TUR1/357/(2004)
CENTRAL ARBITRATION COMMITTEE
TRADE
SCHEDULE A1 - COLLECTIVE BARGAINING: RECOGNITION
DETERMINATION OF THE BARGAINING UNIT
The Parties:
AMICUS
and
SEBDEN STEEL SERVICE CENTRES LIMITED
Introduction
1. Amicus (the Union) submitted an
application to the CAC dated 22 March 2004 that it should be recognised for
collective bargaining purposes by Sebden Steel Service Centres Ltd (the
Company) in respect of a bargaining unit comprising all Machine Operators,
Crane Drivers, Forklift Truck Driver, Slitter Operator, General Labourer and
Guillotine Operator located at the Brierley Hill site. The CAC gave both parties notice of receipt
of the application on
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
Ms Mary Stacey, Chairman, and as Members, Mr Ken Cameron and Mr Ged Fisher. The
Case Manager appointed to support the Panel was Humphrey Uddoh.
3. By a decision dated
Summary of the submission made by
the Union
4. The Union submitted that the Panel,
in deciding whether or not the proposed bargaining unit was an appropriate one,
should take into account the Court of Appeal’s judgment in R v CAC ex parte Kwik-Fit (GB) Ltd [2002] IRLR 395, and should only consider an alternative
bargaining unit if it decided that the Union’s proposed bargaining unit was not
appropriate. The Union stated that it
understood the Company’s position to be that the categories of workers
described in the Union’s application, namely Machine Operators, Crane Drivers,
Forklift Truck Driver, Slitter Operator, General Labourer and Guillotine
Operator, constituted an appropriate group of workers and that the only
question to be resolved was whether the bargaining unit should be the workers
of that description at the Brierley Hill site only, the Union’s proposed
bargaining unit, or the workers of that description across all the Company’s
seven sites, the Company’s preferred bargaining unit.
5. The
6. The
7. The
8. The
9. In its closing statement the
Summary of the submission made by
the Company
10. The Company stated that the Sebden
Group consisted of Sebden Steel Service Centres Ltd, which was engaged in steel
processing, and Albion Steel Sections Ltd, which made steel sections for the
construction industry. Albion Steel
Sections Ltd was based at a single site in respect of which the Company had
recognised the Transport and General Workers’
11. The seven sites and the approximate
number of the relevant description of workers at each site was as follows:
|
Altrincham |
45 |
|
Brierley
Hill |
45 |
|
|
15 |
|
|
10 |
|
Lisburn |
20 |
|
|
10 |
|
Colours |
5 |
12. The Company clarified at the hearing
that there were in fact two operations in or around Brierley Hill with separate
local management, that is, the Brierley Hill site as such and a small site
called “Colours”, which employed five workers of the relevant description, and
was immediately adjacent to the Brierley Hill site.
13. Each of the seven sites was run by a
Divisional Director with the two largest being run by Deputy Managing Directors
who had seats on the Company’s Board.
The Company’s aim was nevertheless to provide a coordinated national
service to its customers.
14. The Company explained that, over a
period of several years, it had been working towards harmonising the terms and
conditions for all employees across the seven sites, and had sought to move in
that direction at Brierley Hill since 2000.
That programme had led to a standard shorter working week of 37½ hours
for employees at Brierley Hill, which brought Brierley Hill into line with the
other sites. All employees were now
eligible for a company-wide death in service scheme and pension scheme. Take up in respect of the pension scheme
varied across sites, and to date no worker at Brierley Hill had sought to take
up the Company’s offer. The Company also
stated that employees at Brierley Hill had been offered the same Permanent
Health Insurance Scheme as employees at the others sites, but that the Brierley
Hill works council declined to accept it.
The Company was currently making efforts to introduce a bonus scheme for
all works employees. Holidays at all
sites were now a standard five week entitlement. If a disciplinary matter was initiated and
went to a level beyond the individual site, it was dealt with in a uniform way
by higher management drawn from above the level of the site.
