Decision

Bargaining Unit Decision

Updated 22 May 2024

Applies to England, Scotland and Wales

Case Number: TUR1/1336 (2023)

22 May 2024

CENTRAL ARBITRATION COMMITTEE

TRADE UNION AND LABOUR RELATIONS (CONSOLIDATION) ACT 1992

SCHEDULE A1 - COLLECTIVE BARGAINING: RECOGNITION

DETERMINATION OF THE BARGAINING UNIT

The Parties:

Communication Workers Union

and

Saab UK Ltd

1. Introduction

1)         The CWU (the Union) submitted an application to the CAC on 7 June 2023 that it should be recognised for collective bargaining by Saab UK Ltd (the Employer) for a bargaining unit comprising the “Development & Customer Solutions Team: Software Engineer- Solutions & Test Engineer- Scrum Master- Solution Architect- Technical Lead- Lead Engineer. Service & Delivery Operations Team: Commissioning & Support Engineer- Project and Service Engineer and Project Management Team”.  The CAC gave both parties notice of receipt of the application on 8 June 2023.  The Employer submitted a response to the CAC dated 13 June 2023, 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 Chair established a Panel to deal with the case.  The Panel consisted of Ms Naeema Choudry, Panel Chair, and, as Members, Mr Alastair Kelly and Mr Paul Morley.  The Case Manager appointed to support the Panel was Kaniza Bibi.

3)         By a decision dated 10 July 2023 the Panel accepted the Union’s application. The parties then entered a period of negotiation in an attempt to reach agreement on the appropriate bargaining unit. As no agreement was reached, 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, which the parties duly did. The Employer also provided a bundle of documents of 190 pages to accompany their submissions. A hearing was held on 10 May 2024 and the names of those who attended the hearing are appended to this decision.

4)         The Panel is required, by paragraph 19(2) of Schedule A1 to the Act (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. 

5)  The matters listed in paragraph 19B(3) are:

(a)   the views of the employer and the union (or unions);

(b)  existing national and local bargaining arrangements;

(c)   the desirability of avoiding small, fragmented bargaining units within an undertaking;

(d)  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

(e)   the location of workers.

6) 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 it considers would be appropriate.

2. Summary of the submissions made by the Union

7)         The Union confirmed that the proposed bargaining unit comprised of the following job roles in the Development & Customer Solutions Team: Software Engineer, Solutions & Test Engineer, Scrum Master, Solution Architect,    Technical Lead, and Lead Engineer. And in the Service & Delivery Operations Team: Commissioning and Support Engineer, Project & Service Engineer, and Project Management Team. When asked by the Panel which roles came under the Project Management Team, the Union confirmed that the roles of Product Earners and Customer Success Managers and that no other roles had been omitted.

8)         The Union outlined the reasons as to why it believed the  bargaining unit it had proposed was compatible with effective management and met the other requirements of paragraph 19B of the Schedule. The Union stated that the Employer was organised and split its workers into five entities namely Public Safety (PSS), Dynamics, Sensors, Seaeye and BlueBear. It explained that Seaeye and BlueBear were pre-existing companies acquired by Saab; Seaeye in 2007 and BlueBear in 2023. The Union also submitted that Seaeye remained separately registered at Companies House with its own separate directors and that Saab UK was a major shareholder in Seaeye, owning 75% of the company. The Union explained that Saab UK owned 100% of BlueBear and staff remained on contracts unique to these businesses, retaining existing terms and conditions. The Union gave the example of working hours and holidays still being different to those in the rest of Saab UK.

9)         The Union stated that in terms of business sectors, the main Public Safety customers were in the emergency sectors, primarily the police and fire brigade and Sensors, which focused on radar and surveillance equipment, was mainly for military applications.  The Union also said that Dynamics was also mainly military in focus, that Seaeye manufactured underwater robotics and BlueBear manufactured automotive drones for land, sea, and air.

