Decision

Decision

Updated 15 February 2022

Applies to England, Scotland and Wales

Case Number: DI/10/2021

15 February 2022

CENTRAL ARBITRATION COMMITTEE

TRADE UNION AND LABOUR RELATIONS (CONSOLIDATION) ACT 1992

SECTION 183 – DISCLOSURE OF INFORMATION

The Parties:

Unite the Union

and

Vanderlande Industries UK Ltd

1. Introduction

1) Unite the Union (the Union) submitted a complaint to the CAC dated 14 October 2021 pursuant to section 183 of the Trade Union and Labour Relations (Consolidation) Act 1992 (the Act). The complaint related to an alleged failure by Vanderlande Industries UK Ltd (the Employer) to disclose information for the purposes of collective bargaining. The Employer submitted a response to the Union’s complaint dated 10 November 2021 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 Professor Gillian Morris, Panel Chair, and, as Members, Mr David Coats, and Mr Mustafa Faruqi. Mr Faruqi was replaced by Mr Sean McIlveen for the purposes of this decision.

3) The complaint was made in respect of “Employees covered under collective bargaining agreements for the baggage strategic partnership contract at Heathrow Airport, and those on the IAG Cargo contract at Heathrow Airport”. The Union stated that it had requested the following information for collective bargaining purposes in correspondence dated 20 April 2021 and sent to the Employer on that date:

Baggage Strategic Partnership Questions:

• What is the total value of the Heathrow Strategic Partnership Baggage Contract, now it has been extended from a 7-10 to 10-13 years contract (what has HAL agreed to pay Vanderlande UK Ltd for the services provided including project works, does this incur contract savings from HAL)?

• What is the total revenue from 2020 and forecasted revenue for 2021-22 for the Heathrow Strategic Partnership Baggage Contract?

• What is the total turnover from 2020 and forecasted turnover for 2021-22 per year for the Heathrow Strategic Partnership Baggage Contract?

• What is the total numbers of employee (sic) and composition (i.e., the number of different job roles in each area) of the workforce of the Heathrow Strategic Partnership Baggage Contract, its cost of wages/salaries and the percentage of gross/net profit, earned per employee i.e. sales/per employee, for 2020?

• What is the total gross/net profit margin from 2020 and forecasted gross/net profit margin for 2021-22 Heathrow Strategic Partnership Baggage Contract?

• What is the return on capital earnings (ROCE) from 2020 and forecasted ROCE for 2021-22 for the Heathrow Strategic Partnership Baggage Contract?

• Can you please provide a breakdown of the total number of furloughed employees in different areas, that work under the Strategic Partnership contract and the business intentions on getting these employees back to work?

• What are the Directors’ emoluments, of those Directors responsible for the Heathrow Strategic Partnership Baggage Contract and were directors awarded a pay increase/bonus for 2020-21?

• What percentage of pay increase will be awarded or proposed to be awarded this year to employees on contracts of employment outside of collective bargaining that work on the Strategic Partnership contract (how is this percentage set/measured, does it increase with RPI/CPI or above)?

• Are there any relevant risk or ongoing concerns since the last company accounts, that directly affect the business on the Strategic Partnership Baggage Contract, which its employees’ Trade Union should be aware of, since the last redundancy situation, is the business in good health?

IAG Contract Questions:

• What is the total value of the current IAG contract and the value of the contract renewal, which is being tendered for?

• What is the total revenue from 2020 and forecasted revenue for 2021 for the IAG contract?

• What is the total turnover from 2020 and forecasted revenue for 2021 for the IAG contract?

• What is the total numbers of employee (sic) and composition (i.e., the number of different job roles in each area) of the workforce of the IAG Contract, its cost of wages/salaries and the percentage of gross and net profit, earned per employee i.e., sales/per employee for 2020?

• What is the total gross/net profit margin from 2020 and forecasted gross/net profit margin for 2021 for the IAG contract?

• What is the return on capital earnings (ROCE) from 2020 and forecasted ROCE for 2021 on the IAG Contract?

• Can you please provide a breakdown of the Total number of furloughed employees in different areas, that work under the IAG Contract and the business intentions on getting these employees back to work?

• What are the Directors’ emoluments, of those Directors responsible for the IAG Contract and were Directors awarded a pay increase for 2020-21?

• What percentage of pay increase will be awarded or proposed to be awarded this year to employees on contracts of employment outside of collective bargaining, that work on the IAG contract (how is this percentage set/measured, does it increase with RPI/CPI or above)?

• Are there any relevant risk or ongoing concerns since the last company accounts, that directly affect the business on the IAG Contract, which its employees’ Trade Union should be aware of, since the last redundancy situation, is the business in good health?

The Union stated that it had only the accounts for the whole of the Employer’s business but that it needed information for each of the two contracts on which its members worked. The Union said that it had been unable to evaluate the financial performance of the two contracts covered by its collective agreements and that it had been materially impeded in collective bargaining by not receiving the information. The Union stated that it had asked the Employer to provide the requested information so that the Union and those on whose behalf it bargained could understand the financial performance of the UK company in the specific areas of the business in which they worked. The Union said that without this information there was a lack of trust, a lack of collective bargaining, an inability to agree terms and conditions of employment in accordance with its recognition agreements and an inability to avoid industrial conflict.

