Decision

Bargaining Unit Decision

Updated 11 May 2026

Applies to England, Scotland and Wales

Case Number: TUR1/1510(2025)

11 May 2026

CENTRAL ARBITRATION COMMITTEE

TRADE UNION AND LABOUR RELATIONS (CONSOLIDATION) ACT 1992

SCHEDULE A1 - COLLECTIVE BARGAINING: RECOGNITION

DETERMINATION OF THE BARGAINING UNIT

The Parties:

Unite the Union

and

Moreco Group Limited

1. Introduction and hearing

1)         Unite the Union (the Union) submitted an application to the Central Arbitration Committee (the CAC) under Schedule A1 of the Trade Union and Labour Relations (Consolidation) Act 1992 (the Act) on 14 November 2025 that it should be recognised for collective bargaining by Moreco Group Limited (the Employer) for a bargaining unit comprising

“All Moreco Group Limited employees working at or from the Milk & More Ipswich depot (19 Boss Hall Road, Ipswich IP1 5BN) save for those employed at Assistant Manager level or above”. 

2)         The CAC gave the parties notice of receipt of the application on 14 November 2025.  The Employer submitted a response to the CAC dated 21 November 2025 which was copied to the Union.

3)         In its response, the Employer contended, in the context that it operated a multi-depot operation, that

“a single depot is too small a unit to be workable”.

4)         In accordance with section 263 of the Act, the CAC Chair established a Panel to deal with the case. The Panel consisted of Mr Stuart Robertson, Panel Chair, and, as Members, Mr David Cadger and Mr Nigel Cotgrove. The Case Manager appointed to support the Panel was Kaniza Bibi.

5)         By a decision dated 17 December 2025 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 Panel arranged a hearing to determine the appropriate bargaining unit and invited the parties to provide the Panel with, and to exchange, written submissions relating to that question.

6)         The Union had also submitted applications seeking recognition by the Employer in respect of the same categories of workers but for different locations, namely TUR1/1514 (2025) (for the Watford depot) and TUR1/1508 (2025) (for the Erith depot). The CAC had registered these applications separately and appointed different Panels to deal with them. In each case those Panels had issued decisions accepting the applications and as no agreement had been reached as to the appropriate bargaining unit, the applications had been set down for hearings on separate dates.  

7)         Following a request from the Employer on 19 March 2026 to consolidate the hearings for the three separate applications into one hearing, the CAC agreed with the parties that the determination of the appropriate bargaining units in respect of each application would be heard by one Panel at one single hearing. The cases were allocated to this Panel, consisting of Mr Stuart Robertson as Deputy Chair and Mr Rob Lummis and Mr Brian Hooper as Members, for that purpose, and the hearing took place by Microsoft Teams on 15 April 2026. The names of those who attended the hearing are appended to this decision. The Union was represented at the hearing by Ms H Ifeka, counsel, and the Employer by Mr J Chamberlain, solicitor. The parties provided written submissions and supporting documentation before the hearing for which the Panel is grateful. The parties then provided oral submissions at the hearing. The Panel was not required to consider any witness evidence at the hearing.

8)         Although the question of the appropriate bargaining unit in the three applications would be decided at a single hearing, the CAC agreed with the parties that the Panel would reach separate determinations and decisions on each one. The parties confirmed to the Panel their agreement to this course of action at the beginning of the hearing but acknowledged and accepted that the issues were the same for each application with no material distinction between the cases.

9)         Before the Panel sets out the parties’ submissions, it will briefly refer to the relevant legislative provisions.

2. Relevant legislation as to determination of the bargaining unit

10)         Under paragraph 19(2) of Schedule A1 to the Act (the Schedule), where an application for recognition has been accepted and the parties have been unable to agree the bargaining unit, the CAC must decide whether the Union’s proposed bargaining unit is appropriate. Under paragraph 19(3), if the CAC decides that the proposed bargaining unit is not appropriate, it must decide a bargaining unit that is appropriate.

11)         Under paragraph 19B(2), in deciding whether a bargaining unit is appropriate, the CAC must take into account–

(a)  the need for the unit to be compatible with effective management;

(b)  the matters listed in sub-paragraph (3), so far as they do not conflict with that need.

12)         The matters in paragraph 19B(3) are–

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

(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.