10)       The Union explained that Public Safety was unique in that it was  the only division in the group fully based in software and that all the other businesses contained an element of manufacturing as well as software design. The Union said that there was no collaboration between Public Safety and other areas of Saab UK on a day-to-day basis. The Union confirmed that Public Safety had its own group of unique customers, its own products and functions including product management, sales, software development, testing and customer support.

11)       The Union stated that whilst Public Safety employees had grade titles similar to Technical and Engineering grades in Sensors and Dynamics, at present hours of work and holiday entitlement differed between the divisions. The Union believed that Saab UK intended to move towards harmonisation of terms later this year however, differences in hours of work would remain driven by customer requirement. The Union also stated that there were terms specific to Public Safety, including overtime/travel time arrangements and that Public Safety in the UK collaborated closely with Swedish colleagues.

12)       The Union said that Public Safety was split between two countries but managed as a single unit and that the recently appointed director of Public Safety was Swedish. The Union confirmed that there was almost no contact between Public Safety staff and staff from other parts of Saab UK, and that Public Safety was solely based at a single office in Hull. The Union confirmed that PSS staff not located near the Hull office were contracted as remote workers and did not use other offices and that no staff from other Saab divisions worked from the Hull office. When asked by the Panel if any staff based at Hull were homeworkers, the Union confirmed that some PSS technical staff worked from home.

13)       The Union summarised by stating that Public Safety was a discrete division within Saab UK operating largely in isolation from other parts of the company and offering specific products to a very different customer base. The Union further indicated that, despite very recently initiated moves towards harmonisation of terms and conditions by Saab UK, differences in terms, as well as the location and nature of work, would remain.  The Union said that given the clearly different organisational structure its view was that recognition for collective bargaining in Public Safety was clearly compatible with effective management.

14)       Finally, the Union confirmed that the issue of consistency with other existing national or local bargaining arrangements did not arise as there were none, and in context of the Saab Technical workforce, the proposed business unit was neither small nor fragmented. The Union confirmed that whilst grade titles were the same as those of staff in other divisions in practice, there was virtually no interchange of staff and very little contact between divisions. The Union said that differences between terms and conditions remained due to the different circumstances and customer requirements of each division.  The Union believed that Public Safety staff were mainly located in a single office in Hull, and not used by other divisions of Saab UK and those Public Safety staff not local to Hull, worked remotely and not from other Saab locations.

3. Summary of the submissions made by the Employer

15)       By way of background, the Employer explained it was essentially a defence contractor, serving the global market of governments, authorities and corporations with products, services and solutions ranging from military defence to civil security, offering research and development in new technology. The Employer referred to itself as a British defence contractor, notwithstanding that some of its products had civilian use (which was relevant to the issue of the bargaining unit), and that it was wholly owned by Saab AB in Sweden.

16)      The Employer explained that it currently employed 500 people across eight sites, with five principal operational centres, namely at Fareham, Farnborough, Hull, London, and Wiltshire. The Employer had 5 separate divisions, or “Business Areas” (Operations as opposed to Support or HQ functions) as follows: (1) Sensor Systems. (2) Seaeye. (3) Land Systems (an expansion of Training and Simulation). (4) BlueBear. (5) PSS (Public Safety Solutions). The Employer stated that the remainder of the company services (Support functions etc) were then grouped together, and Support/HQ and Innovation which was a very small team that sat in HQ but had a close tie with BlueBear.

17)       The Employer stated that for the avoidance of doubt, it did not accept that the statutory tests for recognition would be made out but recognised that was not the focus of the present hearing. The Employer further stated that its statement of case was focused on the issue of the appropriateness of the bargaining unit proposed by the Union, together with the subsidiary issue, if it arose, of any other bargaining unit that the Employer considered would be appropriate.  The Employer said that whilst maintaining its position on the substantive recognition issue, after the lodging of the Union’s application, the parties entered into negotiations as to the proposed bargaining unit. The Employer confirmed, for the avoidance of doubt, the negotiations were not about recognition and given those negotiations were terminated and it deemed it appropriate to say why in these submissions.