2. The hearing

4) To establish whether there were ways in which the parties could be assisted in resolving the issues in dispute the Case Manager asked the parties whether they would be willing to attend an informal meeting with the Panel Chair. Both parties indicated their willingness to attend an informal meeting. The Employer subsequently failed to respond to a series of communications from the Case Manager asking about the Employer’s availability to attend such a meeting and the Panel therefore gave notice that a formal hearing would take place on 7 February 2022. This hearing took place by virtual means and the names of those who attended the virtual hearing on behalf of the parties are annexed to this decision. The Union provided a statement of case prior to the hearing; the Employer provided a witness statement from its Head of HR, Ms. Sue Beech, which was said to form part of the Employer’s statement of case. These documents were exchanged, and submitted to the Panel, in advance of the hearing. At the hearing the Employer sought to submit a written copy of the submissions it intended to make orally together, potentially, with documentation relating to the confidentiality terms of service contracts. The Union did not agree to these documents being admitted at the hearing and after a short adjournment the Panel decided that they should not be admitted.

5) The Panel would like to thank the parties for the patience with which they conducted the hearing. In answers to questions from the Panel Chair, both parties confirmed at the conclusion of the hearing that the hearing had been fairly conducted and that they had had the opportunity to say everything that they had wished to say. At the hearing both parties made comments which cast doubt on the trustworthiness of the other in specific respects. The Panel made no findings on the credibility of those comments; they played no part in the Panel’s decision; and the Panel did not consider that it would serve the interests of good industrial relations to record these comments in detail in this decision.

3. Background^{[footnote 1]}

6) The Employer’s parent company is a Dutch headquartered business, involved in logistics process automation. Its primary areas of operation are Airports, Warehousing and Parcel logistics. The information requested by the Union relates to the Employer’s service contracts (“the Contracts”) to provide and maintain baggage and cargo automation solutions with (a) Heathrow Airports Limited (“HAL”) and (b) IAG Cargo (“IAG”) (a British Airways group company specialising in cargo and freight, rather than passenger, transportation). In relation to HAL, the Employer has an overarching level 1 framework agreement for the design, build, operation and maintenance elements of the Heathrow Airport Baggage Operation. Under this framework agreement there are a number of operation and maintenance work packages that detail the supply of goods and services at Heathrow Airport by location. This contract is a 10 year guaranteed maximum price contract, starting in November 2020 and ending in October 2030. It is an open book contract which can be audited by HAL at any time. In relation to IAG, the Employer is currently involved in a competitive tender process for the renewal of the IAG Operate, Maintain and IT contract based at Heathrow. The previous IAG Contract was for five years at a fixed price; it expired in January 2022 and the Employer is currently providing continuity of service under a rolling extension pending the re-tender. It is the Employer’s practice that every contract operates completely independently from the other contracts operated by the Employer which means that any costs associated with an individual contract must be accounted for within the parameters of the contract itself; there can be no transfer of costs or profit from one contract to another. In addition, the Global Board of the Employer’s parent company determines a “global bonus award for all employees across the worldwide group on an equal basis”. This payment is determined by how its Airports, Parcels and Warehousing business units have performed on a consolidated basis when the global financial accounts are closed. The Employer has no influence on whether a bonus is paid or the amount of any such bonus.

7) Employees within the Airport and Parcel business units in the UK fall into one of two contractual categories. The first category is employees who have been recruited directly by the Employer (“directly recruited employees”). They are not covered by a collective agreement between the Employer and the Union and are managed through a performance related framework. Their individual payments are determined by:

• An individual performance score which is managed through the calibration against all employees and distribution management.

• The relative salary position on a benchmarked pay band.

• A general increase that could be applied through a review of CPI.

• Business affordability.

The Employer is contractually committed to an annual pay review for these employees. The second category is employees covered by the Recognition Agreement between the Employer and the Union; these are most commonly employees TUPE-transferred to the Employer. The Employer conducts collective bargaining on pay with the Union for these employees. The last pay agreement between the parties was in 2020. The Employer decided that for 2021 there would be no collective pay increase offered to employees working on the HAL and IAG Contracts who were covered by collective bargaining in the light of the impact on aviation of the Covid-19 pandemic and the losses declared by its customers, including the airlines.

4. The Relevant Law

8) Section 181 of the Act provides that:

(1) An employer who recognises an independent trade union shall, for the purposes of all stages of collective bargaining about matters, and in relation to descriptions of workers, in respect of which the union is recognised by him, disclose to representatives of the union, on request, the information required by this section. In this section and sections 182 to 185 “representative”, in relation to a trade union, means an official or other person authorised by the union to carry on such collective bargaining.

(2) The information to be disclosed is all information relating to the employer’s undertaking (including information relating to use of agency workers in that undertaking) which is in his possession, or that of an associated employer, and is information –

(a) without which the trade union representatives would be to a material extent impeded in carrying on collective bargaining with him, and

(b) which it would be in accordance with good industrial relations practice that he should disclose to them for the purposes of collective bargaining.

(3) A request by trade union representatives for information under this section shall, if the employer so requests, be in writing or be confirmed in writing.

(4) In determining what would be in accordance with good industrial relations practice, regard shall be had 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.

(5) Information which an employer is required by virtue of this section to disclose to trade union representatives shall, if they so request, be disclosed or confirmed in writing.

