Case Number: TUR1/597/ [2007]

14 April 2008

CENTRAL ARBITRATION COMMITTEE

TRADE UNION AND LABOUR RELATIONS (CONSOLIDATION) ACT 1992

SCHEDULE A1 - COLLECTIVE BARGAINING: RECOGNITION

DETERMINATION OF THE BARGAINING UNIT

The Parties:

The GMB

and

TRW Automotive Systems Ltd

Introduction

1. The GMB (the Union) submitted an application to the CAC, dated 14 September 2007, that it should be recognised for collective bargaining purposes by TRW Automotive Systems Ltd (the Employer). In its application the Union described the proposed bargaining unit as “All the employees working in the following sections, Electronic and Maintenance at TRW Peterlee.” The Union also clarified that employees employed in the “Operators, Maintenance Technicians, Leading Material Handlers, Line Feeders and Leading Operators” sections should be recognised as part of its application and that employees employed in the “Management, Group leaders, Office Staff, Rework Coordinators, Operators Training and Maintenance Technical Facilities” sections should not be recognised as part of its application.

The CAC gave both parties notice of receipt of the application on 19 September 2007.  On 25 September 2007 the Employer submitted a response to the CAC 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 consider the case.  The Panel consisted of Mr Chris Chapman as Chairman of the Panel and Mr Mike Regan and Ms Judy McKnight as Members of the Panel. For the purposes of the hearing Sir Bill Connor replaced Ms McKnight. The Case Manager appointed to support the Panel was Miss Sharmin Khan.

3. By a decision dated 6 December 2007 the Panel accepted the Union’s application. The parties then entered a period of negotiation in an attempt to reach an agreement on the appropriate bargaining unit. As no agreement was reached by the end of the relevant 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 10 March 2008 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 10 March 2008 and to allow time for the decision to be finalised, the Panel extended the period in which it must determine the bargaining unit to 14 April 2008.

Clarification of the Union’s proposed bargaining unit

4. In its written request for recognition to the Employer, the Union listed 6 groups of worker that were to be excluded from its proposed bargaining unit (see paragraph 1 above). In its later written submission to the Panel (in respect of the hearing) the Union listed a further 8 groups of worker that were to be excluded from its proposed bargaining unit. At the start of the hearing, the parties agreed that the Union in providing the additional list was clarifying job grades and was not changing its written request for recognition to the Employer.

5. The Union’s proposed bargaining unit therefore included: Operators; Maintenance Technicians; Leading Material Handlers; Line Feeders; Leading Operators and excluded: Management Group; Leaders Office Staff; Rework Coordinators; Temporary Staff; Maintenance Technical Facilities; Logistics; Information Systems; Engineers; Finance; Administration; Laboratories; Quality Control; Industrial Engineer Launches.

Summary of the Union’s Submissions

6. The Union stated that the Employer’s workforce could be separated into ‘shop-floor’ workers and ‘staff’. The Union’s proposed bargaining unit covered shop-floor workers who were involved in production, worked 12 hour shifts and were paid hourly. This group of workers had demanded recognition of the Union. The Union’s proposed bargaining unit did not cover workers that were considered ‘staff’ who mostly worked day shifts or any blue collar workers who held management positions. The Union contended that its proposed bargaining unit was compatible with effective management. Its request for recognition within this Company was no different to the many other applications it made on a weekly basis. A bargaining unit covering shop-floor workers in manufacturing industry was a classic format that worked.

7. In this case the Union was approached by members that were unhappy with the Employer’s Employee Council. Members were recruited and a petition for recognition was signed. The Employee Council did not have the power for true negotiation. There were 26 representatives covering 12 different sections suggesting to the Union that the Employer did not approach its workforce as one group. Workers felt that the Employee Council did not give them the opportunity to air their views and that it was used more to inform rather than consult. If pay was negotiated in this forum then it was in conjunction with the representatives but not with the workforce. There was no evidence that workers voted on pay. The Union did not believe that there were any existing national or local bargaining arrangements to consider.

