Case Number:
TUR1/541/(2006)
13 February 2007
CENTRAL
ARBITRATION COMMITTEE
TRADE UNION AND LABOUR RELATIONS
(CONSOLIDATION) ACT 1992
SCHEDULE A1 -
COLLECTIVE BARGAINING: RECOGNITION
DECISION ON
WHETHER TO ACCEPT THE APPLICATION
The Parties:
National Union of Journalists (NUJ)
and
The Local Radio Company Ltd
Introduction
1. The NUJ (the Union) submitted an application to the CAC
dated 14 November 2006 that it should be recognised for collective bargaining
by The Local Radio Company Ltd (the Company) for a bargaining unit described in
the following terms: “Staff journalists and the four most regularly used
contract freelances employed in newsrooms in York, Scarborough, Harrogate and
Huddersfield.” The CAC gave both parties
notice of receipt of the application on 16 November
2006. The Company submitted a response to the CAC
on 21 November 2006 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 deal with the case. The Panel
consisted of Professor Linda Dickens, Deputy Chairman, and, as Members, Mr D
Crowe and Mr R Purkiss. The Case Manager
appointed to support the Panel was Sarah Kendall and, for the purposes of this decision,
Simon Gouldstone.
Issues
3. The Panel is required
by the Act to decide whether the Union’s application to the CAC is valid within the
terms of paragraphs 5 to 8; is made in accordance with paragraphs 11 or 12; is
admissible within the terms of paragraphs 33 to 42 of Schedule A1 to the Act;
and therefore should be accepted.
4. In its response to the CAC, the Company made the following
comments:
a) It had no information
regarding the membership of the Union.
b) It believed that there
were six employees in the proposed bargaining unit compared with the Union’s estimate of nine. The
Company had issued 13 consultancy agreements in respect of 10 freelances (who
may have an agreement with more than one radio station) for the provision of
services on an as and when required basis.
Freelances were paid on the submission of an invoice and were not
defined as employees.
c) Each radio station was
a limited company and operated on a geographically separate site.
d) Each radio station was
autonomous and the proposed bargaining unit was proportionately small compared
with the total number of employees in all the individual limited companies.
Membership and Support Check
5. To assist the determination of two of the admissibility
criteria specified in the Schedule, namely whether 10% of the workers in the
proposed bargaining unit are members of the
union (paragraph 36(1)(a)) and whether a majority of the workers in the
proposed bargaining unit would be likely to favour recognition of the union as
entitled to conduct collective bargaining on behalf of the bargaining unit
(paragraph 36(1)(b), the Panel proposed a check to be undertaken by the Case
Manager of the level of union membership within the proposed bargaining
unit. The parties agreed that the
Company would supply to the Case Manager a list of the names of workers within
the proposed bargaining unit and that the Union would supply to the Case
Manager a list of union members within that unit to enable a comparison to be
undertaken. It was explicitly agreed
with the parties that, to preserve confidentiality, the information provided by
one party would not be copied to the other.
The agreed arrangements were confirmed in a letter dated 30 November 2006 from the Case Manager to both parties. The Case Manager received the information
from both parties on 1 December 2006.
6. The Union provided a list of eight
members in the proposed bargaining unit.
The Company provided two tables. One was a list of employees at each
radio station with the journalists specifically identified. The list comprised
each employee’s full name and address, and the station at which they worked.
The second table was a list of freelances with the person’s full name and
address, their station and the date of expiry of their freelance agreement.
Again, the journalists were specifically identified. In the information provided by the Company,
the total number of employees listed was 42, of whom seven were journalists. It
was further stated that two of the journalists had given notice of resignation,
their last working day being 22 December 2006. In the information
relating to freelances, there were 40 freelance agreements listed. However,
some of those individuals listed held agreements with more than one station.
Seven individuals were identified as being journalists. The Company was unable to separately
identify, in accordance with the Union’s proposed bargaining unit, which individuals were “the four most
regularly used” contract freelances employed in newsrooms in York, Scarborough, Harrogate and Huddersfield. For the purposes of the
check the number of workers given by the Company as falling within the Union’s proposed bargaining unit
accordingly included all those individuals who were identified as both contract
freelance journalists and employee journalists.
