Decision

Bargaining Unit Decision

Updated 27 October 2023

Applies to England, Scotland and Wales

Case Number: TUR1/1340/2023

26 September 2023

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

Spirax Sarco Limited

1. Introduction

1) Unite the Union (the Union) submitted an application to the CAC on 20 June 2023 that it should be recognised for collective bargaining by Spirax Sarco Limited (the Employer) for a bargaining unit comprising of “… all Machine Shop Operators employed by Spirax Sarco Limited within The Machine Shop South (Buildings A, B&C) including CNC Setter/ Operators; Press Shop; Weld Cell; Finishing and Lapping department’s”. The location of the proposed bargaining unit was Spirax Sarco Limited, The Machine Shop South (Buildings A, B, &C), Runnings Road South, Kingditch Trade Park, Runnings Rd, Swindon Village, Cheltenham GL51 9NQ. The CAC gave both parties notice of receipt of the application on 20 June 2023. The Employer submitted a response to the CAC dated 27 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 Laura Prince KC, Panel Chair, and, as Members, Mr Sean McIlveen and Ms Claire Sullivan. The Case Manager appointed to support the Panel was Kaniza Bibi.

3) By a decision dated 24 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. A virtual hearing was held on 14 September 2023 and the names of those who attended the hearing are appended to this decision.

4) Both parties provided written submissions prior to the virtual hearing together with supporting documentation. The Panel would like to thank the parties for their clear and concise submissions and for answering the questions raised during the hearing. The information they provided was very helpful to the Panel.

5) 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.

2. Matters clarified at the beginning of the hearing

Clarification of the Union’s Proposed Bargaining Unit

6) At the beginning of the hearing the Panel asked for clarification as to the Union’s proposed bargaining unit. The Union stated that the bargaining unit for which it was seeking recognition consisted of all Machine Shop Operators employed by Spirax Sarco Limited within The Machine Shop South (Buildings A, B&C). These employees all reported into the Machine Manager and comprised of 133 CNC Sander/Wells operators; 11 Team Leaders; 1 Tool Store Operator; 1 Janitor; and 4 Roving Inspectors.

7) The employer submitted that the Team Leaders, Janitor, Tool Operator and Roving Inspectors (‘the additional roles’) were not part of the original bargaining unit put forward by the Union which referenced ‘operatives’. The employer argued that the word operative did not naturally include Team Leaders, Janitors etc. The Union said that they had intended to include and did include these individuals in their original bargaining unit request.

8) The Panel considered the Employers submissions on this point carefully. On balance, the Panel was of the view that the original bargaining unit sought by the Union in their application was the same as that which they relied upon at the hearing. It is notable that the original bargaining unit was said to consist of 150 employees and that the bargaining unit relied upon at the hearing also consisted of 150 employees. The employer argued that this did not reflect the fact that the bargaining units were the same as there had been a loss of employees within the bargaining unit in the relevant period. The employer did not provide any evidence to support this and the panels view is that, in any event, any difference in numbers is minimum. The original bargaining unit put forward by the Union intended to and did cover the additional roles.

3. Summary of the submissions made by the Union

9) The Union stated it had applied for recognition of a bargaining unit consisting of all Operators based at the Machine Shop South (Buildings A, B & C), Runnings Road employed by Spirax Sarco Limited (“the Employer”). The parties had been unable to agree on the bargaining unit, therefore, the matter came before the CAC to determine whether the Union’s proposed bargaining unit was appropriate within para. 19, Schedule A1 of the Trade Union and Labour Relations (Consolidation) Act 1992 (‘TULRCA 1992’). The Union confirmed its submissions would collectively refer to the workers in the bargaining unit as “The Machine Shop Operators”.

