Case Number: TUR1/564/[2007]

27 June 2007

CENTRAL ARBITRATION COMMITTEE

TRADE UNION AND LABOUR RELATIONS (CONSOLIDATION) ACT 1992

SCHEDULE A1 - COLLECTIVE BARGAINING: RECOGNITION

DETERMINATION OF THE BARGAINING UNIT

The Parties:

Connect

and

Vodafone Limited

Introduction

1. Connect (the Union) submitted an application dated 23 March 2007 to the CAC that it should be recognised for collective bargaining by Vodafone Limited (the Employer) for a bargaining unit comprising “All employees working in the Regional Operations North organisation in grades H, I and J”. The location of the bargaining unit was given as “Scotland, Northern Ireland, Wales, North of England and Midlands” below which was added “The main location is in Warrington. Most of the employees are field based and work ‘out of’ sites at various locations”. The CAC gave both parties notice of receipt of the application on 26 March 2007. The Employer submitted a response on 4 April 2007 which was duly 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 Frank Burchill, Chairman of the Panel, and, as Members, Dr Christopher Ball and Mrs Jackie Patel. The Case Manager appointed to support the Panel was Nigel Cookson and for the purposes of this decision, Miss Maverlie Tavares.

3. By a decision dated 27 April 2007 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 by the end of the period, 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 22 June 2007 and the names of those who attended the hearing are appended to this decision. In accordance with paragraph 19 of Schedule A1 to the Act (the Schedule) the Panel’s task was to determine first whether the Union’s proposed bargaining unit was appropriate and then, if it was found not to be so, to determine another bargaining unit that was appropriate. In order to accommodate the hearing on 22 June 2007 and to allow time for the decision to be finalised, the Panel extended the period in which it must determine the bargaining unit to 29 June 2007.

Background

4. The Employer explained that it currently employed 10,138 staff, as at 10 June 2007, based in various locations across the UK in a variety of roles providing a mobile telecommunications network to over 17 million customers. Vodafone Limited was the UK operating company of the Vodafone Group plc which was an international telecommunications group serving over 206 million customers worldwide. It also added that there was a possibility of a merger of the radio access networks between Vodafone and Orange which would affect Regional Operations, but this was still in the very early stages.

Summary of the submission made by the Union

5. The Union explained that, having built up a membership within the Employer’s field engineering and associated workforce, it approached the Employer for voluntary discussions on recognition in Regional Operations in the autumn of 2006. However, these discussions were not successful, and consequently the Union notified the Employer of its intention to seek recognition for collective bargaining purposes under the statutory process for a bargaining unit comprising Regional Operations North.

6. Regional Operations North was part of the Employer’s Regional Operations organisation. As confirmed by the Employer, Regional Operations was divided into seven units, but the most significant of these in terms of employee numbers were Regional Operations North and Regional Operations South. Together these accounted for 83% of all Regional Operations employees. These units deployed the Employer’s field operations workforce, which implemented, operated and maintained the radio access network which formed the backbone of the Employer’s UK operations; employees in the other Regional Operations units performed functions which were not directly operational, such as work on quality of service and performance standards. Regional Operations North covered Scotland, Northern Ireland, Wales, North of England and the Midlands.

7. Although the work carried out by Regional Operations North and Regional Operations South was similar, each prevailed within its own domain in respect of work organisation and accountability. Regional Operations North and Regional Operations South were identified on the Employer’s organisation charts and internal databases as two separate operational entities. Employees in one unit would have little or no contact with employees in the other, except occasionally on training courses. The two units did not work hand-in-hand and employees were not deployed flexibly between one and the other in order to meet normal variations in business needs or priorities. The Union explained that Regional Operations South had a 24 hour shift pattern, whereas Regional Operations North shift pattern only covered the day. Employees in Regional Operations North were managed, and consequently perceived themselves, as working to deliver the operational requirements of a stand-alone unit within the company.

8. The Union therefore believed that a bargaining unit comprising Regional Operations North would be compatible with good management, as evidenced by the facts of the existing management structures within Regional Operations. The Union’s application was for recognition in respect of employees in grades H, I and J. Such a bargaining unit would cover all employees other than those at Grade G - the senior management cadre within the Regional Operations Directorate.

9. The Union did not have significant membership within Grade G, and believed that it would be inappropriate to apply for bargaining rights on their behalf. It would not ordinarily be compatible with good industrial relations for the bargaining unit to include employees who might well be charged with representing the Employer in any subsequent bargaining with the Union. Although such situations were not absolutely unprecedented, they could be difficult to handle and could possibly raise questions as to whether individuals had a conflict of interest. In the interests of promoting good industrial relations, the Union continued to believe that it was desirable to exclude Grade G from the bargaining unit.

10. The Union was aware that the Employer had expressed the view that Regional Operations North was not an appropriate bargaining unit and that the Employer would see the whole of Regional Operations, including all grades of employee, as being the minimum practicable scope for collective bargaining in this area.

