Decision

Bargaining Unit Decision

Updated 5 April 2019

Case Number: TUR1/1084/2019

05 April 2019

CENTRAL ARBITRATION COMMITTEE

TRADE UNION AND LABOUR RELATIONS (CONSOLIDATION) ACT 1992

SCHEDULE A1 - COLLECTIVE BARGAINING: RECOGNITION

DETERMINATION OF THE BARGAINING UNIT

The Parties:

URTU

and

Fowler Welch Limited

1. Introduction

1) URTU (the Union) submitted an application to the CAC dated 8 January 2019 that it should be recognised for collective bargaining purposes by Fowler Welch (the Employer) in respect of a bargaining unit comprising “The employees at the above named address contracted as ‘LGV drivers’ ”. The location of the bargaining unit was given as “Fowler Welch Depot, London Road, Teynham, Sittingbourne, ME9 9PR.” The application was received by the CAC on 9 January 2019 and the CAC gave both parties notice of receipt of the application on 9 January 2019. The Employer submitted a response to the CAC dated 16 January 2019 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 Chairman established a Panel to deal with the case. The Panel consisted of Professor Gillian Morris, Panel Chair, and, as Members, Mr Mike Cann and Ms Lesley Mercer. The Case Manager appointed to support the Panel was Kate Norgate.

3) By a decision dated 29 January 2019 the Panel accepted the Union’s application. The parties then entered a period of negotiation in an attempt to reach agreement on the appropriate bargaining unit. As no agreement was reached, the parties were invited to supply the Panel with, and to exchange, written submissions relating to the question of the determination of the appropriate bargaining unit. A hearing was held on 26 March 2019 and the names of those who attended the hearing are appended to this decision. To accommodate the hearing the Panel extended the period within which it was required to determine the bargaining unit to 8 April 2019.

4) The Panel is required, by paragraph 19(2) of the Schedule to the Act, to decide whether the proposed bargaining unit is appropriate and, if found not to be appropriate, to decide in accordance with paragraph 19(3) a bargaining unit which is appropriate. Paragraph 19B(1) and (2) state that, in making those decisions, the Panel must take into account the need for the unit to be compatible with effective management and the matters listed in paragraph 19B(3) of the Schedule so far as they do not conflict with that need. The matters listed in paragraph 19B(3) are: the views of the employer and the union; existing national and local bargaining arrangements; the desirability of avoiding small fragmented bargaining units within an undertaking; the characteristics of workers falling within the bargaining unit under consideration and of any other employees of the employer whom the CAC considers relevant; and the location of workers. Paragraph 19B(4) states that in taking an employer’s views into account for the purpose of deciding whether the proposed bargaining unit is appropriate, the CAC must take into account any view the employer has about any other bargaining unit that it considers would be appropriate.

2. Matters clarified at the beginning of the hearing

5) The scope of the Union’s proposed bargaining unit. In its written submission the Union stated that its bargaining unit included LGV drivers carrying out permanent or semi-permanent yard-based shunting roles (“shunters”) at Teynham as well as LGV drivers. In answer to a question from the Panel the Employer confirmed that all those conducting shunting roles at Teynham held LGV licences. The Union stated that its proposed bargaining unit did not include members of any other group, such as warehouse operatives or office staff, who had an LGV licence but whose vocational role was other than driving. The Union confirmed that Casual and Apprentice LGV drivers were excluded from its proposed bargaining unit. At a later stage of the hearing the Panel Chair asked the Union whether it considered that shunters fell within the bargaining unit as described in its request for recognition, ie employees contracted as ‘LGV drivers’. The Union said that they did fall within that description; the Employer contested this. The Panel Chair explained to the Union that, under the Schedule, if the Panel considered that the Union’s proposed bargaining unit as described its request for recognition was appropriate it would not proceed to consider the appropriateness of any other bargaining unit. However, if the Union were to submit that a bargaining unit other than that proposed in its request for recognition was appropriate, the Panel would proceed to determine an appropriate bargaining unit without giving any priority to the Union’s choice. The Panel Chair explained to the Union that if it wished shunters to be included the Panel would need to decide whether shunters fell within the scope of the Union’s proposed bargaining unit as described in the request. After a short adjournment the Union stated that it now wished to exclude shunters from its proposed bargaining unit.