18)       The Employer stated that the Union’s position was that it should be recognised by the Employer for collective bargaining purposes for a bargaining unit described in these terms: “the Development & Customer Solutions Team: Software Engineer - Solutions & Test Engineer - Scrum Master - Solution Architect - Technical Lead - Lead Engineer. Service & Delivery Operations Team: Commissioning & Support Engineer - Project and Service Engineer and Project Management Team”. The Employer said these areas of the business that comprised the bargaining unit as contended for by the Union, only amounted to part of one of the above divisions, namely PSS.

19)       The Employer explained that PSS comprised employees in Sweden contracted to Saab AB under Swedish contracts of employment as well as UK employees. The Employer submitted that there was numerous errors, omissions and inaccuracies within the details and figures provided by the Union in setting out it proposed bargaining unit and the Employer’s position was (a) that the Union had failed to adequately consider the true extent of the bargaining unit, (b) that the Union’s proposal was wholly unworkable, and, (c) that (as a bare minimum) on a proper application of the Schedule, the Union’s proposed bargaining unit was unworkable, and/or, in any event should not be accepted. The Employer stated if the Panel agreed that the proposed bargaining unit was not appropriate, then it must also decide a bargaining unit which was appropriate, but the initial focus of its submissions was the inappropriateness of the bargaining unit proposed by the Union.

20)       The Employer, under the heading Errors, Omissions and Confusions made the following observations:

1. The Union had failed to identify all of the relevant roles within the PSS division as part of its application.

2. The Union asserted that there are 42 workers within the PSS division, this was incorrect with there being 74 ^{[footnote 1]}.

3. The Union had missed off certain roles from its application, including the role of Software Developer.

4. The Union even seemed to acknowledge in its application form that it was aware that it had not included all workers within PSS, as in box 15 of the application form, it stated that the three departments highlighted within the application made up the “main” workforce of the UK PSS division.

5. It is not clear why the Union considered some roles within PSS, but not others, to fall within the proposed bargaining unit.

6. There was no rationale provided for not including all of the workers within PSS. As a bare minimum, if the Union wished to have collective bargaining rights in relation to large portions of the PSS division, the Employer expected the proposed bargaining unit to include all of the workers within PSS.

7. The Union had asserted that the location of the bargaining unit should be the Hull office, although there are some remote workers in other parts of the UK identified within the Union’s proposed bargaining unit. It did not make sense, from the Employer’s perspective, to include some remote workers within the bargaining unit and not others.

8. The Union’s application did not make clear what the distinction was between remote workers who worked within the PSS division, and remote workers who worked within other divisions of the business.

9. The location of the workers was key in determining the proposed bargaining unit, and yet the Union had failed to adequately consider all other workers who worked remotely, as well as other central teams that were based at the Hull office. While there were colleagues in PSS teams, some were remote homeworkers, and some were Hull based.

10. The staff assigned to Hull were a mix of home workers and site-based staff. Some of the home workers in PSS lived closer to other Saab locations across the UK, than Hull.

21)       The Employer submitted that the Union had originally stated that the total number of workers employed by the Employer was approximately 153, and that approximately 42 of these workers were in the proposed bargaining unit, of whom 13 were Union members. As far as the Employer was concerned, at the time of its original response, it employed a total of 156 permanent workers excluding Blue Bear and SeaEye, and it now employed a total of 497 permanent workers including SeaEye and Blue Bear, with 15 of those roles about to start imminently. The Employer explained that the increase in personnel was because of recent corporate acquisitions as well as natural growth.

22)       The Employer said that all five divisions within its business should be treated as one distinct unit for the following reasons:

1. The business was run as a whole company regardless of having different “divisions”;

2. All divisions were part of (and the people who worked within them were all employed by) Saab UK Limited.

3. All employees within the five divisions, including managers, were on the same terms and conditions of employment.

4. All divisions were integrated together within the business in respect of central processes such as HR, Finance, commercial, IT systems, etc.

5. As of 1 April 2024, all of the Employer’s operations were run from a central function, meaning that all employees had the same contracts of employment, and benefits, and whose employment was governed by the same policies and procedures, etc. There was no difference between employees or operations.

