Decision

Paragraph 35 Decision

Updated 18 January 2021

Applies to England, Scotland and Wales

Case Number: TUR1/1202(2020)

22 December 2020

CENTRAL ARBITRATION COMMITTEE

TRADE UNION AND LABOUR RELATIONS (CONSOLIDATION) ACT 1992

SCHEDULE A1 - COLLECTIVE BARGAINING: RECOGNITION

DECISION ON WHETHER PARAGRAPH 35 OF THE SCHEDULE APPLIES TO THE APPLICATION

The Parties:

Unite the Union

and

Wates Property Services Ltd

1. Introduction

1) Unite the Union (the Union) submitted an application to the CAC dated 17 November 2020 that it should be recognised for collective bargaining by Wates Living Space ^{[footnote 1]} (the Employer) for a bargaining unit comprising “All employees on the Barnsley Contract at Wates”. The location of the bargaining unit was given as The Old Gatehouse, Rockingham Business Park, Birdwell, Barnsley S70 5TW. The CAC gave both parties notice of receipt of the application on 18 November 2020. The Employer submitted a response to the CAC dated 24 November 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 Professor Gillian Morris, Panel Chair, and, as Members, Mrs Maureen Chambers and Mr Paul Morley. The Case Manager appointed to support the Panel was Nigel Cookson.

3) The CAC Panel has extended the acceptance period in this case. The initial period expired on 1 December 2020. The acceptance period was extended until 6 January 2021 to enable the CAC to hold a hearing to determine the issue relating to paragraph 35 of Schedule A1 to the Act (the Schedule) and for the Panel to finalise its decision.

2. Issues

4) The Panel is required by paragraph 15 of Schedule A1 to the Act (the Schedule) to decide whether the Union’s application to the CAC is valid within the terms of paragraphs 5 to 9; is made in accordance with paragraphs 11 or 12; is admissible within the terms of paragraphs 33 to 42; and therefore should be accepted. In this case the Panel decided to treat as a preliminary issue the question of whether the Union’s application was inadmissible under paragraph 35 of the Schedule. Paragraph 35 of the Schedule, so far as material, reads as follows:

(1) An application under paragraph 11 or 12 is not admissible if the CAC is satisfied that there is already in force a collective agreement under which a union is (or unions are) recognised as entitled to conduct collective bargaining on behalf of any workers falling within the relevant bargaining unit.

(2) But sub-paragraph (1) does not apply to an application under paragraph 11 or 12 if

(a) the union (or unions) recognised under the collective agreement and the union (or unions) making the application under paragraph 11 or 12 are the same, and

(b) the matters in respect of which the union is (or unions are) entitled to conduct collective bargaining do not include all of the following: pay, hours and holidays (“the core topics”)….

(6) The relevant bargaining unit is –

(a) the proposed bargaining unit, where the application is under paragraph 11(2) or 12(2);

(b) the agreed bargaining unit, where the application is under paragraph 12(4).

In view of the Panel’s decision to treat the application of paragraph-35 as a preliminary issue, the summaries of the Union’s application and the Employer’s response to the Union’s application below are confined to those matters relevant to the preliminary issue. The Panel has not considered the parties’ submissions on any matters other than those relating to the preliminary issue and those submissions have played no part in the Panel’s decision.

3. Summary of matters contained in the Union’s application relevant to the preliminary issue

5) In answer to the question whether there was an existing recognition agreement of which the Union was aware which covered any workers in the proposed bargaining unit the Union answered “Yes”. The Union stated that 30 members were “covered by the red book only for contractual terms, not for negotiation, consultation or Health & Safety”. The Union said that members had been TUPE’d from Barnsley Metropolitan Borough Council.

4. Summary of matters contained in the Employer’s response relevant to the preliminary issue

6) In its response to the Union’s application the Employer stated that there was an existing agreement for recognition in force covering workers in the proposed bargaining unit. The Employer stated that the agreement in question was the Joint Negotiating Committee for Local Authority Craft & Associated Employees National Agreement on Pay & Conditions of Service dated January 2009, known as the “Red Book”. The Employer provided a copy of the Red Book. Asked if the other party to this Agreement was a union recognised by the Agreement and entitled to conduct collective bargaining on behalf of any workers falling within the relevant bargaining unit the Employer answered “Yes”. The Employer confirmed that each union that was party to the Agreement had a certificate of independence. The Employer stated that it believed that the Agreement had continued to have effect in relation to 45 ^{[footnote 2]} workers in the bargaining unit identified by the Union.

5. Further correspondence relating to the preliminary issue

7) On 25 November 2020 the Case Manager copied the Employer’s response to the Union. In the Case Manager’s covering letter the Union was asked in the first instance to provide a response to the Employer’s submission that the application was not admissible under paragraph 35 of the Schedule. The Union was asked to include in its response any documentation which it considered relevant in support of its submissions.

8) In a letter to the Case Manager dated 26 November 2020 the Union stated that it did not consider that regulation 6 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) ^{[footnote 3]} applied post-transfer. The Union stated that the 45 workers who transferred to the Employer were working alongside the Employer’s existing workforce. For that reason, the Union believed that the transferred organised grouping of resources did not retain a distinct identity post transfer and that the so-called Red Book did not provide the Union with collective bargaining rights for that group of workers. The Union stated that Kier Ltd, the outgoing employer, (“Kier”) had confirmed to the Employer that no trade union recognition agreement existed for the purpose of bargaining or representation. The Union also noted the following numbered points:

1. Both Kier and the Employer would only recognise employee representatives and not trade unions during pre and post TUPE consultation meetings;

2. Health and Safety Committee requests under the Safety Representative and Safety Committees Regulations 1977 had been denied;

3. Facilities Agreements requests had been denied;

4. Time off for purposes of representation had been denied;

5. No consultation or negotiating forum existed that the Employer and the Union were party to locally on this contract.

9) The Case Manager copied the Union’s letter of 26 November 2020 to the Employer. In the Case Manager’s covering letter the Employer was asked to respond to each of the individual numbered points made by the Union in its letter in as much detail as possible and to supply any supporting documentation available if it wished to dispute any of these points.