7. The result of the membership check was that there were 14
workers in the Union’s proposed bargaining unit of whom eight were members of
the Union; a membership level of 57.14%.
8. The Case Manager’s report of the result of the check was
circulated to the parties and the Panel on 8 December
2006. The Union responded in a letter dated
11 December 2006 stating that it trusted a
membership level of 57% was sufficient for the CAC to accept the
application. It further commented that
it was inappropriate for the Company to supply the names of seven freelances;
these workers did casual shifts so it would be a simple process for the Company
to find the four who had worked the most regularly in recent months. It also
disputed the Company’s statement that it employed seven, rather than six, staff
journalists in the newsroom in question. In view of those factors, it believed
the true membership level was 80%. The
Company responded in a letter dated 12 December
2006. It stated that it did not accept that members
of the union constituted 10% of the workers in the proposed bargaining unit as
the numbers included self-employed individuals who were not defined as
“workers” as they had no mutuality of obligation. It also stated that it remained
of the opinion that each business was a stand alone business for the purpose of
collective bargaining and therefore the majority of employees within the stated
bargaining unit would not vote in favour of recognition.
9. In view of the issues raised in the Union’s application, the
Company’s response, the Case Manager’s report of the membership check and the
parties’ comments on that check, the Panel decided to arrange a hearing to
enable it to hear evidence as to whether the Union’s application should be
accepted. At this point, Professor
Gillian Morris was appointed as Panel Chairman in view of Professor Dickens’
non-availability.
10. On the instructions of the Panel, the Case Manager wrote to
the parties on 9 January 2007 with details of the
arrangements for the hearing and to invite their written submissions on any
issues they wished to address in relation to whether the Union’s application should be
accepted. In addition to any other
points that the parties wished to make, the Panel asked the parties
specifically to address three groups of issues raised in the
documentation. These were as follows:
a) Whether all or any of
the newsrooms specified in the Union’s application to the CAC were separate
legal entities and, if so, who were the shareholders in each company and what
was the relationship of each company to the others and to the Local Radio
Company Ltd;
b) The identity of the
employer of the workers in the Union’s proposed bargaining unit; and
c) Whether the contract
freelance staff were ‘workers’ within the definition in s 296 of the 1992 Act.
The Panel also requested
that the Union should address the issue of how “the four most regularly used contract
freelances” were to be identified for the purposes of paragraph 36 of Schedule
A1 to the Act.
11. To assist the parties, the Case Manager supplied them with an
opinion given to the CAC by John Bowers QC, acting as amicus curiae, in relation to the case of GPMU & Derry Print Ltd and John Brown Printers Ltd (TUR1/113
& 115/(2001). For the sake of completeness the parties were
also supplied with a copy of the CAC decision in that case dated 17 January 2002, although it was made clear to the parties that the
decision of one CAC Panel does not bind another. The parties were also provided with two extracts
from the 1992 Act, namely paragraph 2 of Schedule A1 to the Act and section 296
of the Act.
12. The hearing took place in London on 7 February 2007 and the names of those who attended are appended to
this decision. Prior to the hearing, the
parties supplied the Panel with, and exchanged, written submissions.
The hearing
13. At the beginning of the hearing, the Panel Chairman explained
that on the basis of the written submissions there appeared to be common ground
between the parties that the four newsrooms in the Union’s proposed bargaining unit
were separate legal entities. The parties confirmed that this was the case. The
Panel Chairman then referred the parties to Mr Bowers’ opinion that, to be
accepted, an application for statutory recognition could only be submitted in
respect of a single employer. She asked the parties whether they wished to
contest this conclusion. The parties confirmed that they did not. The Panel
Chairman then explained that, in the light of this, the Panel intended to invite
the parties to make initial submissions on the issue of whether the Union’s application related to a
single employer. The Panel would then adjourn to decide that issue and would
communicate its decision orally to the parties. If the Panel decided that the
application did relate to a single employer it would proceed to invite
submissions on the remaining issues relevant to the acceptance stage of the
application. If it decided that the application did not relate to a single
employer, the application would not be accepted.