8. Based on its expertise and experience with other companies the Union did not feel there would be any issues regarding small fragmented bargaining units if the Union’s proposed bargaining unit was accepted by the CAC Panel. There were clear differences between the groups it wished to represent and the groups it did not. The groups that were excluded were considered ‘staff’ or ‘management’, the majority worked permanent days, were salaried and had separate facilities.

9. Finally the Union provided with its submission statements from three different workers. Two were Repair Operators and one was a Packing Operator with 11 years service. All three made the following main points:

· That they had not heard of Re-work Co-ordinators or Maintenance Technical Facilities.

· That Logistics, Information Systems, Engineers, Finance, Administration, Laboratories, Quality Control, Industrial Engineer Launches, were all known as staff, worked day shifts, did not work on the shop-floor regularly and had separate facilities such as toilets and lockers.

· That they had never been consulted on pay or other issues by the representatives on the Employee Council and were informed of decisions by the team leader or by way of the notice board.

· Group Leaders were classed as management.

10. On the basis of the above information the Union believed that it had proposed an appropriate bargaining unit that was compatible with effective management.

Summary of the Employer’s Submissions

11. The Union had stated that this application was much like other applications it submitted on a regular basis. The Employer responded that the compatibility of the proposed bargaining unit with effective management must be judged according to the particular circumstances and character of the Employer’s undertaking: this application was unique.

12. The Employer explained that the Company specialised in the manufacture of electronic crash sensors and controllers for Toyota, Fiat, Ferrari and Mercedes A class. The sections included in the Union’s proposed bargaining unit were poorly conceived and could not be mapped on to the actual structure of the plant. The plant was more accurately separated into the following 11 groups of worker: HR & Admin; MIS; Logistics & Purchasing; Finance; Engineering; Stores; Production; Quality-Lab; Maintenance; Quality and Industrial Engineering.

13. The Employer provided with its submission a Labour Force Analysis Chart which set out the whole structure of the plant broken down into the 11 groups and the types of worker within each group. For ease of reference, the chart identified by colour code the following.

14. Workers included in the Union’s proposed bargaining unit were highlighted in green. They were:

• Stores – Line Feeders, Material handlers, Material Handlers Lead
• Production – Operators and Lead Operators
• Maintenance – Maintenance Technicians

15. Workers that the Employer considered ‘may more readily be seen to be shop-floor workers’ whose work was related to production but had been left out of the bargaining unit by the Union were highlighted in orange. They were:

· Stores – Stores Group Leader, Stores Supervisor

· Production – Group Leader, Business Unit Leader, Trainers, Senior Trainer, Re-work Co-ordinators

· Quality Lab – Lead Quality Technician, Shift Process Quality technician, Product Quality Technician, Warranty Technician

· Maintenance – Maintenance Group Leader, Trainee Engineer

· Industrial Engineering – Maintenance Technical Facilities.( incorrectly described as Plant Technician)

16. Workers that the Employer considered ‘may more readily be seen to be office workers’ whose work was not related to production and had been left out of the bargaining unit by the Union were highlighted in red. They were:

• HR & Admin – HR Officer, Receptionist, Secretary
• MIS – CIM Technician, CIM Engineer, Applications Developer, IS Technician, IS Infrastructure Analyst.
• Logistics & Purchasing – Buyer, Indirect Materials Buyer, Business Systems Analyst, Material Controller, Materials Administrator, Production Planner
• Finance – Assistant Accountant, Accounts Clerk
• Engineering – Manufacturing / Process Engineer, Test Engineer, Trainee Engineer
• Quality – SOA Engineer, Customer Quality Engineer, AOI Engineer, Business Systems Co-ordinator
• Industrial Engineering – Continuous Improvements Co-ordinator, Health Safety & Environment Co-ordinator, Industrial Engineer, Lean Promotions Officer, Site Facilities Leader, Design Change Controller, Programme Manager.

17. The Employer did not believe that the Union’s proposed bargaining unit (as described in paragraph 14 above) was compatible with effective management. The Employer proposed two alternative bargaining units to the Panel. The Employer’s primary position was to propose a bargaining unit that covered all employees on the plant except senior management i.e. a bargaining unit that covered all 11 groups of worker described in paragraphs 14 to 16 inclusive above. This will be called, for the purposes of this decision, proposal A.