10) In a letter to the Case Manager dated 1 December 2020 the Employer explained that Barnsley Metropolitan Borough Council (“BMBC”) had first outsourced the provision of its social housing repair works (“the Services”) in 2002 and that the Employer was the latest provider of those services, having commenced its contract with BMBC with effect from 1 July 2020. The Employer said that the previous provider of the services was Kier, which had operated the contract for some 10 years, and that the Employer and Kier had agreed that TUPE applied to the change in the identity of the service provider. The Employer said that, as a result, it became the employer of all the employees in the Union’s proposed bargaining unit on the same terms and conditions as those which applied immediately before 1 July 2020. The Employer said that the Union’s argument appeared to be that TUPE did not apply to this transfer, an assertion which the Employer believed extraordinary as, if correct, the contracts of employment of those employees (as well as the Red Book) would not have transferred to the Employer. The Employer said that there had not previously been any debate (far less a dispute) as to whether TUPE applied. The Employer said that its position was that TUPE did apply, as a result of which regulation 6 of TUPE applied. The Employer said that the Union’s argument was wholly inconsistent with the position it adopted in the collective consultation prior to 1 July 2020 and wrong as a matter of both law and fact; the 45 workers referred to by the Union were never a separate entity.

11) The Employer said that it accepted that the provisions of the Red Book were incorporated into the terms and conditions of employment of those workers who originally transferred from BMBC in 2002 to the provider of the Services. The Employer said that the figure of 45 such employees given in its response to the Union’s application ^{[footnote 4]} was erroneous; in fact only 21 legacy employees of BMBC who originally transferred in 2002 were in that position. The Employer said that it understood that there were two providers of the Services prior to Kier being awarded the contract for the provision of the Services in or about 2010 and that TUPE had applied each time there was a change in the provider. The Employer said that on each occasion the new provider of the Services had accepted that the provisions of the Red Book remained incorporated in the contracts of employment of the transferred employees and that it was bound by any changes to the terms and conditions of employment covered by the Red Book which were negotiated at national level between the unions and the employers. The Employer attached an email exchange between Kier and the Employer dated 18 June 2020 where Kier stated as follows:

Kier do not have a formal written collective agreement and have no record of a document that was transferred in 2010. However, since the transfer, Kier have continued to work and recognise the trade unions in the spirit of working together, holding regular meetings covering H&S, processes and general updates and consulting on items, eg the bonus on transfer - letter previously shared with you, as and required. Generally, the involvement of the TU reps tends to be around discipline, grievance and investigation matters.

The Employer also referred to an email dated 18 June 2020 from the Union at the bottom of this email trail which was sent following a consultation meeting earlier that day and which read as follows:

Further to today’s TUPE consultation meeting and Unite the Unions (sic) request for clarity on Wates position over recognising the Union.

While we accept and appreciate your confirmation that you work with the trade unions, Unite is clear in its position that recognition has been transferred under TUPE from 2002 when Barnsley Metropolitan Borough Council outsourced its social housing repairs works (emphasis added by the Employer).

As confirmed in today’s meeting (and I’d like it recording (sic) in the minutes) by Paul Clarke that Kier have always worked to the Trade Union recognition agreement with the client Barnsley Metropolitan Borough Council. This recognition agreement remains in place however, we don’t have one dated at the time of transfer. We do however have this agreement protected by the National Joint Council Red Book Agreement which is updated and kept current through negotiation annually.

12) The Employer said that it entirely accepted that not all of the workers in the proposed bargaining unit were covered by the Red Book and that the core topics covered by that agreement were negotiated at a national rather than local level. The Employer said that this did not change the fact that some workers in the proposed bargaining unit were covered by the Red Book which covered the negotiation of core topics, as a result of which the Union’s application was inadmissible under paragraph 35 of the Schedule. The Employer said that the fact that both parties accepted the continued application of the terms negotiated under the Red Book had recently been confirmed. The Employer said that on 1 October 2020 the Union’s Regional Officer in North East Yorkshire and Humber region had sent an email to various officials of the Union asking them to confirm to the stewards “with Red Book members in their workplaces” the outcome of the national negotiations under the Red Book. The Employer said that this email had been forwarded on 6 October 2020 to one of the Union’s local representatives on the BMBC contract with the message:

Please find below confirmation from the National Officer on acceptance of red book pay offer.

The Employer provided copies of these emails and confirmed that it would implement this pay offer.

13) The Employer addressed the individual numbered points in the Union’s letter of 26 November 2020, set out in paragraph 8 above, as follows:

1. Representatives of the Union had attended some 20 consultation meetings prior to the transfer of the Services to the Employer on 1 July 2020. These meetings had been held in compliance with regulation 13 of TUPE. The Employer said that although the identity of the appropriate representatives was a matter for Kier, the Employer’s understanding was that the Union was only a party to that consultation because it was the recognised trade union for some of the affected employees (regulation 13(3)(a) of TUPE) and that it only held that status as a result of the Red Book.

2. Health and Safety was not a ‘core topic’ for the purposes of paragraph 35(1)(b) of the Schedule ^{[footnote 5]} but the Employer enclosed a copy of an email dated 27 June 2020 sent by the Employer to the Union and the Union’s workplace reps and employee reps which read as follows:

For the avoidance of doubt Wates have re-iterated on many occasions that we are more than happy to work with the trade unions in regards to the employees that are transferring from Kier to Wates on 01 July, that work on the Barnsley contract. We recognise that there are collective agreements (red and green book) which apply to some of the transferring workforce on the Barnsley contract and have advised many times that the contractual provisions of those will be honoured moving forward. As part of the requirement under TUPE Wates have requested details from Kier in terms of agreements in place that are eligible to transfer and Kier have confirmed on numerous occasions that they do not have any formal agreements in place. They have however confirmed that they do work with the trade unions, and do so in the spirit of working together for the benefit of the employees and the company. For example including unions in regular H&S meetings and updates on processes and when resolving discipline, grievance and investigation matters.