6) The scope of the Employer’s operation and terms and conditions of employment.^{[footnote 1]} The Panel sought clarification of the Employer’s operation in the light of the Employer’s submission that the appropriate bargaining unit should comprise all individuals below management level who were employed across the Employer’s Teynham, Paddock Wood and Thanet Birchington sites, which together comprised its “Kent Depot”. The Employer explained that its Teynham site was in mid-Kent, with Paddock Wood and Thanet Birchington each being around 26 miles either side of Teynham. The Employer said that its proposed bargaining unit included all LGV Drivers, Apprentice LGV Drivers, Casual LGV Drivers, Shunters, and warehouse and office non-managerial staff. In answer to questions from the Panel about the terms and conditions of employment relating to pay, hours and holidays of these respective categories of staff the Employer said that members of all these groups worked variable shift patterns and had the same holiday entitlements. The Employer said that methods of calculating overtime rates varied between each category. The Employer gave the following additional information about specific groups:

(i) LGV Drivers. The Employer stated that there were 89 LGV Drivers at Teynham; three at Paddock Wood and two at Thanet Birchington. The Employer stated that drivers at the Teynham and Paddock Wood sites had identical terms and conditions although shift patterns could vary between individuals. At Thanet Birchington, driver contracts had been inherited under a TUPE transfer to the Employer about a year ago and terms and condition differed for this site. The Employer stated that it was in the process of aligning terms and conditions and that a new driver at Thanet Birchington would have the same contract as a driver at Teynham and Paddock Wood. The Employer explained that drivers at all three sites were part of a single pool and could be required to drive to wherever customer requirements demanded, the only difference being the site at which they collected a truck at the start of their shift. The Employer stated that drivers were paid weekly, their pay being calculated on the basis of hours worked, with enhanced pay for unsocial hours working and overtime.

(ii) Casual LGV Drivers. The Employer said that there were six Casual LGV Drivers at Teynham, none at Paddock Wood and one at Thanet Birchington. Of those six casual drivers, one had worked for the Employer for 18 years; one for 11 years, and four for under two years. The Employer stated that Casual LGV Drivers were on zero-hours contracts but received the same pay as permanent drivers when they worked and were regarded as employees. The Employer said that the number of hours individual Casual Drivers worked for the Employer varied greatly; drivers were kept on the Employer’s books for as long as they wanted even if they were unable to accept work when offered. The Employer said that Casual LGV Drivers received paid holidays, with their entitlement being calculated retrospectively. The Employer said that it also used agency workers to manage peaks and troughs in demand.

(iii) Apprentice LGV Drivers. The Employer said that there was currently one Apprentice LGV Driver in the Kent Depot, who was based at Teynham. The Employer explained that Apprentice Drivers were recruited annually and became permanent, and entitled to the full LGV Driver rate, when they completed their apprenticeship which normally took around 14 months. Apprentices were paid at an apprentice rate for around the first three months, following which, provided they acquired their licence, they were paid a percentage of the full LGV Driver rate which increased as their apprenticeship progressed. The hours and holidays of apprentices were based on the same structure as those of permanent drivers.

(iv) Shunters. The Employer said that there were five Shunters at Teynham; four at Paddock Wood and none at Thanet Birchington. The Employer stated that Shunters were paid on a weekly basis and were required to work a minimum number of hours with enhanced rates for unsocial hours work and overtime. The Employer said that for historic reasons there were different pay rates for Shunters at Teynham and at Paddock Wood but their holidays and hours were the same. The Employer said that if a Shunter was asked to act as a LGV Driver on the public highway he or she would still be paid at the Shunter rate.

(v) Warehouse staff. The Employer said that there were 33 non-managerial warehouse staff at Teynham; 24 at Paddock Wood; and none at Thanet Birchington The Employer said that warehouse staff were paid a fixed weekly wage which differed from that of Shunters; those at Teynham are paid at a different rate from those at Paddock Wood for historic reasons.