18. Should the Panel not accept its primary position, the Employer’s fall back position was to propose a bargaining unit that covered all the shop-floor workers (workers related to production) on the plant, i.e. a bargaining unit that covered all the workers described in paragraphs 14 and 15 above. This will be called, for the purposes of this decision proposal B.

Proposal A

19. Proposal A covered all employees on the plant except Senior Management which mapped on the current structure of the plant covered: HR & Admin; MIS; Logistics & Purchasing; Finance; Engineering; Stores; Production; Quality-Lab; Maintenance; Quality and Industrial Engineering. The structure of this proposed bargaining unit would be the same as the current Employee Council and therefore compatible with effective management. The Council was broken down into constituencies that covered the same groups of worker included in proposal A: There were existing local arrangements between the Employer and the Employee Council that the Panel should consider. Genuine negotiations on pay had taken place.

20. The Employee Council consulted and negotiated on all matters of collective interest for all employees except Senior Management. The democratically elected Employee Council did not distinguish between salaried and hourly paid workers and negotiated with the Employer on terms and conditions of employment such as pay and hours successfully. The Employer submitted to the Panel as supporting evidence documents showing previous wage negotiations between the Employee Council and the Employer as well as a copy of a signed agreement. The evidence exemplified that negotiations had commenced in October last year for a January settlement. The Plant Manager was given a budget of 3%. The Employee Council claimed 4.6%. Negotiations progressed and the pay claim was settled at 3.5%. The Plant Manager was given approval from the Vice President of Global HR in America and the pay award was applied to all employees except the Senior Management team.

21. The Employer contended that not accepting this proposal would lead to industrial disharmony. Small groups of workers who on any analysis were part of the shop-floor, would be outside the scope of the bargaining unit and dealt with separately, whether as part of the ‘office’ side or even worse as part of a small miscellaneous group. Inevitably different agreements would be reached in respect of certain matters and the process of undertaking two or more distinct negotiations would take more management time. There was a real prospect of differing outcomes in relation to employee remuneration.

22. Finally in respect of proposal A, the Employer clarified for the Panel that issues brought to the table at the Employee Council were negotiated at representative level. It was up to the representatives to communicate with its constituents. Everyone had access to the notice boards where outcomes and other information would be posted. Previous issues had not been negotiated and decided by way of a vote of individual constituents.

Proposal B

23. The Employer’s alternative second proposal was a bargaining unit that covered the workers in the Stores, Production, Quality –Lab and Maintenance groups. The Employer if it were to recognise the Union’s terminology , could agree that the HR & Admin, MIS, Logistics & Purchasing, Finance, Engineering, Quality and Industrial Engineering groups all contained ‘office’ workers and that the remaining groups: Stores, Production, Quality –Lab and Maintenance could be said to contain ‘shop-floor’ workers who were inextricably linked to production work.

24. The Union’s proposed bargaining unit when mapped on the current structure of the plant did not include all shop-floor workers in each shop-floor group but only some of the workers which would therefore create some fragmentation. If the Panel did not accept its initial proposal, the Employer proposed that the Panel find at least that it would be appropriate to cover all shop-floor workers in the bargaining unit described in paragraph 14 and 15 above.

25. The workers excluded by the Union from its proposed bargaining unit described in paragraph 15 above were all shop-floor workers who shared the same terms and conditions and who all worked shifts. They could all use the Company’s ‘step’ scheme to acquire more skills and pay. There was inter-changeability amongst workers in the Union’s proposed bargaining unit and workers outside it through secondment. Excluding these workers from the bargaining unit would lead to divisions amongst the shop-floor workers. Small miscellaneous groups outside the proposed bargaining unit would be created.

26. For example taking the Stores group: Line Feeders, Material Handlers, and Material Handlers – Lead were included by the Union but the Stores Group Leader and Stores Supervisor were excluded. The Employer concluded that the Union probably sought to exclude these workers on the basis of their job titles and that the Union would probably have included them if they had been called ‘Store Operators’. These workers were promoted from operator level and were dedicated to the shop-floor. The Stores Group Leader was responsible for materials in and product out and had no ‘supervisory’ responsibilities other than to supervise the stores. The Stores Group Leader reported to the Stores Supervisor who also worked on the shop-floor. Therefore these workers should have been included in the proposed bargaining unit.