Summary of the submissions made by the Union
14. The Union stated that it was important to explain the
background to its application to the CAC. The Union had been approached by
members at four radio stations: Home FM (Huddersfield), Stray FM (Harrogate), Minster Sound Radio
(York) and Yorkshire Coast Radio (Scarborough). These members had been
told that the Company was going to pool the news rooms at these stations into
one “news neighbourhood” or “news hubbing” operation covering all four
stations, whereby one journalist, on a rota basis, would provide a news service
to all four stations. The Union members
had not been consulted on this measure, which they regarded as a substantial
change in their terms and conditions of employment. As a result, five
journalists submitted an individual grievance.
The grievances were heard together by a panel of three: Mr Vetti,
described by the Union as Regional Programme Controller, Mr Carter, described as Group Head
of News, and Mr Booth, described as Regional Managing Director. The Union said that in the event the
Company decided that the news “hubbing” operation should be introduced only at
weekends and some of the journalists received a pay increase.
15. The Union submitted that, despite being separate legal
entities, the four radio stations were operated, in reality, by a single
employer, which was the Company. It
submitted that this was demonstrated
by the way that the grievances
referred to in the paragraph above had been handled. Firstly, all the grievances were heard at
the same place by the same people and were effectively handled as a
‘collective’ issue. Secondly, the panel
hearing the grievances comprised two regional managers and one manager from the
Company’s headquarters in High Wycombe. Thirdly, there was one outcome which was
applied across the four stations, namely news “hubbing” at weekends only, and
pay increases for certain individuals at the various stations. The Union submitted that it had
therefore been shown that the Company could dictate what happened at the local
radio stations. It submitted that the line management system for all four radio
stations ran through Minster Sound Radio (with news editors on the other three
stations reporting to staff based in York), up to the Company
centrally.
16. The Union submitted that there was other evidence of
the Company exercising control over the subsidiary companies consistent with
there being, in reality, a single employer.
The Company had provided with its
written submission a copy of a statement of terms and conditions of employment
relating to an employee at Huddersfield FM and a statement of particulars of
employment relating to an employee at Yorkshire Coast Radio. At the hearing the
Union sought to submit in
evidence a statement of particulars of employment relating to employment at
Minster Sound Radio. The Company said
that it had no objection to this statement being admitted in evidence and the
Panel Chairman therefore agreed that it could be. The Union compared the statement
relating to Minister Sound Radio with that relating to Yorkshire Coast Radio
and maintained that they were almost
identical, including an opt-out from the maximum weekly working time set out in
the Working Time Regulations. (The Union submitted that the
statement relating to employment at Huddersfield FM was no longer current.) In
addition, the Union pointed out that details of the disciplinary and grievance procedures
were contained in a handbook which included, for example, a facility for employees
to take grievances ultimately to the Chief Executive of the Company. The Union stated that job
descriptions were also issued in a standard form; those attached to the
statements relating to employment at Minster Sound Radio and Yorkshire Coast
Radio were each headed “The Local Radio Company PLC” rather than giving the
name of the radio station at which the employee worked. Finally it stated that
the statement relating to Minister Sound Radio provided that, although the
employee’s usual place of work was at Minster, the employee could be required
to work “at any station owned by the Local Radio Company”. The Union submitted that this
reinforced its argument that the Company, and not the local stations, was the
employer.