10) The Union explained that the Machine Shop was a separate and well-defined area within the Employer’s larger site based at Runnings Road. Until approximately 10 years ago, the Machine Shop was based on a different site from the rest of the Employer’s operations. The Union confirmed that it now sat within the larger site at Runnings Road, and it was divided by a road from the other areas and that the North and south were joined by a tunnel under the road. It was the Employer’s only (at least UK based) machine shop. The Union also confirmed that other sections of the Runnings Road site with non-desk-based workers were the North Side and the East Side, the latter of which was sometimes called “ESMU” (for completeness, the Machine Shop is sometimes referred to as the South Side, and there is no West Side). The Union explained that two other locations undertook materially different functions from the machine shop and had different and separate management structures. The Union gave an example stating the North Side contained an assembly line and warehouse whereas the East Side undertook specialist welding. The Union also stated that Machine Shop Operators who collectively made up the bargaining unit worked to manufacture the Employer’s product and once this process was completed, the components were sent from the Machine Shop to other parts of the Employer’s operation to be assembled into a finished product.

11) The Union confirmed that the North and East Side worked different hours/patterns to the Machine Shop Operators and gave the example of the North Side Operators who were on day shifts all worked a four-day week, while the Machine Shop Operators who were on day shifts worked a five-day week. The night shifts in other sections also differed from those in the Machine Shop. The Union also explained that the reference to a four-day week shift pattern mentioned by the Employer was correct, and this was clarified by the business as a ‘trial ‘that the Employer could more easily try in production assembly

12) The Union stated that the Machine Shop chain of command was as follows: Operator, Section Leader, Production Manager to an overall Machining Manager. The Union confirmed that the Machining Manager’s authority was over the entire Machine Shop and that the North and East Side all had separate management structures.

13) In regard to training and flexibility, the Union explained that in order to work in the Machine Shop and use the machinery safely, workers needed specific training and therefore, as a general rule, workers did not cross over between the Machine Shop and the other parts of the site, due to not being cross trained on their different functions. The Union explained that for the Machine Setter/Operator role in the Machine Shop, it was an essential requirement to have NVQ Level 2 in Manufacturing.

14) The Union confirmed that the Machine Shop Operators were not subject to the same pay scales as operators in the North or East Side and while the Employer had a form of grading system for its employees, it did not have consistent pay scales. The Employer also paid operators (at least within the Machine Shop) different rates of pay for the same roles. As far as the Union understood, this differentiation in pay did not directly correspond to either an employee’s performance or longevity of service. The Union stated that the Machine Shop Operators all had the same holiday entitlement and working hours.

15) The Union referred to Paragraph 19B of the Schedule which set out the factors that the CAC must take into account when deciding whether a bargaining unit was appropriate as well as drawing the Panel’s attention to Kwik Fit (GB) Ltd v CAC [2002] ICR 1212 where Buxton LJ said at [7] “the statutory test is set at the comparatively modest level of appropriateness, rather than of the optimum of best possible outcome”. The Union pointed out that ‘Compatible’ in paragraph 19B (2) referred to ‘consistent with’ or ‘able to co-exist with’ effective management. The Union also referred to Harvey on Industrial Relations which paraphrased the question as follows: “taking account of the statutory criteria and of the way in which the undertaking operates and is organised, does the proposed bargaining unit offer a sensible and workable vehicle for settling by collective bargaining the pay, hours and holidays of the workers concerned? The Union stated that most importantly the test was not whether the proposed bargaining unit was the most effective or desirable, only whether it was ‘appropriate’. The Union confirmed that it was only ‘effective management’ which was required, not that it be compatible with the ‘most effective management’. The Union further stated that if the Panel determined that the bargaining unit proposed by the Union was not appropriate, the Panel should consider and determine a different bargaining unit which would be appropriate.

16) The Union’s view was that the proposed bargaining was the appropriate bargaining unit whereas the Employer took issue with the fact that the bargaining unit excluded similar parts of the business in the same physical areas, or which were covered by the same management structures.

