Case Number: DI/05/2024

4 February 2025

CENTRAL ARBITRATION COMMITTEE

TRADE UNION AND LABOUR RELATIONS (CONSOLIDATION) ACT 1992

SECTION 183 – DISCLOSURE OF INFORMATION

The Parties:

GMB

and

Serco  

1. Introduction

1)         Unite the Union (the Union) submitted a complaint to the CAC dated 6 August 2024 pursuant to section 183 of the Trade Union and Labour Relations (Consolidation) Act 1992 (the Act).  The complaint related to an alleged failure by Serco (the Employer) to disclose information for the purposes of collective bargaining.  The Employer submitted a response to the Union’s complaint dated 15 August 2024 which was copied to the Union.

2)         In accordance with section 263 of the Act, the CAC Chair established a Panel to consider the complaint.  The Panel consisted of Mrs Lisa Gettins, Panel Chair, and, as Members, Mr Alastair Kelly, and Mr Paul Moloney.  The Case Manager appointed to support the Panel was Kate Norgate.

3)         The complaint was made in respect of “Detention Custody Officers (DCO’s), and “Non-DCO roles e.g. Managers, Catering and Cleaning Staff etc….”.  The Union stated that it had requested the following information for collective bargaining purposes in correspondence dated 29 July 2024 and sent to the Employer on that date:

1. Gross and net profit specific to the Yarls Wood contract for the financial years 2023/24 and 2022/23.

2. Allocation of the above profit.

3. Details of Government Funding.

4. Total Wage Bill for both the DCO and Non-DCO bargaining groups.

4)     The Union said that the collective bargaining purpose for which the information was requested was “Pay Negotiations 2024.”

5)         The Union stated that in both sets of pay negotiations the Employer had used the argument that the contract had tight profit margins and made very little profit.   The Union said that, in contrast, the Employer’s global financial statements hold up Immigration Services as a highly successful and growing part of the business.  The Union said that it had no access to finances specific to the Yarl’s Wood contract, which had led to its request, and that it required this information to assess the validity of its argument.  The Union stated that the Employer had militantly stuck to its unaffordability argument, and that so far it had only had their word for it.   The Union said that as this impacts the negotiations, it believed that the Employer should be transparent and provide evidence to support its argument. The Union said that Acas talks were upcoming and without this information there was little else to discuss, which would only seek to prolong and delay the talks. 

6)            In its written submission, the Employer contended that the Union’s request was made on 30 July to the Contract Director.  The Union had subsequently e-mailed the Senior People Partner on 6 August 2024 asking for confirmation that the information would be provided prior to the meeting with Acas on 20 August 2024. On 7 August 2024, the Employer had responded to the Union, confirming that the request was being reviewed and that it would revert once available to share. The Employer said that at no point had the request been refused.

2. The hearing

7)         To establish whether there were ways in which the parties could be assisted in resolving the issues in dispute, the Panel Chair held an informal meeting with the parties on 7 October 2024. As it did not prove possible to reach agreement, the Panel decided to hold a formal hearing, which took place by virtual means on 13 January 2025. The names of those who attended the virtual hearing are annexed to this decision. Both parties provided written statements of case which were exchanged, and submitted to the Panel, in advance of the hearing. 

3. Background^{[footnote 1]}

8)         Justice & Immigration is one of Serco’s five core sectors. In the UK, Serco Justice operate five adult prisons as well as Prison Escorting and Court Services and Electronic Monitoring Services. Serco Immigration operate and three Immigration Detention Centres as well as providing housing and accommodation for asylum seekers.

9)         The three Immigration Removal Centres (IRCs) operated by Serco were Derwentside, Gatwick and Yarl’s Wood. Yarl’s Wood IRC located in Bedford was the contract in which the disclosure of information complaint relates. The contract was a fully contained residential centre that housed adult men and women. Serco delivered services at Yarl’s Wood IRC on behalf of the Home Office Immigration Enforcement (HOIE) and had managed the contract since 2007 with the second generation of the contract being awarded in April 2015.