11. The Union explained that in November 2006 it had approached the Employer to open informal discussions about the possibility of recognition in Regional Operations as a whole. The Union did this on the basis that it was quite understandable that the Employer should prefer the scope of union recognition to align with one of its internal directorates. The Employer agreed to meet the Union to discuss the concept and potential benefits of recognition across Regional Operations. However, after two meetings, the Employer advised the Union orally that it had decided not to recognise the Union. The Union received no written confirmation of this decision, or of the Employer’s reasons for declining to consider recognition in more detail, beyond it stating that it preferred not to have a ‘third party’ involved in its employee relations.

12. The Union was not minded to argue that Regional Operations North was its long-term preferred bargaining unit: it was no secret within the company that the Union was actively building up membership in Regional Operations South, and the members in that unit are following the progress of this application for recognition with considerable interest. However, it seems to the Union that, in the absence of an Employer positively championing union representation and collective bargaining, it was only right to identify the appropriate bargaining unit by reference to both the Employer’s structure and the level of demonstrable support for Union recognition among employees.

13. In accepting the Union’s application, the CAC took the view that membership of a trade union was a likely indicator of support for union recognition. As already explained, Regional Operations North was a separately-designated unit within the Regional Operations organisation, comprising the northern sector of the Employer’s field operations workforce; and the Union currently has roughly two-thirds of employees in the target grades in membership. There was therefore a good basis for considering that Regional Operations North would be able to conduct meaningful collective bargaining with the Union, and there clearly was support for the Union amongst the employees who would be covered by collective bargaining under this arrangement.

14. The Union understood that the Employer took the view that the bargaining unit should be Regional Operations as a whole. However the fact was that, towards the end of 2006, the Union invited the Employer to engage in a voluntary negotiating relationship across Regional Operations. The Employer declined that opportunity.

15. The Union submitted its application for recognition in Regional Operations North on the basis that it understood that Regional Operations North was a stand-alone unit within the overarching organisation of Regional Operations. The Union was not aware of any compelling evidence to the contrary. Consequently, the Union believed that Regional Operations North was a viable bargaining unit within Vodafone UK.

Summary of the submission made by the Employer

16. The bargaining unit proposed by the Union comprised a team of 189 workers in Employee Grades H, I and J. These workers were based in Regional Operations North. This team provided support to the radio network operations in Northern England, Wales, Scotland and Northern Ireland. Many of the workers in this team were mobile and worked from their homes which were located in these regions.

17. The Employer explained that Regional Operations North was part of its Regional Operations function of 536 workers based throughout the UK. Regional Operations was in turn part of the Technology function which provided a whole range of technical support and services to the operation of the business. The whole Regional Operations was operated as one entity with a leadership team based in Newbury, Theale and Hayes that covered all of its UK based staff. Regional Operations North had a mirror image team covering the operational support that was required for the rest of the UK. This was called Regional Operations South. There were 250 workers based either in Hayes or at their home locations.

18. In addition there was a group comprising 93 workers that provided further technical and planning capability. These workers were centrally based in Newbury and Theale. They covered the areas of Acquisitions and Environment, Special Coverage and Events, National Base Station Construction Standards, National RAN (Radio Access Network) Quality of Service and National Site Share Service. The Employer attached to its submission an organisation chart of the complete Regional Operations function with total worker numbers. The total number of workers in Grades H, I and J was approximately 500. The other 36 workers were UK based managers and so were outside the scope of the Union’s proposed bargaining unit.

19. It was the Employer’s view that the appropriate and smallest bargaining unit compatible with effective management was the complete Regional Operations Unit. It had arrived at this conclusion on the basis that Regional Operations was managed, operated and performed UK wide as one team providing one seamless and consistently high standard of service. As a customer travelled from Southern England to Northern England they received continuous coverage and did not have to readjust their connection as they entered the Regional Operations North area. The Employer did not operate its services or treat its workers any differently in Regional Operations North.

20. All of the workers in Regional Operations North were paid on the same basis of grade, qualifications experience and skills and they operated using the same operating procedures on the same equipment and facilities as their colleagues that provided the same service and support elsewhere in the UK. They had the same standard employment terms and conditions, holidays, working hours, shift requirements and training arrangements. They had the same manager as the rest of Regional Operations.

21. The current manager in charge of Regional Operations North was actually the manager in charge of the whole of the Regional Operations function including North, South and Central Services. This manager reported directly to the Chief Technical Officer who was in charge of the whole Technology function. The Chief Technical Officer was a member of the Board. The Manager for Regional Operations overall was based in Warrington. It was the Employer’s aim to continue to reduce the number of layers of management between its customers and its business leaders rather than to increase them. Accordingly, the Employer was not seeking to create any new local managerial roles to manage a different and localised Regional Operations North.

22. If the Union’s application was granted then the Employer could potentially have to manage and support workers in Regional Operations North in a different way to the workers elsewhere and it was the Employer’s view that a differential approach that would result from recognition of the proposed bargaining unit would not be conducive to good employee relations across all of the Regional Operations teams. The Employer aspired to have good and consistent employee relations throughout the organisation and it sought to maintain consistency of treatment of terms and conditions as part of that approach.