13)         Paragraph 19B(4) provides that in taking an employer’s views into account for the purpose of deciding whether the proposed bargaining unit is appropriate, the CAC must take into account any view the employer has about any other bargaining unit that he considers would be appropriate.

3. The Union’s submissions

14)         Although, as already explained, the Panel will issue separate decisions in respect of each application, the parties’ submissions dealt with all three cases together, reflecting that the issues are common to each application with no material distinctions between them.

15)         By way of introduction, Ms Ifeka told the Panel that the Employer operates a milk and food delivery business known as ‘Milk and More’. It is currently owned by Freshways Limited and was previously owned by Müller UK (2015-2023) and before that by Dairy Crest.

16)         Ms Ifeka addressed the relevant legal principles. She submitted that there are two stages to the CAC’s determination under paragraph 19B. The first stage, under paragraph 19B(2)(a), focuses on whether the bargaining unit is compatible with effective management. This is the primary consideration or, as the Court of Appeal expressed it in R (Lidl Ltd) v Central Arbitration Committee [2017] ICR 1145 at [15], the “determinative question” which has “primacy” over other matters. The second stage, under paragraphs 19B(2)(b) and 19B(3), requires the Panel to consider the statutory five factors in so far as they do not conflict with that primary consideration.

17)         Ms Ifeka reminded the Panel that in exercising its functions, it is under a general duty as formulated at paragraph 171 of the Schedule:

“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” (Lidl at [17]). 

18)         At the first stage, when deciding whether a bargaining unit is appropriate, the test is whether it is suitable for collective bargaining. As the Court of Appeal expressed it in R (on the application of Kwik-Fit Ltd) v Central Arbitration Committee [2002] ICR 1212 at [7].  

“the statutory test is set at the comparatively modest level of appropriateness, rather than of the optimum of best possible outcome:”:

There is a “broad criterion of ‘appropriateness’”: Lidl at [16].

19)         If the Panel decides that the bargaining unit is appropriate, it must find in favour of the union’s request: R (Cable & Wireless Services UK Ltd) v Central Arbitration Committee (QBD) [2008] EWHC 115 (Admin) at [9].

20.)         Ms Ifeka said that when considering the need for the bargaining unit to be compatible with effective management, “compatible” in paragraph 19B(2)(a) means “consistent with” or “able to co- exist with” effective management. “Effective management” relates mainly to the employer’s methods of resolving issues of pay, hours and holidays by collective bargaining. It may be reasonable to expect the employer to make some changes to its existing management structures to accommodate the bargaining unit. The Panel is not required “to seek the optimum bargaining unit,” or to “search for” or determine “the most suitable bargaining unit”: Kwik Fit at [15, 11, 18]. It will have to consider any proposals from the employer in the second stage, under paragraph 19B(4). But in the first stage, the starting point is simply whether the union’s proposal is appropriate: Kwik Fit at [6].

21)         Ms Ifeka submitted that at the second stage, under paragraphs 19B(2)(b) and 19(3), the Panel is required to consider both parties’ views, in so far as this does not conflict with the need for the unit to be compatible with effective management, and how the bargaining unit would work with existing bargaining arrangements (if applicable).

22)         Under paragraph 19B(3)(c), the Panel must consider the desirability of avoiding small, fragmented bargaining units within an undertaking, again, in so far as this does not conflict with the primary consideration. As to this, Ms Ifeka directed the Panel in some detail to the decision in Lidl.

23)         In Lidl, the GMB union had applied for recognition for 273 warehouse staff at Bridgend, about 1.2% of Lidl employees (Lidl at [6]). The CAC granted the application. Lidl issued proceedings for judicial review. Lewis J granted permission but dismissed the claim. Lidl then appealed to the Court of Appeal. Lidl argued that the bargaining unit was a small “artificial” and “statistically insignificant” group, that granting recognition would run contrary to Lidl’s “one company ethos” and that treating Bridgend employees differently would not be efficient or compatible with effective management [Lidl at [20-21]). The Court of Appeal dismissed both grounds of appeal.

24)         Ground 1 of the appeal concerned the question of whether a sole bargaining unit (at Bridgend) could be considered “fragmented” (Lidl at [34-36]). In dismissing Lidl’s appeal on this ground, Underhill LJ observed that he considered the issue to be of limited general significance but that Lidl’s concerns fell to be considered under the more general heading of compatibility with effective management, and the kind of “fragmentation” of which Lidl complained (which he found was not “fragmentation” within the meaning of the statutory language) “is not to be treated as axiomatically undesirable” (Lidl at [34-38]).

