One size does not fit all

The
Central Arbitration Committee now has more than 50 union recognition disputes
under its belt. David Morgan looks at the trends emerging from its decisions,
and an important new ruling on its discretion

The statutory regime for compulsory trade union recognition has been running
for nearly two years and the Central Arbitration Committee that adjudicates in
recognition disputes has issued more than 50 decisions. The majority have dealt
with preliminary issues concerned with admissibility of the union’s
application. To have an application accepted, the union must establish that at
least 10 per cent of workers in the proposed bargaining unit are members and
that the majority of workers in that bargaining unit would be likely to favour
collective bargaining.

After allowing the application, the CAC has to assist the union and employer
to reach agreement on the appropriate bargaining unit within 20 working days.
If agreement cannot be reached, the CAC has a statutory duty to decide the
matter.

Deciding on the appropriate bargaining unit comprises the most critical
function of the statutory regime. A union’s application may stand or fall on
the scope of the unit. With larger bargaining units, it becomes less likely
that the union will enjoy a majority support for recognition, or even meet the
10 per cent threshold test. Experience has shown that, more often than not, a
union will withdraw its application if the proposed bargaining unit is held not
to be appropriate.

What is appropriate?

The CAC’s overriding consideration is that the unit should be compatible
with effective management. It will also take into account other, possibly
conflicting, factors.

While CAC decisions do not have binding effect as legal precedents on
subsequent cases, recent decisions reveal certain trends in its approach to
these tests. Clearly the CAC will treat compatibility with effective management
as of paramount importance. Further, it is generally reluctant to interfere
with an employer’s existing bargaining arrangements and attaches a great deal
of importance to them.

An employer’s preference tends to be for a larger bargaining unit, often
encompassing the entire workforce, for two reasons. First, it dilutes union
membership and, second, decisions on pay, hours and holidays and other terms
and conditions are taken at board or national level in most companies.

However, very few CAC decisions have favoured this "whole company"
approach. In Benteler Automotive UK and the ISTC (TUR 1/4/2000), one of the
first significant cases to come before the CAC, the union proposed a bargaining
unit comprising weekly-paid shop floor employees, excluding monthly-paid
technical, supervisory and administrative staff.

The company argued that the proposed bargaining unit would split the
workforce and impede effective management, hampering the company’s teamworking
philosophy and vision. It also argued for a whole-company approach to the
bargaining unit as it already had a works council operating across the company
for communication and consultation purposes.

In the event, the CAC based its decision on the reality of existing
management organisation in the company and ruled in favour of the bargaining
unit proposed by the union. The CAC considered that the whole-company
philosophy suggested by the company was, as yet, an aspiration. The bargaining
unit proposed by the union more accurately reflected the characteristics of the
workers involved.

Multi-site organisations

Significantly, the Benteler decision involved a company operating at only
one establishment. In subsequent cases, the CAC has had to determine the appropriate
bargaining unit in businesses operating on several sites. In one of the few
decisions favouring the employer’s whole-company approach to the bargaining
unit, the CAC considered the multi-site operation in the application of TGWU
and Gala Casinos Ltd t/a Maxim’s Casino Club (TUR1/119/2001).

In that case, the union sought recognition for all gaming employees at one
of the company’s London casinos. Supporting its application, the union argued
that the particular casino had a distinct profile within the group company.
There were different rates of pay at the location, and distinctions in the
nature of the work compared with other parts of the business, particularly the
bingo division.

The employer argued primarily that as all decisions on pay, hours and
holidays were taken at board level within the group company, the appropriate
bargaining unit should comprise all employees, or at least all those in its
casino division.

The CAC had little hesitation in concluding that the bargaining unit
proposed by the union would not be compatible with effective management. Given
that the company operated 26 casino premises and another 170 bingo clubs
throughout the UK, fragmentation was a decisive factor in the CAC’s reasoning.
It took into account the existence of common terms and conditions of employment
and pay scales throughout the casino division. It held that separate bargaining
units at local level would be fragmentary and could invite numerous other
bargaining units composed of employees subject to the same terms and conditions
of employment.

In TGWU and Kwikfit (TUR1/126/2001), the union sought recognition for a
proposed bargaining unit comprising the two London divisions (made up of 110
centres) of a company with 646 centres in the UK. The company argued that all
employees shared a common employee handbook, training, career ladder, hours of
work and holiday entitlement. It also emphasised the integrated and centralised
nature of its operations, arguing that a fragmentation of bargaining units in
London would inhibit the flexible movement of labour. On the other hand, the
union made reference to the London weighting allowance and a trend of
decentralisation of collective bargaining in the industry.

In this case, the CAC did not consider a bargaining unit covering the whole
of London to be fragmented given 20 per cent of the company’s employees were
based there. While the CAC accepted the company operated centrally and applied
uniform policies and procedures across all sites, it considered that other
aspects of the business, such as the relative autonomy of divisional directors
meant that dealing with other matters (including collective bargaining) at the
London division level would not be incompatible with effective management.

Freedom for discretion

However, last month, the High Court of England overturned this decision on
judicial review and remitted the case back to a freshly constituted CAC for
re-hearing. While the full case report has yet to be published, we understand
the court held that a proposed bargaining unit could not trump other more
appropriate bargaining units and that the CAC had erred in its approach to its
discretion in this regard. Despite the fact that the employer and the union are
called on to propose an appropriate bargaining unit, the CAC should be free to
hold that a different unit is more appropriate. That discretion must be
exercised reasonably.

With no formal right of appeal from a CAC decision and the reluctance of
courts to interfere with the CAC’s discretion, employers must get their views
across forcefully and correctly at the CAC.

For unions, too, the choice is crucial. If an approach fails, the union is
barred from bringing another application for the same bargaining unit for three
years.

David Morgan is a solicitor in the employment law unit of McGrigor
Donald. He successfully represented Gala Casinos before the CAC in London

Compatible with effective management?

The CAC will take into account the
following:

– The views of the employer and of the union.

– Existing national and local bargaining arrangements.

– Avoiding small fragmented bargaining units within an
undertaking.

– The characteristics of workers falling within the proposed
bargaining unit and any other employees of the employer whom the CAC considers
relevant.

– The location of workers.

– Section 19(4) of Schedule A1 of TULR(C)A 1992.

Dealing with recognition applications

– Make sure the union has correctly
designated the employer. The rules provide that an application must be levelled
at the company employing the workers, not, for example, a trading name.

– Do not forget Acas. There is a technicality in the rules
stating that, if the employer proposes Acas assistance or involvement during
the first 10 days of the 20 day negotiation period and the union declines the
offer, the union will be barred from proceeding with the matter at the CAC.

– Unions will often petition the workers in their proposed
bargaining unit to ascertain their likely support for recognition. Employers
should seek an independent confidential audit of membership under the auspices
of the CAC or Acas.

– Choose the bargaining unit carefully. Remember that while a
wider unit may dilute union membership, if unsuccessful, you may end up with
recognition in a larger group than originally proposed.

– Empower your staff consultative forum and ensure decisions
are taken at the appropriate level, preferably across the company.

– In a multi-site business, retain contractual mobility and
flexibility provisions in the contract of employment. A flexible workforce will
add weight to an argument that localised bargaining units will lead to
fragmentation.

– As the CAC need not follow the bargaining units proposed by
either party, employers should consider putting forward more than one alternative
bargaining unit.

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