1. The Employer said that it had confirmed to the relevant Union representatives that to the extent that facilities were required to enable them to perform their duties under the Red Book, they would be provided in accordance with the previous arrangements with Kier.

2. The Employer said that it was not correct to state that time off for purposes of representation had been denied. The Employer said that on at least two occasions (15 July 2020 and 10 November 2020), a local Union representative had requested and been granted time off in order to perform duties for the Union. The Employer provided copies of emails confirming this.

3. In relation to the Union’s point that no consultation or negotiating forum existed that the Employer and the Union were party to locally on this contract, the Employer said that it did not understand the relevance of this point for paragraph 35 of the Schedule. The Employer said that it had confirmed on numerous occasions that it would maintain the arrangements that Kier had had with the Union.

14) The Panel considered the submissions set out above and decided that a hearing should be held to assist it to decide the preliminary issue. A virtual hearing was held on 17 December 2020 and the names of those who attended the virtual hearing are listed in the appendix to this decision. In a letter from the Case Manager dated 2 December 2020 the parties were informed that the Panel would reach its decision on the basis of evidence in the form of written submissions from the parties, which would be exchanged prior to the hearing, and that they should include any supporting documentation with their submission for consideration by the Panel regardless of whether it had already been lodged with the CAC. The Employer was also asked to provide sample redacted contracts of those workers whose terms and conditions of employment incorporated the provisions of the Red Book.

6. Summary of the Union’s written submissions for the purposes of the hearing

15) The Union stated that, contrary to what the Employer had said, the Union was not arguing that TUPE did not apply to the transfer of the relevant workers on 1 July 2020 from Kier to the Employer. The Union said that whether an organised grouping of resources retained a distinct identity post transfer was a relevant matter when it came to the application of Regulation 6 of TUPE but not to the application of TUPE as a whole. The Union said that it accepted that Regulation 6 probably did apply, given its understanding of the service post-transfer. However the Union suggested that the Panel should look at the position of Kier during the pre-transfer consultation and said that in the pre-transfer period Kier had provided certain information to the Employer, which included the following statement on collective agreements:

We do not have a written collective agreement. Kier work with the unions. There are 4 elected local reps on site. The involvement of the union tends to be around employee relations issues – grievance/ discipline/investigations etc. The unions have approached Kier to have a meeting with respect to an agreement, however, we have stated this would need to be discussed with Wates post transfer.

The Union said that any employer working with unions around the sorts of employee relations issues described by Kier was doing nothing more than facilitating the statutory right of accompaniment which each employee has by virtue of the Employment Relations Act 1999, section 10. The Union said that whilst it was correct that “matters of discipline” was one of the grounds upon which collective bargaining could take place under section 178(2)(d)) of the Act, when working with Kier on such matters there were no “negotiations relating to or connected with” those matters (see section 178(1)). The Union stated that such interactions did not, therefore, constitute “collective bargaining” for the purposes of section 178.

16) The Union said that if the Panel was satisfied that there was no collective bargaining with Kier, then the position of those in the proposed bargaining unit currently employed on so-called Red Book Terms became irrelevant. For further clarity on this point the Union drew the Panel’s attention to the ruling of the Court of Justice of the European Union in Mark Alemo-Herron and Others v Parkwood Leisure Ltd ^{[footnote 6]} where the Court had been asked to determine the scope of Article 3 of Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses. In that case the Court had decided that: Article 3 … must be interpreted as precluding a Member State from providing, in the event of a transfer of an undertaking, that dynamic clauses referring to collective agreements negotiated and adopted after the date of transfer are enforceable against the transferee, where that transferee does not have the possibility of participating in the negotiation process of such collective agreements concluded after the date of the transfer.
The Union contended that this decision meant that the receiving employers of those employees on Red Book Terms were not bound by TUPE to implement the salary increases which resulted from collective bargaining which had taken place at the National Joint Council, which was the process through which Red Book pay rates were increased. The Union submitted that it could not therefore be said that collective bargaining, which was conducted on behalf of groups of employees to which certain of the transferring employees in the present matter used to belong, was being conducted under a collective agreement between the joint unions (including the Union) and the Employer. The Union submitted that on all the grounds referred to in its submissions its application was admissible.

7. Summary of the Employer’s written submissions for the purposes of the hearing

17) The Employer stated that the Union, in its application, had incorrectly named the Employer as “Wates Living Space”. The Employer submitted that there was already in force a collective agreement under which the Union was recognised as entitled to conduct collective bargaining on behalf of one or more workers within the proposed bargaining unit and, as such, the application was inadmissible pursuant to paragraph 35(1) of the Schedule.

18) The Employer explained that the outsourcing of the Services by BMBC in or around 2002 had amounted to a relevant transfer under TUPE 1981 and that as a result the contracts of employment of all BMBC employees employed in the provision of the Services transferred to the transferee (regulation 5) and any collective agreement in relation to the BMBC transferring employees had effect as if made between the trade union and the transferee (regulation 6). The Employer said that prior to the transfer, the transferring employees were employed by BMBC on standard terms and conditions, clause 3 of which provided:

During your employment with this Authority, all your terms and conditions of employment will be in accordance with the agreements made by….. J.N.C. for Local Authorities’ Services (Building and Civil Engineering).

