Decision

Bargaining Unit Decision

Updated 15 March 2023

Applies to England, Scotland and Wales

Case Number: TUR1/1284/2022

17 October 2022

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

The Noble Collection UK Ltd

1. Introduction

1) GMB (the Union) submitted an application to the CAC dated 3 August 2022 that it should be recognised for collective bargaining purposes by The Noble Collection UK Ltd (the Employer) for a bargaining unit comprising “all managerial, office/administration and retail Staff employed by The Noble Collection UK Ltd at 26-28 Neal Street, London WC2H 9QQ; 26-28 Neal Street, London WC2H 9PS; and Hamleys Toy Store, 188-196 Regent Street, London W1B 5BT” The location of the bargaining unit was given as 26-28 Neal Street, London WC2H 9QQ; 26-28 Neal Street, London WC2H 9PS; and Hamleys Toy Store, 188-196 Regent Street, London W1B 5BT. The application was received by the CAC on 3 August 2022 and the CAC gave notice of receipt of the application to the parties that day. The Employer submitted a response to the CAC dated 8 August 2022 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 Professor Gillian Morris, Panel Chair, and, as Members, Mr Kieran Grimshaw and Mr Paul Noon OBE . The Case Manager appointed to support the Panel was Kate Norgate. Mr Roger Roberts replaced Mr Grimshaw for the purposes of this decision.

3) By a decision dated 24 August 2022 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. A virtual hearing was held on 11 October 2022 and the names of those who attended the hearing are appended to this decision.

4) The Panel is required, by paragraph 19(2) of Schedule A1 to the Act (the Schedule), to decide whether the Union’s 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 “[i]n 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.”

2. Matters clarified at the start of the hearing

5) The number of workers in the Union’s proposed bargaining unit. The Panel noted that the Employer had stated in its submission that there were three senior managers, a retail team of 15 staff, and an office team of six staff in the Union’s proposed bargaining unit whereas the Union had stated that there were seven office staff. The Union confirmed that it was content to accept the Employer’s figure of six staff in the office team.

6) The role of senior managers. The Employer had stated in its submission that the three senior managers had significant management responsibilities that would preclude them from being part of the Union’s proposed bargaining unit. In answer to questions from the Panel the Employer stated that these three senior managers were the General Manager; the People and Operations Director; and the Head of the Retail Team. All three were salaried; the contracts of the General Manager and the People and Operations Director provided for a bonus calculated by reference to the performance of the business and their personal performance; any bonus received by the Head of the Retail Team was non-contractual and discretionary. The contracts of the General Manager and Head of the Retail Team specified a 40-hour week; the People and Operations Director’s contract specified a maximum number of hours over a four-day week. The General Manager and People and Operations Director were entitled to 25 days holiday per year plus Bank Holidays; the Head of the Retail Team was entitled to 20 days holiday plus Bank Holidays. The People and Operations Director is responsible for reviewing the pay and bonuses of all staff; having conducted a review she makes recommendations to the owner of the business who decides whether or not to implement these recommendations in part or in full. The Panel asked the Union whether, having received this information, it still wished to include these senior managers in its proposed bargaining unit and the Union confirmed that it did.

7) Provisions relating to pay, hours and holidays of retail and office staff. The parties confirmed their agreement that retail staff were hourly paid and office staff were salaried. The parties also confirmed that any bonus (in the case of sales assistants, commission) received by these groups was non-contractual and discretionary although at a later stage of the hearing the Employer said that one member of the office team – the Mass Marketing Director – had a contractual entitlement to commission. The Employer said that office staff worked an eight-hour day which included a one-hour unpaid break; retail staff worked a 40-hour week, their hours of work being determined according to the published rota/shift, with a one-hour unpaid break each day. The Employer said that retail staff received 28 days annual leave including Bank Holidays, with time off in lieu if required to work a Bank Holiday. The Employer said that under their contracts office staff received 20 days annual leave plus eight Bank Holidays but in practice longer-serving employees received 25 days annual leave plus Bank Holidays and by the end of 2022 all the office staff would fall into this category and receive 25 days annual leave.

8) Method of pay determination. The Employer explained that the People and Operations Director conducted a regular pay and bonus review each December for all staff. Her recommendations were then submitted to the owner of the business who made the final decision on whether the recommendations should be implemented in whole or in part. The Employer said that it continually tracked market rates for each of the teams, and roles within them, and aimed to ensure that its pay levels remained in the upper quartile for each role. The Employer said that it had also granted an extraordinary Cost of Living bonus to be paid to all staff totalling £1,500 gross (pro rata where applicable), payable in three instalments in December 2022 , January 2023 and February 2023.