9) Section 182(1), so far as material to this case, provides that an employer is not required by section 181 to disclose information -

(c) which has been communicated to him in confidence, or which he has otherwise obtained in consequence of the confidence reposed in him by another person: or

(d) which relates specifically to an individual (unless that individual has consented to its being disclosed);

(e) the disclosure of which would cause substantial injury to his undertaking for reasons other than its effect on collective bargaining.

In formulating the provisions of any Code of Practice relating to the disclosure of information, ACAS shall have regard to the provisions of this subsection.

Section 182(2) provides that in the performance of his duty under section 181 an employer is not required -

(a) to produce, or allow inspection of, any document (other than a document prepared for the purpose of conveying or confirming the information) or to make a copy of or extracts from any document, or

(b) to compile or assemble any information where the compilation or assembly would involve an amount of work or expenditure out of reasonable proportion to the value of the information in the conduct of collective bargaining.

5. Matters resolved or agreed at the hearing

10) In her witness statement Ms Beech stated that the Employer was willing to provide the following items of information which the Union had requested:

• A breakdown of the total number of furloughed employees in different areas, that work under the Strategic Partnership contract and the IAG contract and the business intentions on getting these employees back to work;

• The percentage of pay increase to be awarded or proposed to be awarded this year to employees on contracts of employment outside of collective bargaining that work on the Strategic Partnership contract and the IAG contract (how is this percentage set/measured, does it increase with RPI/CPI or above)?

At the hearing the Employer undertook to supply this information to the Union by 15 February 2022. On the basis of this undertaking the Union withdrew these items from its complaint at the beginning of the hearing. The Union also withdrew from its complaint the following items:

• Are there any relevant risk or ongoing concerns since the last company accounts, that directly affect the business on the Strategic Partnership Baggage Contract and the IAG Contract, which its employees’ Trade Union should be aware of, since the last redundancy situation, is the business in good health?

• What is the total revenue from 2020 and forecasted revenue for 2021-22 for the Heathrow Strategic Partnership Baggage Contract and for the IAG Contract.

6. Matters on which the Panel sought clarification at the start of the hearing

11) The two sets of requests. The parties confirmed that they regarded the requests relating to the Heathrow Strategic Partnership Baggage Contract with Heathrow Airports Ltd (“the HAL Contract”) and the IAG Cargo Contract (“the IAG Contract”) as identical in all material respects; ^{[footnote 2]} that they were content for the Panel to apply the same considerations to both sets of requests; and that references in this decision to the HAL Contract should be taken to refer in addition to the IAG Contract unless specifically stated otherwise.

12) How the Employer measures business affordability. The Panel noted that Ms Beech had stated in her witness statement that any costs associated with each contract must be accommodated within the parameters of the contract itself, ie there could be no transfer of costs or profit from one contract to another. She had also stated that the Employer did not have information relating to turnover ratios split into individual contracts; this type of information was accounted centrally for the whole business. The Panel asked the Employer to clarify how “business affordability” was measured in relation to directly recruited employees (see paragraph 7 above). The Employer said that it had a pay budget at a global level and that its central overhead costs were budgeted at that level but that pay increases for those employed within an individual service contract were self-financing within that contract.

13) How pay increases are funded. The Panel noted that Ms Beech had stated in her witness statement that under the HAL Contract the Employer could not without the express permission or agreement of its customer pass on any price increases, such as increases in staff pay, to HAL. The Panel asked the Employer whether any assumptions about pay increases had been built into the HAL Contract given its 10-year duration. The Employer said that it would normally need to absorb any pay award within the scope of the existing contract for the remainder of its term meaning that any pay increase would need to be funded by improved efficiency and productivity unless the Employer were to bear the cost itself. In her witness statement Ms Beech said that HAL had made total losses of £3.4bn since the start of the pandemic and IAG, as part of British Airways, had suffered similarly. The Employer said that in this context it would not be regarded as a responsible business partner were it to seek a pay increase from customers that were encountering unprecedented financial challenges.

14) Confidentiality provisions in the Contracts. In her witness statement Ms Beech stated the following:

Vanderlande is … bound by confidentiality provisions with the service contracts with HAL and IAG. Notwithstanding this, given the sensitivity of the contract and how the profitability aspects of it operate, any disclosure of the information would not be regarded at all favourably by a customer, in particular in this instance HAL and IAG themselves. Those customers have an expectation that the financial aspects of their contracts with Vanderlande (e.g. what they are prepared to pay for services) will remain strictly confidential.

The Panel Chair inquired what this statement meant and pointed out that “any disclosure of the information would not be regarded at all favourably by a customer” could bear a wide range of meanings. She asked why the Employer had not submitted the confidentiality terms of the Contracts in evidence. Ms Beech said that she did not know why these terms had not been submitted in evidence but confirmed that she had seen them and that her statement was accurate. The Employer said that it may be able to obtain the relevant documentation if the Panel would find this of assistance. As explained in paragraph 4 above the Panel decided that such documentation, even if it were to be made available, should not be admitted at the hearing stage.

15) The relevance of recently registered UK company accounts. In its letter dated 20 April 2021 requesting information from the Employer the Union made the following statement:

Providing an accurate assessment of an employer’s ability to pay is crucial for the pursuance of collective bargaining by trade unions. In normal circumstances we might use the most recently registered company accounts to assess this ability to pay. However, in the exceptional circumstances of the COVID-19 pandemic and effect it has had on aviation we can no longer rely upon these accounts to give us a true picture, on all elements of the business.