17) The Union stated there was no existing bargaining arrangements in place for workers within the proposed bargaining unit or otherwise within the Employer’s workforce and there were no existing collective bargaining agreements. The Union also stated that the bargaining unit was compatible with effective management and desirability of avoiding small, fragmented bargaining units as per Paras. 19B(2)(a) and (3)(c). The Union confirmed the bargaining unit proposed was plainly compatible and the workers within the unit fulfilled specific roles and formed a coherent and discrete group, and there was no reason that it would be incompatible with effective management. In relation to ‘Fragmentation’ the Union wish to highlight three key matters relating firstly to the numbers involved, secondly to fragmentation generally, and thirdly to existing recognition, the Union explained as follows:

18) Firstly, as to the numbers involved, the bargaining unit cannot be said to be small in size. Based on the Employer’s calculations the total number in the proposed BU was 139. The Employer had also reported that the total number of employees for all of the UK supply side was 570 and the total number of non-desk-based employees was 373. This meant that the proposed bargaining unit represented a sizeable proportion of the overall workforce (from 24.3% of the overall workforce, to 37.3% of all non-desk-based employees). It could not therefore be described as a ‘small, fragmented bargaining unit’. The Union referred to commentary in Harvey which noted: ‘…if there were to be a likelihood of proliferation of bargaining units but the units themselves were large ones, then that should not be regarded as undesirable’ (at [1263.02]).

19) Secondly, as to fragmentation more generally, the Union stated it was not a case that it was seeking to hive off certain roles. The Union confirmed that the proposed bargaining unit would represent all Machine Shop Operators, including the 4 operators employed as Inspectors, a team leader, a janitor and a store operator. They represented a distinct (and large) section of the site contained within a specific management structure. The Union also confirmed that the existence of other operators, working within different roles on different sections of the Employer’s site did not render the proposed unit as fragmented.

20) Thirdly, as to existing recognition, the Union explained that this was not a case where the proposed bargaining unit would fragment and/or would encourage fragmentation of existing bargaining units into smaller groups, as there were no existing bargaining units or recognition agreements in place. The Union referred to NUJ and Talksport Ltd (t/a Signal Radio) (TUR1/475/05, 29 December 2005) CAC wherein a bargaining unit of four people out of 26 workers at one of 18 sites was held to be appropriate since there was no other bargaining group in existence.

21) The Union stated that the following eight points were relevant to the factors of characteristics and location:

a. Location: All workers in the proposed bargaining unit worked at the same location, namely the Machine Shop. The workers in these roles did not regularly (or on their reporting usually, ever) undertake work or outside of the Machine Shop;

b. Similar roles: The roles in the proposed bargaining unit were all based within the Machine Shop, and all had the title “Operator”. These roles were all well-defined, and represented a cohesive and discrete group of workers with similar characteristics;

c. Staff handbook and policies: The same staff handbook and policies applied to all the workers within the proposed bargaining unit;

d. Shift Work: The workers in the proposed bargaining unit were all shift workers;

e. Terms and conditions of employment: The standard terms and conditions of employment within the proposed bargaining unit was the same.

f. Pay Structure: The Union understood that the workers did not have a defined pay structure and were paid varying rates. Therefore, there was no consistent policy or progression which collective bargaining could disrupt.

g. Holiday entitlement: The workers in the proposed bargaining unit had the same holiday entitlements.

h. Training: All workers within the proposed bargaining unit must undergo training in order to work in the Machine Shop. This training was particular to their line of work and differed from operators in other parts of the Employer’s business.

22) Finally in conclusion the Union submitted that, in all the circumstances, that its proposed bargaining unit was appropriate.