9) Place of work. The Employer stated that the usual place of work for the majority of staff was Neal Street but retail staff were expected to work at Neal Street and/or two concessions at Hamleys Toy Store on a rotation basis.

3. Summary of the Union’s submissions

10) The Union submitted that all staff should be included within the bargaining unit. The Union said that all staff received a basic rate of pay, with no distinction between the different groups, and that it could negotiate pay across the board for all staff, for whom it believed there should be a general pay award. The Union submitted that the Employer currently applied pay increases across the board and that negotiating pay for all staff would not be overly complicated. The Union said that bonuses in all cases were discretionary. The Union said that it recognised that bonuses may be applied differently to different groups of staff at the discretion of the business and said that there was nothing to prevent discussions on bonus criteria and their application to different staffing roles proceeding in the future. The Union said that it recognised that the difference in working hours for different roles reflected the needs of the business. The Union said that any improvement in holiday entitlement beyond 20 days plus Bank Holidays should apply across the board to all employees.

11) The Union said that it saw no grounds for a fragmented bargaining unit as this was a small employer. The Union said that most staff had generic terms and conditions and that the differences between different groups would not hinder general pay discussions. The Union also said that it would want to apply equality- proofing to the terms of all staff and that this was a further justification for including all staff within the bargaining unit. The Union submitted that all its members would wish to be within the bargaining unit regardless of their role.

4. Summary of the Employer’s submissions

12) The Employer submitted that the Union’s proposed bargaining unit was not appropriate.

The Employer submitted that the responsibilities of the three senior managers ^{[footnote 1]}, which included making proposals on pay to the owner of the business, precluded them from being part of the Union’s proposed bargaining unit. The Employer also contended that the business was split into two very distinct teams. The first was the retail team of 15 staff (some of whom are part time) who sell its products directly to the public in the Employer’s shop in Neal Street and two concessions in Hamleys. The second was the office team of six, at various levels of seniority, whose roles focussed on either wholesale, mass market or online selling of the products the Employer manufactured. The Employer said that the nature of the roles of these two groups were significantly different as were their conditions and processes. The Employer maintained that the percentage-based approach to pay increases favoured by the Union rather than the role-based market- tracked approach implemented by the Employer would not be in the best interest of its teams as a whole and could create a greater gap between the lower tier of pay and the management tier.

13) The Employer disputed the Union’s assertion that the terms and conditions of the retail team and the office team were broadly similar and exhibited a table in support of this view.

Term / Office / Condition	Office Staff	Retail Staff
Place of work	Written Statement of Main Terms of Employment says: ‘The Employee’s usual place of work will be 26-28 Neal Street, London WC2H 9QQ or other such place of business within the United Kingdom as the Company may reasonably require.‘ Since the Covid pandemic, flexibility to work from home has been provided though this remains at the discretion of the company and subject to business needs/requirements of individual roles	Written Statement of Main Terms of Employment says: ‘The Employee’s usual place of work will be Hamleys Noble Collection concession and/or the Neal Street Store, or other such place of business within the United Kingdom as the Company may reasonably require. ‘
Hours of work	Written Statement of Main Terms of Employment for the majority of staff says: ‘The Employee’s normal hours of work will be 9.00am to 5.00pm Monday to Friday with a one-hour unpaid break each day.’	Written Statement of Main Terms of Employment says: ‘The Employee’s hours of work will be 40 hours per week, 5 days from 7. Hours of work are in accordance with the published rota/shift; with a onehour unpaid break each day.’
Basic Pay	Written Statement of Main Terms of Employment says: ‘The Employee’s basic salary will be £XX,XXX per annum subject to such deductions as may be required by law.’	Written Statement of Main Terms of Employment says: ‘The Employee’s basic salary will be £X.XX per hour subject to such deductions as may be required by law.
Basic pay reviews	Salaries are generally reviewed annually in December with increases deemed appropriate applied from the January payroll following a review of market forces and development of individual roles	Hourly rates for Sales Assistants and Assistant Managers are reviewed regularly against market forces and are maintained at an upper quartile in 2022.
Public / Bank Holidays	Written Statement of Main Terms of Employment says: ‘The Employee will not normally be required to work on public/bank holidays’	Written Statement of Main Terms of Employment says: ‘Due to the nature of our business Employees may be required to work on any of the public/bank holidays listed below according to the roster, and it is a condition of employment that Employees work on these days when required to do so’
Public / Bank Holidays	January to December	April to March
Variable pay (bonuses/commission)	No contractual entitlement but individual annual bonuses have historically been given each year, usually in December according to individual contribution/performance in role and financial performance of the business.	Non contractual sales commission of 1% of gross sales used as a ‘pot’ which is divided amongst sales assistants according to hours worked in the month and adjusted up and down according to individual performance in role as assessed daily by Assistant Managers/Manager using a traffic light system. An additional £260 per month is awarded (usually split between 2 employees) for outstanding customer service.