The Employer said that the above JNC agreement was thereby incorporated by reference into the contracts of employment of the transferring employees. The Employer exhibited a redacted copy of this document which was headed “Statement of Particulars”. The Employer said that, in January 2009, the JNC for Local Authorities’ Services (Building and Civil Engineering) was replaced by the JNC for Local Authority Craft & Associated Employees National Agreement on Pay & Conditions of Service (the “Red Book”) and that the Union was one of the unions which was a party to the Red Book. The Employer exhibited a copy of the Red Book. The Employer said that the Red Book was a collective agreement as defined in s178(1) of the Act and that its terms in relation to, inter alia, pay, hours, and holidays were incorporated into the contracts of employment of the transferring employees. The Employer said that the Union was thereby a recognised trade union in relation to the transferring employees, negotiating at a national level with agreements implemented locally.

19) The Employer said that it understood that Kier had taken over the provision of the Services from Willmott Dixon in or around 2010. TUPE 2006 applied to the transfer, as a result of which the contracts of employment of all BMBC transferring employees which incorporate the Red Book transferred to Kier under regulation 4 of TUPE ^{[footnote 7]} ; under regulation 5 ^{[footnote 8]} the Red Book national collective agreement transferred to Kier in relation to BMBC transferring employees; and under regulation 6 ^{[footnote 9]} the Union continued to be recognised by Kier to the same extent as by Willmott Dixon in respect of the matters covered by the Red Book in relation to the BMBC transferring employees. The Employer said that so far as it was aware, all annual pay increases negotiated under the terms of the Red Book which had applied to the BMBC transferring employees had been implemented by Kier since it had taken over the provision of the Services. The Employer said that following a tendering process it had taken over the provision of the Services with effect from 1 July 2020. The Employer said that TUPE had applied to this situation, as a result of which the contracts of employment of all BMBC transferring employees (as well as all other Kier employees who were employed in the provision of the Services) transferred to the Employer pursuant to regulation 4; under regulation 5 the Red Book national collective agreement transferred to the Employer in relation to the BMBC transferring employees; and under regulation 6 the Union continued to be recognised by the Employer in relation to the BMBC transferring employees to the same extent as by Kier in respect of the matters covered by the Red Book. The Employer said that the employees of Kier employed in the provision of the Services were an organised grouping of resources or employees which had maintained its identity distinct from the remainder of the Employer’s undertaking.

20) The Employer said that prior to 1 July 2020 the Employer, as the transferee, had participated in collective consultation pursuant to regulation 13 of TUPE. The Employer said that the other participants were representatives of Kier (as the transferor) and a number of individuals who were the “appropriate representatives” within the meaning of regulation 13(3). The Employer said that there were approximately 14 consultation meetings, all of which were attended by at least one representative of the Union, and the Employer had understood that these individuals were present at those meetings pursuant to the provisions of regulation 13(3)(a) which provides that:

the appropriate representatives of any affected employees are - if the employees are of a description in respect of which an independent trade union is recognised by their employer, representatives of the trade union.

The Employer said that during the course of the collective consultation the Union had contended that the recognition agreement (i.e. now in the terms of the Red Book) had been transferred under TUPE from 2002 when BMBC outsourced the Services, as shown by an email from the Union to the Employer dated 18 June 2020, which the Employer exhibited. The Employer said that the Union had also noted in that email that:

Kier have always worked to the Trade Union recognition agreement with the client … [BMBC]. This recognition agreement remains in place however we don’t have one dated at the time of transfer. We do, however, have this agreement protected by the National Joint Council Red Book Agreement which is updated and kept current through negotiation annually.

21) The Employer said that the Union had first formally invited the Employer to recognise it for collective bargaining in a letter dated 28 September 2020 following a communication from the Employer dated 18 September 2020 in which the Employer had explained that it was committed to continuing with the existing arrangements that applied to the BMBC transferring employees. The Employer said that the Union’s letter dated 28 September 2020 included the following:

The original staff TUPEd from BMBC did have a recognised status for collective bargaining through the BMBC recognition agreement. However, through passage of time and Kier being reluctant to accept there was recognition locally we have to assume the status doesn’t exist. The issue of Red Book terms and conditions are nothing more than honouring contractual terms that have been TUPEd over at the time. This doesn’t identify the group as a separate bargaining unit.

The Employer said that it had responded in a letter to the Union dated 9 October 2020 in which it had asserted that because there were 25 employees in the proposed bargaining unit of 99 (ie the BMBC transferring employees) who were already covered by the Red Book for matters including pay, hours and holiday, any application to the CAC would be inadmissible. The Employer said that it considered itself bound by any future terms and conditions collectively negotiated by the JNC in respect of the Red Book even though regulation 4A of TUPE permitted a ‘static’ approach to the transfer of collective agreements. ^{[footnote 10]} The Employer said that this commitment had recently been evidenced by the Union asking the Employer to implement the nationally negotiated pay review under the Red Book and the implementation of that increase by the Employer when it took over provision of the Services. The Employer said that it had further committed to paying the increase from the date the agreed increase took effect to the date it had taken over provision of the Services, ie from 1 April 2020 to 30 June 2020. Copies of all the relevant documentation were exhibited by the Employer.

