Case Number: TUR1/446/2005

28 July 2005

CENTRAL ARBITRATION COMMITTEE

TRADE UNION AND LABOUR RELATIONS (CONSOLIDATION) ACT 1992

SCHEDULE A1 - COLLECTIVE BARGAINING: RECOGNITION

DETERMINATION OF THE BARGAINING UNIT

The Parties:

Amicus

and

Baker Oil Tools

Introduction

1. Amicus (the Union) submitted an application to the CAC dated 7 April 2005 that it should be recognised for collective bargaining by Baker Oil Tools (the Employer) for “Machine Shop; Warehouse; Gofers; Inspection; Toolroom; Maintenance; Welders; Assembly; Labourers and Apprentices” at the premises of Woodside Road, Aberdeen.

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 Kenny Miller, Panel Chair, and as Members, Mrs Maureen Shaw and Mr Bill Speirs. The Case Manager appointed to support the Panel was Sarah Kendall.

3. By a decision dated 16 May 2005, the Panel accepted the Union's application and, as no agreement was reached on the bargaining unit, subsequently invited both Parties 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 13 July 2005 and the names of those who attended the hearing are appended to this decision.

Summary of the submission made by the Trade Union

4. In deciding the above issue the Union reminded the Panel that it should bear in mind the decision of the Court of Appeal in Regina (Kwik-Fit) (GB) Ltd) v. Central Arbitration Committee where guidance was given as to how the CAC ought to determine the bargaining unit. In that case the Court of Appeal held that the task of the CAC was to determine whether the structure proposed by the Union was appropriate for bargaining purposes but the CAC did not have to choose the most appropriate bargaining unit from those submitted to it. It was held that the word “appropriate” was used by the Parliamentary Draftsman to direct the CAC’s attention to whether the bargaining unit it had under consideration was suitable for the purpose of which it was to be used, the Court held that if the CAC concluded that the Union’s unit was appropriate the Panel should stop there. It was made clear that the CAC did not have to conduct a search for the most appropriate unit from among those that were proposed to it. In short, in the Union’s view, the test to be applied is whether the proposed bargaining unit proposed by the Union is an appropriate bargaining unit rather than the most or more appropriate bargaining unit.

5. The Union stated that its proposed bargaining unit consisted of all employees in the machine shop, warehouse, gofers, inspection, tool room, maintenance, welders, assembly, labourers and apprentices. It believed those identified in its proposed bargaining unit to be all of the hourly paid employees within the organisation who were directly employed by the Employer.

6. The Union stated that the workers in the proposed bargaining unit worked in teams which were the basic unit of organisation within the shop floor. The Union contended that there were complete weekly paid employee teams which indicated that it was compatible with effective management for the Employer to deal with groups of hourly paid employees on a day to day basis.

7. The Union stated that the Employer recently consulted with shop floor workers through a works committee that it set up for the purpose of changing the shift arrangements. The Union argued that the Employer managed to deal with this issue without apparent difficulty which suggested that it was not incompatible with effective management for the Employer to deal with hourly paid workers as a distinct group within the company. The Union referred the Panel to CAC case Amicus and Spraymaster Limited TUR1/294/2003 where negotiation rights did not cause problems where they operated in conjunction with a consultative committee and which the Union contended created no conflict.

8. The Union reported that there were no existing local or national bargaining arrangements for those within the proposed bargaining unit. There had in the past been consultation with employee representatives on ad hoc issues arising from time to time but this had never extended to negotiation and had been on an infrequent basis.

9. The Union stated that its proposed bargaining unit constituted all hourly paid workers which was a sizable group and was a logical constituency to choose. The Union stated that the proposed bargaining unit drew a line between office and manual staff and would not result in small fragmented bargaining units. The Union reported that there were several groups of employees who were excluded from the Union’s proposed bargaining unit.

10. The Union stated that several groups of employees working on the shop floor were excluded from the Union's proposed bargaining unit. The Union submitted also that programmers/schedulers fell more naturally into the category of 'office' workers. The Union further submitted that tool stores staff were employed by another group company and therefore they could not be considered as part of this application.