(vi) Office staff. The Employer said that there were 35 non-managerial office staff all of whom were based at Teynham. The Employer said that office staff were paid a monthly salary for a standard 40-hour week with provision for overtime. The Employer confirmed that office staff had the same variable shift pattern as LGV Drivers. The Employer said that if a member of the office staff held an LGV licence and was asked to ‘help out’ with driving duties he or she would be paid on their usual office staff rate.

The Employer said that its long-term aim was to try to harmonise terms and conditions across all three sites within the Kent Depot.

3. Summary of the submissions made by the Union

7) The Union submitted that its proposed bargaining unit was appropriate. The Union said that it organised within the logistics sector and had always represented drivers since its foundation in 1890. The Union said that it had some warehouse workers in membership but normally these workers had separate bargaining arrangements. The Union said that it had a few managers and administrative staff in membership but these were normally former LGV drivers who had retained their membership and would be outside any bargaining group. The Union submitted that the alternative bargaining unit proposed by the Employer was unmanageable. The Union said that it had offered to include Shunters at Teynham within its bargaining unit to accommodate the Employer during talks between the parties ^{[footnote 2]} but that it could not properly represent other groups of workers. The Union stated that generally it did not represent casual drivers as they could go a considerable time without work and it would be odd if such workers had an input into terms and conditions of employment. The Union further stated that it did not seek to recruit apprentices as they worked on different terms and conditions to professional drivers. The Union said that rejection of its proposed bargaining unit would amount to saying that a specialist union could never achieve recognition under the statutory process.

8) The Union stated that there were no existing workplace bargaining arrangements at Teynham or any of the Employer’s other sites. The Union said that there was no danger of fragmentation and that separate agreements for smaller ‘satellite’ sites were standard in the road transport industry. The Union said that it had no members or contact with LGV drivers at Paddock Wood or Thanet Birchington; that drivers at Paddock Wood and those at Thanet Birchington had no interest in being part of its proposed bargaining group; and that it was not the Union’s concern how these drivers might view a particular matter. The Union submitted that drivers at Paddock Wood and Thanet Birchington should constitute separate bargaining groups. The Union submitted that the Employer could manage different terms and conditions for Shunters at its Teynham and Paddock Wood sites respectively and that employers who negotiated at a main site generally passed on terms and conditions to the smaller sites.

9) The Union referred to R (Cable & Wireless Services UK Ltd) v CAC [2008] IRLR 425 and R (Lidl Ltd) v CAC [2017] IRLR 646 in relation to the desirability of avoiding small fragmented bargaining units within an undertaking. The Union said that in this case there would be an identifiable boundary to the unit in question and its proposed bargaining unit would not divide up the workforce into numerous groups prone to compete with each other. The Union said that the workers in its proposed bargaining unit were a distinct group with specific responsibilities, work location and terms and conditions. The Union said that they were a coherent group of people with a common description who were presently excluded from any collective bargaining structure. The Union said that it would not attempt to negotiate working hours or shift patterns that would cause any difficulty to the Employer.

10) In response to the Employer’s evidence relating to a Consultative Forum (see paragraph 15 below) the Union stated that it had discussed the forum with individuals within the bargaining unit and they were not aware of its existence.

4. Summary of the submissions made by the Employer

11) The Employer submitted that in determining whether the bargaining unit proposed by the Union is appropriate, the CAC is not required to decide whether it is the most appropriate, but whether it is an appropriate bargaining unit having regard to the factors identified in paragraph 19B. The Employer said that in undertaking this analysis, the need for compatibility with effective management under sub-paragraph 19B(2) was of primary importance and the principal guiding factor, although the CAC should also have regard to all of the factors identified in sub-paragraph 19B(3) (R (Kwik-Fit (GB) Ltd) v CAC [2002] ICR 1212; R (Cable & Wireless Services UK Ltd) v CAC, above).