25)         Underhill LJ noted the historical background to the policy considerations behind paragraph 19B(3)(c): 

“36 …. It has long been regarded as undesirable (to use the statutory term) that employers should have to negotiate in more than one forum - and, more particularly, with more than one trade union - in respect of parts of their workforce who were not essentially different. At the very least, conducting two or more sets of negotiations where one would do is wasteful of time and effort.  But there is also the risk of inconsistent outcomes, which can breed anomalies and discontent between comparable groups of workers (including, though certainly not only, in an equal pay context).  Further, there is a risk of disruption as a result of competition between trade unions: it will be noted that that point is made by the CAC in the decision which was under challenge in R (Cable & Wireless Services UK Ltd) v Central Arbitration Committee: see para 29 above.  The policy expressed by head (c) is evidently that, other things being equal, where a group of employees can appropriately be bargained for by a single trade union in a single bargaining unit it is desirable that they should be. It is thus concerned specifically with fragmentation of collective bargaining. …

38 … But that kind of fragmentation is not the mischief referred to by paragraph 19B(3)(c): it does not involve fragmentation between bargaining units or fragmented collective bargaining.”

26)         Ms Ifeka contended that in summary, the policy behind paragraph 19B(3)(c) reflects historic issues of competition between trade unions and Parliament’s desire to avoid the industrial turmoil such competition might cause. The words of the statute make clear, however, that even if there are small, fragmented bargaining units within one undertaking, that is not a determinative factor. Had it been so, the statutory language would be mandatory: for example, “the necessity of avoiding” or “the requirement to avoid.” Instead, the statutory language expresses a preference: “the desirability”.  

27)         Ms Ifeka contended that the reality is that this is no longer a world of high union membership in which this Union can hope to achieve national recognition. The Union has sought to seek recognition for appropriate local bargaining units.

28)         Ms Ifeka finally reminded the Panel that under paragraphs 19B(3)(d) and (e), the Panel must also consider the characteristics and location of workers. When considering the characteristics of the workers, the Panel should consider their roles and responsibilities, the nature of the work done, working practices, workplace culture or identity, and of course terms and conditions, with particular attention to the three ‘statutory items’ of pay, hours and holidays.

29)         Ms Ifeka said that at the first stage, the Union’s position is that the proposed bargaining units are suitable for the purpose of collective bargaining and are compatible with effective management. She observed that the Union had for decades been recognised under voluntary recognition agreements with the business’s previous owners, Dairy Crest and Müller UK. The latter agreement was between two trade unions, the Unite Agreement and USDAW. National recognition had only ceased on 25 October 2025.

30)         Ms Ifeka noted that the terms of employment disclosed by the Employer evidenced this history of collective bargaining. By way of example, in respect of Ipswich:

• Three of the four contracts disclosed (the Centre Operative and Drivers) state that “base pay” is “reviewed annually in conjunction with the relevant recognised trade union and contain the express term that the “terms and conditions of employment are governed by the National Recognition Agreement (for Milk & More) … [which] may be amended from time to time.”

• The Fitter’s contract states that “your renumeration will be in accordance with the relevant Local/National Agreement, between the Society and the appropriate Trade Union(s) in respect of your category of employment” and requires the employee “to become and remain a member of the appropriate Trade Union party to such agreements.”

31)         In relation to the Watford depot, a number of contracts disclosed by the Employer recorded that base pay was reviewed annually in conjunction with the relevant recognised trade union. Other contracts referred to what was, at the material time, the National Recognition Agreement and described salary as a trade union‑agreed payment, which might be reviewed through negotiation with the unions. Few of the Watford contracts expressly stated that no collective agreements affected the employee’s terms and conditions. Ms Ifeka cited, by way of example, the contract of the Duty (Night) Manager, which attracted the highest salary, involved a 40‑hour working week, and did not contain a shortage clause. This role fell outside the proposed bargaining unit. A further example was a Home Delivery Driver contract dated February 2026, which post‑dated the cessation of national recognition in October 2025.

32)         In respect of the Erith depot, the Centre Operative contract recognised that terms and conditions were governed by the National Recognition Agreement. Similar provisions appeared in the contracts of a number of Home Delivery Drivers.