11. The Union stated that the proposed bargaining unit was selected on the grounds that the workers in the bargaining unit operated on similar grades and performed similar types of work, and that all were hourly paid. All of those outside the bargaining unit were monthly paid. The Union contended that hourly paid work was manual and the monthly paid work was office based, technical or administrative in nature. The Union referred to CAC case GPMU and Derwent Information Ltd TUR1/72/2001 stating that there were more fundamental differences in this case given that a larger number of workers would be excluded from the proposed bargaining unit than was the case in Derwent. The different conditions in weekly and monthly paid could not be incompatible because the Employer was already managing two different groups of workers effectively.

12. The workers in the proposed bargaining unit all wore the same uniform – a boiler suit or shirt and trousers with the company logo on it. All other staff were not required to wear a uniform, but instead wore “office clothes”. This was one of the factors which formed the basis for the workers’ own identification within the company of two distinct groups. The Union asserted that the Company’s policy with regard to uniforms supported the distinction between hourly paid staff and salaried staff.

13. The Union stated that workers in the proposed bargaining unit worked a three shift system. The assembly department’s shift patterns were slightly different but it was still a three shift system. With the exception of programmers and schedulers, no monthly paid employees worked shifts. The programmers and schedulers had traditionally worked shifts but it seemed that they were going to become day shift workers only. It was considered that programmers and schedulers had other characteristics which mean that they were best placed with the other monthly paid workers rather than with the hourly paid workers.

14. The Union argued that Foremen should not be included in the bargaining unit as they had supervisory responsibility which included counselling workers regarding disciplinary proceeding and were able to initiate disciplinary action against workers with the assistance of Human Resources although the responsibility for issuing warnings etc lay with Human Resources or the Production Manager. The Union also concluded that the Foremen were not manual workers as they wore business suits. The Union referred to CAC case TUR1/367/2004 UNIFI and The Cyprus Popular Bank Limited trading as Laiki Bank which supported this view that management should not be included in the appropriate bargaining unit.

15. The Union understood that hourly paid employees had overtime and fixed hours, whereas the monthly paid employees had flexi-time and no overtime. The monthly paid staff received a one hour lunch break whereas the hourly paid employees received a 20 minute lunch break. It was the Union’s understanding that the monthly paid staff received different sickness benefits to those on the shop floor. The workers in the proposed bargaining unit all worked in the Company’s Bridge of Don site.

16. The Union stated that workers in the proposed bargaining unit worked separately to the monthly paid employees except a few programmers and schedulers who worked from an office on the shop floor who were already excluded from the proposed bargaining unit based on their terms and conditions, status and their identification within the organisation.

17. The Union asserted that monthly and hourly paid employees, for the most part, were so separate that one union member had observed that there were some office employees that the hourly paid employees did not even recognise. The Union submitted that the Employer had set great store by the team ethos within the company. The Union acknowledged that the teams interlinked between those workers included and those excluded from the proposed bargaining unit. It argued that a secretary worked very closely with their manager and although this close relationship was a factor to be considered there was a hierarchy of responsibility such as to make this grouping an inappropriate bargaining unit. This was very much the case with the Employer’s proposed bargaining unit. The Union claimed that the workers themselves chose the Union’s proposed bargaining unit, and that it was triggered by the Employer instigating shift pattern changes. It was this and overtime rates that started this process. The workers in the proposed bargaining unit have interests which were not shared by those outside of the proposed bargaining unit.