12) The Employer stated that in relation to sub-paragraph 19B(3)(c) – the desirability of avoiding small fragmented bargaining units within an undertaking - the focus was on avoiding fragmentation of collective bargaining where that may result in the core terms of employment for different parts of what is essentially a single workforce being set in different forums, with the risk of adverse consequences such as inconsistent outcomes breeding anomalies and discontent between comparable groups of workers, or even possible competition between unions (R (Lidl Ltd) v CAC, above, Underhill LJ at [36]). The Employer emphasised that differential treatment of different parts of an integrated workforce, with comparable consequences, would still be important factors going to the issue of compatibility with effective management, even if they did not fall within the relatively narrow compass of the fragmented bargaining factor. The Employer said that the focus should be on the substance of the concerns, not on their technical classification within the list of relevant factors (Lidl, Underhill LJ at [38]-[39]).

13) The Employer stated that the Union’s proposed bargaining was not appropriate as it did not include all of the drivers within the Kent Depot who were (and needed to be) managed as a single, interchangeable driver workforce on common terms and conditions. ^{[footnote 3]} The Employer stated that the Union’s proposed bargaining unit also excluded the remainder of the single, integrated workforce below management level. The Employer explained that all areas of the Kent Depot operated on a 24-hour, seven-day basis which functioned as a single cohesive whole with operations involving office and warehouse staff and drivers co-ordinated and inter-related. The Employer said that, as a result, these groups shared important key characteristics which warranted their consistent treatment: they all operated a variety of shifts; were required to interact with each other; were engaged on similar levels of terms and conditions, depending on their role; and were required to be flexible where necessary, which was essential to the service offered by the Employer.

14) The Employer referred to a previous CAC decision relating to its Washington Depot where the CAC had accepted that the appropriate bargaining unit was all employees within the region below management level ^{[footnote 4]} and said that the arrangements for setting terms and conditions were the same in Kent. The Employer said that if this bargaining unit were not adopted by the Panel then, as a minimum, to avoid impeding effective management, the appropriate bargaining unit should include all of the Drivers and Shunters employed to work across the Kent Depot. The Employer stated that the Union had not addressed the compatibility with effective management of its proposed bargaining unit in its submissions but had focussed rather on union organisation and support which were irrelevant to the statutory test. The Employer said that any collective bargaining at the Kent Depot needed to be with a union capable of representing the interests of the workforce as a whole and the Union had acknowledged that it could not do this because of its specialist nature. The Employer said that it had received a previous application for recognition by Unite at the Kent Depot some 10-14 years ago and that if Unite were in the future to represent some drivers as well as other staff at the Kent Depot this could lead to fragmentation and competition within the workforce. The Employer said that the fact that terms and conditions of employment differed between categories of staff did not mean that it was compatible with effective management to have separate bargaining arrangements for each category. In answer to the Union’s submission that it was standard in the road transport industry to have separate bargaining arrangements for ‘satellite sites’ the Employer’s Chief Executive Officer said that in 24 years’ experience in the industry he had never known this to happen.

15) The Employer submitted that under the current arrangements it treated the workforce at its Kent Depot as a single, cohesive unit and it had always adopted an open communications policy to seek the views of the entire workforce on any issues that required consultation, which included pay and other terms and conditions of employment. The Employer said that there was a Consultative Forum for the Kent Depot composed of staff representatives from all sites, who were elected from each separate constituency by way of a ballot and which met monthly. The forum currently consisted of two driver representatives, one shunter representative, two warehouse representatives, and two office representatives. The Employer said that the current driver representatives were from Teynham and that they were actively encouraged to seek the views of colleagues at the other two sites although the Employer could not prove that they did so. The Employer said that it reviewed pay rates on an annual basis. The overarching minimum percentage increase was set at national level with regard then being given to local factors, including affordability, customer pricing, pay rates in the area, and representations from the workforce. The Employer said that the most recent pay increase would take effect from 1 April 2019, with Drivers and Shunters in the Kent Depot receiving a higher increase than other staff.