33)         In short, Ms Ifeka submitted that employees were on contracts which reflected a history of harmonious collective bargaining, albeit a history which had not achieved especially generous pay increases or short hours/days. She invited the Panel to note that the last pay ‘rise’ of April 2025 (during the tenure of union recognition) was, to the best of the Union’s  knowledge, simply the legal requirement to pay the National Minimum Wage, and most workers continue to work a six-day week (although some workers at Grantham depot work a five-day week, and the Employer manages this difference in working practice between depots).

34)         Ms Ifeka submitted that considered in the round, this background weighed strongly towards the conclusion that the proposed bargaining unit will be “able to co- exist with” effective management. There was no evidence that union recognition in the past had been incompatible with effective management, even when two trade unions were recognised, which was precisely the situation discussed as ‘undesirable’ in Lidl and Cable & Wireless.

35)         Ms Ifeka contended that there was little merit, if any, in speculating about possible future changes which lay outside the core areas of pay, hours and holidays. Nonetheless, she reminded the Panel that it may be reasonable to expect the employer to make some changes to its existing management structures to accommodate a bargaining unit.

36)         As to the factors at what she called the second stage, Ms Ifeka submitted that the Union’s view is that the proposed bargaining units are the appropriate group of employees on similar terms and conditions, who perform operational work within a single workplace, a depot – picking orders, driving vans, delivering products to customers, repairing vans – and who wear the same uniform, work generally at each depot, and live locally to it. As to existing bargaining arrangements, she observed that no other union had bargaining arrangements at any depot or nationally.

37)         In respect of the desirability of avoiding small, fragmented units, Ms Ifeka reminded the Panel that paragraph 19B(2) is the primary and determinative consideration (Lidl at [15]). In so far as consideration of paragraph 19B(3)(c) does not conflict with the primary consideration, and in so far as it is relevant, it is accepted that the proposed bargaining unit is statistically small compared to the total number of operational staff. Smallness will not necessarily result in fragmentation (Cable & Wireless at [15-17, 19]). As to the “desirability” of avoiding fragmentation, if the Panel is minded to recognise the proposed bargaining unit, there is no risk of the employer negotiating “with more than one trade union” or “of disruption as a result of competition between trade unions” (Lidl at [36]).

38)         Ms Ifeka accepted that recognition of each bargaining unit, on the face of it, raised the possibility of fragmented collective bargaining between each unit in the future. However, the primary and determinative consideration is the compatibility of each bargaining unit with effective management. 

39)         As to the characteristics and location of workers, Ms Ifeka noted that those within the proposed bargaining units work in operational roles at each depot. They are attached to a depot. Their contracts reflect that the depot is their “place of work.” She accepted that the drivers’ contracts contain clauses which allow the Employer to ask drivers to work from other locations. As to this, she says that the Union understands that many drivers are not asked to work elsewhere temporarily. The key point is that when drivers are asked and when they do agree, they are paid extra. She says that geographically, depots are separately located and largely self-contained (Cable & Wireless at [17]).

40)         As to the characteristics of the workers, the majority of those in each bargaining unit work as drivers. They arrive at the depot in the late evening for the start of their shift. There is some variation in local practice: for example, at the Erith depot, goods are picked for the drivers, but at other depots drivers may do some or all of the picking. The drivers use a hand set and a route map to deliver orders. After they return to the depot, they hand back the van and finish their shift in the early morning. Other workers within each bargaining unit work on the warehouse floor controlling inbound and outbound goods and supporting the delivery operation and repairing vehicles. It is understood that the centre operatives also drive vans on occasion.

41)         In respect of terms and conditions, workers in each bargaining unit work between 40 and 48 hours a week, five to six days a week. The majority are on a six-day week, although it is understood that Grantham depot operates a five-day week. Pay rises appear to be linked to the National Minimum Wage. There are some local variations in respect of location allowance. Employees generally receive a minimum of 25 days leave per year and are entitled to payment in lieu if they work a public holiday. The Fitter’s contract suggests there may have been some local provisions for holidays which differed by “department/branch.” The employee’s obligations in respect of notice vary. Some workers are required to give one month’s notice in writing, other two weeks’ notice. Most drivers are simply required “to give notice.” Workers in each bargaining unit wear a blue branded uniform, a blue branded body warmer, Hi-Vis jacket, gloves and safety boots.

