arrangements. As the proposed bargaining unit comprised around 300 employees, it would prevent small, fragmented bargaining units on the same contract of employment at the site. The proposed bargaining unit promoted inclusivity and flexibility within the workforce and was therefore compatible with effective management.

7) Furthermore, the Union confirmed that since it had been organising at Mossfield Rd, the Employer had initiated an ‘Employee Representatives Group’ (ERG). The Union stated that this group had been set up to convince employees at the site that they did not need a trade union. The Union further stated that the ERG was made up only of representatives from the Mossfield Road site and it did not cover either of the other two sites. The Union said details of the structure of the representatives could be found on a letter dated 30 March 2023 within its submissions. The Union believed that the creation of the ERG at one site clearly demonstrated that the proposed bargaining unit was within the scope of the current consultation framework set up recently by the Employer and was therefore compatible with effective management. The Union stated that as the initial issue raised by union members of additional contractual hours from 41 hours per week to 43 was done so without meaningful consultation or negotiation and was only implemented at the Mossfield Road site, that the Employer distinguished between the Mossfield Road site and other sites. The Union confirmed its proposed bargaining unit was compatible with effective management.

4. Summary of the submissions made by the Employer

8) The Employer explained that it employed a workforce of around 500 people and operated at three locations in Stoke-on-Trent: Boothen Old Road, Clarence Road and Mossfield Road, the latter being the largest. All three divisions were part of the same legal entity, Don-Bur (Bodies and Trailers) Ltd. These locations were in close proximity to each other, and were interrelated in the manufacturing and assembly process, with high levels of employee flexibility to move between locations and collaborate with co-workers on a range of distinct but integrated tasks. This also meant the Employer operated very unified people practices, developed over many years, which applied to all hourly paid workers, specifically but not restricted to pay, hours of work/shift patterns, and holidays.

9) The bargaining unit proposed by the Union was not appropriate as it excluded the two sister sites at Boothen Old Road and Clarence Road, where hourly paid workers qualified for the same pay, hours, and holidays as those at Mossfield Road. The Employer believed that the Union had selected Mossfield Road because that was where it had its membership and that it had no members or support at the other two sites. This, however, was not relevant as it was not based on the legal criteria for a bargaining unit.

10) The Union’s proposed bargaining unit was not appropriate as it was not compatible with effective management as it would be unworkable in practice as it bore no relation to the manner in which decisions were made, specifically in respect of rates of pay, hours of work, holiday entitlement, and other employment matters. In addition, it excluded workers who shared the same characteristics and were employed on common terms and conditions of employment. It also created small, fragmented units at the other sites, which was undesirable and it would contribute to unfair and inefficient work practices.

11) On the other hand, the bargaining unit proposed by the Employer was similar to the Union’s, but it would cover all hourly paid employees at the Employer’s three sites at Mossfield Road, Clarence Road and Boothen Old Road. In simple and pragmatic terms, this option retained the concept of “hourly-paid workers” but extended it across all three locations. This meant that, in the event that collective bargaining was adopted, this alternate bargaining unit ensured consistency of representation for all hourly-paid workers who shared the same characteristics, avoided segregation, and removed the likely risk of differential treatment resulting from negotiated outcomes, leading to anomalies and perceptions of unfairness, which in turn could affect the industrial relations by breeding discontent between colleagues who worked closely together. When asked by the Panel if the Employer was offering voluntary agreement on all three sites the Employer said that this was not the case.

12) The Employer stated that the need for seamless integration of work required a great deal of workforce flexibility/teamwork for the overall operation to run smoothly. It explained that the Mossfield Road site manufactured the main capital goods and had a large fabrication shop producing the chassis and other major steel and aluminium components. The Clarence Road site was essentially split into two halves, with one side producing curtains, load restraints, decals etc. and the other side doing repairs to HGV trailers and rigids with shotblast facilities and paint booths at their disposal. The Boothen Old Road site again provided repairs to trailers and rigids, but also had full commercial vehicle MOT capabilities. Staff across the sites worked together to achieve a result that would not be possible if they stood alone with no cross-site interactions. Examples of this would be that trailer deliveries and collections were co-ordinated between the three sites so that maximum efficiency was achieved. Decal appliers will often move between Mossfield and Clarence Road to where bottlenecks need relieving, as will welders and painters”.