10)       Yarl’s Wood IRC employed around 300 staff. Yarl’s Wood IRC recognised the GMB union and the Partnership Agreement was dated May 2008. The agreement allows for negotiations on pay and conditions of employment as well as a mechanism for information and consultation regarding collective issues.

11)       Pay was reviewed annually at Yarl’s Wood IRC. The annual pay review date previously was 1 April for all employees at the contract. This changed in 2022 due to the re-role in 2021. The DCO population had pay increases in April and July 2021. The next pay review was due to be 1 April 2023 however, this was brought forward to November 2022 due to ongoing recruitment and retention challenges and salary levels compared with competitors. The DCO population received pay increases in November 2022 and November 2023.  The November 2024 negotiations had recently concluded whereby the pay offer had been accepted following the ballot process.

12)       The non-DCO population included all other roles (c.85) at the contract in bands 4-8 excluding Facilities Management staff.  Pay negotiations for the non-DCO population for April 2024 commenced in February 2024 following receipt of the GMB pay claim on 31 January 2024.

4. Summary of the submissions made by the Union

13)          At the start of the hearing the Union clarified that items 2 to 4 of its disclosure complaint had now been resolved and that the only outstanding matter that it believed had not been adequately addressed was item 1, namely, “Gross and net profits specific to the Yarl’s Wood contract for the financial years 2023/24 and 2022/23”. 

14)       The Union said that as explained in detail during the informal meeting, it had not previously requested this information, as in its view there was more than enough in Serco’s financial statements to demonstrate that its recent pay claims were affordable.  The Union said that its formal request was prompted by the Employer’s continued assertion that the Yarl’s Wood contract made very little profit and, as such, this meant that its pay claim could not be met.  The Union said that this position was continually leading to an impasse in negotiations.  The Union explained that it was currently in dispute over pay for the second time this year, and that it was important that it was able to provide an informed view to its members when they are balloting on pay offers.  There was also the possibility of further arbitration, as detailed in the recognition agreement, and the Union believed that it was a reasonable request that any decision made in this regard was taken with the full facts available.

15)       The Union said that it was further concerned that the Employer had expressed doubt towards the accuracy of the figures provided directly from the Home Office through a Freedom of Information (FOI) Request in relation to the provided funding in the years stated in paragraph 13 above. The Union said that, for transparency, a further FOI request was submitted to clarify the figures and a response was received on 11 December 2024.   The Union said that although it appeared that there may have been a discrepancy in the original figures, there had been much higher re-purposed funding with a figure of £17.4m being provided in the tax year 2023/24 that was significantly higher than the £8m referred that was referred to in the informal meeting. The Union said it had previously been unaware of any increased funding as this had not been divulged by Serco in negotiations, nor was this information available in their financial reports. The Union said that recent discussions had led it to believe that they were still in discussion with the Home Office to seek more funding with a view to increase pay in the future. The Union said that this inconsistency in information relating to Home Office funding made the Employer’s assertion that the Union should calculate the profit based on various figures provided, completely untenable.    

16)       In response to a question from the Panel the Union explained that it was shortly going into negotiations for Non-DCO’s and emphasised that there was no strike agreement due to the DCO role, which made it even more important.   The Union also clarified that it had requested the information with regard to the two different years so that it could see whether it was increasing or decreasing.

17)       In answer to a further question from the Panel, the Union explained that although the normal course of events would be to obtain the information from publicly available reports, this was not possible on this occasion, as although there was plenty of information, it was not broken down by individual contract level.

18)       When asked by the Panel what it was seeking from the net profit figures, when it had already been provided with information on the profit margin, the Union said that it was an indicator as to how well the company was doing.

19)       The Union closed by stating that its request was simple, unambiguous, and in line with the Acas Code of Practice on the Disclosure of Information, it was the usual information. The Union disagreed with the Employer’s assertion that there had been transparency, stating that the Union had obtained information via a FOI request.  The Union said that it had requested the hearing in the pursuit of obtaining the figures it had originally asked for, so that it could proceed with the current dispute and draw a line under the protracted negotiations.  The Union finally added that it did not believe that it was close to agreement as asserted by the Employer, and that there was a possibility that it would be going into arbitration again soon.