16) The Employer stated that cohesion amongst workers at the Employer’s Kent Depot, as well as the Employer’s ability to effectively manage them, would be damaged if the bargaining unit proposed by the Union were adopted as appropriate since it would divide workers who, in practice, worked closely together on a day-to-day basis. It would also make the alignment of terms and conditions more difficult. In respect of the LGV Drivers in particular, whereas at present the Employer could plan its operations in a way that treated them as a single labour pool, if some drivers had different pay and associated employment costs, or different limits on their contractual hours, the Employer’s ability to manage its operations effectively would be severely impeded as those differences would have to be taken into account in planning and costing any customer’s requirements. The Employer said that at present if changes in working patterns were required to manage a new contract this could be done in a single forum whereas if the Union’s proposed bargaining unit were in place the Employer would need to approach the Union for drivers at Teynham and the Consultative Forum for other workers. The Employer cited BALPA v Jet2.com Ltd [2017] ICR 457 in support of the proposition that non-contractual rostering arrangements and other non-contractual matters could be covered within ‘pay, hours and holidays’ which formed the subject-matter of statutory recognition. In answer to a question from the Panel the Employer said that it had last consulted the Consultative Forum on the implications of a new customer contract some 14 months ago.

17) The Employer submitted that the workers within its proposed bargaining unit had sufficient characteristics in common to be members of a single bargaining unit. The Employer said that the only difference between Casual and other LGV drivers was the zero-hours element and Apprentice LGV Drivers were part of a single pool of labour who, after an initial three month period, had the same working arrangements as other drivers. Shunters drove LGV vehicles even if predominantly in the yard and were treated as part of the LGV workforce. Warehouse and office staff were also part of a single workforce whose working patterns needed to inter-relate. In terms of location, they all worked within a single region.

5. Considerations

18) The Panel is required, by paragraph 19(2) of the Schedule to the Act, to decide whether the proposed bargaining unit is appropriate and, if found not to be appropriate, to decide in accordance with paragraph 19(3) a bargaining unit which is appropriate. Paragraph 19B(1) and (2) state that, in making those decisions, the Panel must take into account the need for the unit to be compatible with effective management and the matters listed in paragraph 19B(3) of the Schedule so far as they do not conflict with that need. The matters listed in paragraph 19B(3) are: the views of the employer and the union; existing national and local bargaining arrangements; the desirability of avoiding small fragmented bargaining units within an undertaking; the characteristics of workers falling within the bargaining unit under consideration and of any other employees of the employer whom the CAC considers relevant; and the location of workers. Paragraph 19B(4) states that in taking an employer’s views into account for the purpose of deciding whether the proposed bargaining unit is appropriate, the CAC must take into account any view the employer has about any other bargaining unit that it considers would be appropriate. The Panel must also have regard to paragraph 171 of the Schedule which provides that “[i]n exercising functions under this Schedule in any particular case the CAC must have regard to the object of encouraging and promoting fair and efficient practices and arrangements in the workplace, so far as having regard to that object is consistent with applying other provisions of this Schedule in the case concerned.” The Panel’s decision has been taken after a full and detailed consideration of the views of both parties as expressed in their written submissions and amplified at the hearing.

19) The Panel’s first responsibility is to decide, in accordance with paragraph 19(2) of the Schedule, whether the Union’s proposed bargaining unit is appropriate. The Panel notes that it cannot reject the Union’s proposed bargaining unit because it feels that a different unit would be more appropriate nor, in considering whether it is compatible with effective management, can it consider whether it is the most effective or desirable unit in that context. ^{[footnote 5]}

20) The Panel does not consider that the Union’s proposed bargaining unit is appropriate because it is confined to LGV Drivers at Teynham. The Employer gave evidence that the pay, hours and holidays of drivers at Teynham and Paddock Wood are identical. The Panel notes that the terms and conditions of LGV Drivers inherited under a TUPE transfer at Thanet Birchington differ from those at the other two sites but also notes that the Employer is in the process of aligning terms and conditions and that a new driver recruited to work at Thanet Birchington would have the same terms and conditions as drivers at Teynham and Paddock Wood. The Panel further notes that LGV Drivers at all three sites work interchangeably in terms of journeys undertaken on behalf of the Employer’s customers, the only difference being that they begin their working day at their ‘home’ depot. This was not disputed by the Union.