The Panel Chair asked the Union to explain this statement. The Union said that the Employer had said that the Union could not rely on the UK company accounts to assess its ability to pay employees working on the Contracts. The Union also said that the registered accounts did not drill down into the Employer’s individual service contracts.

7. Summary of the submissions made by the Union

16) The Union said that the information which had been requested on the 20 April 2021 was for the purpose of collective bargaining with regard to its 2021/22 negotiations over pay. The Union said that the information requested was necessary for the Union to collectively bargain over its members’ terms and conditions as this information would inform the Union of its members’ contribution to the financial position of the Employer and the Employer’s ability to afford any increase to its members’ pay. The Union said that the information would therefore influence the formulation and presentation of its position within pay negotiations and the pursuit and conclusion of those negotiations. The Union said that it had mainly requested contract-level financial information because negotiations over pay with the Employer were conducted at this level. The Union said that it had also requested information regarding pay increases that were paid to Directors in 2020-21, and to those employees on contracts with the Employer that were outside the scope of its collective bargaining arrangements, as this information would be both indicative of the Employer’s ability to pay and an index whereby it could measure the Employer’s commitment to equity within the workforce.

17) The Union said that the information it had requested fell within that detailed within paragraph 11 of the Acas Code of Practice on disclosure of information to trade unions for collective bargaining purposes (“the Acas Code”), namely:

(i) Pay and benefits;

(iii) Manpower;

(iv) Performance; and

(v) Financial information

The Union also asserted that the provision of this information would be in accordance with good industrial relations practice.

18) The Union said that the Employer had provided no detailed argument or evidence in support of its claim that the disclosure of the information requested would cause substantial injury to the undertaking for reasons other than its effect on collective bargaining and noted that under paragraph 15 of the Acas Code the “burden of establishing a claim that disclosure of certain information would cause substantial injury lies with the employer”. The Union said that the information requested was to be used only within the collective bargaining process; it was not to be made available to any competitor of the Employer nor was it to be made publicly available. The Union said that it would run contrary to the Union’s own interests for any competitor of the Employer to receive financial information which would assist that competitor to undercut the Employer. The Union said that for those reasons it was willing to agree to any reasonable commitment to confidentiality sought by the Employer and that it had offered to do so repeatedly. The Union said that it believed that the lack of any effort by the Employer to seek specific assurances which could alleviate concerns about commercial confidentiality supported the Union’s view that commercial confidentiality was merely an excuse to avoid providing information which would assist the Union in the collective bargaining process. The Union also contended that there was no considerable work or expenditure involved in providing the information requested, which the Union said was clearly relevant to collective bargaining, and that section 182(2)(b) of the Act did not, therefore, apply. The Union said that it reasonably believed that the information requested was in the possession of the Employer and comprised information that the Union would typically be provided with within a pay negotiation. The Union said that most bullet points within its initial request required the Employer to provide the Union with one or two figures alone. The Union said that it accepted that the request for information regarding the number of employees in each role within the workforce (including the numbers furloughed) was more complex, but contended that it was not unreasonable to provide such information to a union which the Employer recognised for the purposes of collective bargaining in respect of those employees’ terms and conditions of employment. The Union said that the Employer had previously asserted that “Companies House can be relied upon to give a true picture of all aspects of the UK businesses, Airports & Parcels Solutions and Warehousing Solutions” but said that the accounts information provided to Companies House did not comprise the information that the Union had requested specific to those contracts for which its members were recognized. The Union said that the HAL Contract had been with Babcock prior to the TUPE- transfer to the Employer and that Babcock had normally provided a summary of the state of the business and in doing so had drilled down further than the Employer. The Union also said that HAL provided information relating to the finances of its business.

19) The Union made some additional submissions specifically in relation to the individual items of information requested. The Union said that it needed information about the total value of the Contracts given that the Employer had said that the money for any pay rise had to be found within those contracts and that total value was relevant, therefore, to the Employer’s ability to pay. The Union said that total turnover, too, went to the Employer’s ability to pay. The Union said that it needed information about the number of employees and composition of the workforce and cost of wages/salaries to be informed about the costs of any potential pay increase to the Employer and that the percentage of gross/net profit earned per employee was relevant to members’ contribution to the Employer’s financial performance and ability to pay. During the course of the hearing the Union said that it would abandon its request for information about the percentage of gross/net profit earned per employee within that item. In relation to total gross/net profit margin and forecasted gross/net profit margin on the HAL Contract the Union referred to paragraphs 10 and 11 of the Acas Code. Paragraph 10 reads as follows:

To determine what information will be relevant, negotiators should take account of the subject-matter of the negotiations and the issues raised during them; the level at which negotiations take place (department, plant, division, or company level); the size of the company; and the type of business the company is engaged in.

The Union said that it was requesting contract-level information on profit margins in this case as it had been told by the Employer that its ability to pay was determined at contract-level. The Union made the same point in relation to its request for information relating to the return on capital earnings and said that this was a good indicator of an Employer’s financial performance. The Union said that information about Directors’ emoluments was also a good indicator of the Employer’s ability to pay as well as enabling it to assess equity within the workforce. The Union said that to meet the Employer’s objection to revealing information about individual directors it would accept remuneration details solely for the UK Directors and on an anonymised basis. In answer to the Employer’s statement that there was only one UK director, the Union said that it was its understanding that there were at least two.