4. Summary of the submissions made by the Employer

23) The Employer considered that industrial relations would not be improved if the Union was recognised in respect of the bargaining unit it proposed as this would only be recognition in relation to a small section of the Employer’s workforce. More fundamentally, the Employer disagreed in its response with the number of workers said to be in the proposed bargaining unit and asserted that it had 534 employees working at its UK supply manufacturing business. The Employer stated however, using the descriptors the Union used to arrive at its figure for the number of workers in the proposed bargaining unit, it concluded that this figure would now be approximately 160 workers. The Employer had provided a copy of its management structure relating to the machine shop workers in a bundle with its submissions. The Employer had not commented on the Union’s membership figures, as it did not have the data to confirm or challenge them. The Employer asserted however that it did not believe that the majority of workers in the proposed bargaining unit would be likely to support recognition, given the feedback it had received. The Employer stated the feedback had suggested that some individuals may have been pressurised into signing documents indicating support for recognition by the longer-serving union members, without understanding what the implications of this were. The Employer concluded with a suggestion that membership and support should be tested by a ballot, should the application be allowed to proceed.

24) The Employer asserted that the proposed bargaining unit did not make sense in terms of good industrial relations or in terms of coherent collective bargaining. Additionally, the Employer asserted that the proposed bargaining unit was somewhat artificial and constructed in order to maximise the proportion of workers within it who were members of the Union.

25) The Employer appreciated that the hearing was about the proposed bargaining unit, but it felt compelled to inform the Panel that it received four letters from employees expressing serious concerns over the conduct of union members during the period when the Union was gathering support for this application. The Employer stated that the letters could be found in the bundle within its submissions. The Panel explained that the sole purpose of the hearing was to determine the issue of the bargaining unit according to the statutory criteria.

26) The Employer confirmed that it had plans for changes in its manufacturing processes to reflect the state of the company’s order book and general economic factors and that it carried out this process out on an annual basis. The Employer stated any measure of support taken in the early part of 2023 would be inherently unreliable by the time any decision on recognition was taken by the CAC. The Employer then repeated it submission that a ballot should be an absolute requirement in the current process, whatever the outcome of this hearing.

27) It was understood by the Employer that the Panel would consider whether the proposed bargaining unit put forward by the Union was appropriate, having taken the Employer’s submissions into account, rather than deciding which of two competing bargaining units was the more appropriate (R v CAC ex p Kwik Fit (GB) Limited [2002] IRLR 395). The nub of the Employer’s submissions was that the problems that would be caused by endorsing the Union’s choice of bargaining unit would render that bargaining unit inappropriate.

28) Furthermore, in its submissions the Employer confirmed that the proposed bargaining unit did not promote good industrial relations or allow for coherent collective bargaining between the Union and the Employer, and that the proposed bargaining unit was artificial and chosen so as to maximise the proportion of workers within it who were members of the Union. The Employer stated the Union had not considered anything other than how best to achieve a majority of membership in the proposed bargaining unit and had simply drawn a circle around its current members and had not paid any attention at all to the practicality of the bargaining unit that it has proposed.

29) The Employer explained that it had operated in Cheltenham for over 100 years without recognising a union as an aid to industrial relations, and its business group operated under a set of group-wide inclusion commitments that promised ‘Everyone is Included’. The Employer’s UK colleagues totalled around 2784, all of whom were subject to any agreed pay increase or pay review process within the UK. The Employer explained that the total body of the UK Group colleagues were subject to the same overall set of policies, procedures and general terms and conditions, which amounted to approximately 1246. Based on the descriptors provided by Unite, the Employer’s best calculations for the proposed bargaining unit was 139 colleagues within an operating business titled ‘UK Supply’, which employed circa 545 workers. As previously noted, the Employer found it genuinely difficult to determine the number of current employees within the proposed bargaining unit, as it would not describe or divide its business as the Union had done. The Employer also explained that the impact of the proposed bargaining unit on effective management was highlighted in its bundle starting at page 76. The Employer’s management structure was also set out in the bundle and demonstrated that the Machine Shop workers were managed under different leadership teams, even within the same building. The Employer stated that the proposed bargaining unit cut across the management structure as different machine shop workers were managed by different leadership teams and employees carrying out work as operators in the same physical or departmental areas had been excluded from the proposed bargaining unit. The Employer confirmed that team leaders, who were considered part of the Machine Shop and of the production process generally had also been excluded and in this way the proposed bargaining unit had been artificially divided both “vertically” and “horizontally”.