23. The Employer confirmed that there were no existing collective bargaining arrangements and that the application was the first such statutory application it had received. It stated that it did not wish in the future to evolve an employee relations environment with potentially many different unions seeking collective bargaining over many different and disparate small groups of employees, because this would not be conducive to good employee relations or effective management. It was for this reason that the Employer had proposed an alternative bargaining unit.

24. The Employer explained that it currently operated an Employee Consultative Committee (ECC) with 16 elected employee delegates covering the whole of its UK business. The whole Technology function totalling 1,662 workers were represented by 4 delegates elected from across the function. As Regional Operations formed part of the Technology function they were not separately represented. The ECC met quarterly with the Chief Executive Officer and other representatives on the Employer’s side to discuss any worker and business issues of significance.

25. It was the Employer’s view that within a Technology function of 1,662 workers and a Regional Operations function of 536 workers, to have a bargaining unit of 189 workers alone was not a desirable situation and did not enable the Employer to avoid small, fragmented and unrepresentative bargaining units. Recognition for such a small group of workers could also involve disproportionate localisation of terms and conditions when the Employer sought to operate all terms and conditions at best at a Company wide level and at the very least at a functional level. As an international group the Employer also sought to use consistent worker related arrangements across all of its operating companies. For example it used a consistent worker grading structure across all companies so that a role at grade H in the UK was operating at the same level as a grade H in Italy, Germany, Spain or Portugal.

26. As its business evolved to be more consistent internationally to better serve all of its customers the possible creation of small localised bargaining units at such a level as just one small team as proposed by the Union, was less and less reflective of how the Employer operated its business. All of the employees, wherever they were based, had standard working hours, holidays, grades, annual pay review dates and pension arrangements. The only group that had some differences in working hours were the retail store staff and this was due to historical arrangements around store opening hours.

27. The Employer explained that there were nine types of roles based within Regional Operations North and that these were primarily skilled engineering roles. All other employees within the rest of Regional Operations shared these broad job roles and titles. In its written submissions the Employer detailed the numbers, employee grades, job titles and locations of the workers in the Union’s proposed bargaining unit.

28. It was the Employer’s desire to continue to maintain good employee relations with all of its employees. It believed that, for all the reasons set out above, the appropriate bargaining unit was the complete Regional Operations Unit comprising 536 employees rather than the smaller and more fragmented unit of Regional Operations North containing 189 employees.

Considerations

29. 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) states 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 he 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 careful consideration of the views of both parties as set out in their written submissions and delivered orally at the hearing.

30. The Panel’s first responsibility is to decide whether the Union’s proposed bargaining unit is appropriate. The Panel’s decision has been taken after a full and detailed consideration of the views of both Parties and finds that the bargaining unit as proposed by the Union is appropriate for the following reasons.

31. The group of relevant workers is easily identifiable and situated at various locations described as one location “Regional Operations North” by both parties. The Employer argued that this group of workers is no different to the other workers within Regional Operations, but it is clear by the Employer’s current arrangements that it treats this group of workers as one unit, as demonstrated on its organisational chart. The Panel is also in agreement with the Union for excluding Grade G from the appropriate bargaining unit. The Employer has provided no evidence to make the Panel conclude that it is necessary to have the four managers in Grade G within the unit. Over the course of the hearing the Employer admitted that it would not find it difficult to enter into negotiations with the unit as proposed by the Union, confirming the Union’s argument that it is not incompatible with effective management. The Employer’s argument is that it wants to continue to treat all staff the same across the company, and this would not happen if the Union negotiated different terms and conditions for this group of workers, and that it would not be conducive to good employee relations across Regional Operations. As stated earlier in paragraph 29 of the decision, Schedule A1 requires the Panel to decide whether the Union’s proposed bargaining unit is appropriate and, if found not to be appropriate, to decide a bargaining unit which is.

32. It was argued by the Employer that the proposed bargaining unit was small within Regional Operations and the company as a whole, and this would cause fragmentation. We are not convinced by these arguments. The size of this unit is only second in number to Regional Operations South from the other identified units on the Employer’s organisation chart. The number of workers in Regional Operations North is sufficient to constitute a distinct bargaining unit. Given that there are no national or local existing bargaining arrangements, the Panel is swayed by the Union’s arguments and believes that the size of the bargaining unit is appropriate, and that it will not lead to fragmented bargaining.

Decision

33 The appropriate bargaining unit is one that comprises “All employees working in the Regional Operations North organisation in grades H, I and J”. The location of the bargaining unit was given as “Scotland, Northern Ireland, Wales, North of England and Midlands” and the main location being in Warrington.

Panel

Professor Frank Burchill, Chairman

Dr Christopher Ball

Mrs Jackie Patel

27 June 2007

Appendix

Names of those who attended the hearing:

For the Union

Ms Steph Marston - Director of Organising & Development

Ms Cait Hughes - Senior Organiser

For the Employer

Mr David Dunwoody - Employee Relations Manager

Mr Alan Thomas - Head of Policy and Reward