20) The Union said that when it had raised the argument that the information registered at Companies House showed the strong financial performance of the organisation as a whole the Employer had said its financial performance for pay purposes was contract- specific. The Union said that it had very little financial information relating to the Contracts and that collective bargaining was next to impossible with the information available to it. The Union said that the information it had requested was much more limited than the examples given in the Acas Code; it represented information which was typically requested and received from employers and that it was rare that an employer sought to withhold from the Union the type of information requested in this case. In answer to a question from the Employer the Union said that it would get contract-specific financial data on a routine basis and it was rare that this information was withheld in outsourcing. The Union said that contract-specific information was shared freely and regularly in the local authority context. The Union said that it was the Employer’s own practice which required each contract to be self-funding and said that the Employer was not merely a set of individual contracts; it had a head office and central administration. The Union also said that the directly recruited employees had received pay rises during the past year. The Union accepted, in answer to a question from the Employer, that these rises were tied to performance although the Union also said that it had been told that this increase had included an inflation-related element.

21) The Union pointed to paragraph 20 of the Acas Code which reads as follows:

Employers should aim to be as open and helpful as possible in meeting trade union requests for information. Where a request is refused, the reasons for the refusal should be explained as far as possible to the trade union representatives concerned and be capable of being substantiated should the matter be taken to the Central Arbitration Committee.

The Union said that the Employer had not attempted to explain its position. The Union said that it was alarming that the Employer had asserted that disclosing information such as the value of the contract would contravene section 182(1)(c) of the Act without bringing any evidence to substantiate its position. The Union said that the Employer, equally, had not attempted to explain why the disclosure of certain information would cause substantial injury to it or to reach agreement with the Union. The Union said that in her witness statement Ms Beech had said that the Employer’s client would be unhappy if information were disclosed (see paragraph 14 above) but the Union submitted that this fell far short of substantial injury. The Union contended that disclosing the total value of the Contracts to the Union could not result in substantial injury to the Employer. The Union said that if every employer followed the approach of the Employer to disclosing information there could be no collective bargaining. The Union said that there was no basis for the Employer’s contention that the Union would share any information disclosed by the Employer with members in other companies in any way that would cause substantial injury to the Employer. In answer to the Employer’s contention that Union representatives who became privy to the information could change employers, the Union said that there was no restriction on senior employees, who may be privy to the information requested, moving between companies. The Union said that it needed to understand the pressures to which the Employer was subject and could only do so by being given the information requested.

8. Summary of the submissions made by the Employer

22) The Employer said that it was operating in a highly competitive and relatively small global market- place so any sharing or releasing of contractual or financial information could seriously jeopardise or prejudice the viability of the Employer and its global business. The Employer said that all suppliers within the industry kept a close watch on each other. The Employer said that information about company-wide financial performance was available to the Union and that Covid did not impact on that except that particular contracts had been doing badly. The Employer said that requests for contract-specific information had not been raised with the Employer prior to the requests currently before the CAC and that the Union had not previously been privy to this type of information. The Employer asserted that no employers in a similar position to the Employer had been asked to provide contract-specific information and that no complaints against them had been made by the Union to the CAC. The Employer said that it could see why the Union wanted information on the Contracts but submitted that this information was so commercially sensitive that disclosure would damage the Employer and its relationships with its contractors. In relation to the HAL Contract, the Employer said that this was an unusual contract in being an open-book contract under which the interests of the Employer and HAL were aligned. The Employer said that once the mechanics of this contract were known this would have an injurious effect on the Employer’s ability to maintain its relationship with HAL. The Employer said that, as it was currently in a competitive tender process for the renewal of the IAG Operate, Maintain and IT contract based at Heathrow, information about the arrangements under the previous contract were particularly sensitive. The Employer referred to paragraph 14 of the Acas Code which reads as follows:

Some examples of information which if disclosed in particular circumstances might cause substantial injury are: cost information on individual products; detailed analysis of proposed investment, marketing or pricing policies; and price quotas or the make-up of tender prices…. In answer to questions from the Panel the Employer acknowledged that this may mean that the knowledge of the Union about affordability would be reduced but said that this was a situation which the Union had faced every year when having pay negotiations with the Employer. The Employer said that employees, whether union represented or not, had never been privy to such types of contract-specific information in connection with any pay discussions or negotiations with the Employer. In her witness statement Ms Beech said that employees had always been able to rely upon the financial information available on (sic) Companies House and other information and updates about business and contract progress and health that we share with them and with Unite on a running basis.

23) The Employer submitted that what was in accordance with good industrial relations practice for the purposes of section 181(2)(b) of the Act was a two-way process and that the restrictions in section 182 were designed to help good industrial relations. The Employer submitted that if it were to be forced to divulge information which was damaging to the company this would not support good industrial relations and may lead to redundancies. The Employer also submitted that it would not be in accordance with good industrial relations for the Employer to breach confidentiality with its customers. The Employer referred to the paragraph in Ms Beech’s witness statement about confidentiality which reads in full as follows:

Vanderlande is also bound by confidentiality provisions with the service contracts with HAL and IAG. Notwithstanding this, given the sensitivity of the contract and how the profitability aspects of it operate, any disclosure of the information would not be regarded at all favourably by a customer, in particular in this instance HAL and IAG themselves. Those customers have an expectation that the financial aspects of their contracts with Vanderlande (e.g. what they are prepared to pay for services) will remain strictly confidential. In addition, HAL and IAG both enter pay bargaining arrangements with Unite, hence any information provided by Vanderlande to Unite regards our contract with HAL and IAG could be useful to Unite when they enter into discussions with HAL and IAG regards their own pay bargaining.