42)         In summary, Ms Ifeka submitted that at the first stage, the history of collective bargaining and the employees’ contracts provided persuasive evidence that each proposed bargaining unit will be compatible with effective management in terms of resolving issues of pay, hours and holidays. This, she submitted, is the primary and determinative consideration. As to the second stage, and insofar as it does not conflict with the primary consideration, she accepted that the Employer is opposed to recognition. Nonetheless, there was on the face of it no reason to elevate speculative concerns to a genuine and substantial risk of fragmented (i.e. disrupted) collective bargaining. Even if the Panel concluded that there is such a risk, Parliament’s intention was that it was desirable to avoid such a risk, not necessary to do so, and that paragraph 19B(3)(c) is subordinate to the primary and determinative consideration, compatibility with effective management. Moreover, other factors, such as the shared nature of the work performed, and the characteristics and location of the workers, weighed in favour of recognition for each bargaining unit.

43)         Accordingly, Ms Ifeka invited the Panel to accept the bargaining unit proposed by the Union.

4. Employer’s submissions

44)         In its written submissions, the Employer provided information about its Milk & More business. It operates residential and commercial milk and food delivery services, primarily across the South‑East and South‑West of England. It has approximately 1,060 employees, including 27 employees at its head office in Camberley and 1,033 employees across 32 operational centres/depots. Approximately 944 employees work in operational roles, including roles within the scope of the proposed bargaining units. The Milk & More brand has existed since 2016, following Muller’s acquisition of the liquid milk processing and distribution operations of Dairy Crest.

45)         During Muller’s ownership, the business had been loss‑making and by 2023 Muller had planned to close the business and make all staff redundant.  On 1 January 2024 the business was acquired by the Freshways Group and in the 2023 financial year it incurred losses of approximately £24 million. The Employer explained that, following the acquisition, a number of cost‑cutting measures had been implemented, including range reductions, centre closures and reductions in headcount and that despite these measures the business incurred further losses of approximately £8 million in 2024 and was estimated to have incurred further losses of approximately £4.5 million in 2025.

46)         The Employer stated that, pursuant to a voluntary recognition agreement dated 6 June 2020, the business had previously recognised Unite and USDAW across all centres and in October 2025 it exercised its right to terminate that agreement. The Employer regarded the recognition agreement as a legacy arrangement entered into under previous ownership which was considered no longer appropriate following the change in ownership and for the additional reasons set out in the formal notice of termination dated 3 April 2024.

47)         The Employer stated that it did not agree that any of the proposed bargaining units were compatible with effective management. The business operated 32 centres across the South‑East and South‑West of England and for management purposes, the centres were divided into two regions, each under the control of a Regional Manager reporting to the Head of Operations. The Union had not sought recognition on a business‑wide or regional basis, as had previously been the case.

48)         The Employer stated that when recognised, the Union had not sought to bargain at local level and contended that this suggested that depot‑level recognition was not considered optimal for effective representation. The Union had now pursued recognition on a depot basis and this approach risked creating small and fragmented bargaining units within the undertaking and if successful, recognition would result in multiple bargaining units, with further applications anticipated.

49)         The Employer submitted that the Union’s approach contrasted with other cases in which unions had emphasised the absence of parallel application and following termination of the national agreement, it had not sought to vary terms and conditions locally. The business continued to operate nationally standardised policies and procedures and differential terms across centres would not be compatible with effective management. Each proposed bargaining unit comprised a single centre representing a small proportion of the workforce. Employees at Erith represented approximately 3 per cent of the operational workforce, and employees at Ipswich and Watford approximately 4 per cent each. The Employer submitted that these units would constitute a fragmented subset of workers performing identical roles to those employed elsewhere.

50)         The Employer explained that workers across centres performed identical functions under identical terms and procedures and that employees were routinely required to work temporarily from other centres. The Employer said that during the 2025–26 holiday year, drivers from other centres worked at Erith for 129 days and at Watford for 50 days and Ipswich drivers had worked at other centres for a total of 52 days during the same period. The Employer submitted that driver rota data demonstrated regular cross‑centre working and recognition at individual centres would result in conflicting terms, policies and procedures applying to the same individuals. This would impose unreasonable operational burdens and create management complexity, and the Standard Operating Procedure demonstrated the integrated and complex nature of the business. Localised variations would require bespoke policies, retraining, duplicated audits and additional administrative burden.