5. Summary of the submissions made by the Employer

20)       The Employer said that from the outset of the request for information from the Union, it had not refused to provide the information.  The Employer said that it wished to maintain positive relations with the Union and that it had been transparent in the discussions and requests made. 

21)       With regard to the outstanding item of the Gross and net profits specific to the Yarl’s Wood contract for the financial years 2023/24 and 2022/23, the Employer referred to the following extract from its letter to the Union dated 15 August 2024:

“Serco’s arbitration paper submission dated 13 May 2024 which was shared with the GMB and ACAS for the purposes of the DCO Pay Review detailed the following:

Yarl’s Wood IRC 2024 budgeted profit margin is 2.3%, however actual results for the first three months of 2024 were below this level of profitability. In 2023, Yarl’s Wood IRC profit margin was below 3%.”

22)       The Employer explained that the request specific to gross and net profits was the primary focus of the CAC informal meeting that was held on 7 October 2024. It was the Employer’s understanding that the Union wanted the information provided in simple terms referring to the absolute profit value and not in percentage margin terms. The informal meeting also included the rationale for not providing net profit due the commercially sensitivities and wider implications across Serco’s business model.  The Employer said that it had followed up on this action and responded formally in writing on 16 October 2024 detailing the gross profit for that year.

23)       The Employer said that in this letter it set out the following information to the Union related to Serco’s contract at Yarls Wood Immigration Removal Centre (IRC):

“As background, the Yarl’s Wood IRC was re-purposed during 2021 into 2022, which has led to an increase in funding payable to Serco.  This explains the lower revenue figures quoted on our call of 7th October, which were based upon the original contract prior to this re-purpose. 

The FOI response received by the GMB does take account of the higher re-purposed funding, however it indicates a large increase from £11.0m in the 2022/23 year to £19.5m in 2023/24. 

We suspect that some of the funding recorded in the second quoted year actually related to the first, meaning that the two annual figures are in reality more similar in each of those years. We can therefore confirm that Serco’s reported revenue for the 2023/24 year was between these two figures. We can also confirm that, in line with the % margin provided previously, gross profit for that year was under £350k.

We explained on the call that we would not provide details of our net profit for this contract due to the commercially sensitivity of that information and its’ wider implications across our business model. We also don’t believe that this would unnecessarily impede any recognised trade union in submitting a duly prepared pay claim.”

24)       The Employer said that as referenced at the informal meeting with the CAC on 7 October 2024, Serco’s interpretation of gross profit was the net total figure of all revenues and costs directly attributable to the Yarl’s Wood contract.  Net profit would simply be this, but further reduced by an apportionment of overhead costs of the wider Serco Group.   The Employer said that it did not ordinarily calculate this information, nor did it believe that it would add any value to the pay claim.  The disclosure of net profit would implicitly give information about the overhead structure of the wider Serco Group, and this should remain confidential due to commercial sensitivities. Disclosure of such information could impact current and future bid opportunities if accessed by competitors.

25)       The Employer said that it considered that the additional disclosure of net profit did not add significant value to the pay negotiation process between Serco and the GMB, but posed a risk to its confidential financial information.  It was the Employer’s view that not having access to the net profits had not impeded the Union in putting in its pay claim and progressing negotiations.  The Employer said that specific to the non-DCO pay claim at Yarl’s Wood IRC, the Union had submitted the pay claim and pay negotiations had continued throughout 2024, albeit still outstanding but Serco had responded to feedback and sought to address through variations to offers.  The Employer believed that it was useful to note that as recently as Thursday 12 December, it had held an informal discussion with the Union exploring potential resolution to the pay negotiation for the non-DCO population.

26)       In answer to a question from the Panel, the Employer explained that the Agreement was very dated, but it would check as to whether it had a confidentiality clause.  The Employer added that it was likely that it did not, and that that this was something that it should do.