The Employer said that a non -disclosure agreement with the Union would not solve the problem because the Union represented members working for its competitors and contractors and could use knowledge which had come into their possession in negotiations with those bodies; in addition representatives may move jobs and work for a competitor employer. The Employer said that the information sought by the Union would be incredibly useful to a competitor and potentially could have devastating financial consequences for the Employer by enabling a competitor to undercut it in a future tender process. The Employer said that it was for the Union to suggest a confidentiality agreement that was enforceable and appropriate and that it had not done so.

24) The Employer said that it had always met its legal obligations for employees who had been TUPE-transferred in protecting their terms and conditions of employment and that many of those terms and conditions were better than those applicable to its directly recruited employees. The Employer said that it had enabled employees to retain employer and employee contributions above its own company pension scheme. The Employer said that in total package terms, a significant number of people who had TUPE- transferred had higher total package values than those of directly recruited employees and submitted that the comparison being made by the Union between employees on performance related pay (i.e. not collectively bargained terms) and those covered by collective bargaining was not a good like-for-like comparison as pay was only one element. The Employer said that TUPE-transferred employees could move to the terms applicable to directly recruited employees if they so wished. The Employer said that employees covered by collective bargaining with the Union worked exclusively on one or other of the HAL or IAG contracts; they did not work between the two.

25) The Employer made submissions in relation to the individual items of information which the Union had requested. In relation to the total value of the Contracts, the Employer said that this was a vague request which would not inform negotiations and was, in any event, covered by section 182(c) and (e) of the Act. The Employer submitted that “turnover” meant different things in different contexts and that non-disclosure would not, without more, impede collective bargaining. In her witness statement Ms Beech said that if “turnover” referred to a ratio that considers the potential costs versus the revenue of a contract the Employer’s finance team had confirmed that the Employer did not have the information of turnover ratios split into individual contracts; this type of information was accounted centrally for the whole business. The Employer said that if “turnover” referred to revenue, this information was highly confidential and very commercially sensitive. In relation to the total number of employees and composition of the workforce, the Employer said that the total numbers of employees that were being deployed in each part of the business and breaking down job roles was information that would be useful to a competitor and was therefore sensitive commercial detail especially when it was allied with average pay figures. The Employer said that it did not have some of the information being requested in any event; cost and percentage per head was not a metric that it used or maintained. The Employer said that some of the information requested under this heading would necessitate detailed calculations and significant time. In relation to the Union’s statement at the hearing that it would abandon its request for information about the percentage of gross/net profit earned per employee the Employer said that an item of information requested should be viewed in its entirety and it was not appropriate to break down various parts of an individual item. The Employer said that information about the total gross/net profit margin from 2020 and forecasted gross profit margin for 2021-22 was highly confidential and very commercially sensitive. The Employer said that it did not calculate the return on capital earnings on a contract-by-contract basis as typically there was little “capital” deployed on a contract-by-contract basis. The Employer also submitted that not having such information would not impede the Union in collective bargaining as it said nothing about profitability but would in any event cause substantial injury if disclosed to a competitor. In relation to the emoluments of directors, the Employer said that there was only one UK statutory director and that ordering disclosure of his package would contravene section 182(1)(d). The Employer said that even if there were two UK directors, as the Union had maintained, it would contravene GDPR to release this information. The Employer said that in any event non-disclosure of this information would not impede collective bargaining.

26) The Employer submitted that section 182(1)(e) of the Act applied to all the matters that the Employer objected to disclosing. Section 182 states that an employer is not required by section 181 to disclose information -

(e) the disclosure of which would cause substantial injury to his undertaking for reasons other than its effect on collective bargaining.

The Employer also pointed to paragraphs 11, 14 and 15 of the Code and submitted that none of these related to disclosing information about an individual customer and that paragraph 14 specifically identified information on individual products. The Employer submitted that the possibility that certain customers would be lost to competitors constituted substantial injury and that disadvantage in a tendering process could be counterproductive to the interests of union members.

27) The Panel Chair said that she had noted that the Employer had referred at many points during its submissions to an employer not being required by section 181 to disclose information which has been communicated to him in confidence, or which he has otherwise obtained in consequence of the confidence reposed in him by another person (section 182(1)(c))

The Panel Chair said that this sub-section did not permit an employer simply to label information as “confidential” without more. In response, the Employer drew attention to the relevant paragraph of Ms Beech’s witness statement (see paragraphs 14 and 23 above) and the fact that Ms Beech had confirmed at the hearing that she had read the relevant provisions of the Contracts and that her statement was accurate. The Employer also submitted that it was self-evident that the terms of section 182(1)(c) would have been met in commercial contracts of this nature.

The Employer’s offer and the Union’s response to that offer

28) During the hearing the Panel sought to explore with the parties whether there may be scope for an agreement between the parties on the information to be disclosed by the Employer which could meet the concerns of both parties. The hearing was adjourned briefly on two occasions for each party to consider the matter privately. At the conclusion of this process the Employer offered to disclose the following information:

• the percentage of actual against forecast total value/gross revenue for each year;

• the percentage of actual against forecast net profit for each year;

• the percentage which labour costs represented of actual and forecast total value of the contract for each year.