Summary of the submission made by the Employer

18. The Employer submitted that the appropriate bargaining unit should be “All Staff in the dedicated Manufacturing Department who undertake a Manufacturing role with the exclusion of Senior Management”. The Employer provided a very detailed and comprehensive breakdown of the categories of workers within the company’s divisions and sub-departments. The Employer submitted that the bargaining unit proposed by the Union, which was confined to most hourly paid staff, was not compatible with effective management. It agreed with the Union that certain categories of workers should not be included in the appropriate bargaining unit. The Employer agreed that the Manufacturing Services Supervisor should not be within the bargaining unit as he performed a role more consistent with management. It further stated that the Quotation Specialists worked independently and should be excluded from the appropriate bargaining unit and this was also the case for the Quality Assurance Engineers due to the independent nature of their particular role. The Union’s proposed bargaining unit comprised the following categories:

Production Operator

Production Welders

Production Labourers

Production Apprentices

Production Apprentice Trainer/Operator

Production Service Shop Warehouse Person

Production Service Shop Goods Inward Clerk

Manufacturing Support Tooling Operators

Quality Control Inspectors

Quality Control Calibration

Quality Control Inspector Team Leaders

Order Completion Warehouse Person

Order Completion Assembly Operators

Order Completion Assembly Team Leaders

HSE/Maintenance/Facilities Labourers

HSE/Maintenance/Facilities Technicians (Mechanical)

HSE/Maintenance/Facilities Technicians (Electrical)

19. The Employer stated that for the appropriate bargaining unit to be compatible with effective management it would need to be widened to include the following categories:

Production Foreman

Production Service Shop Senior Analyst

Manufacturing Support Production Engineers

Manufacturing Technical Support Planner

Manufacturing Schedulers

Manufacturing Schedulers Supervisor

Order Completion Shipping Warehouse Person

Order Completion Inventory Control Analyst

Order Completion Export/Import Co-ordinators

Order Completion Buyers

Order Completion Support Analyst

Order Completion Senior Analyst

Order Completion Customer Support Supervisor

Order Completion Department Assistant

Order Completion Assembly Supervisor

Order Completion Shipping Controller

Order Completion Distribution Superintendent

Order Completion Warehouse Supervisor

Order Completion Co-ordinator

HSE/Maintenance/Facilities Maintenance Foreman

HSE/Maintenance/Facilities Maintenance Superintendent

HSE/Maintenance/Facilities Training and Safety Engineer

20. The Employer reported that it was embracing an all for one culture. The Employer had since 2003 had in place an established Employee Representative Forum known as the “Communication Group”. The Communication Group was elected to provide a forum at which a free exchange of views on all matters of company wide interest and operating efficiency of the enterprise could be discussed and exchanged. This had included issues such as flexi-time, safety, facilities on site and the “9 day fortnight”.

21. The Communication Group was attended typically by the General Manager, Production Manager and Human Resources Manager. The Group met on average every 2 months with the Representatives meeting prior to the full meeting to agree the Agenda they wished to discuss. Each Department had at least 1 Representative on the Communication Group with larger Departments having at least 2 Representatives. Department Representatives served a term of 2 years, which could be extended. The election of representatives to the Communication Group was by nomination, and from then on by vote if required. The Employer stated that the Communication Group discussed issues which affected all Employees, a complete Department or a group of Employees within the facility but acknowledged that this forum had limitations as policy issues could not be issues for discussion.

22. The Employer explained the role of the Works Committee which was separate to the Communication Forum. This was a short-life consultation group solely set up regarding the Employer’s move to a three shift pattern. It was made up from all affected parties both hourly and monthly paid. It involved a three month consultative process where all relevant issues were discussed over this period. Further, the Employer stated that a sub group was set up to look into start and finish times for hourly paid staff. Hourly paid workers wanted to work one Sunday in six as opposed to two Sundays in Six. They were entitled to an hour lunch break but after discussions and consultation a 20 minute lunch break was agreed which enabled the workers to achieve their goal of working only one Sunday in six.

23. The Employer argued that to apply the Union’s proposed bargaining unit that only hourly paid staff should be within the appropriate bargaining unit was a far too simplistic approach and did not pay any regard to the team work required and the fact that hourly and salaried staff were required to work in close co-operation in order for the company to function efficiently. If such an approach was taken it would mean that the Employer would no longer be able to effectively manage each of the Divisions.

