Decision

Bargaining Unit Decision

Updated 7 May 2019

Case Number: TUR1/1073/2018

13 February 2019

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

Senior Aerospace Weston

1. Introduction

1) Unite the Union (the Union) submitted an application to the CAC dated 10 October 2018 that it should be recognised for collective bargaining by Senior aerospace Weston (the Employer) in relation to a bargaining unit comprising “Hourly paid workers at Senior aerospace Weston, Earby”. The application was received by the CAC on 11 October 2018 and the CAC gave both parties notice of receipt of the application on that day. The Employer submitted a response to the CAC dated 17 October 2018 which was copied to the Union.

2) In accordance with section 263 of the Trade Union and Labour Relations (Consolidation) Act 1992 (the Act), the CAC Chair established a Panel to deal with the case. The Panel consisted of Mr Charles Wynn-Evans, Chair of the Panel, and, as Members, Mrs Maureen Chambers and Mr Gerry Veart. The Case Manager appointed to support the Panel was Linda Lehan.

3) By a decision dated 5 November 2018 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 hearing was held on 29 January 2019 and the names of those who attended the hearing are appended to this decision.

4) The Panel is required, by paragraph 19(2) of the Schedule to the Act (the Schedule), to decide whether the Union’s proposed bargaining unit is appropriate and, if that proposed bargaining unit is found not to be appropriate, to decide in accordance with paragraph 19(3) a bargaining unit which is appropriate. In order to accommodate the hearing the Panel extended the period within which it must make its decision to 15 February 2019.

2. Summary of the submissions made by the Union

5) The Union submitted that its proposed bargaining unit was compatible with effective management and that the Employer treated the ‘hourly paid’ employees as a distinct and separate unit. The Union said that membership had risen almost tenfold since April 2018 due to issues that affected the hourly paid shop floor workers. The Union stated that in March 2018 the Employer started to implement a new pay grading structure for “every hourly paid individual” and provided a copy of a staff notice which stated that an overview of the new Pay Grading Structure was presented to the Works Council Representatives and that the pay structure would reduce from 10 bands to 5 – Grades A to E. The notice further stated that one to one sessions would be arranged during the first two weeks of April for every hourly paid individual. The Union said that the hourly paid workers were managed differently to the salaried staff and that examples of this different treatment were the docking of pay due to lateness, overtime pay and sick pay entitlements.

6) The Union stated that, in its opinion, the Works Council arrangements operated by the Employer were a red herring. The Employer continued to engage with a Works Council at the two other sites it operated in the North West where union recognition was already in place. Also, the Union argued that in practice the Works Council did not really negotiate on behalf of employees - that was the reason why the relevant workers had originally contacted the Union – rather, the Works Council was merely a vessel to receive proposals prior to them being implemented by the Employer. The Union stated that the relevant workers were dissatisfied with the Works Council as they did not consider that they had a vote, that the Works Council represented their concerns or that any real collective bargaining was conducted.

7) The Union stated that its proposed bargaining unit had a very clear and identifiable boundary and was, therefore, self-contained and there was no room for doubt as to whether or not any particular worker fell into or outside of the proposed bargaining unit. The bargaining unit was not only consistent with the other Senior Aerospace sites but also was consistent with arrangements operated across the Aerospace sector including at employers such as BAE and Rolls-Royce.

8) The Union stated that it already carried out collective bargaining for ‘hourly paid’ workers at Bird Bellows and BWT and provided emails from workplace representatives who confirmed this. The Union stated that, despite the Employer’s assertion to the contrary, the Employer is connected to Bird Bellows and BWT and could be seen on the Employer’s website as being part of the same Aerospace portfolio of companies. The Union stated that all three sites shared the same company registration number. The Union said that there was also only one signatory to the health, safety and environmental policy statement covering the three establishments and which promoted core values including Integrity and collaboration across the Senior group.

9) The Union stated that, because of the nature of their role, hourly paid workers were a unique occupational group and that the proposed bargaining unit was clearly compatible with effective management. The Union stated that hourly paid workers were on similar or the same terms and conditions and rates of pay, were flexible and moved within different areas of the site - for example they were required to work across both the Employer’s West and East facilities.