22) The Employer submitted that there were two ways in which a TUPE transferee may be bound by a collective agreement to which the transferor was a party: first, where the collective agreement was incorporated into individual contracts of employment, by dint of regulation 4(2)(a) of TUPE; and second, collective agreements and arrangements transferred pursuant to regulation 5. Trade union recognition also transferred where the provisions of regulation 6 of TUPE were met. The Employer said that, under paragraph 35 of the Schedule, where a Union was already recognised for even one worker, a proposed bargaining unit including that worker would be inadmissible. The Employer said that what was relevant was that there was another collective agreement in place. The Employer said that the recognition and the agreement need not be formal as a “collective agreement” under section 178 of the Act meant “any agreement or arrangement” between an employer and a union relating to specified matters. Therefore, if the employer did in fact negotiate with a union in respect of a definable bargaining unit, then that union was recognised, even if the employer had never expressly accorded recognition, and even if the employer positively refused formally to accord recognition (NUM and RJB Mining (UK) Ltd).^{[footnote 11]}

23) The Employer said that whilst paragraph 35(1) usually operated to prevent the CAC from being drawn into inter-union competition, it was not limited to that scenario and also applied where the applicant union itself was already recognised in respect of one or more workers in the proposed bargaining unit (Unite the Union and Cranberry Foods Ltd).^{[footnote 12]} The Employer said that the collective agreement in force need not be a locally negotiated agreement; a national agreement would suffice to render any subsequent application inadmissible so long as the agreement operated to confer on the union or relevant unions negotiating rights with the defendant employer or its representative (UIU and City of Edinburgh Council).^{[footnote 13]} The Employer said that for national agreements to act as a bar to admissibility, it was not enough that the employer be a member of an organisation which negotiated at a national level; the relevant workers’ terms and conditions of employment must actually be governed by the national collective bargaining system (Unite the Union and Interserve Industrial).^{[footnote 14]} The Employer said that the relevant pre-existing collective agreement must be “in force” and that ordinarily, a collective agreement remained in force until it was terminated, suspended, repudiated or abandoned (R (on the application of NUJ) v CAC); ^{[footnote 15]} a collective agreement which had become defunct was not in force.

24) The Employer said that much of the Union’s argument was premised on the basis that the Red Book national collective agreement and/or union recognition for the purposes of collective bargaining did not transfer to the Employer as the legacy BMBC employees did not maintain a distinct identity per regulation 6 of TUPE. In response the Employer submitted that the collective agreement and union recognition did transfer over (‘the TUPE Argument’); and second, that in any event, how the Employer came to be bound was entirely irrelevant. The Employer submitted that regardless of whether the agreement and recognition arose because of TUPE or otherwise, it was clear that at the very least, an “arrangement” was in place as the Red Book was given effect and impacted upon the core topics (‘the Common Sense Argument’).

25) In relation to the TUPE Argument, the Employer submitted that pursuant to regulation 5 of TUPE, the Red Book was a collective agreement made by or on behalf of Kier with the Union which it recognised in respect of the BMBC transferring employees whose contracts of employment transferred to the Employer pursuant to regulation 4.1 of TUPE. Regulation 5(a) provided that the Red Book therefore had effect as if made between the Union and the Employer in respect of the BMBC transferring employees. The Employer submitted that employees who transferred from Kier to the Employer (including but not limited to the BMBC transferring employees) maintained an identity distinct from the remainder of the Employer’s undertaking. The Employer submitted that prior to the transfer, the Union was recognised by Kier in respect of the BMBC transferring employees, who were employees of the Employer in consequence of the transfer. The Employer said that accordingly, by virtue of regulation 6(2)(a) of TUPE, the Union was deemed to have been recognised by the Employer to the same extent as Kier was in relation to the transferring employees. The Employer said that although regulation 4A of TUPE provides that the Employer is not bound by any provisions of the Red Book which were agreed after the date of the transfer and which result from collective bargaining in which it was not involved, the Employer had repeatedly confirmed to the Union that it considered itself bound by and would honour the provisions of the Red Book in relation to the BMBC transferring employees The Employer submitted that the Union also believed that the Employer was bound by the annual pay review negotiated under the Red Book.

26) In relation to what it called ‘the Common Sense Argument’, the Employer said that the Red Book had been in force since 2009, it being the successor to the JNC agreement incorporated into the contracts of employment of the BMBC transferring employees at the point of transfer in 2002. The Employer said that it was a collective agreement and recognised the Union (and three other unions) as entitled to conduct collective bargaining on behalf of workers; the parties were agreed that the relevant bargaining unit was made up of all the Employer’s employees who worked on the provision of the Services; and the remaining BMBC transferring employees were employed in that relevant bargaining unit. The Employer further submitted that the Red Book national collective agreement was clearly “in force”. The Employer said that the CAC had recognised that national agreements satisfied the paragraph 35(1) requirements and that it was clear that the agreement existed; that the BMBC legacy employees’ contracts incorporated the national collective agreement; that negotiation occurred at a national level; and that this agreement was implemented. The Employer said that there was no suggestion that this agreement had been abandoned by the Employer; indeed it had been applied by it.

27) The Employer said that the relevant topics for collective bargaining were any of the specified matters as provided by s. 178 of the Act i.e. including those which go beyond the core topics. The Employer submitted that it was clear that there was an agreement and recognition in place as regards the specified matters as BMBC legacy employees’ terms and conditions of employment as related to the core topics incorporated the Red Book and the Red Book national pay increase was implemented by the Employer (ss. 178(2)(a) and (g)); Union representatives had been given time off by the Employer to conduct union duties and for intra-union meetings (s. 178(2)(f) of the Act); and the Union recognised the same by emails of 18 June 2020 (referred to in paragraph 20 above) and 27 June 2020, which was also exhibited by the Employer. The Employer submitted that a further email from the Union dated 29 June 2020 had been predicated on the incorrect premise that a written agreement was necessary.^{[footnote 16]} The Employer submitted that the only way by which the Union’s application could be admissible would be if it were able to benefit from paragraph 35(2), i.e. to extend its recognition to all of the core topics but as it was already recognised for the core topics in respect of 25 employees paragraph 35(2) could not operate to render the application admissible. The Employer concluded by requesting that the Panel find that the Union’s application was inadmissible and that it be dismissed.

8. The conduct of the hearing

28) The Panel Chair said that the Panel had read the parties’ very clear submissions carefully. She said that the Panel wished to open the hearing by clarifying certain matters. She would then put specific questions to the Employer. The Panel Chair said that both parties would have the opportunity to make any further points they wished to make at the conclusion of that process. In answer 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.