51)         The Employer stated that all centres currently operated on a six‑day delivery model and any variation in operating patterns at a single centre would require significant system, scheduling and customer‑facing changes. The Employer submitted that differences in pay awards at individual centres would result in employees performing the same role being paid differently and argued that this would be manifestly unfair and incompatible with effective management. The Employer stated that centralised management allowed the business to operate with a smaller head‑office function and explained that depot‑level recognition would require additional management, HR support and duplication of processes. The Employer said that such changes would increase costs and operational inefficiency.

52)         The Employer stated that disruption had already occurred at the Erith centre during union recruitment activity and said that union representatives had made allegations which it denied as entirely false and inflammatory and had no factual basis and risked undermining trust. The Employer submitted that such activity demonstrated the risk of divisive localised industrial relations and suggested that fragmented recognition would enable the Union to play one workplace against another. The Employer stated that its financial position, while not determinative, was relevant to effective management and explained that the business remained loss‑making and dependent on third‑party funding and that increased costs or operational inefficiency could jeopardise financial viability.

53)         Finally, the Employer submitted that none of the proposed bargaining units were appropriate and each unit was too small, fragmented and disconnected from the broader operational structure.  The Employer said that recognition would undermine interoperability, increase costs and conflict with effective management and invited the Panel to conclude that the proposed bargaining units were inappropriate and to dismiss the applications.

54)         Mr Chamberlain developed these submissions orally. He agreed with Ms Ifeka as to the legal background and questions to be answered by the Panel. He contended that the main issues were fragmentation and the significance of interoperability.

55)         Mr Chamberlain accepted that there was a long history of national recognition of trade unions. That recognition had ended. The contract terms identified by Ms Ifeka related to a completely different situation of national union recognition.

56)         As to interoperability, Mr Chamberlain said that all depots were on the same, nationally agreed terms and conditions as to pay, hours and holidays. There was no difference between the depots as to the roles and jobs performed there.  If recognition was granted on a depot-by-depot basis, there was a real risk of employees on different terms and conditions working alongside each other doing the same jobs as employees regularly agreed to work at different depots. This was not compatible with effective management. He accepted, however, that employees are assigned to a particular depot and working elsewhere is voluntary and attracts a payment.

57)         Mr Chamberlain distinguished the situation in Lidl. In that case, there was only one proposed bargaining unit. In these cases, there are three. Even accepting that there would be the same recognised union at each site, the fact that there will be three separate bargaining units would create precisely the kind of fragmentation of collective bargaining about which the Employer is concerned. Even if avoiding fragmentation was only desirable, the decisions in Lidl at paragraph 28 and Cable and Wireless at paragraph 16 illustrate that it is axiomatic that fragmentation of bargaining units is to be avoided.

58)         Mr Chamberlain submitted that the undesirability of fragmentation feeds into the question of whether the proposed bargaining units are compatible with effective management. He says that multiple bargaining units are obviously incompatible. He says that it is highly unusual for three applications to be made by the same union against the same employer at the same time in respect of separate sites and proposed bargaining units. Each application is being considered separately, meaning that there will be, if successful, three recognised but distinct bargaining units. This, he says, is obviously incompatible with effective management.

59)         In answer to a question from the Panel, Mr Chamberlain advised that the Employer does not propose an alternative bargaining unit, if the Panel finds that the Union’s proposed bargaining units are inappropriate.

60)         In response, Ms Ifeka contended that the emphasis on the undesirability of fragmented bargaining units was primarily about avoiding inter-union competition. It was not, she submitted, unusual for there to be separate location-based bargaining units within large employers. It was not, she contended, inevitable that the Union would seek to negotiate different terms as between the proposed bargaining units; rather, it was improbable that the Union would enter into separate pay negotiations for each site and the Union was prepared to agree to single-table negotiations across the three sites. 

61)         Ms Ifeka also observed that the Union vigorously challenged the Employer’s assertion, referred to at paragraph 52 above, about inappropriate behaviour by it. As this issue was irrelevant to the questions to be addressed by the Panel, the Panel says nothing more about this aspect except for noting it.

5. Discussion and conclusions

62)         The Panel has given full and detailed consideration to the parties’ submissions as summarised above. As agreed, the Panel has considered each application separately and will issue decisions for each case, but the parties have not sought to distinguish between the applications and the Panel has found no reasons to do so either. The decisions are therefore in substantively identical terms.

