Decision

Bargaining Unit Decision

Updated 23 September 2021

Applies to England, Scotland and Wales

Case Number: TUR1/1204(2020)

27 April 2021

CENTRAL ARBITRATION COMMITTEE

TRADE UNION AND LABOUR RELATIONS (CONSOLIDATION) ACT 1992

SCHEDULE A1 - COLLECTIVE BARGAINING: RECOGNITION DETERMINATION OF THE BARGAINING UNIT

The Parties:

Unite the Union

and

East End Foods PLC

1. Introduction

1) Unite the Union (the Union) submitted an application to the CAC on 17 December 2020 that it should be recognised for collective bargaining by East End Foods PLC (the Employer) for a bargaining unit comprising the “Hourly paid drivers and hourly paid shop floor warehouse operatives without management responsibilities”. The CAC gave both parties notice of receipt of the application on 17 December 2020. The Employer submitted a response to the CAC dated 21 December 2020 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, Panel Chair, and, as Members, Mr David Coats and Mr Nicholas Caton. The Case Manager appointed to support the Panel was Ms Sharmin Khan and, for the purposes of this decision, Nigel Cookson.

3) By a decision dated 23 February 2021 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. The parties were given notice that a hearing would take place by virtual means on 8 April 2021. The names of those who attended the virtual hearing on behalf of the parties are annexed 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.

2. Summary of the Union’s submissions

5) At the outset of the hearing the Panel Chair, having had sight of both parties’ written submissions, asked whether the bargaining unit had been agreed or whether it was the case that the definition of the bargaining unit had been agreed but no agreement had been reached as to which categories of workers fell within the agreed definition. The Union confirmed that the definition of the bargaining unit was essentially agreed although the inclusion of some roles remained in dispute.

6) The Union explained that its proposed bargaining unit had been selected after consultation with its members when it was decided to seek recognition in respect of a bargaining unit that comprised “Hourly paid Drivers and Hourly paid Warehouse shop floor operatives without management responsibilities”. The Union believed that the following job roles fell within the scope of the above bargaining unit: Warehouse Operatives; Production Operatives; Forklift Drivers; Lorry Drivers; Drivers Mates; Machine Operators and Hygiene Operatives.

7) The Union submitted that this bargaining unit was coherent and formed a distinctive group of workers for the purposes of collective bargaining because they shared the same terms and conditions; were all hourly paid shop floor operatives; had no management responsibility; did not carry out disciplinary procedures or grievances and were involved in production and movement of products only. The Employer, in its letter of 1 March 2021 setting out the specified information pursuant to paragraph 18A of the Schedule, listed additional job roles which it stated were salaried but weekly paid and were paid overtime on an hourly rate basis. These were the QA technicians; Production Admin; Production Supervisor; Rice Mill Manager; Supervisor Rice Mill; Transport Planning Manager and Despatch Assistant. The Union believed that all of these job roles should be excluded from the bargaining unit.

8) The Union was also concerned that the breakdown of job roles in the specified information did not list the role of Team Leader or Section Leader and, having consulted with its members, the Union believed that the Employer had included these roles within the numbers it had provided. The Union made clear that its proposed bargaining unit did not include team leaders because they had management responsibilities and this would cause a conflict of interest. The Union believed that there were around 12 Team Leaders/Section leaders that should be discounted from that group. The Union confirmed when questioned that this number had been provided by its members within the proposed bargaining unit.

9) Explaining why these roles should be excluded the Union stated that the QA Technicians did not come under the same management structure as the workers in the proposed bargaining unit. Although they were based on the shop floor their job involved inspecting the quality of the product and work rather than production and movement of the product and the role was classed as an administrative role, which traditionally would be classed as a white collar role. The Union believed that these characteristics did not fall into the proposed bargaining unit. The Union excluded the Production Admin for similar reasons. In addition, the Union understood that the Production Admin role had been known to have some involvement in disciplinary procedures.

10) The Union sought to exclude the Production Supervisor, Rice Mill Manager, Transport Planning Manager, Supervisor Rice Mill, Despatch Assistant as these were all roles listed by the Employer as salaried and so their pay would be negotiated separately from the workers in the proposed bargaining unit. They also shared different terms and conditions to the workers in the proposed bargaining unit and they all had management responsibilities which would cause a conflict of interest. Traditionally these workers would all be classed as white collar workers and the Union did not feel that workers with such characteristics belonged in its proposed bargaining unit.

11) Asked by the Panel to confirm the number of workers in dispute between the parties, the Union said that it believed there were approximately 12 team leader roles included in the figures given by the Employer for the number of Production Operatives and Warehouse Operatives. In addition, there were two Despatch Assistants, one Materialist Specialist, the Production and Rice Mill Supervisors as well as four QA Technicians adding up to a total of 21 workers, all of whom the Union believed did not fall within its proposed bargaining unit.