9. Matters clarified at the start of the hearing

29) The Panel Chair noted that the Employer had opened its written submissions by stating that the Union had incorrectly named the Employer in its application to the CAC as “Wates Living Space”. She asked the Union whether it accepted that the correct name was “Wates Property Services Ltd”. The Union confirmed that it accepted this and it was agreed by both parties that “Wates Property Services” should be substituted for “Wates Living Space” for the purposes of the Union’s application.

30) The Panel Chair said that in the Case Manager’s letter of 2 December 2020 the Employer had been asked to provide sample redacted contracts of those workers whose terms and conditions of employment incorporated the provisions of the Red Book. She observed that the only document of this nature which had been supplied by the Employer was a Statement of Particulars dating from 2002. The Employer stated that as far as it was aware no further such documents had been issued since that time.

31) The Panel Chair noted that paragraph 4 of the Annex to the Red Book, headed “Constitution”, listed the following Employer’s representatives: Local Government Association; Welsh Local Government Association; N Ireland Local Government Association; National Association of Local Councils. She asked if it was common ground that the Employer was not listed as participant in collective bargaining by the JNC. The Employer confirmed that the Employer was not listed in paragraph 4.

10. Amplification of the Employer’s submissions at the hearing

32) The Panel Chair said that the Employer had stated in its submissions that it would honour the provisions of the Red Book in relation to the BMBC transferring employees even though regulation 4A of TUPE provided that it was not bound by any provisions of the Red Book which were agreed after the date of the transfer and which resulted from collective bargaining in which it was not involved. She asked the Employer, in view of this statement, to identify the agreement under which a union was entitled to conduct collective bargaining on behalf of the bargaining unit. The Employer said that its position was as stated in its written submissions. The Employer said that national collective agreements would fall within the ambit of “collective bargaining” and that the CAC had recognised this in previous decisions. The Panel Chair said that the CAC cases cited by the Employer seemed to involve the employer in question either participating directly or via a representative body in national collective bargaining and to have preceded the introduction of regulation 4A of TUPE. The Employer did not dispute that. In answer to a question from the Panel Chair the Employer confirmed that it did not have any input into the negotiating process conducted by the JNC through any of the bodies conducting those negotiations.

33) The Panel Chair said that the question under paragraph 35 was not whether workers were employed on collectively-agreed terms but whether there was already in force a collective agreement under which a union is recognised as entitled to conduct collective bargaining on behalf of any workers falling within the proposed bargaining unit. The Employer reiterated that there was a national agreement in place and that the Employer was bound by it. The Employer said that under section 178 a “collective agreement” did not require a formal agreement; an “arrangement” was sufficient and such an arrangement was in place.

34) The Panel Chair referred to the email dated 18 June 2020 from Kier recorded in paragraph 11 above and noted that this referred to working together and consulting rather than negotiation. She also referred to the three last bullet points in the Employer’s letter to the Union dated 9 October 2020. These read as follows:

• Previous employers have also consulted with Unite on proposed changes to terms and conditions of the Recognised Employees at a local level. For example, Kier consulted and engaged with Unite regarding a proposal to change the bonus for the Proposed Bargaining Unit.

• As part of the TUPE Transfer, Unite representatives attended consultation meetings with Wates on behalf of the Recognised Employees (and the Wider Proposed Bargaining Unit).

• Again, Wates considers that it will need to consult with Unite over any proposed changes to the terms and conditions of the Recognised Employees set out in the Red Book.

The Panel Chair said that these bullet points referred to consultation and engagement with the Union rather than negotiation. The Employer cautioned against reading these documents as not referring to negotiation. The Panel Chair asked the Employer whether it could give any examples of having negotiated with the Union. The Employer said that there were no examples.

35) Following a short adjournment the Panel Chair invited the parties to make any further points they wished to make. The Employer emphasised once again that a Union could be recognised for the purposes of paragraph 35 without a formal agreement; under section 178 an “arrangement” would suffice. The Employer cited the case of NUM and RJB Mining (UK) Ltd as an example of this. The Employer said that at the very least there was an “arrangement” in place whereby the subject-matter of collective bargaining at national level was incorporated into individual contracts. The Employer also pointed to the fact that Union representatives had been given time off by the Employer to conduct union duties and for intra-union meetings. The Employer referred the Panel to emails in support of this. So far as material the relevant documents read as follows: ^{[footnote 17]}

15 July 2020, 1605: Email from WT, under whose name the following appeared: Unite the Union, Workplace rep, Health and safety rep, Equalities rep; Mental Health First Aider

I’d like to request time off for a union meeting between myself, SB and RG. S has penciled us in provisionally to take up the board room from 2.30 to 3.30 next Friday 24th July. If this is OK to go ahead can we please make sure that our diaries are kept clear.

This is a meeting among reps and nobody else is required to attend. If anyone does wish to attend can you let us know so we can extend the requested time slot.

10 November 2020, 8.58, from WT:

Good morning. I asked yesterday morning but had no reply on my Wates email. I’d like to request a day off to carry out Union duties. I’d suggested this Friday if it’s convenient.

10 November 2020, 9.13, to WT from the Employer:

…. Your diary will be cleared for Friday so your (sic) fine to carry out Union duties.

2 December 2020, 10.36, from WT:

Good morning. Requesting a couple of hours for union duties or a (sic) hour and half tagged onto lunchbreak for next week please. Any day is ok but really need it to be next week if at all possible.

2 December 2020, 2.20pm, to WT from the Employer

There’s availability for either Wednesday 9th and Thursday 10th?

Please confirm which day is best and I will block out on the planner.

2 December 2020, 14.05, from WT:

Thank (sic) we’ll go for Wednesday 9th 1-2.30pm …

The Employer submitted that these emails showed that there had been negotiations between the Employer and the Union relating to or connected with facilities for officials of a trade union under section 178(2)(f) of the Act and that there had therefore been collective bargaining as a matter of reality.