17. The Union also explained that there was a close link
between the ownership of the local stations and the Company. Of the four radio stations in question, their
ownership was split between the Local Radio Company itself, Radio Investments
Ltd and Minster Sound Radio Ltd. In
practical terms, there appeared to be a strong element of direction from the
Company to its subsidiaries, with line management operating through a regional
structure. The Union cited GPMU & Derry Print Ltd and John Brown Printers Ltd as an example of the way that the ‘corporate
veil’ could be lifted to reveal the true way in which a company was structured
and managed. When asked by the Panel whether it wished to submit that all 27
radio stations within the corporate group were operated by a single employer,
or only the four that were referred to in its application, the Union stated
that it could not comment on all the radio stations but that for the reasons it
had provided these four were operated by a single employer.
18. In conclusion, the Union submitted that there was
one employer, the Company, and that its application should therefore be allowed to proceed.
Summary of the submissions made by the Company
19. The Company submitted that it owned a total of 27 radio
stations throughout the UK, some of which had been
bought as going concerns. Each company was a separate legal entity and a
separate employer for the purposes of the Act.
The fact that they may be associated employers did not mean that they
constituted a single employer. Each of the four radio stations referred to in
the application was registered at Companies House; filed its own accounts;
entered into its own leases and other property agreements; owned its own
equipment and other assets; had its own budget and management structure; and
handled its own staffing issues such as recruitment, discipline, pay and hours
of work. There were no cross-subsidies
between the radio stations, they did not share equipment, and an individual
station threatened with closure would not be supported by others within the
group or by the Company itself. An individual who moved between stations would
be given a P45 and if employees of one station were facing redundancy and
positions were available in other stations, those employees would be required
to apply for such positions in open competition with external candidates. The
Company stated that each station was a separate company due to the nature of
the industry, not in order to avoid employment legislation. Ofcom awarded
licences to each station, not to the Company centrally, and, in some cases,
there was a local board of directors drawn from a radio station’s catchment
area. The Company denied that the weekend “hubbing” operation constituted a
sharing of facilities by stations. An individual journalist would go to the
station at which he or she worked to read the news; they were not required to
go to other radio stations. Participation in “hubbing” was voluntary on the
part both of the radio stations and of the journalists themselves.
20. The Company explained that local radio stations could
purchase services from elsewhere in the group.
For example, local stations were free to use, or not to use, the
services of the central human resources (“HR”) function at High Wycombe (whose staff were employed
by Radio Services Ltd) on staffing issues. The HR department had a template for
contracts of employment but it was for the local management to determine what
the terms should be and individual stations were free to obtain their HR advice
elsewhere and not to use the handbook of policies and procedures that the HR
department had produced. The Company said that contracts of employment supplied
to staff contained significant differences. Similarly, job descriptions were
written by managers at the individual stations, although the HR department
could assist with this. In response to the Union’s evidence that the statement
relating to employment at Minster Sound Radio included a requirement to work at
any radio station owned by the Company, the Company said that such a provision
had never been used and it had no intention of using it. It was unable to
explain how it had come to be present in the statement.
21. The Company rejected the Union’s assertion that the method
of handling the five grievances described in paragraph 15 above supported the Union’s contention that all four
radio stations were operated by a single employer. The grievance procedure in
the handbook provided for a grievance to be heard in the first instance by the
manager at the station, unless he or she was involved in the matter. As each
radio station employed a small number of staff, there were often practical
problems in providing further stages in
the grievance procedure which allowed for the consideration of grievances by an
independent person at the radio station.
In such cases, it sometimes happened that it was appropriate for a
grievance to be heard by a manager from another station or the Company’s
headquarters. In the case in question, all five staff raising a grievance had
sent a letter directly to a manager they perceived as having ‘regional’
responsibilities rather than their own line manager and had therefore by-passed
the first stage of the procedure. This was the first time that grievances had
been dealt with in the first instance at regional level. Each grievance had been heard individually.
The fact that each grievance was heard by the same three-person panel was
designed to ensure consistency and did not constitute an acknowledgement by the
Company that there was a collective grievance against it. The Company stated
that the pay increases proposed by that panel in respect of certain individuals
took the form of a recommendation to their employer. By way of clarification, the Company
explained that it was erroneous on the part of the Union to describe Mr Vetti and Mr
Carter as ‘regional’ managers. They were
both employed by individual radio stations but offered professional expertise
by way of advice and guidance, respectively in the areas of programming and
sales, to other stations. That was
undertaken on the basis that those other stations could choose whether or not
to avail themselves of those services and no financial consideration passed
between the stations. There was no
‘regional’ line management of the individual radio stations.