12) When asked to explain the practical consequences if the Panel accepted the Employer’s argument and included salaried workers in the appropriate bargaining unit the Union stated that there were several things to factor in with one being that a percentage pay award to high earning workers would result in a higher increase than for those workers paid less whereas the blue collar workers simply wanted parity of pay.

13) In summary, the Union believed that the proposed bargaining unit which excluded those posts mentioned above, was coherent and would allow for effective management. The Employer did not have any national bargaining arrangements in place. The Union’s proposed bargaining unit consisted of workers with common characteristics and the workers were all based in the same location. The Union reminded the Panel that the majority of its information as to the internal structure within the company came from its members. It reiterated that it was not just an argument between a small number of salaried and hourly paid workers but that some workers stood in for management during times of absence so could possibly create a conflict of interest within the bargaining unit.

14) The Union agreed that the parties were not really that far apart. However, there remained the concern with the Employer’s proposal that five salaried workers be included in the bargaining unit. The Union took on board the Employer’s comments but was steadfast of the view that it would cause a conflict of interest to have these workers included. There seemed to be some sort of impasse between the parties regarding the number of team leaders and the Union asked for the opportunity of providing evidence on the numbers in due course. Team leaders or section leaders had managerial responsibilities and this, so the Union asserted, would cause conflict going forward as these workers would be involved in investigative and disciplinary processes within the workplace. Also, the Union was concerned that they could put themselves forward as workplace representatives for the Union side during collective bargaining negotiations which would cause difficulties for the Union.

3. Summary of the Employer’s submissions

15) By way of background, the Employer explained that the company had been established for almost 50 years in the imports, production, processing and wholesale distribution of Indian foods and specialities. It started as a small family run business, and it was now one of the UK’s largest specialist for spices, lentils, pulses and rice. The company became a PLC in 1994 and was now owned by a private equity company, Exponent, under the Vibrant Foods umbrella. It had one operating base namely, East End House, Kenrick Way, West Bromwich B71 4EA and currently employed 268 employees. These fell in to two distinct categories - office workers (sales, accounts. HR etc.) and shop floor (production, warehouse, drivers). The second category of worker was commensurate with the bargaining unit as described by the Union.

16) The Employer confirmed that it was content to agree that the appropriate bargaining unit was as proposed by the Union on the basis that recognition was subsequently secured by the appropriate numbers by secret ballot.

17) The Employer explained that it had previously included the Transport Manager, the Despatch Manager and four Production Team Leaders in information provided to the CAC but that, upon reflection, it accepted that these workers had some managerial responsibilities which extended to workers and so the Employer no longer regarded them as falling within the Union’s definition of the bargaining unit. Accordingly, the Employer acknowledged that the Production Team Leaders, which it said numbered four in total, as well as further roles that were managerial in nature, should likewise be excluded.

18) This left the following roles which the Employer regarded as falling within the Union’s definition (the numbers being correct as at 30 March 2021): 11 Hygiene Operatives; 92 Production Operatives; 4 QA Techs; 31 Warehouse Operatives; 4 Drivers Mates; 19 FLT Drivers; 10 L Drivers; 20 Machine Operators; 2 Production and Rice Mill Supervisors; 1 Materials specialist and 2 Despatch Assistants.

19) All of these workers were managed by the Site Manager or the Technical QA Manager. They all worked under the same contract of employment and to the same Company Handbook. The Employer explained that it was currently poised to distribute new contracts and a new Handbook to conform to recent updates in the law but also to confirm an enhancement to holiday entitlement. All of the workers would receive the new contracts and all contracts would then be essentially the same.

20) The Employer explained that rather than 21 roles being in dispute, as claimed by the Union, there were only 12 and so it was easier to concentrate on these 12 workers and to look at their particular job roles. First, the QA Technicians which the Union correctly identified as reporting to the Technical Manager rather than the Production Manager. However, the same was true for the Hygiene Operatives whom the Union sought to include. The Employer stated that the QA Techs used metal detectors to check for any metal in the products and only spent about 10% of their time on admin work. They were also hourly paid and had no managerial responsibilities and the Employer would argue that it would be against the ethics of the bargaining unit if these workers were not included. As for the Production Admin role, the Employer had already discounted this person from its proposed bargaining unit.