24. The Employer stated that prior to a way of working based on teams an individual would follow a tool from silo to silo and if there were problems the tool would become held up and parts would take longer which would have implications on customer service and ultimately productivity. The Employer described its vision and the improvements that would be put into operation over time based upon a team approach. It stated that the proposed changes being implemented now were of a physical nature; moving machines onto the shop floor and repositioning them. The Employer stressed that it wanted to put the resource where the bottlenecks were and to achieve that staff needed to become more versatile. Teams were required to adapt quickly so as to operate flexibly when product requirements changed quickly. The Employer claimed that Foremen acted as a link between team members and other departments / cells and encouraged cradle to grave operations.. The role of foremen was changing from a command and control approach to one where they helped ensure that the teams operated in a self-directed manner. Appropriate training was being provided to bring this about. This would ultimately result in teams being aware and able to identify bottlenecks and could organise themselves so they were able to deal with and manage tasks quickly.

25. The Employer stated that although the coaching role was under way the development and implementation would take time, maybe a few years since it is a long term plan.

26. The Employer conceded that to realise its vision could take a number of years but claimed that there had already been an increase in productivity from 46% to 90%. The Employer stated that it was trying to promote a culture where the teams would be multi-skilled and would for example carry out basic maintenance on machinery rather than rely on the maintenance experts; maintenance would be part of the teams/cells in the future. Individuals were encouraged to develop and learn new skills in operating different machinery. Overtime was offered to work the machines and in addition this was how individuals earned performance pay. The Employer stated that it was developing, within the teams, champions for four key areas: safety, quality, delivery and value and it would be implementing a template assessment – questions designed to identify where the cell is in terms of its development/progress. These would be applied by 12 assessors, mainly operators. A champion would then identify areas for improvement and would work with the team/cell to achieve this.

27. The Employer stated that the bargaining unit as suggested by the Union seemingly appeared to make a very simple distinction between weekly paid and monthly paid staff. The Employer claimed that to draw this distinction was too simplistic as not only were the roles clearly interlinked as stated above, but most other terms and conditions of employment were the same. When the Employer considers the workers terms and conditions (including pay, hours and holidays) it did not have in mind whether a worker is hourly or weekly paid, simply the nature of the role. Neither did it agree with the Union’s term of manual worker. Workers in the proposed bargaining unit need to keep abreast of changes and technological advances. The machinery used by the workers is high tech some can be operated manually but some require programming – some programmes being more sophisticated than others require programming offline and the job is sent to the machine later. Some workers sit at a PC and others stand up. The Employer addressed the Union’s view that wearing a uniform was an additional marker identifying individuals as different from monthly paid workers by stressing that uniforms were not intended to categorise a group of workers; those workers who wore uniforms did so for protection.

28. The Employer stated that the division of weekly and monthly paid staff were for costing reasons and that the job determined what band a member of the workforce would be in and therefore whether they were weekly or monthly paid. The work completed by weekly paid staff was linked to unit costing and the cost of the workers time was put onto the customer. This was closely controlled by the hour and weekly paid staff were required to clock in. Monthly and salaried staff were working in a process, this was something that benefited the whole company.

29. Although there are different rate bands in operation for weekly and monthly paid staff, all Employees had their grades and bands determined by the Salary Management System. The Salary Management System was run from the Company’s Headquarters in Houston and looked at all the relevant market data. Decisions on what increase should be made to the bands were made on market forces and not on whether an employee was paid weekly or monthly.

30. The Employer stated that the bonus system which was introduced in January 2005 was applicable to all workers, with the exception of the top level of management. Under the Bonus Scheme all workers would receive a 3% bonus if the Employer hit its specified target. If the Employer failed to reach target there was an entry level bonus which was applicable to all workers and which was worked out as a percentage of the performance level the Employer should have reached. A percentage was then paid of the 3% which would have been due if the Employer had reached target.

31. The Employer recognised that the pay and bonus systems needed to be addressed before it could realise the potential of the proposed changes and that it could not build teams who were on different benefits and whether the changes were affected by the Employer or Union recognition differences will be stamped out.