21) The Panel notes the Union’s submission that there are other Employers in the road transport industry at which collective bargaining is confined to a single site with other ‘satellite’ sites being subject to separate arrangements. The Employer disputed this. The Panel has not found it necessary to investigate this matter further as it does not consider that, on the facts of this case, omitting the three drivers at Paddock Wood and the two at Thanet Birchington from a bargaining unit of 89 drivers at Teynham and subjecting them to separate arrangements for determining pay, hours and holidays would be compatible with effective management. In view of its finding on this matter the Panel has not found it necessary to decide whether the exclusion of Casual and Apprentice LGV drivers from the Union’s proposed bargaining unit is compatible with effective management.

22) Having determined that the bargaining unit originally proposed is not appropriate the Panel must, pursuant to paragraph 19(3) of the Schedule, decide a bargaining unit which is appropriate.

23) At the outset of the hearing the Union said that it wished to include shunters as well as drivers at Teynham within its proposed bargaining unit. It later said that it wished to exclude them having considered the potential implications of their inclusion for the Panel’s decision-making process under the Schedule (see paragraph 5 above). The Panel has nevertheless considered whether a bargaining unit which included shunters would be an appropriate bargaining unit and has concluded that, being confined to Teynham, it would not be appropriate for the reasons given in paragraphs 20 and 21 above.

24) The Employer proposed a bargaining unit which comprised all individuals below management level who are employed by the Employer across the Employer’s Teynham, Paddock Wood and Thanet Birchington Sites ( the “Kent Depot”). This includes all LGV Drivers, Apprentice LGV Drivers, Casual LGV Drivers, Shunters and warehouse and non-managerial staff.

25) The Panel considers that the Employer’s proposed bargaining unit is compatible with effective management. The Panel accepts the Employer’s evidence that workers within this bargaining unit are subject to the same terms as regards hours and holidays. As set out in paragraph 6 above, they have differing payment structures but the Panel does not consider that this means that the pay of these respective groups cannot be considered within the same bargaining arrangements. The Panel has also considered the matters listed in paragraph 19B(3) of the Schedule. The views of the Union and the Employer have been set out above. There are no existing national or local bargaining arrangements. The Employer’s proposed bargaining unit would avoid small fragmented bargaining units within the Employer’s undertaking. The workers it covers all work at the Employer’s “Kent depot” and although they perform a variety of roles the Panel does not consider that this prevents them being members of a single bargaining unit. The Panel is satisfied that its decision is consistent with the object set out in paragraph 171 of the Schedule.

6. Decision

26) The appropriate bargaining unit is all individuals below management level who are employed by the Employer across the Employer’s Teynham, Paddock Wood and Thanet Birchington Sites ( the “Kent Depot”).

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

Panel

Professor Gillian Morris, Chairman of the Panel

Ms Lesley Mercer

Mr Mike Cann

05 April 2019

Appendix

Names of those who attended the hearing:

Appendix

Names of those who attended the hearing:

For the Union

Brian Hart - URTU, National Officer

Alexander Harris - URTU, Regional Officer

For the Employer

Ben Cooper QC - Counsel

Nick Hay - Chief Executive Officer

Lynda Hulme - Human Resources Director

Elizabeth Lang - Solicitor, Bird & Bird LLP

Sam Rayner - Solicitor, Bird & Bird LLP

1. Some of the information included in this paragraph was given at a later stage of the hearing but is included here for ease of reference. ↩

2. See, however, paragraph 5 above ↩

3. See, however, paragraph 6 above where the Employer stated that LGV Drivers at Thanet Birchington who had been subject to a TUPE transfer were on different terms and conditions from those at Teynham and Paddock Wood. ↩

4. Unite the Union and Fowler Welch-Coolchain Ltd TURI/786 (2012), 18 September 2012. ↩

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