21) All of the workers the Employer believed should be in the bargaining unit were paid by the hour with the exception of five workers. These were the Materials Specialist, the two Rice Mill Supervisors and two Despatch Assistants. These workers were salaried purely as a legacy from the previous owners and under the new structure would not be salaried. With the exception of this one characteristic, they were employed on the same terms as the other workers and are paid overtime on an hourly rate basis. Although the Rice Mill Supervisors had job titles which included the word ‘supervisor’, their managerial responsibility did not extend to people management. Rather, they were responsible for the machinery and essentially carried out the job of a production operative on the same contractual terms and conditions as other Shop floor workers. The Employer did not view these workers as being white collar. They did not get involved in any discipline or grievance process. As for the Despatch Assistants, the Employer stated that if one of the posts was advertised today it would not be advertised as a salaried position. This role was responsible for planning routes for the drivers and whilst they did stand in for Transport Managers in their absence, they had a hands-on role and were not white collar workers and should be in the bargaining unit. For these reasons, and to avoid fragmented bargaining units, the Employer believed that these five workers should be included in the bargaining unit.

22) When asked by the Panel if there was a grading system for workers in the bargaining unit the Employer said that there was not. It explained that the business had only been in its ownership for 18 months and that, historically, it was a family run business with a flat structure which was split hourly paid and salaried. The blue collar workers were paid depending on their role. There was pay differential between, for example, Lorry Drivers and Warehouse Operatives.

23) The Panel asked the Employer to explain the practical consequences if it left out of the determined bargaining unit those workers the Employer sought to include. The Employer argued that it would fragment discussions over pay and terms and conditions if they were omitted. Asked whether it would engage in collective bargaining and then simply apply the same pay award to other groups, the Employer said that it would possibly apply the negotiated pay award across the board but those workers outside the bargaining unit would not have the opportunity of contributing to the bargaining process.

24) The Employer’s position was that the parties were not far apart, indeed there were only 12 workers in dispute. The Employer could not identify the additional team leaders referred to by the Union. Part of the issues were in identifying the bargaining unit. It explained that previously it was a small family business and workers were made salaried and given vanity job titles which inflated what they actually did. The new owners were trying to fit these roles into a structure. The Employer submitted that workers may well feel alienated if they were not included in the bargaining unit. Whilst the Employer could match any negotiated pay rise it was trying to integrate its workforce and having workers excluded from the bargaining unit could isolate them further.

25) In summary, for the reasons given, the Employer submitted that it would be compatible for effective management for the following workers to be included within the same bargaining unit: Hygiene Operatives; Production Operatives; QA Techs; Warehouse Operatives; Drivers Mates; FLT Drivers; Lorry Drivers; Machine Operators; Production and Rice Mill Supervisors; Materials specialist and Despatch Assistants.

4. Considerations

26) 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 parties as expressed in their written submissions; the answers provided by both parties to questions posed by the Panel; and the documentary evidence submitted by the parties.

27) 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 reminds itself that when applying the statutory criterion set out above, it cannot reject the bargaining unit put forward by the Union simply on the basis that it believes a different unit would be more appropriate.

28) The parties submitted that there was little difference between their respective positions in that they agreed the definition of the bargaining unit but not which category of workers should be included. However, the Panel takes a different view. The Union defines its proposed bargaining unit as comprising workers that are hourly paid. The Employer, whilst stating it agrees the definition of the appropriate bargaining unit, then seeks to include workers that are not hourly paid but are salaried. It described these five salaried workers as ‘legacy workers’. Plainly, a bargaining unit cannot be defined as comprising only hourly paid workers if it also contains salaried workers and so the Panel will therefore proceed on the basis that the bargaining units being proposed by the parties are different albeit only in this respect.

29) The first task of the Panel is to decide whether or not the Union’s proposed bargaining unit is appropriate. The Panel must avoid the temptation to identify what, in our view, would be the most suitable bargaining unit, whether it be the bargaining unit comprising hourly paid workers as proposed by the Union, one comprising the hourly paid workers plus the five legacy workers as proposed by the Employer or a modified or improved version of either.

30) The Union proposes a bargaining unit limited to hourly paid workers and one that excludes any role that has a degree of managerial responsibility. It also excludes the five legacy workers who, according to the Employer, share common terms and conditions and work under the same contract of employment as the hourly paid workers but are salaried, rather than hourly paid.

31) The Parties are therefore in agreement that the bargaining unit should include the hourly paid workers in the following roles: Hygiene Operatives; Production Operatives; Warehouse Operatives; Drivers Mates; Fork Lift Truck Drivers; Lorry Drivers and Machine Operators. The Panel agrees that it would be compatible with effective management for these workers to be in the determined bargaining unit as they are a readily identifiable group of workers and they are part of the operational category within the Employer’s undertaking which it describes as ‘shop floor’. We heard no arguments from either party that any members of the other category within the undertaking, which the Employer described as ‘office workers’ and includes such roles as sales, accounts and HR functions, should be included and we can see no reason to include any of these workers given that their characteristics are so different from the shop floor workers. Accordingly, we take the view that it is appropriate that such workers fulfilling administrative duties not be included in the determined bargaining unit.