22. The Company accordingly asked the Panel to decide that the
employers of the individuals in the proposed bargaining unit were the four
local radio stations and not the Company, and that, in consequence, the Union’s application should not be
accepted.
Considerations
23. As indicated in paragraph 13 above, it is common ground
between the parties that each of the radio stations is a separate legal entity.
Paragraph 2 of Schedule A1 to the Act states that “[r]eferences to the employer are to the
employer of the workers constituting the bargaining unit concerned.” Paragraph 4 states that the union or unions
seeking recognition “must make a request for recognition to the employer”.
Neither party disputed the terms of Mr Bowers’ opinion that, to be
accepted, an application for statutory recognition must be
submitted in respect of a single employer who is the employer of the workers in
the proposed bargaining unit. The first issue for the Panel, therefore, was
whether the application in this case had been made to a single employer who is
the employer of the workers in the proposed bargaining unit. The Panel has
considered carefully the written and oral submissions of the parties.
24. The Panel accepts that, as well as being a separate legal
entity, each radio station is financially and operationally autonomous. Each enters into leases for its own premises,
purchases and maintains its own equipment, and recruits its own staff. Contracts of employment are between an
individual member of staff and a radio station. The Panel regards these factors
as persuasive indicators that each radio station is a separate employer.
25. The Union submitted that the
introduction of the news “hubbing” operation was an indicator that the Company
had exercised a managerial right to implement a process across four radio
stations. In response, the Company
explained that the new operation did not entail a journalist working at any
location other than their normal place of work, and that participation on the
part of the journalists, and of the radio stations themselves, in the “hubbing’
operation was voluntary. The latter
point was not challenged by the Union and the Panel does not regard this operation
as inconsistent with each radio station being an employer. The Union argued that the provision
in the statement of particulars relating to employment at Minster Sound Radio
that the individual could be required to work at any station owned by the
Company pointed to the Company being the employer. However the Panel does not
regard the presence of such a provision as sufficient, of itself, to determine
that the Company is the employer.
26. The Company stated that certain services were available to
individual radio stations from other companies within the group. For example, the radio stations may choose to
use the central human resources function, staffed by employees of Radio
Services Ltd, and some senior radio
station staff, such as Mr Vetti and Mr Carter, provide assistance to other
stations. The Company further explained
that, in order to provide a grievance
procedure that complied with statute, individual radio stations need to involve
managers from other stations in order to provide an independent appeal stage. There is therefore a degree of interchange
between the radio stations themselves and between the radio stations and Radio
Services Ltd. The Panel does not find this inconsistent with each radio station
being a separate employer. The Panel accepts that the grievance described in
paragraphs 15 and 21 above was, exceptionally, dealt with from the beginning at
a level beyond the individual radio station. In the circumstances in question
the Panel does not find this inconsistent with each radio station being a
separate employer
27. The Panel’s conclusion is that the employer of the
individuals in the Union’s proposed bargaining unit is the radio station at which the
individual works and not the Company. It
therefore follows that the Union’s request for recognition has not been made
to the employer of the workers in the proposed bargaining unit.
Decision
28. For the reasons given above, the Panel’s decision is that the
application is not accepted by the CAC.
Gillian Morris
David Crowe
Bob Purkiss
13 February 2007
Appendix
Names of those who attended
the hearing
For the Union:
Ms J Lennox Assistant Organiser, NUJ
Mr M Barter Former Northern
Regional Organiser. NUJ
For the Company:
Mr D Smith Employment Law
Adviser
Mr M Vetti Programme
Controller, Minster FM
Mrs L Wells Company Secretary,
The Local Radio Company Ltd
Mrs F McCarthy Head of Human Resources,
The Local Radio Company Ltd