13) The Employer explained that, in relation to pay, hours and holidays, all hourly paid employees were paid in line with their skill level. All pay increases within the last five years had been linked to appraisals. Its starting rate was always above the National Minimum Wage. Employees across all sites had the option to receive additional payments for training/apprenticeship mentoring etc. All hourly paid employees at all three sites worked set basic hours with an element of contractual overtime, all employees also had the option of voluntary overtime. At the Mossfield Road site hourly paid worked 41 Hours Basic with 2 hours compulsory overtime. Voluntary overtime was also available. On Clarence Road and Boothen Road sites hourly paid work 40 Hours Basic with 2.5 hours compulsory overtime. Voluntary overtime was available. All employees across all the sites had identical holiday entitlements: 30 days per year with an additional day after 5 years’ service. Due to the interactions of staff across all sites, introducing different pay award processes would quickly bring very real divides within the organisation. This would be detrimental to efficient employee co-operation that existed at the moment, and very much more difficult to manage.

14) As for the characteristics of the workers, all employees worked for the same Employer. They all worked standard hours within their particular shift pattern to suit the manufacturing process which their department aligned to. All employees shared the same standard lunch break for ease of management. All employees across the sites received the same holiday entitlement, i.e., 30 days for the full year (plus an additional day after 5 years’ service). All employees across all three sites had their holiday pay calculated the same way: all new starters who have not completed a full year were allocated their holiday allowance pro rata and accruing weekly in line with their dates of commencement. All employees downloaded a company app that allowed them to request any holiday leave adhering to booking rules, the system tracked how many employees had requested leave at the time of booking ensuring this did not leave the department understaffed. The manager would then authorise the leave. The Panel asked the Employer if there was ever any pushback from staff to work across the three sites and the Employer confirmed that staff had always demonstrated flexibility when asked to work across the three sites.

15) The Employer stated that if it operated with different bargaining units, it would potentially crate an “us and them” divide. The Employer operated as a whole and that a separate bargaining unit would result in fragmentation, and it felt that the likely course it would take would be to ‘mirror’ the outcome of collective bargaining at Mossfield Road and apply it across to the other two sites. There should simply be a single bargaining unit across all three sites so that all workers have a say and that implementing differential pay, hours of work and holidays would be unmanageable, and the other sites would effectively become ‘shadow’ bargaining units. The Employer was also concerned that the other two sites could potentially be vulnerable to other unions attempting to get recognition and if this was to happen, the business as a whole would be very difficult to manage.

16) The Employer accepted that it did not currently recognise a trade union for collective bargaining purposes, however, it had established an Employee Representative Group (ERG), which provided a voice to all employees, regardless of site location or role. The ERG was aligned with the fact that all decisions on pay, hours and holidays were taken at a central level. The Employer’s alternative option for the bargaining unit would be more appropriately aligned with the ERG and avoid duplication of time and resource for employee engagement. The Employer confirmed that the ERG had been set up following wildcat strikes. These strikes had been a surprise for the Employer and productivity fell, they felt they recognised the need for greater communication hence the reason why the ERG was set up in early 2023 at Boothen and Clarence Road and then one month later at Mossfield. The ERG that was setup was very embryonic and its purpose was to try and bring everyone together. The Panel asked about shift patterns and the Employer confirmed that they were fixed historically and for nightshifts the pattern was 6-6 and day shifts 7-5.