6. Technical workers all reported to the Employer’s Chief Information Officer ^{[footnote 1]}. There was a combined skills matrix and mapping exercise completed for such colleagues across all of the divisions. Colleagues were allocated and moved across divisions to work on technical projects, in other words a technical project may involve engineers from a few divisions.

7. All divisions had the same leadership team.

8. Although PSS was referred to as a division, it did not have the nature of management team in the way some organisations may run a division.

9. All divisions were subject to the same processes in respect of sales, auditing, accreditation, appraisals, etc.

10. Any decisions in respect of pay or changes to terms and conditions were taken centrally, and applied in the same way to all workers within these divisions, and

11. A collective employee body (which is given authority for the purposes of consultation for the purposes of s.188 of TULRA and TUPE) was in place (namely the “Employee Voice Forum”).

23)       The Employer stated it was, with respect to the Union, nonsensical to suggest that one part of the PSS division should form a distinct bargaining unit for trade union recognition purposes, as decisions in relation to pay, hours and holidays would impact all divisions within the Employer equally, and not purely PSS. The Employer said under no circumstances could it realistically be suggested that the bargaining unit the Union had proposed would be compatible with effective management.

24)       The Employer stated it was committed to providing a working environment which enabled employee growth, development, and career management and accordingly, its aim was that its personnel were able to move around any operation and be secure in the knowledge that they had the same terms and conditions. The Employer’s aim was that engineers/technical grades would be able to work in any operation within the business and move around to gain experience and variety of work, to the mutual benefit of the Employer and the workforce. In order to do this, the model must be “one Saab”, and not individual operations working independently or in silos. The Employer also stated that having a bargaining unit which comprised but one part of one division would be wholly incompatible with the effective management of such a business model.

25)       The Employer said that Seaeye employees were technically employed by a separate legal entity but were on the same terms and conditions, and nevertheless its position was that the Seaeye division should be within the bargaining unit of approximately 184 workers. The Employer explained Seaeye employees were now also fully integrated with the central functions and on the same terms and conditions as all other divisions, and therefore were no longer a separate unit for the purposes of collective bargaining.

26)       The Employer stated it had set up an “Employee Voice Forum” which all employees within Saab UK could take part in, and allowed employees to ensure that any issues they had in respect of hours, pay and holidays could be addressed directly with management. The Employer explained that there was a signed Terms of Reference for this body and in its first meeting a list of issues had been raised in the form of a live table of the issues raised and/ or actioned to date. The Employer said changes negotiated by the Employee Voice Forum (to which employees elect the representatives) were material and most recently this had been a reduction in the usual weekly hours, without reduction in pay, from 40 to 37.5 hours per week. The Employer confirmed changes applied to many employees including all the employees in the Union’s proposed bargaining unit and notification announcements were sent to all employees confirming the changes made to date, as a result of the Employee Voice Forum.

27)       For these reasons the Employer explained that the Union’s proposed bargaining unit, if accepted would result in small, fragmented bargaining units within one undertaking, precisely the mischief paragraph 19(3)(c) of the Schedule sought to avoid.

28)       Finally, the Employer stated that Paragraph 19B (4) of the Schedule provided that in deciding whether the proposed bargaining unit was appropriate the CAC must take into account any view the Employer had about any other bargaining unit that the Employer considered would be appropriate. The Employer explained that in the event that the Panel did not determine that the bargaining unit proposed by the Union was appropriate, the Employer’s position was that the bargaining unit should comprise the Employer’s headcount as a whole, i.e., the workforce of Saab UK of 497 workers. The Employer said in the alternative, but only as a fallback position, it would contend for a bargaining unit comprising technical grades across Saab UK.  In conclusion, the Employer submitted that the bargaining unit proposed by the Union was plainly not appropriate and that the only appropriate bargaining unit should be the Employer’s workforce at a whole.

4. Considerations

29)       The Panel begins with the statutory framework. The Panel is required, by paragraph 19(2) of the Schedule to the Act, to decide whether the proposed bargaining unit is appropriate and, if found not to be appropriate, to decide in accordance with paragraph 19(3) a bargaining unit which is appropriate. Paragraph 19B (1) and (2) 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 it considers would be appropriate.  The Panel must also have regard to paragraph 171 of the Schedule which provides that “In 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.”