10) The Union stated that the Employer had during the relevant talks offered up different bargaining units. For example; the Employer originally suggested that the bargaining unit cover the whole site, then in discussions with ACAS this changed to exclude seven managers and in its latest submission the Employer sought to add three office based departments to the proposed bargaining unit. The Union noted that in Section 178 (2)(a) of the Trade Union Labour Relations Consolidation Act 1992 it is not only provided that collective bargaining relates to terms and conditions of employment but also to the physical conditions in which any workers are required to work. The Union noted that the employees identified in its proposed bargaining unit were the traditional shop floor operatives who had completely different physical conditions from office staff.

11) The Union stated that the Employer had raised concerns that the proposed bargaining unit would leave a small group out of negotiations although the Employer’s latest proposal would actually leave an even smaller and fragmented group of workers.

12) Finally, the Union stated that it had been consistent throughout the process and the bargaining unit proposed was a standard bargaining unit in the Aerospace industry. The Union stated that if the CAC agreed with its proposed bargaining unit then all three Senior Aerospace sites in the North West would operate the same bargaining unit and this would be another step closer to giving the workers at Weston the support they so desperately needed.

3. Summary of the submissions made by the Employer

13) By way of background information the Employer explained that Senior Aerospace Weston was a supplier of a wide range of complex machined components and sub-assemblies for original equipment manufacturers (OEMs) predominantly in the commercial aviation market sector. The Employer stated that Senior Aerospace Weston was founded in 1948 as a small family enterprise by Richard Sutton and had passed on through two generations until the business was sold in 2010. The business had grown into a globally competitive manufacturing business and, despite being acquired in 2010 by Senior Plc, had retained many of its original core values.

14) The Employer explained that it leased two factory units on a small trading estate near Skipton from the Sutton family and both units machined aerospace components from metal billets or forgings for engine or wing structures. The Employer stated that very little had changed within the business since the acquisition by Senior Plc and, whilst there were five Senior manufacturing sites in the UK, there was no link between them as they operated in entirely different divisions, with different markets, different capabilities and skill sets within them.

15) The Employer stated that the core of its business comprised employees who consisted of machine operators, assembly staff, inspectors, chemical processors, warehouse operatives, logistics and administration staff, manufacturing and quality engineers along with support functions of purchasing, commercial and finance. The Employer said that, whilst there were two separate buildings much of the work that was carried out was equivalent in nature and on an increasing basis activity was interchangeable between the two premises.

16) The Employer explained that it manufactured parts to customer specifications and did not carry out design work or hold any intellectual property and everyone in the business was orientated to support the manufacturing operation in the best way it could, irrespective of the function it sat within. As a consequence, and on a routine basis, representatives within functional teams provide support to areas outside of their traditional core in order to achieve the aims of the Employer’s customers. By way of example, the Employer said that it was not unusual to see Shift Managers operating machines, packing or working in despatch or even driving to suppliers to collect or make deliveries. Similarly, Manufacturing Engineers and members of the quality team were frequently seen running machines and assembling product.

17) The Employer stated that the bargaining unit proposed by the Union excluded employees who in many cases were on exactly the same terms and conditions as those within the proposed bargaining unit and that this would ostracize employees not included in the proposed bargaining unit thereby leaving them unrepresented. The Employer proposed what it considered to be a simple alternative bargaining unit which included all those proposed by the Union (i.e. hourly paid) along with those equivalent administrative teams who were subject to the same terms and engineering and quality employees who were also subject to the same terms. The Employer stated that it proposed to exclude those in a management position, defined as the Leadership Team, Tier 1, Tier 2 Management and Administration 2. The Employer stated that its proposed bargaining unit incorporated the overwhelming majority of the workforce (285 employees compared to 255 as proposed by the Union) and was consistent with effective management across the totality of the business.