11. Amplification of the Union’s submissions at the hearing

36) The Union said that there was a world of difference between negotiating about facilities and being granted time off. The Union said that there had been no inquiry about the purpose of the individual requests for time off which could have been to act as a companion in a disciplinary or grievance matter. The Union said that representatives other than those representing the BMBC legacy employees had also been involved in areas like health and safety. The Union said that the Employer had not shown that there had been any negotiation by Union representatives. The Union submitted that the contractual arrangements for the legacy BMBC employees were a separate matter from collective bargaining.

12. Considerations

37) Paragraph 35 of the Schedule, so far as material, reads as follows:

(1) An application under paragraph 11 or 12 is not admissible if the CAC is satisfied that there is already in force a collective agreement under which a union is (or unions are) recognised as entitled to conduct collective bargaining on behalf of any workers falling within the relevant bargaining unit.

(2) But sub-paragraph (1) does not apply to an application under paragraph 11 or 12 if

(a) the union (or unions) recognised under the collective agreement and the union (or unions) making the application under paragraph 11 or 12 are the same, and

(b) the matters in respect of which the union is (or unions are) entitled to conduct collective bargaining do not include all of the following: pay, hours and holidays (“the core topics”)….

(6) The relevant bargaining unit is –

(a) the proposed bargaining unit, where the application is under paragraph 11(2) or 12(2);

(b) the agreed bargaining unit, where the application is under paragraph 12(4).

The Panel is, therefore, required to decide whether it is satisfied that there is already in force a collective agreement under which a union is (or unions are) recognised as entitled to conduct collective bargaining on behalf of any workers falling within the proposed bargaining unit. 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.

38) The Employer based its submissions that the Union’s application was inadmissible under paragraph 35 on what it termed ‘the TUPE argument’ and ‘the Common Sense argument’ set out in paragraphs 24-27 above. For the reasons set out below the Panel is not satisfied that either of these arguments apply in this case.

39) The Panel accepts that the Employer has committed itself to honouring the provisions of the Red Book in relation to the BMBC transferring employees. The Panel also accepts that the provisions of the Red Book are the product of collective bargaining by the parties which make up the JNC for Local Authority Craft & Associated Employees; that the Union is one of the unions recognised for the purposes of the JNC; and that the Red Book covers pay, hours and holidays (the “core topics” specified in paragraph 35(2)(b)) . However paragraph 35(1) does not merely require that a worker falling within the proposed bargaining unit is employed on terms which are the product of collective bargaining regardless of the source of those collectively-agreed terms; it requires there to be in force a collective agreement under which a union is recognised as entitled to conduct collective bargaining on behalf of such a worker. The Employer submitted that a national agreement would suffice to render any subsequent application inadmissible so long as the agreement operated to confer on the union or relevant unions negotiating rights with the defendant employer or its representative.^{[footnote 18]} The Panel is prepared to assume for the purposes of this decision that this proposition is correct. As the Employer makes clear, however, for a national agreement to apply in this context there is a requirement that the agreement in question confers negotiating rights on the union with the respondent employer or its representative. The Panel appreciates that section 178(1) of the Act covers any “arrangement” as well as a formal agreement in this context and has considered carefully whether there is evidence of an agreement or arrangement which confers such negotiating rights in this case.

40) The Employer itself acknowledged that it does not have any negotiating rights under the JNC Constitution. The Employer also confirmed that it did not have any input into the negotiating process through any of the bodies conducting those negotiations. It further acknowledged that it was not involved in collective bargaining for the purposes of regulation 4A of TUPE. For the avoidance of doubt, the Panel has no evidence that Kier was in a different position to the Employer; the fact that Kier may have applied the pay increases negotiated under the Red Book to the BMBC transferring employees does not without more mean that there was in force a collective agreement under which a union was recognised as entitled to conduct collective bargaining on their behalf. On the basis of the evidence before it the Panel is not satisfied that the Red Book constitutes a collective agreement under which the Union is recognised as entitled to conduct collective bargaining on behalf of any worker in the Union’s proposed bargaining unit.

41) The Employer submitted that, prior to the transfer, the Union was recognised by Kier in respect of the BMBC transferring employees. The Employer submitted that, by virtue of regulation 6 of TUPE, the Union was deemed to have been recognised by the Employer to the same extent as the Union was recognised by Kier in relation to the BMBC transferring employees. The Panel has considered carefully whether there is any evidence of recognition of the Union by Kier. The documentation before the Panel indicates that Kier engaged with and consulted with the Union but the Panel is not persuaded that Kier recognised the Union for the purposes of “collective bargaining”, ie. “negotiations relating to or connected with” one or more of the matters specified in section 178 of the Act. The Panel has also considered carefully whether there is any evidence of recognition of the Union by the Employer itself. The Panel accepts that the Employer considers that it would need to consult with the Union in relation to proposed changes to terms and conditions of employees covered by the Red Book.^{[footnote 19]} However consultation is not the same as negotiation. The Employer submitted that if an employer did in fact negotiate with a union in respect of a definable bargaining unit then that union was recognised even if the employer had never expressly accorded recognition and even if the employer refused formally to accord it.^{[footnote 20]} The Panel Chair asked the Employer whether it could give any examples of having negotiated with the Union. The Employer said that there were no such examples.

42) At a later stage of the hearing the Employer drew attention to the reference in its written submissions to the fact that Union representatives had been given time off by the Employer to conduct union duties and for intra-union meetings. The Employer submitted that the email trails recorded in paragraph 35 above showed that negotiations had taken place between the Employer and the Union in relation to facilities for officials of trade unions within the meaning of section 178(1) and (2) of the Act. The Panel has considered these emails carefully and is not persuaded that these individual requests for time off constitute negotiations between the Employer and the Union over facilities for trade union officials within the meaning of section 178(1) and (2). In view of that conclusion the Panel was not required to consider the implications of the Union’s submissions that there had been no inquiry about the purpose of the individual requests for time off and the fact that representatives other than those representing BMBC legacy employees had been involved.