30)       In reaching its decision the Panel has taken full and detailed account of the views of the Union and the Employer as expressed in their written submissions, responses to questions and oral submissions during the hearing. Both parties confirmed at the conclusion of the hearing that the hearing had been conducted fairly and that they had the opportunity to say everything that they had wanted to say to the Panel.

31)       The Panel’s first responsibility is to decide, in accordance with paragraph 19(2) of the Schedule, whether the Union’s proposed bargaining unit is appropriate. That does not require the Panel to determine whether it is the most appropriate bargaining unit; only whether it is appropriate. This is the overriding requirement under 19B(2) and relates principally to the matters to be collectively bargained for under the statutory regime namely pay, hours and holidays. The requirement is that the proposed bargaining unit would be compatible with effective management, not that it be compatible with the most effective management. Against the background of that overall responsibility the Panel has to consider the matters listed in paragraph 19B(3) of the Schedule reminding itself that these matters must not conflict with the need for the unit to be compatible with effective management.

32)       The Panel finds in the circumstances that the bargaining unit proposed by the Union is compatible with effective management. The Panel’s reasons are as follows:

(a)   the roles in the Union’s proposed bargaining unit all form part of the Public Safety (PSS). PSS is situated in one location, namely, Saab Public Safety Solutions, 1st Floor, No.1 @ The Dock ,31-38 Queen Street, Hull, HU1 1UU.

(b)  PSS staff not located near the Hull office are contracted as remote workers and do not use other offices.

(c)   No staff in other divisions work from the Hull office although some central functions are based there.

(d)  PSS in the UK collaborates more closely with colleagues in Swedish than other parts of the UK business. Indeed, the most recently appointed director of Public Safety is Swedish.

(e)   There is no collaboration between PSS and other areas of Saab UK on a day-to-day basis.

(f)   all of the workers in the roles in the Union’s proposed bargaining unit are subject to the same contracts of employment.

(g)  The harmonisation process to which Mr Gilroy had referred to in his submissions was still in its early stages. The panel noted that PSS have some terms and conditions that are specific to them such as for overtime/travel time.

33)       As part of those deliberations the Panel considered those matters at 19(B)(2)(b) not dealt with above as follows:

(a) The views of the employer and union were fully considered. Suggestion by the Employer during the course of the hearing that recognition could be across all sites comprising one group of employees was not further explored by the parties and had not been considered previously. The panel also noted that the Employer’s suggestion included Seaeye which is a separate legal entities.

(b) There are no current national or local bargaining arrangements notwithstanding the creation of the Employee Voice Forum.

(c) The Union’s proposal created one bargaining unit at a single site and the proposed bargaining unit is situated in one location, and it avoided small, fragmented bargaining units.

5. Decision

34)       The Panel’s decision is that the appropriate bargaining unit is that proposed by the Union, namely: “Development & Customer Solutions Team: Software Engineer- Solutions & Test Engineer- Scrum Master- Solution Architect- Technical Lead- Lead Engineer. Service & Delivery Operations Team: Commissioning & Support Engineer- Project and Service Engineer and Project Management Team”. 

Panel

Ms Naeema Choudry, Panel Chair

Mr Alastair Kelly

Mr Paul Morley

22 May 2024

6. Appendix

Names of those who attended the hearing

For the Union

Ray Ellis - Head of Recruitment, Organising & Membership Growth

Andy Clark – Saab Employee, Software Engineer

For the Employer

Fiona Elder – Solicitor Knights PLC

Jim Wright – Partner Knights PLC

Paul Gilroy KC – Leading Counsel

Linda Taylor – Saab Group -Vice President Head of Business Support

Mason Fenlon – Saab Group- Chief Technology Officer

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1. The panel noted that the numbers set out at page 80 of the Employer’s bundle referred to 69 workers in the PSS division. ↩ ↩²