17) The Employer stated that when it came to the need to avoid small, fragmented bargaining units within an undertaking, it was apparent that the Union’s proposed bargaining unit would exclude 103 employees out of an hourly-paid operational workforce of 410 in total. This would mean leaving out just 25% of the Employer’s hourly-paid workforce. The Employer accepted that the Union’s proposed bargaining unit was not, of itself, ‘small’, but it would leave out too small separate bargaining units at the nearby sites in Clarence Road and Boothen Old Road. The Employer confirmed if these sites were to be left out, it would isolate and fragment them from the collective bargaining process and more importantly, the issue that this criterion sought to avoid. It was necessary, so the Employer argued, for the CAC to look at both elements of this phrase and to give credibility to the effectiveness of a single-site bargaining unit at Mossfield Road-only could potentially lead to other bargaining units at the other two sites and competing or rival applications by other trade unions. The Employer was not of such a scale as to be able to cope with this and it would certainly not be compatible with effective management. The Employer contended that the key spirit of the legislation was to avoid fragmentation and it submitted that fragmentation was simply not necessary or appropriate here. The Employer believed it made sense that the bargaining unit was extended to include the hourly-paid employees at the other two sites which were also in Stoke-on-Trent.

18) The Employer also referred to a number of previous CAC decisions in support of its submissions. The Panel is not bound by these decisions and in any event, they were determined on a particular set of facts unique to each case. The Employer also took the Panel to R (Cable & Wireless Services UK Ltd) v CAC [2008] IRLR 425 in which Collins J held: “Small fragmented units are regarded as undesirable in themselves. However, it is obvious that the real problem is the risk of proliferation which is likely to result from the creation of one such unit.” In Lidl Ltd v Central Arbitration Committee & Anor [2017] EWCA Civ 328 the issue was the threat of proliferation of similarly small, fragmented units and the instability that would result from such proliferation of bargaining units: “…it would reflect a well-known problem in industrial relations – perhaps more historical than current, but policy-makers in this field have long memories. It has long been regarded as undesirable (to use the statutory term) that employers should have to negotiate in more than one forum – and, more particularly, with more than one trade union – in respect of parts of their workforce who were not essentially different. At the very least, conducting two or more sets of negotiations where one would do is wasteful of time and effort. But there is also the risk of inconsistent outcomes, which can breed anomalies and discontent between comparable groups of workers (including, though certainly not only, in an equal pay context) … The policy expressed by head (c) is evidently that, other things being equal, where a group of employees can appropriately be bargained for by a single trade union in a single bargaining unit it is desirable that they should be. It is thus concerned specifically with fragmentation of collective bargaining.” (Underhill LJ at para. 36).

19) The Employer acknowledged that if the Panel found in favour of the Union, the Employer would face the opposite of the problem which Underhill LJ identified (at para 38) of “a small island of recognition in a sea of non-recognition”; but rather two small islands of non-recognition in a sea of recognition. Accordingly, in assessing the desirability of avoiding small, fragmented bargaining units within an undertaking, the focus was on avoiding fragmentation of collective bargaining where that may result in the core terms of employment for different parts of what was essentially a single workforce being set in different forums, with the risk of adverse consequences such as inconsistent outcomes breeding anomalies and discontent between comparable groups of workers.

20) The Union had identified the hourly-paid operational workers employed at Mossfield Road only. Those workers shared the very same characteristics with their counterparts who happen to be based at the other two sites nearby. These colleagues carried out identical work functions and performed the same job functions. They were employed by the same Employer. They ought not to be left out of the collective bargaining unit. It therefore made no sense to split off one site from the other simply on the grounds of location or union membership density.

21) To recognise a trade union solely in relation to one site location but not the other two would unnecessarily split an integrated operation in two. It would create needless divisions amongst colleagues and the way in which they were managed. This was illogical and unworkable in practice. Accordingly, the Employer encouraged the CAC to have regard to the existing characteristics of the workers in the Union’s proposed bargaining unit rather than the location that they happened to be based at, and simply extend the bargaining unit to hourly paid employees at all three locations. This created a more logical and fair result which in the event of union recognition would be compatible with effective management