27. From the Production group: Operators and Lead Operators were included in the Union’s proposed bargaining unit. However the Group Leaders, Business Unit Leaders, Trainers, Senior Trainer and Re-work Co-ordinators that were all part of the Production group were excluded by the Union.

28. Contrary to the Union’s view, Production Group Leaders were not ‘staff’ or ‘office’ based; their function was to manufacture the product on the shop-floor. Their responsibilities were all to do with the shop-floor. They did have additional supervisory responsibilities but they did not have dismissal powers. There was a fine line between being a supervisor and not being a supervisor on the shop-floor. Operators were promoted to Lead Operators who could then be seconded to the position of Group Leader. There was already an element of supervisory distinction between the Operators and the Lead Operators in the Union’s proposed bargaining unit. Lead operators had in the past been seconded to the position of Group Leader and then changed back to an Operator position. To exclude the Group Leaders could therefore be an impediment to effective management. The Employer could see no reason why the Group Leaders should be left out of the bargaining unit.

29. Business Unit Leaders were the most senior people on the shop-floor where they did have their own office but they were on the same terms and conditions as the other workers on the shop-floor with a difference in salary. They did not have the benefits that members of management would have.

30. Trainers were Production Operators who had an aptitude for training co-workers on the production line. They were in effect manufacturing staff training manufacturing staff. An Operator could be promoted to be a Trainer and his or her pay would increase but all other terms and conditions remained the same. The Employer submitted a copy of a Trainer’s contract and an Operator’s contract as supporting evidence.

31. Trainers were much like the Re-work Co-ordinators who were Operators entirely based on the shop-floor with the responsibility to ensure ‘re-work’ was kept to a minimum level. These were basically Operators (one of whom currently happened to be a Group Leader). Any Operator could be tasked with the job of Re-work Co-ordinator and any Re-work Co-ordinator could move back to production so Re-work Co-ordinators did not have a separate contract. Re-work Co-ordinators’ supervisory duties did not include disciplinary powers. They received the same rate of pay as the Group Leader

32. None of the workers in the Quality Lab were included in the Union’s proposed bargaining unit. The Quality Lab covered Lead Quality Technicians, Shift Process Technician, Product Quality Technician, and Warranty Technician. Lead Quality Technicians were in the Quality – Lab group as opposed to the Production Group for reasons of governance, meaning somebody working on quality issues would not be able to report directly to someone in Production. This did not detract from the fact that the Lead Quality Technicians were based on the shop-floor. Lead Quality Technicians spent 90% of their time with Production. Shift Process Quality Technicians reported to the Lead Quality Technicians. Product Quality Technicians were shop-floor workers who related what came back from the field to what was being made on the shop-floor. Warranty Technicians worked closely with the Product Quality Technicians.

33. From the Maintenance Group: Maintenance Technicians were included but the Maintenance Group Leaders and Trainee Engineer were excluded though they all worked on the shop-floor. The Maintenance Technical Facilities worker was found in the Industrial Engineering Group but was essentially the same as a Maintenance Technician. The difference was that the Maintenance Technical Facilities worker worked day shifts and instead of maintaining machinery he or she maintained the lighting, and like facilities on the premises.

Considerations

34. The Panel is required, by paragraph 19(2) of the Schedule, 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 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.”

35. The Panel’s first responsibility is to decide whether the Union’s proposed bargaining unit is appropriate. The bargaining unit as proposed by the Union and mapped on to the current structure of the plant covered:

· Stores – Line Feeders, Material handlers, Material Handlers Lead

· Production – Operators and Lead Operators

· Maintenance – Maintenance Technicians

36. The Union’s proposal was simple. The Union relied upon the division between shop-floor hourly paid workers and office salaried workers and blue collar workers who had management responsibilities. It put a case that its objective was to represent workers that were involved with production on the plant and was a response to a demand for such representation. However the Employer was able to demonstrate that a number of workers involved in shop-floor or production work were without good reason excluded from the Union’ s proposed bargaining unit. This could largely be attributed to the Union’s lack of knowledge about the individual job roles carried out on the plant. The Union relied on a format that in its experience of recognition in other manufacturing companies had worked but failed to capture the detailed operations and structure of the Company in which it sought recognition. The Panel finds that the Union’s proposed bargaining unit was not compatible with effective management as it failed to include the workers that the Employer was able to demonstrate were within its own definition of production workers or workers closely allied to production or ‘shop-floor’. The Union’s proposed bargaining unit by excluding those workers would be liable to lead to fragmentation in the bargaining process. Furthermore it could raise issues at a particular time as to whether a worker, depending on the job being done at the time, was within or outside the bargaining unit.