18) The Employer stated that its business relied heavily on new talent joining the company through the apprentice scheme each year. The Employer explained that Senior Aerospace Weston operated an established and nationally recognised apprenticeship programme and working in conjunction with their local training provider – Burnley College, had recruited 4-6 Apprentices year on year. The Employer currently had 25 in the four year programme. Typically an apprentice would move throughout the business during the first four years of joining the Employer before settling on a vocation that suited both them and the Employer and very often lead them to settling outside of traditional manufacturing operations, examples included engineering, quality, inspection, HR and so on.

19) The Employer stated that the business was essentially delivered out of two facilities, delivering either structural or compressor components. The teams delivering the business were largely allocated between the two facilities – under the leadership of a Manufacturing Manager - and each facility had an operational team that was supported by a team of logistics (production support, warehouse operatives) and dedicated quality and engineering assistance.

20) Across the business there were three shift patterns that ultimately supported the business on a 24/7 basis. The Employer stated that the majority of employees worked either a shift pattern (6am-2pm, 2pm-10pm, 10pm-6am) 5 days a week or worked on a day shift. There was also a smaller group of employees who worked on a “ continental shift” that supported the business on a 24/7 basis.

21) The Employer stated that, given the context and history of the organisation, it was no surprise that many of the terms and conditions of employment were identical across various categorisations of employees. The Employer stated that all employees are required to clock in and out, up to and including the C.E.O. The Employer stated that the pay structure was very similar between those in the Union’s proposed bargaining unit and those excluded. The Employer said that in respect of pay rises all employees receive the same percentage pay rise which was negotiated through the Works Council. Also all the employees are invited into the same ‘All Employee Bonus Scheme’. The Employer gave the following examples of common terms and conditions of employment:

Hours: Every employee within the business was contracted to provide 37 hours per week, with one exception being those on continental shifts whereby 42 hours per week was necessary to achieve the shift pattern as voted for by employees through the Works Council.

Holidays: Every employee within the business was contracted to 33 days holiday, with one exception being those on continental shifts for the same reasons identified above.

Pension contribution: Every employee within the business was eligible for a 10% pension, regardless of the work area they reported into.

Overtime: This was the largest differentiator between the key terms. However, it did not discriminate between those within the proposed bargaining unit and the balance of the work force. Specifically, areas across wider functions other than operations were eligible for overtime premiums with only managers and some more senior administration staff not being eligible.

Sick Pay: All employees of the company were eligible to receive sick pay again with the modification to incorporate an equivalent for those on continental shifts.

Payment frequency: The Employer confirmed that all employees were paid on a monthly basis. Whilst the term ‘hourly paid’ is utilised within Senior Aerospace Weston, it refers to a mechanism to ensure appropriate premiums and overtime could be accurately be applied.

Pay structure: Finally, given similarities across functions previously identified, both culturally and contractually, the Employer argued that it was also important to highlight the similarities in pay across the previously mentioned groups. Fundamentally the salary range across the proposed bargaining unit of the hourly paid employees had a significant overlap with wider groups of the business, including Administration 1, Engineering and Quality Engineering.

22) The Employer also contended that the Works Council did perform a substantive negotiation role in respect of all its employees including the workers covered by the proposed bargaining unit. Whilst individual terms of employment, particularly in relation to senior executives, would be dealt with individually the Employer did negotiate with the Works council on issues of general application including overall percentage pay rises.

23) To summarise, the Employer stated that the differences in terms and conditions across all its employees was minimal and there was as much difference between ‘hourly’ shift patterns as between hourly paid employees and functional support areas. The Employer stated that to segregate the workforce by imposing a bargaining unit that divided and thus discriminated in respect of a proportion of its employees on equivalent terms and conditions could not be managed effectively.

24) The Union disputed certain aspects of the Employer’s position. The Union said that hourly paid workers had to work for the Employer for 2 years to get full access to sick pay whereas salaried staff received this from day one. The Union also submitted that hourly paid workers received overtime immediately after completing core hours but salaried staff either were not paid overtime or had to go over their flexi time before they did. The Union did not consider the Works Council to be a negotiating body for the reasons already outlined above and in support of the argument that the Works Council did not perform a collective bargaining function it was noted that arrangements for feedback of issues discussed with the Works Council to employees for feedback were not uniform in terms of whether votes were taken in the relevant constituencies.