43) On the basis of the evidence before it the Panel is not satisfied that there is already in force at either national or local level a collective agreement, in the form of either an agreement or arrangement, under which a union is recognised as entitled to conduct collective bargaining on behalf of any workers falling within the Union’s proposed bargaining unit. The Panel has therefore concluded, on the balance of probabilities, that paragraph 35 does not render the Union’s application inadmissible in this case.

13. Decision

44) For the reasons given in paragraphs 38-43 above the Panel has decided that paragraph 35 does not render the Union’s application inadmissible. Having determined this preliminary issue the Panel will now take the necessary steps to determine whether the remaining admissibility and validity provisions referred to in paragraph 4 above are satisfied.

Panel

Professor Gillian Morris, Panel Chair

Mrs Maureen Chambers

Mr Paul Morley

22 December 2020

14. Appendix

Names of those who attended the virtual hearing on 17 December 2020:

For the Union

Shane Sweeting - Unite Regional Officer

Martin Wright - Unite Regional Legal Officer

For the Employer

Ruaraidh Fitzpatrick - Counsel

Siobhan Thomson - Solicitor, Greenwoods GRM

Andrea Giles - HR Director, Wates

Yvonne Heeley - HR Advisor, Wates

1. In its application to the CAC the Union stated that the name of the Employer was Wates Living Space. In its written submissions provided for the purposes of the hearing the Employer stated that this name was incorrect. In answer to a question from the Panel Chair at the start of the hearing the Union agreed that Wates Property Services Ltd was the correct name of the Employer and the parties agreed that this name should be substituted for Wates Living Space on the Union’s application: see paragraphs 17 and 29 below. ↩

2. In a letter to the Case Manager dated 1 December 2020 the Employer stated that the figure of 45 workers was erroneous and that there were 21 ‘legacy’ employees: see paragraph 11 below. ↩

3. Regulation 6 reads as follows: (1) This regulation applies where after a relevant transfer the transferred organised grouping of resources or employees maintains an identity distinct from the remainder of the transferee’s undertaking. (2) Where before such a transfer an independent trade union is recognised to any extent by the transferor in respect of employees of any description who in consequence of the transfer become employees of the transferee, then, after the transfer— (a) the trade union shall be deemed to have been recognised by the transferee to the same extent in respect of employees of that description so employed; and (b) any agreement for recognition may be varied or rescinded accordingly. ↩

4. See paragraph 6 above. ↩

5. This should read paragraph 35(2)(b) ↩

6. Case C-426/11, judgment of 18 July 2013. ↩

7. Regulation 4, so far as material, reads as follows: 1) Except where objection is made under paragraph (7), a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to the relevant transfer, which would otherwise be terminated by the transfer, but any such contract shall have effect after the transfer as if originally made between the person so employed and the transferee. 2) Without prejudice to paragraph (1), but subject to paragraph (6) and regulations 8 and 15(9), on the completion of a relevant transfer –a) all the transferor’s rights, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this regulation to the transferee; and b) any act or omission before the transfer is completed, of or in relation to the transferor in respect of that contract or a person assigned to that organised grouping of resources or employees, shall be deemed to have been an act or omission of or in relation to the transferee. ↩

8. Regulation 5 reads as follows: Where at the time of a relevant transfer there exists a collective agreement made by or on behalf of the transferor with a trade union recognised by the transferor in respect of any employee whose contract of employment is preserved by regulation 4(1) above, then – (a) without prejudice to sections 179 and 180 of the … Act … that agreement, in its application in relation to the employee, shall, after the transfer, have effect as if made by or on behalf of the transferee with that trade union, and accordingly anything done under or in connection with it, in its application in relation to the employee, by or in relation to the transferor before the transfer, shall, after the transfer, be deemed to have been done by or in relation to the transferee; and (b) any order made in respect of that agreement, in its application in relation to the employee, shall, after the transfer, have effect as if the transferee were a party to the agreement. ↩

9. See note 3 above. ↩

10. Regulation 4A of TUPE applies to transfers taking place on or after 31 January 2014. It reads as follows: 1) Where a contract of employment, which is transferred by regulation 4(1), incorporates provisions of collective agreements as may be agreed from time to time, regulation 4(2) does not transfer any rights, powers, duties and liabilities in relation to any provision of a collective agreement if the following conditions are met – (a) the provision of the collective agreement is agreed after the date of the transfer; and (b) the transferee is not a participant in the collective bargaining for that provision. 2) For the purposes of regulation 4(1), the contract of employment has effect after the transfer as if it does not incorporate provisions of a collective agreement which meet the conditions in paragraph (1). ↩

11. TURI/32/00, 16 February 2001. ↩

12. TURI/768/11, 27 February 2012. ↩

13. TURI/526/06, 6 September 2006. ↩

14. TURI/746/11, 2 August 2011. ↩

15. [2005] EWCA Civ 1309, [2006] IRLR 53. ↩

16. This email from the Union to the Employer, exhibited by the Employer, included the following text: “While I thank you for offering engagement and consultation with the reps going forward, this offer is meaningless without a written agreement being in place … I am formally asking for recognition of Unite the Union for the Barnsley contract TUPEd from Kier by way of written agreement. Failing this, a position of dispute will be put in place and the CAC given control of the outcome. ↩

17. The emails from WT listed below were addressed to various individuals representing the Employer. The identity of these individuals is not material in this context and they are referred to above generically as “the Employer 2 December 2020, 10.36, from WT”. ↩

18. See paragraph 23 above. ↩

19. See paragraph 34 above. ↩

20. See paragraph 22 above. ↩