The Union said that it would be next to impossible to have meaningful negotiations on pay without the specific figures which it had sought in its request and the parties continued with their submissions. Both parties said that they were content for the terms of the Employer’s offer and the Union’s response to that offer to be recorded in this decision.

29) During the course of open discussion of the Employer’s offer the Panel expressed the view that the information that the Employer had offered to disclose, while not perfect, would enable the Union to conduct pay negotiations. At the conclusion of the hearing the Union said that it feared that the Panel’s view of the Employer’s offer and the Union’s response to that offer would influence the Panel’s consideration of its complaint and that the Union would be prejudiced as a result. The Panel Chair stated that the Panel’s view of the Employer’s offer and the Union’s response would not influence its consideration of the Union’s complaint and the Panel wishes to place on record in this decision that it has not influenced the Panel’s consideration of the Union’s complaint.

9. 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.

10. The Relevant Law

31) Section 181 of the Act provides that:

(1) An employer who recognises an independent trade union shall, for the purposes of all stages of collective bargaining about matters, and in relation to descriptions of workers, in respect of which the union is recognised by him, disclose to representatives of the union, on request, the information required by this section. In this section and sections 182 to 185 “representative”, in relation to a trade union, means an official or other person authorised by the union to carry on such collective bargaining.

(2) The information to be disclosed is all information relating to the employer’s undertaking (including information relating to use of agency workers in that undertaking) which is in his possession, or that of an associated employer, and is information –

(a) without which the trade union representatives would be to a material extent impeded in carrying on collective bargaining with him, and

(b) which it would be in accordance with good industrial relations practice that he should disclose to them for the purposes of collective bargaining.

(3) A request by trade union representatives for information under this section shall, if the employer so requests, be in writing or be confirmed in writing.

(4) In determining what would be in accordance with good industrial relations practice, regard shall be had 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.

(5) Information which an employer is required by virtue of this section to disclose to trade union representatives shall, if they so request, be disclosed or confirmed in writing.

32) Section 182(1), so far as material to this case, provides that an employer is not required by section 181 to disclose information -

(c) which has been communicated to him in confidence, or which he has otherwise obtained in consequence of the confidence reposed in him by another person: or

(d) which relates specifically to an individual (unless that individual has consented to its being disclosed);

(e) the disclosure of which would cause substantial injury to his undertaking for reasons other than its effect on collective bargaining.

In formulating the provisions of any Code of Practice relating to the disclosure of information, ACAS shall have regard to the provisions of this subsection.

Section 182(2) provides that in the performance of his duty under section 181 an employer is not required -

(a) to produce, or allow inspection of, any document (other than a document prepared for the purpose of conveying or confirming the information) or to make a copy of or extracts from any document, or

(b) to compile or assemble any information where the compilation or assembly would involve an amount of work or expenditure out of reasonable proportion to the value of the information in the conduct of collective bargaining.

33) In relation to each of the items contained in the request for information the Panel has begun by considering whether the information requested fell within the scope of section 181(2) of the Act. In cases where the Panel considered that the information requested fell within the scope of section 181(2) the Panel has then proceeded to consider whether the Employer was not required to disclose the information under section 182 of the Act.

34) The Employer submitted that, in the event that the Panel found that an item of information requested fell within the scope of section 181(2), the Employer would not be required to disclose that information because, inter alia, the information had been communicated to the Employer in confidence, or which the Employer had otherwise obtained in consequence of the confidence reposed in it by another person (see section 182(1)(c) above). As noted in paragraph 14 above the Employer chose not to submit the confidentiality provisions of the Contracts in evidence at the time that Ms Beech’s witness statement referring to confidentiality was submitted. At the hearing the Employer drew attention to the relevant paragraph of Ms Beech’s witness statement and the fact that Ms Beech had confirmed at the hearing that she had read the relevant provisions of the Contracts and that her statement was accurate. The Employer also submitted that it was self-evident that the terms of section 182(1)(c) would have been met in commercial contracts of this nature. The Panel does not regard Ms Beech’s witness statement to be sufficiently clear for the Panel to conclude that the terms of section 182(1)(c) are satisfied nor does it regard it as self-evident that they are satisfied in the circumstances of the case. The Panel has therefore concluded that no reliance can be placed on the application of section 182(1)(c) in this case.

35) The Panel’s conclusions relating to each of the items of information requested by the Union are as follows:

What is the total value of the Heathrow Strategic Partnership Baggage Contract, now it has been extended from a 7-10 to 10-13 years contract (what has HAL agreed to pay Vanderlande UK Ltd for the services provided including project works, does this incur contract savings from HAL)?

The Panel concurs with the Employer’s submission that the reference to “total value” is not wholly clear but considers the best interpretation to be a reference to the total value of the contract over the total contract period. The Panel does not consider that the total value of the contract could be translated into a figure which could meaningfully inform collective bargaining in a specific bargaining period and consequently the Panel is not satisfied that representatives of the Union would be to a material extent impeded in any specific pay period by not having the information requested. The Panel is not, therefore, satisfied that trade union representatives would be to a material extent impeded in carrying on collective bargaining with the Employer as required by section 181(2)(a).

What is the total turnover from 2020 and forecasted turnover for 2021-22 per year for the Heathrow Strategic Partnership Baggage Contract?