27)       The Employer said that the DCO pay review at Yarl’s Wood IRC was due on 1 November 2024, a pay offer was made by Serco on 15 November 2024 which was balloted by the GMB and accepted on 9 December 2024.  The Employer maintained that it was therefore evident that the absence of the net profits had not impacted this pay negotiation process.   

28)       The Employer explained that the pay negotiations had continued throughout 2024 for non-DCO’s, and that meetings were ongoing and it was now on the third phase.  The Employer said that it had successfully concluded negotiations for DCO’s in the latter part of 2024. Net profit information was commercially sensitive and the absence of this information should not impede pay negotiations.  The Employer added that in 15 years, this information had never previously been requested, and this had not impeded collective bargaining.

29)       The Employer closed, stating that it therefore respectfully requested that the CAC panel uphold its decision to withhold the net profit information in light of these considerations. The Employer said that its commitment to transparency remains but within the bounds of protecting its financial interests, as do maintaining positive employee relations with a view to successfully conclude the collective bargaining process for non-DCO’s at Yarl’s Wood IRC.

6. Considerations

30)       The Panel’s decision on this complaint has been taken after a full and detailed consideration of the views of both parties as expressed in their written submissions and amplified at the hearing.

31)       The question for the Panel to address is whether, given the circumstances of this case, the Employer is under the duty set out in section 181 to disclose the information requested by the Union. If the Panel is to find in the Union’s favour and uphold its complaint, it must be satisfied that the conditions set out in section 181 are satisfied. 

32)       Turning now to the tests under section 181(2), for the Employer to be under a duty to disclose information to the Union, it has to be information without which the Union would be to a material extent impeded in carrying out collective bargaining with the Employer. If the Panel is satisfied that this is the case, it will then move on to consider the second limb under section 181(2) and whether it would be in accordance with good industrial relations practice that the Employer should disclose the information for the purposes of collective bargaining. To assist the Panel with its determination as to what would be in accordance with good industrial relations practice, the Act states that the Panel should have regard to the relevant provisions of any Code of Practice issued by Acas, but not so as to exclude any other evidence of what that practice is. The Panel reminded themselves of the provisions of the Code of Practice.

33)       Clearly, the purpose of the disclosure provisions is to encourage the flow of information with the aim that it improves a Union’s knowledge of the relevant undertaking and therefore its ability to take part in the process of collective bargaining with an employer. The information concerned must have some relevance to whichever element of collective bargaining happens to be the subject of the parties’ negotiations. The test in section 181(2)(a) refers to information without which the trade union would be impeded. In other words, does the absence of this information hinder the Union’s efforts to take part in collective bargaining with the Employer. 

34)       The Panel’s conclusion is that the test is not met and that the Union are not impeded to a material extent in their ability to carry out collective bargaining in the absence of the information set out in this Application.  The Panel particularly noted that gross profit information for the latest financial year had been provided by the Employer and, crucially to the considerations of the Panel, as had details of profit margins.  The Panel noted that the DCO pay review for Yarl’s Wood had been concluded, to include ballot and acceptance of the offer, in the absence of the information sought in this Application. Whilst the Panel reminded themselves that this application was not in respect of the DCO pay review, the Panel noted that the DCO pay review had concluded without the information requested in this application and had not been impeded.  The Panel also took into consideration the confirmation from the parties that the non-DCO pay negotiations have commenced and are ongoing.

7. Decision

35)       For the reasons given in paragraphs 33 to 34 above, the Panel does not consider the complaint to be well-founded.

Panel

Mrs Lisa Gettins, Panel Chair

Mr Alastair Kelly

Mr Paul Moloney

4 February 2025

8. APPENDIX

Names of those who attended the hearing

On behalf of the Trade Union:

John Colquhoun                  -           GMB Senior Organiser

Andre Marques                    -           GMB Regional Organiser

On behalf of the Employer:

Stacey Arnold                       -           Contract Director Yarl’s Wood

Michael Straker                   -           Senior Financial Business Partner

Laura Cliffe                            -           Senior People Partner

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