37. The Panel then considered the suggested bargaining units put forward by the Employer, and firstly considered proposal A. The Panel is not persuaded by the Employer’s case that the Company operates to a one company philosophy as the structure of the Employee Council demonstrates that it structures the constitution of that body in the context of negotiation and consultation as quite separate constituencies, with clear delineations between constituencies and specifically the separate identification of Production from other departments within the Company. The Panel also noted that the terminology of ‘staff employees’ was utilised and in certain cases incorporated into statements of terms and conditions of employment and this aspect reinforced the Panel’s view that there was not a one company philosophy.

38. For these reasons the Panel has concluded that firstly the Union’s proposed bargaining unit is not an appropriate bargaining unit, and secondly the initial bargaining unit proposed by the Employer and labelled in this decision as proposal A is not an appropriate bargaining unit. The Panel then considered the Employer’s proposal B. In the Panel’s view after considering all the evidence the proposed bargaining unit advanced by the Employer and described as Proposal B is the appropriate bargaining unit for the following reasons. Essentially it encompasses all those hourly paid workers of the respondents who are either engaged in production or linked to the production process, as summarised by Mr Sweeney in his closing submissions at the hearing, and who are not part of the company’s management structure or ‘staff’. To the extent that the Union was proposing a bargaining unit distinguishing the ‘shop-floor’ from ‘staff’ and management this proposal most closely replicated that distinction in practice. It was compatible with the way the company was at present organised.

39. The Panel has also considered the matters listed in paragraph 19B(3) of the Schedule so far as they do not conflict with the need for the bargaining unit to be compatible with effective management in particular the desirability of avoiding small fragmented bargaining units within the undertaking. The Panel has taken into account the views of the parties as summarised in this decision. The Panel is satisfied that there are no operative national or local agreements covering the Company’s employees, and that there are no other relevant issues relating to the characteristics of the workers or to location beyond those which it has taken into account.

Decision

40. The Panel concludes that the Union’s proposed bargaining unit is not appropriate and believes that a bargaining unit which covers the following groups of worker is an appropriate bargaining unit:

· Stores – Line Feeders, Material handlers, Material Handlers - Lead, Stores Group Leader, Stores Supervisor.

• Production – Operators and Lead Operators, Group Leaders, Business Unit Leaders, Trainers, Senior Trainer, Re-work Co-ordinators

• Quality Lab – Lead Quality Technicians, Shift Process Quality Technicians, Product Quality Technicians, Warranty Technicians

• Maintenance – Maintenance Group Leaders, Trainee Engineer, Maintenance Technicians

• Industrial Engineering – Maintenance Technical Facilities.( described on the Labour Force Analysis Chart as Plant Technician)

41. As the appropriate 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 of the Schedule.

Panel

Mr Chris Chapman – Chairman of the Panel

Mr Mike Regan

Sir Bill Connor

14 April 2008

Appendix

 Names of those who attended the hearing:

For the Union

Mr Stephen Thompkins – Regional Organiser GMB

Mr Terry Scarr – Senior Organiser GMB

Ms Margaret McGeever – Repair Operator TRW

Ms Karen Surtees – Repair Operator TRW

Mr Stephen Blair – Packing Operator TRW

For the Employer

Mr Phillip William Pearce – Plant Manager

Ms Joanna Prest – Lead Quality Technician

Mr Seamus Sweeney – Counsel

Mr Dominic Gillespie – Senior Employee Relations Adviser

Mr Adrian Maitra – Head of Legal

Mr Robin Finley – Production Manager

Ms Caroline Bird – HR Manager