63)         The Panel set out the relevant legislative provisions as paragraphs 10 to 13 above. The task of the CAC is to decide whether the Union’s proposed bargaining unit is appropriate, or if, but only if, it decides that the proposed bargaining unit is not appropriate, to decide a bargaining unit that is appropriate. The nature of the exercise appears at paragraph 15 of the decision in Lidl:

“15.    it is worth spelling out the structure of the exercise required by paragraphs 19(2) and 19B. The determinative question is simply whether the proposed bargaining unit is appropriate. That term is not defined anywhere; but in considering the statutory question the CAC is obliged to take into account the matters specified in paragraph 19B(2). Among those matters the need for the unit to be compatible with effective management, as specified under (a), clearly has primacy over the sub-paragraph (3) matters (brought in via (b)). That appears from the provision that the latter are only to be taken into account so far as they do not conflict with that need. But the considerations covered by the two heads under paragraph 19B(2) are not wholly distinct: to a considerable extent the assessment of the sub-paragraph (3) matters will feed into the assessment of the compatibility of the unit with effective management.”

64)         In deciding whether the Union’s proposed bargaining unit is appropriate, the Panel is not required to decide if the bargaining unit is the best or most suitable unit. There may be a number of possible suitable bargaining units. The statutory test is set at the relatively modest level of appropriateness, not the best possible outcome. The Panel cannot reject the Union’s proposed bargaining unit because it feels that a different unit would be more appropriate nor, in considering whether it is compatible with effective management, can it consider whether it is the most effective or desirable unit in that context.

65)         The paramount consideration is for the bargaining unit to be compatible with effective management. Compatible in paragraph 19B(2)(a) means consistent with or able to co- exist with effective management. It is not required to be compatible with the most effective management. It may be necessary for an employer’s management to make administrative adjustments to accommodate the bargaining unit. Within that paramount requirement, the Panel has to consider the matters listed in paragraph 19B(3). Reminding itself that those matters must not conflict with the need for the Terms to be compatible with effective management. The Panel has not adopted the sequential two-stage approach recommended by Ms Ifeka, which does not appear in the statute; rather, the Panel has taken the factors in paragraph 19B(3) into account in its overall assessment of compatibility.

66)         As already mentioned, the Employer’s challenge to the appropriateness of the Union’s proposed bargaining unit relates to two issues: first, interoperability, and second, the creation of small, fragmented bargaining units. The Panel will address these issues in the context of the five factors in paragraph 19B(3) and then look at the paramount consideration of compatibility with effective management, mindful that those factors may influence the overall compatibility and appropriateness of the proposed bargaining unit.

67)         The Panel has set out the views of the Employer and the Union in some detail earlier in this decision and does not repeat them here. The Panel has noted that the Employer has not put forward an alternative bargaining unit for consideration, instead inviting the Panel to take the alternative course of rejecting the Union’s proposed bargaining unit and dismissing the application, a course of action not open to it under the statute.

68)         There are no existing national or local bargaining arrangements in this case. The Employer terminated the previously existing national recognition agreement with the Union and USDAW in October 2025. In her submissions, Ms Ifeka observed that the Employer had a history of harmonious collective bargaining which suggested that recognition of trade unions was not incompatible with effective management of its business, but this seemed to the Panel to be directed to the desirability of recognition of a trade union as a whole and did not assist the Panel in considering the separate issue of the appropriateness of the proposed bargaining unit. The Panel noted that there was no history of collective bargaining in the Employer’s business at a local level but this was in the context of long-established national recognition arrangements which made such bargaining unnecessary; Ms Ifeka acknowledged that the Union could not hope to organise nationally and had chosen to seek recognition at the local level.

69)         As far as the characteristics and location of workers are concerned, the Panel notes that the workers in the proposed bargaining unit are based at and work from a discrete site, one of the Employer’s 32 locally situated depots from which it carries out its operational activities. They form the entire workforce at the site below management level. They form a clearly definable and identifiable group. Broadly speaking, with some small exceptions at some sites, the duties of the workers and the way in which their activities are organised are the same whichever depot they work from. Terms and conditions of employment as to pay, hours and holidays are set nationally and there is little, if any, local variation.