Considerations

32. The Panel is required, by paragraph 19(2) of the Schedule, to decide whether the proposed bargaining unit is appropriate and, if found to be not appropriate, to decide in accordance with paragraph 19(3) a bargaining unit which is appropriate. In deciding an appropriate bargaining unit the Panel must take into account, in accordance with paragraph 19B(2), 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. Those matters 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 proposed bargaining unit and of any other employees 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”. This decision has been arrived at after careful consideration of the views of both Parties as expressed in their written submissions and amplified at the hearing.

33. A critical question for the Panel is whether, in accordance with paragraph 19B(2)(a) of the Schedule, a bargaining unit comprising of “Machine Shop; Warehouse; Gofers; Inspection; Toolroom; Maintenance; Welders; Assembly; Labourers and Apprentices” at the premises of Woodside Road, Aberdeen is compatible with effective management. The rationale for the Union's position was that its proposed bargaining unit covered a coherent group of staff.

34. The workers in the Union’s proposed bargaining unit were a homogenous group of workers who enjoyed similar terms and conditions of employment and rates of pay. This group of workers are skilled manual workers paid by the hour on a weekly basis who are rewarded the same rates of overtime as opposed to the office workers who are paid on a monthly basis and generally do not work overtime though the Panel does recognise that some monthly paid individuals assist the teams within the proposed bargaining unit and receive overtime. Benefits that are available to the Employer’s workforce are not streamlined and level of benefits, particularly sick pay, for the workers who fall in and those outside the proposed bargaining unit differ markedly. The workers in the proposed bargaining unit wear protective clothing albeit a boiler suit or shirt and trousers with the company logo emblazoned upon it, monthly paid workers wear office attire suggesting that there are two distinct groups of workers.

35. The Panel recognises that the Employer has made considerable changes to the structure of the organisation and is in the process of implementing a cradle to grave system based upon a team ethos which involves initiating a significant cultural shift within the company. The Panel understands the motivation behind the Employer’s proposed bargaining unit but also recognises, as the Employer fairly conceded, that that there are major differences in terms and conditions, for example, the regulation of benefits, performance related pay and bonuses.

36. The Panel applauds the Employer on its vision for change and its genuine dedication to team building. It is clear that the Employer has already enjoyed considerable success in achieving an empowered, multi skilled workforce and nurturing a team ethos. But by the employer’s own admission there is still some distance to travel. It is the view of the Panel that if the Union’s proposed bargaining unit were applied it would not prevent the employer’s team approach from developing further. The Panel has heard no evidence that supports the view that the differences of weekly and monthly paid has had a negative impact on effective management. Accordingly, the Panel believes that the Employer’s team ethos approach is not, as yet, sufficiently embedded in the company to negate the Union’s proposed bargaining unit. Neither, in the Panel’s view, would the Union’s proposed bargaining unit fragment the workforce since a clearly identifiable, cohesive and sufficiently large group of workers would remain outside the proposed bargaining unit.

37. In the light of these considerations, the Panel has come to the conclusion that the Union’s proposed bargaining unit is an appropriate unit. The Panel is satisfied that the bargaining unit proposed by the union is compatible with effective management and that there are enough and sufficient differences between hourly paid and monthly paid staff to enable us to hold that it is appropriate to exclude this latter group from the unit. The Panel has tested the Union’s proposed bargaining unit against the Employer’s arguments and finds that the Union’s proposed bargaining unit is compatible with effective management and is an appropriate bargaining unit.

Decision

38. The Panel's decision is that the appropriate bargaining unit is that specified by the Union in its application, namely for “Machine Shop; Warehouse; Gofers; Inspection; Toolroom; Maintenance; Welders; Assembly; Labourers and Apprentices” at the premises of Woodside Road, Aberdeen.

Panel

Professor Kenny Miller

Mrs Maureen Shaw

Mr Bill Spiers

28 July 2005

Appendix

Names of those who attended the hearing:

For the Trade Union

Alison Humphrey Solicitor, Rowley Ashworth

Gordon Samsom Regional Officer, Amicus

For the Employer

Jason French Williams Solicitor, Eversheds

Sandy Wotherspoon

Allan Robertson

For the CAC

Sarah Kendall Case Manager

Vicky Oxley Case Support