4. Considerations

25) 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 and amplified at the hearing. 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 so, 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 proposed bargaining 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.”

26) The Panel is first tasked with determining whether the bargaining unit proposed by the Union is appropriate. The Panel should not reject the Union’s proposed bargaining unit because it considers that a different unit would be more appropriate nor, in considering whether the proposed bargaining unit is compatible with effective management, should it consider whether that proposed bargaining unit is the most effective or desirable unit in that context. There is no requirement imposed on the Panel to seek to identify a more appropriate bargaining unit if it finds that the union’s proposed bargaining unit is appropriate. Paragraph 2(3) of the Schedule states that “[r]eferences to the proposed bargaining unit are to the bargaining unit proposed in the request for recognition”. It is the bargaining unit set out in the union’s request that the Panel must first assess.

27) The views of the Employer and the Union, as described earlier in this decision, have been fully considered.

28) The Panel has noted the Employer’s concerns that to segregate the workforce by imposing a bargaining unit that treats separately a proportion of employees on equivalent terms and conditions to those within the proposed bargaining unit would be difficult to manage effectively. As far as the characteristics of workers are concerned, the Union’s proposed bargaining unit consists of a discrete group of workers who are all hourly paid workers and share the same terms and conditions of Employment. In light of the evidence given about the nature of the workplace and the commonality of employment terms across the hourly paid workers the Panel considers that the proposed bargaining unit reflects a sufficiently coherent and distinctive group not to give rise to small or fragmented bargaining units.

29) As to the location of the Union’s proposed bargaining unit, the relevant workers all work across two close by buildings and, as stated by the Employer, much of the work carried out is equivalent in nature and on an increasing basis activity is interchangeable between the two buildings in question.

30) Whilst there were no existing national and local bargaining arrangements with trade unions for the Panel to take into account in relation to the proposed bargaining unit for the particular site in question, the Panel has also noted and borne in mind the Union’s contention that its argument that its proposed bargaining unit is compatible with effective management is supported by the fact that other divisions of the Employer have in place union recognition arrangements in relation to the same nature of bargaining unit whilst also having a Works Council in place. The Panel considers the fact that recognition arrangements relating to hourly paid workers are in place elsewhere within the Employer’s Group to be a factor supportive of the proposed bargaining unit being compatible with effective management.

31) The Panel has also noted and borne in mind the Union’s contention that other employers in the aerospace sector operate similar bargaining unit arrangements. Whilst accepting that this may not be universal practice across the aerospace industry, the Panel considers the fact that other significant employers such as BAE and Rolls-Royce operate union recognition arrangements on a similar basis to that proposed by the Union is a factor supportive of the proposed bargaining unit being compatible with effective management. Whilst the Union and the Employer disputed the nature, role and representative functions of the Works Council in place at the relevant site and whether it conducted negotiations for all staff, the Panel does not consider that its existence undermines the compatibility of the proposed bargaining unit with effective management.

32) Taking into account the matters set out above and the matters listed in paragraph 19B(3) of the Schedule the Panel has determined that the proposed bargaining unit is compatible with effective management and has concluded that a bargaining unit composed of workers as set out in the Union’s application does not conflict with the object of encouraging and promoting fair and efficient practices and arrangements in the workplace. The Panel is satisfied that its decision is consistent with the object set out in paragraph 171 of the Schedule.

5. Decision

33) For the reasons given above the Panel’s decision is that the appropriate bargaining unit is that proposed by the Union namely “Hourly paid workers at Senior aerospace Weston, Earby”.

Panel

Mr Charles Wynn Evans, Chair of the Panel

Mrs Maureen Chambers

Mr Gerry Veart

13 February 2019

6. Appendix

Names of those who attended the hearing:

For the Union

Ross Quinn - Unite Regional Officer

Sarah Murphy - Unite Employee

For the Employer

David Fellows - Chief Executive Officer

Julie Beckett - Human Resources Manager