70)         The Panel also notes that workers may agree to work at different sites when workload or staffing issues require it. This is what Mr Chamberlain describes as interoperability. Although Mr Chamberlain gave figures for the number of hours where workers at the Ipswich, Erith and Watford sites work elsewhere, he did not set the figures against the total number of hours worked there, and Ms Ifeka suggested that many drivers are not asked to work elsewhere. The Panel concludes that whilst it regularly occurs, it does not form a major part of workers’ duties and further, such working is voluntary and attracts an additional payment and all employees remain contractually located at their local site. This does not create, in the Panel’s view, any significant risk of conflict between employees if workers within the bargaining unit find themselves working with employees at other sites who may be on different terms and conditions.

71)         As to fragmentation, the Panel has had regard to the observations of the Court of Appeal on the question at paragraphs 36 and 38 of Lidl, quoted above. Paragraph 19(3)(c) is intended to avoid fragmentation of collective bargaining (i.e. negotiating with more than one union). That does not arise in this case; there are no bargaining arrangements with other Unions or any evidence that they may come into being in the future. The Panel accepts that if the Union is recognised at one or a small number of individual sites, but nowhere else, the Employer’s mechanisms for setting pay, hours and holidays might be described as fragmented in the sense that such terms were determined by collective bargaining at those sites but not elsewhere. The proposed bargaining unit could also be described as ‘small’ when compared with the overall workforce. However, this kind of fragmentation is not the mischief referred to in paragraph 19(3)(c) as it does not involve fragmentation of collective bargaining.

72)         But as Mr Chamberlain points out, there is a respect in which this case differs from the situation in Lidl: in that case, there was one proposed bargaining unit located at a single site; in this case, whilst the Panel is deciding each bargaining unit separately, it cannot ignore the existence of the other applications and proposed site-based bargaining units. As Ms Ifeka acknowledges, this raises at least the possibility of fragmentation of collective bargaining between the separate bargaining units, if recognition is granted at each of the sites. Mr Chamberlain argues that this is precisely the kind of fragmentation about which the Employer is concerned.

73)         The Panel notes, however, that the three proposed bargaining units involve the same union and description of employees. In the Panel’s view, it is highly improbable that the Union will contend, or the Employer will offer, different terms as to pay, hours and holidays at the sites. There is no obvious difference between the sites which might lead to such a situation. The Panel notes Ms Ifeka’s intimation on behalf of the Union of willingness to enter into single-table bargaining across the sites. In these circumstances, the Panel finds that there is no real possibility of fragmentation as between the bargaining units at the sites.

74)         The Panel recognises, however, the view expressed in Lidl about the existence of “a small island of union recognition in a sea of non-recognition”. This will not necessarily be irrelevant to the issue of whether the proposed bargaining unit is appropriate, but it will fall to be considered under the more general heading of compatibility with effective management, and the Panel now turns to this issue.

75)         The Panel has regard to the general principle that the test of comparability is set at a relatively modest level of appropriateness. The Panel cannot reject the Union’s proposed bargaining unit because it feels that a different unit would be more appropriate nor can it consider whether it is the most effective or desirable unit in that context. The Panel has found that the proposed bargaining unit is a clearly identifiable and discrete grouping of employees comprising the whole operational workforce at the site below management level. The Panel recognises that the Employer will be faced with collective bargaining with a relatively small group of employees and the administrative inconvenience that will result from that requirement but does not find any matters which render the proposed bargaining unit incompatible with effective management measured by the standard of appropriateness. The proposed bargaining unit represents, in the Panel’s view, a cohesive, identifiable bargaining unit compatible with effective management. The Panel finds in these circumstances that the Union’s proposed bargaining unit is compatible with effective management and is appropriate.

6. Decision

76)         The Panel’s decision is that the appropriate bargaining unit is that proposed by the Union, namely:

“All Moreco Group Limited employees working at or from the Milk & More Ipswich depot (19 Boss Hall Road, Ipswich IP1 5BN) save for those employed at Assistant Manager level or above”. 

Panel

Mr Stuart Robertson, Panel Chair

Mr Rob Lummis

Mr Brian Hooper

11 May 2026

7. Appendix

Names of those who attended the hearing

For the Union

Helena Ifeka                          -           Counsel

Perry Wright                           -           Regional Officer London and Eastern Region

Steven Howard                     -           Home Delivery Driver

Richard Brand                       -           Home Delivery Driver

For the Employer

Jonathan Chamberlain      -           Gowling WLG LLP

Gurjeet Bahra                         -           Gowling WLG LLP

Vinesh Shah                            -           Statutory Director

Jon Bleeze                                -           Head of Operations

Edward Marriot                      -           Head of Legal