The Employer said that parity of annual leave between the retail and office staff could be achieved only by reducing office staff to 20 days from 25.

14) In answer to questions from the Panel the Employer said that the office team consisted of the following roles: the Amazon/IT manager who worked alongside an Amazon administrator; the wholesale manager and the wholesale assistant; the social media/marketing manager and customer support administrator; and the mass marketing director. The Employer said that there was only one job title per person and that all these roles were very distinct. The Employer said that the managers within the office team all received the same basic pay; the mass marketing director, unlike other members of the office team, was also contractually entitled to commission. The Employer said that the two assistants within the office team also received the same basic pay as each other. The Employer said that it considered that the principle of parity of pay between staff in the office team was fair but that this could change in the light of market forces.

15) The Employer submitted that retail and office staff could not be regarded as a single unit and that the bargaining unit should consist of retail staff alone. The Employer said that there was greater clarity and structure to their rewards which included non-contractual sales commission for the sales assistants. The Employer said that one per cent of gross sales was used as a pot which was divided amongst sales assistants according to the hours they had worked in the month and adjusted up or down on the basis of their individual performance as assessed by assistant managers according to a traffic light system. These assessments were checked by the Head of the Retail Team then forwarded to the People and Operations Director. The Employer said that an additional £260 per month was awarded (usually split between two employees) for outstanding customer service.

5. Considerations

16) 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 “[i]n 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 the Union and the Employer as expressed in their written submissions and as amplified during the course of the hearing. 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 although the Union representative asked his lack of experience in appearing before the CAC to be noted.

17) 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. The Panel notes that it cannot reject the Union’s proposed bargaining unit because it feels that a different unit would be more appropriate nor, in considering whether it is compatible with effective management, can it consider whether it is the most effective or desirable unit in that context. ^{[footnote 2]}

18) The Panel considers that the Union’s proposed bargaining unit is not compatible with effective management. The Union’s proposed bargaining unit includes senior managers who are currently responsible for reviewing pay and bonuses for other members of that bargaining unit and who could be expected to engage in collective bargaining on behalf of the Employer were the Union to be recognised. The inclusion of such senior managers within the bargaining unit would entail them conducting negotiations on behalf of the Employer in a context where their own terms and conditions would be affected by the outcome of such negotiations. This situation would present a conflict of interest which would not be compatible with effective management.

19) Having decided that the Union’s proposed bargaining unit is not appropriate the Panel’s next responsibility is to decide a bargaining unit which is appropriate. The Panel has determined that the bargaining unit proposed by the Employer, that of retail staff employed at the Employer’s Neal Street store and the two concessions in the Hamleys Toy Store, excluding the Head of the Retail Team, is an appropriate bargaining unit. The Panel considers that this bargaining unit is compatible with effective management. Workers in this bargaining unit are a distinct group, working under the Head of the Retail Team. They are all hourly paid and their basic rate of pay is subject to common market criteria. The bonuses for all retail staff are non-contractual although sales assistants are covered by a specified non-contractual commission scheme. All retail staff have the same provisions relating to hours and holidays.

20) The Panel has considered the matters listed in paragraph 19B(3) of the Schedule so far as they do not conflict with the need for the unit to be compatible with effective management. The views of the Employer and the Union, as described earlier in this decision, have been fully considered. The Panel does not consider that there are any existing local or national bargaining arrangements. As far as the desirability of avoiding small fragmented bargaining units within the undertaking is concerned, there are no other bargaining units in the undertaking. All staff within the bargaining unit are involved in selling the Employer’s products directly to the public and they all work at either Neal Street, one of the two concessions in Hamleys Toy Store, or both of these geographical locations. The Panel is satisfied that its decision is consistent with the object set out in paragraph 171 of the Schedule.

6. Decision

21) The appropriate bargaining unit is “all retail staff employed by the Noble Collection UK Ltd at 26-28 Neal Street, London WC2 and Hamleys Toy Store, 188-196 Regent Street, London W1 excluding the Head of the Retail Team”.

Panel

Professor Gillian Morris, Panel Chair

Mr Paul Noon OBE

Mr Roger Roberts

17 October 2022

7. Appendix

Names of those who attended the virtual hearing on 11 October 2022:

For the Union

Mark Holland - GMB Regional Organiser

For the Employer

Therese Eyre Watson - People and Operations Director

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1. See paragraph 6 above. ↩

2. R (on the application of Cable and Wireless Services UK Ltd v CAC [2008] EWHC 115 (Admin), Collins J at [9]. ↩