15. Terms and conditions of employment
for all works employees were reviewed annually by a remuneration committee
consisting of three Board Members. The Company stated that pay increases were
discussed at local level at the works councils and that each council submitted
its views to the remuneration committee.
The Company explained that the Board’s considerations were nevertheless
governed by the performance of the Company as a whole and not by the
performance of individual sites. Despite
the fact that two sites were loss-making, the strength of the Group had allowed
improvements in rates of pay for all employees.
16. The Company acknowledged that pay
rates at both Brierley Hill and Colours were higher than at the other five
sites; the average hourly rate for works employees at Brierley Hill and Colours
was £6.12, as opposed to £5.84 at the other sites. The Company acknowledged further that
Brierley Hill had its own bonus scheme.
It stated that it planned to introduce a more uniform bonus scheme
across all sites, including Brierley Hill, but that this would not supplant the
existing bonus scheme at Brierley Hill.
17. The Company emphasised that a
bargaining unit consisting solely of workers employed at the Brierley Hill site
would not be compatible with effective management as it would vitiate the work
carried out on harmonisation across the Group.
The Company also argued that the
18. In closing, the Company stated that
Brierley Hill was not an appropriate bargaining unit. The appropriate bargaining unit was one
consisting of the categories of workers described in the
Further Evidence
19. At the hearing the Panel Chairman
asked the Company to provide further information for the Panel’s consideration,
namely, documentary evidence concerning the Company’s policy of moving towards
harmonisation of terms and conditions for all sites including Brierley
Hill. Such documentation was to cover
bonus schemes, permanent health insurance and pensions, and rates of pay per
job description for workers at Brierley Hill and all other sites. It was agreed that the Company would send
copies of the requested information to the
20. The
Company provided some of the requested information to the CAC on
21. The
information provided by the Company was in the form of a letter and
enclosures. The enclosures included the
notes of several works council meetings, dating from the time Sebden Steels had
taken over the Brierley Hill site from the previous owners, written notices and
communications to the workers at Brierley Hill, and an example of a written
statement of particulars of terms and conditions of employment. In its letter, the Company indicated that it
was not prepared to disclose information on rates of pay as it did not consider
it to be relevant to the question of determining an appropriate bargaining
unit. However, it confirmed that rates
of pay at the Brierley Hill site were “a little ahead of the market place and
the rest of the company as a whole”, and that a revised bonus scheme was in
operation at four sites with an expectation that it would soon be applied to
the other sites.
22. The
Considerations
23. The Panel is required by paragraph
19(3)(a) and (b) of Schedule A1 to determine the appropriate bargaining unit.
In doing so it must be guided by the overriding principle that the unit must be
compatible with effective management.
Paragraph 19(4) lists certain other considerations to be taken into
account in so far as they do not conflict with this primary principle. These are: the views of the employer and of
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 proposed
bargaining unit and of any other employees of the employer whom the CAC
considers relevant; and, the location of workers. The Panel must also have regard to paragraph
171 of the Schedule which provides that “in exercising its 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”.
24. The CAC’s duty was explained by the
Court of Appeal in R v CAC ex parte
Kwik-Fit (GB) Ltd [2002] IRLR 395. The CAC considers the union’s proposed
bargaining unit and determines whether it is appropriate. As part of that process, it must consider
whether the employer’s objections to the union’s unit and the employer’s own
proposed bargaining unit, if any, render the union’s proposed unit
inappropriate. The test is a
comparatively modest one of ‘appropriateness’, which is not to be equated with
the best possible, or optimal, outcome.
Further, the CAC exercises its duty in the light of the legislative
purpose, which was described by Elias J in a passage approved by the Court of
Appeal in Kwik-Fit as follows: “to
enable a trade union which is refused recognition by an employer to use the
legal process to require the employer to enter into collective bargaining”.