22) The Employer stated that having demonstrated that the Union’s proposed bargaining unit was not appropriate, it fell to the Employer to propose an alternative bargaining unit for the Panel’s consideration. The alternative bargaining unit should consist of: “All hourly paid employees located at the Employer’s three sites at Mossfield Road, Clarence Road and Boothen Old Road, all in Stoke-on-Trent”. In essence, the Employer’s proposed bargaining unit was an adapted version of the Union’s proposal simply by including the hourly paid workers employed by the same employer at its other two local sites in Stoke-on-Trent. The Employer confirmed this was revised bargaining unit was more unified by bringing together all hourly-paid workers: all three locations in an interdependent and unified business. The Employer believed that a bargaining unit covering all hourly paid workers across all 3 locations was compatible with effective management, whereas the Union’s proposal for the Mossfield Road only site, would effectively make the smaller sites “shadow” bargaining units because collectively negotiated agreements made at Mossfield Road site would invariably be applied to workers at sister locations. This would therefore leave the Employer in a vulnerable position whereby other unions could propose recognition at the smaller sites and make a unified management approach unworkable.

23) Finally, the Employer submitted that union membership presence was not a relevant criterion in determining the appropriateness of a bargaining unit. The Union’s proposed bargaining unit was not compatible with effective management because it included hourly paid workers at one site only, and excluded workers at two nearby sister sites, which effectively rendered these sites as small, fragmented units. The Employer believed that revising the Union’s proposals simply to include comparable hourly paid workers at these two additional sites made it an appropriate bargaining unit and would be compatible with effective management. The workers at all 3 sites: shared the same characteristics, were paid the same hourly rates of pay, worked the same shift patterns, could be expected to and do work across all sites, operated similar equipment, and enjoyed the same employment terms and conditions. In conclusion, the Employer would invite the CAC to determine a bargaining unit comprising: “All hourly paid employees located at the Employer’s three sites at Mossfield Road, Clarence Road and Boothen Old Road, all in Stoke-on-Trent”.

5. Considerations

24) 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: the views of the employer and the union; existing national and local bargaining arrangements; the desirability of avoiding small, fragmented bargaining units within an undertaking; 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 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 take into account 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.” The Panel’s decision has been taken after a full and detailed consideration of the views of both parties as expressed in their written and oral submissions. Both parties confirmed at the conclusion of the hearing that the hearing had been conducted fairly and that they had had the opportunity to say everything that they had wanted to say to the Panel.

25) 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. Both parties confirmed at the conclusion of the hearing that the hearing had been conducted fairly and that they had the opportunity to say everything that they had wanted to say to the Panel.

26) 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.

27) The Panel finds in the circumstances that the bargaining unit proposed by the Union is compatible with effective management. The Panel’s reasons are as follows:

(a) the roles in the Union’s proposed bargaining unit are all situated in one location, namely, Mossfield Road, Stoke-on-Trent ST3 5BW.

(b) all of the workers in the roles in the Union’s proposed bargaining unit are subject to the same contracts of employment.

(c) Centrally based Operations Directors have responsibility for setting the terms and conditions of staff in the Union’s proposed bargaining unit.

(d) The Panel is aware of examples both in the private and public sector and in differing sizes or organisations where different types of workers are included in the same bargaining unit, which is not incompatible with effective management.

28) As part of those deliberations the Panel considered those matters at 19(B)(2)(b) not dealt with above as follows:

(a) The views of the employer and union were fully considered. Suggestion by the Employer during the course of the hearing that recognition could be across all sites comprising one group of employees was not further explored by the parties and had not been considered previously.

(b) There are no current national or local bargaining arrangements.

(c) The Union’s proposal created one bargaining unit at a single site whereas the Employer’s proposal created one, at three different sights. The Union’s proposal avoided small, fragmented bargaining units.

6. Decision

29) The Panel’s decision is that the appropriate bargaining unit is that proposed by the Union, namely: “All hourly paid direct and indirect employees at Mossfield Road, Stoke-on-Trent ST3 5BW”

Panel

Mrs Lisa Gettins, Panel Chair

Mr David Cadger

Mr Ian Hanson

7 August 2023

7. Appendix

Names of those who attended the hearing

For the Union

Chris Hoofe - Regional Organiser

Rachel Fagan - Regional Organiser

Stuart Richards - GMB Senior Regional Organiser

For the Employer

Lisa Blake - HR Manager

Andrew Bushnell - Finance Director

David Morgan - Solicitor