The Panel appreciates that the term “turnover” can be interpreted in different ways but has taken it to be synonymous with “revenue” in this context. The Panel is satisfied that this is information without which representatives of the Union would be to a material extent impeded in carrying on collective bargaining with the Employer and which it would be in accordance with good industrial relations practice for the Employer to disclose for the purposes of collective bargaining. However the Panel is persuaded that this is commercially sensitive information relating to a single contract whose disclosure could potentially affect the Employer’s competitive position and thereby cause substantial injury to the Employer’s undertaking for reasons other than its effect on collective bargaining. In reaching this conclusion the Panel has had regard to paragraphs 14 and 15 of the Acas Code of Practice. The Panel has concluded that the Employer has satisfied the burden of establishing that disclosure of this information would cause substantial injury to the Employer’s undertaking.

What is the total numbers of employee (sic) and composition (i.e., the number of different job roles in each area) of the workforce of the Heathrow Strategic Partnership Baggage Contract, its cost of wages/salaries and the percentage of gross/net profit, earned per employee i.e. sales/per employee, for 2020?

The Panel considers that in the majority of circumstances unions could expect employers to disclose information relating to the total numbers of employees together with the composition of the workforce and cost of wages/salaries and that a request of this nature would fall within the terms of section 181(2). Had the Union not also requested, as part of this item, the percentage of gross/net profit earned per employee the Panel would have proceeded to consider the Employer’s contention that disclosure of such information in this case would cause substantial injury to the Employer’s undertaking. In this case, however, the Union also initially requested, as part of this item, and in making its complaint, the percentage of gross/net profit earned per employee. During the course of the hearing the Union said that it abandoned its request for that information. The Employer submitted that it was not appropriate for the Panel to break down an individual item of information requested into various parts and the Panel concurs with that view in this case. The Panel does not consider that the percentage of gross/net profit earned per employee is information without which representatives of the Union would be to a material extent impeded in carrying on collective bargaining with the Employer and is not satisfied, therefore, that the requirement in section 181(2)(a) has been met in relation to this item taken as a whole.

What is the total gross/net profit margin from 2020 and forecasted gross/net profit margin for 2021-22 Heathrow Strategic Partnership Baggage Contract?

The Panel concurs with the Union’s submission that in the absence of adequate information about an Employer’s profitability it is extremely difficult for a union to formulate a pay claim. The Panel is satisfied that this is information without which representatives of the Union would be to a material extent impeded in carrying on collective bargaining with the Employer and which it would be in accordance with good industrial relations practice for the Employer to disclose for the purposes of collective bargaining. However, as in the case of the item relating to turnover, the Panel is persuaded that this is commercially sensitive information relating to a single contract whose disclosure could potentially affect the Employer’s competitive position and thereby cause substantial injury to the Employer’s undertaking for reasons other than its effect on collective bargaining. In reaching this conclusion the Panel has had regard to paragraphs 14 and 15 of the Acas Code of Practice. The Panel has concluded that the Employer has satisfied the burden of establishing that disclosure of this information would cause substantial injury to the Employer’s undertaking.

What is the return on capital earnings (ROCE) from 2020 and forecasted ROCE for 2021-22 for the Heathrow Strategic Partnership Baggage Contract?

The Panel does not consider that this is information without which representatives of the Union would be to a material extent impeded in carrying on collective bargaining with the Employer.

What are the Directors’ emoluments, of those Directors responsible for the Heathrow Strategic Partnership Baggage Contract and were directors awarded a pay increase/bonus for 2020-21?

The Panel does not consider that this is information without which representatives of the Union would be to a material extent impeded in carrying on collective bargaining with the Employer.

11. Decision

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

12. Concluding observations

37) The Panel appreciates the particular difficulties that confront a union where information which would normally be expected to be disclosed by an employer is commercially sensitive because that information relates to a single contract.

38) The Panel notes that some of the terminology used in the Union’s original request for information, and repeated in its complaint to the CAC, was ambiguous or too general to be translated into an order by the CAC were the Panel to have found the complaint to be wholly or partly well founded. Unions may wish to consider whether the language they use in framing a complaint to the CAC should have the precision required to be translated into an order under section 183(5) of the Act.

Panel

Professor Gillian Morris, Panel Chair

Mr David Coats

Mr Sean McIlveen

15 February 2022

13. APPENDIX

Names of those who attended the hearing

On behalf of the Trade Union:

Ms Lindsey Olliver - Regional Officer

Mr Daniel Collins - Convener for Unite the Union

Mr Graham Douglas - (Workplace Rep) Deputy Convener

Mr Richard Balaam - (Workplace Rep), Representatives for employees TUPE transferred in 2018.

Mr Adam Lambert - Unite the Union Legal Officer

On behalf of the Employer

Ms Sue Beech - Human Resources Director

Ms Sarah Charsley - Head of Service for Airport and Parcel Solutions UK

Mr Charles Crow - Counsel, No.5 Chambers

1. This summary of the factual background is taken from Ms Beech’s witness statement. These elements of the statement were not disputed by the Union. Words in quotation marks in this paragraph are direct quotations from the witness statement. ↩

2. It was noted that the wording of the first request relating to the IAG Contract differed from that of the first request relating to the HAL Contract. The Union said that the first request relating to the IAG Contract should be amended to read “What is the total value of the current IAG contract”? and the Employer did not dispute that amendment being made. ↩