25. The issue in dispute between the parties is whether the bargaining unit should comprise the categories of workers described in the Union’s application, namely Machine Operators, Crane Drivers, Forklift Truck Driver, Slitter Operator, General Labourer and Guillotine Operator, at the Company’s Brierley Hill site only, as proposed by the Union, or if that unit was found to be inappropriate, a bargaining unit comprising such workers across the Company’s seven sites, as proposed by the Company. It is to be noted that neither party suggested that the appropriate unit should consist of workers of the relevant description at the two adjacent sites of Brierley Hill and Colours.
26. The rationale for the Union’s
position was that there was a cohesive group of workers at the Brierley Hill
site, that there were distinct terms and conditions arrangements applicable at
that site only, that harmonisation had not progressed as quickly or as far as
the Company contended, that there were no bargaining arrangements in place
across the Company and that the number of workers in its proposed unit would
not lead to the creation of small fragmented bargaining units. The Company, on the other hand, contended
that it was in the process of implementing a national level of service to
customers that was consistent across the Company, that part of that process was
harmonising the terms and conditions of all, to use the Company’s terminology,
works employees, that many harmonised elements within the terms and conditions
arrangements were already in force, that decisions on pay increases were taken
at Board rather than local level and that separate bargaining arrangements for
Brierley Hill would create internal divisiveness within the Company.
27. The
Panel’s decision has been taken after a full and detailed consideration of the
views of the parties as expressed in their written submissions, their
supplementary submissions post-dating the hearing, and the oral evidence and
argument advanced at the hearing.
28. The considerations that the Panel
has taken into account in reaching its conclusions on whether the
(1) The average hourly rate of pay for
the workers at Brierley Hill and Colours is higher than that at the other five
sites.
(2) Pay increases are determined by a
Board-level remuneration committee after some input from site-level
consultative works councils.
(3) Apart from average hourly rates,
Brierley Hill has its own bonus scheme.
This scheme was not to be eliminated as part of the Company’s initiative
to provide a more uniform bonus.
(4) The Company has harmonised across
all sites some major elements of the terms and conditions package, including
hours, holidays, the disciplinary procedure above site-level, and the provision
of death-in-service benefit and a pension scheme.
(5) Take up of the pension scheme varies
across sites, and no worker at Brierley Hill has to date chosen to take up the
Company’s pension.
(6) While a personal health insurance
scheme applies at other sites, the works council at Brierley Hill opposed its
application and it was not applied there.
(7) There is no company-wide works council
or other company-wide consultation machinery in respect of terms and conditions
of employment. There are only site-level
consultative bodies, including the one at Brierley Hill, with representatives
appointed by the Company rather than elected by the workforce.
(8) While it is possible that the
introduction of collective bargaining at Brierley Hill could have an impact on
pay levels and other aspects of terms and conditions of employment, depending
on what the Company might agree with the
(9) There is a tier of senior management
above site-level, but each site has a local director and to that extent has a
degree of autonomy.
29. In the light of these
considerations, the Panel concludes that on balance the
30. The Panel has also considered the
matters listed in paragraph 19(4) of the Schedule so far as they do not
conflict with the need for the bargaining unit to be compatible with effective
management. Firstly, the Panel has taken
account of the views of the parties as summarised in this decision. Secondly, the Panel finds that there are no
existing bargaining arrangements within the Company. Thirdly, the Panel does not consider that the
adoption of the
Decision
31. The appropriate bargaining unit is
that proposed by the Union, that is, all Machine Operators, Crane Drivers,
Forklift Truck Driver, Slitter Operator, General Labourer and Guillotine
Operator at the Company’s Brierley Hill site.
Professor Roy Lewis
Ken Cameron
Ged Fisher
Appendix
Names of those who attended the
hearing:
Representing the
Neil
Johnson Solicitor
– Rowley Ashworth
Arthur
Emanuel Regional
Organiser
Neil
Jones Employee
- Amada Operator
Derek
Swift Amicus
Observer
Alison
Humphrey Rowley
Ashworth Observer
Representing the Company
Terry
Rahilly Advisor
–
Ron
Hill Chairman
and Chief Executive Officer
Tony
Smith Divisional
Managing Director