32) The question that the Panel must address is whether or not it is compatible with effective management to exclude the so called legacy workers, that is the five workers in the roles of QA Techs, Production and Rice Mill Supervisors, Materials specialist and Despatch Assistants.

33) In considering the parties’ submissions both orally and in writing as well as the information drawn out by way of questions during the course of the hearing, the Panel has reached the decision that to exclude these workers form the determined bargaining unit would not be compatible with effective management. The legacy workers are integrated into the shop floor operation within the business and, as established during the course of the hearing, have no managerial responsibilities. These are characteristics shared by the other workers that the Union seeks to include in its bargaining unit and we can see no justification to exclude them on these grounds. Those amongst the legacy workers with ‘supervisor’ in their job title are responsible for the supervision of machinery rather than any responsibility over their hourly paid colleagues. We accept the Employer’s submissions as to why these workers are salaried rather than hourly paid and we are of the view that to omit them on this basis would not be compatible with effective management given that all other characteristics are common to both sets of workers.

34) In arriving at our decision the Panel is conscious of the need to avoid small, fragmented bargaining units. The desirability of avoiding such units was addressed by Collins J in the matter of R(Cable & Wireless Services U.K. Limited) & Central Arbitration Committee & The Communication Workers Union [2008] EWHC 115 (Admin) where he explained that:

“… the real problem is the risk of proliferation …. Hence it is important to see whether such a unit is self-contained. Fragmentation carries with it the notion that there is no obvious identifiable boundary to the unit in question so that it will leave the opportunity for other such units to exist and that will be detrimental to effective management”.

In this case it is clear that the determined bargaining unit satisfies Collins J’s critique as being self-contained and having a clear identifiable boundary. In our view this would not be the case were we to exclude the legacy workers. To exclude these workers would, so the Panel believes, give rise to the opportunity for other small units to exist and, as stated by Collins J, this would be detrimental to effective management.

35) There was much discussion during the hearing as to the number of Team Leaders and/or Section Leaders on the shop floor. The Union put forward a figure based on information it had been provided by its members within the shop floor operation but the Employer said that the actual figure was much fewer. The Union offered to supply at a later date evidence on this point.

36) However, the Panel do not believe this is necessary as, at this stage of the process, we are concerned with identifying the particular categories of worker within the shop floor rather than the number within each category. Given that neither party has argued that these roles be included in the determined bargaining unit we take the view that those with line management or supervisory responsibility should not be within the confines of the appropriate bargaining unit given the possible conflict of interest so highlighted by the Union. We emphasise here that we are referring to those with supervisory responsibility for workers rather than those charged with the oversight of any machinery.

37) The Panel has taken into account in reaching its decision the matters listed in paragraph 19B(3) of the Schedule so far as they do not conflict with the need for the bargaining unit to be compatible with effective management in particular the desirability of avoiding small fragmented bargaining units within the undertaking. The Panel has also taken into account all the views of the parties as summarised in this decision. The Panel is satisfied that there are no national or local agreements covering the workers referred to above and that there are no other relevant issues relating to the characteristics of the workers or to location beyond those which the Panel has taken into account. We are of the view that a ‘shop floor’ bargaining unit excluding those workers with supervisory and managerial functions is a clear and distinct bargaining unit and is a bargaining unit which would be compatible with effective management.

5. Decision

38) The appropriate bargaining unit in this matter is one comprising “Drivers and Warehouse shop floor operatives without management responsibilities”. For the sake of clarity, this bargaining unit includes workers in the following roles: Warehouse Operatives; Production Operatives; Forklift Truck Drivers; Lorry Drivers; Drivers Mates; Machine Operators; Hygiene Operatives; QA Technicians; Production and Rice Mill Supervisors; Materials Specialist and Despatch Assistants and excludes the role of Team Leader or Section Leader.

39) As the appropriate bargaining unit differs from the proposed bargaining unit, the Panel will proceed under paragraph 20(2) of the Schedule to decide if the application is invalid with the terms of paragraphs 43 to 50.

Panel

Mrs Lisa Gettins, Panel Chair

Mr Nicholas Caton

Mr David Coats

27 April 2021

6. Appendix - Names of those who attended the hearing

For the Union

Andy Hall - Regional Officer, Unite the Union

Dorota Dudek - Organiser, Unite the Union

For the Employer

Anu Soni - People Partner

Jayne Butcher - Group HR Manager

Clare Pitchford - External HR Adviser