30) The Employer confirmed that in its submissions that under the management of the Operations Manager, the number of employees matching the Union’s descriptors totalled 133. But there were other employees in the same buildings involved in the same manufacturing processes who had been excluded, as well as employees in other buildings involved in manufacturing, all of whom would not form part of collective bargaining if recognition were to be granted in the way requested. Furthermore, the Employer confirmed that there were 185 ‘shop floor/direct or indirect’ colleagues who worked within buildings A, B and C of the Manufacturing Site, which had been identified as the location of the proposed bargaining unit, and in total across the operating business there are 327 colleagues who were considered as ‘shop floor/direct or indirect’, who fell under the same grading structure.

31) The Employer stated the contracts of employment used for all UK Supply workers were identical, save for differing schedules which set out specific key terms of the individuals’ contracts and these would include differences in working hours and shift schedules. The Employer referred the Panel to its template contract in its bundle.

32) Finally, the Employer reiterated that the proposed bargaining unit had the potential to create disparities between workers carrying out the same work in the same locations, thereby creating clashing, fragmented and disruptive bargaining arrangements within the business. Accordingly, the proposed bargaining unit was not compatible with effective management and opened up the possibility of small parts of the team involved at shop-floor level in the Employer’s manufacturing processes being covered by collective bargaining, when others in the same team and/or in the same building and/or doing the same type of work would not. The Employer confirmed that in this way the proposed bargaining unit failed to take into account the characteristics of the workers which fell, and should fall, within the proposed bargaining unit, contrary to paragraph 19B of the Schedule. As mentioned above, the Employer did not believe that a majority of colleagues were likely to support recognition. The Employer stated that should it be unsuccessful in persuading the CAC that the proposed bargaining unit should be rejected, it would be essential to hold a ballot to decide whether the Union was recognised. The Employer explained that a meeting had been held between representatives from the Employer, the Union, and Acas on 16 August 2023 to progress discussions around widening the proposed bargaining unit to make this more workable. However, despite the Employer highlighting its concerns as expressed above, the Union had refused to widen the scope of its proposed bargaining unit. The Employer’s submission was that the artificially narrow bargaining unit proposed by the Union should be put aside and that a ballot should be held, whether for shop floor/direct or indirect’ employees or for the whole of the Manufacturing Site.

5. Considerations

33) 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. The Panel’s decision has been taken after a full and detailed consideration of the views of both parties as expressed in their written and oral submissions.

34) In reaching its decision the Panel has taken 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.

35) 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.

36) 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 are all situated in one location, namely, The Machine Shop South (Buildings A, B, &C), Runnings Road South, Kingditch Trade Park, Runnings Rd, Swindon Village, Cheltenham GL51 9NQ

(b) all of the workers in the roles in the Union’s proposed bargaining unit are subject to the same contracts of employment. The Panel notes the submission of the Employer in which it stated workers contracts of employment used for all UK Supply workers were identical.

(c) The Panel is aware of examples both in the private and public sector and in differing sizes or organisations where different types of workers are included in the same bargaining unit, which is not incompatible with effective management.

37) 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.

(b) There are no current national or local bargaining arrangements.

(c) The Union’s proposal was a bargaining unit at one location across the south side of a building referred to as the Machine Shop. The Union’s proposal avoided small, fragmented bargaining units. The Employer had not suggested an alternative bargaining unit other than stating it welcomed discussions around widening the proposed bargaining unit and that the bargaining unit proposed by the Union should be put aside and that a ballot should be held.

6. Decision

38) The Panel’s decision is that the appropriate bargaining unit is that proposed by the Union, namely “CNC Setter/ Operators; Press Shop; Weld Cell; Finishing and Lapping departments, Section Leaders, Roving Inspectors, Janitor and Tools Store Operative employed by Spirax Sarco Limited within The Machine Shop South (Buildings A, B&C)”.

Panel

Ms Laura Prince KC, Panel Chair

Mr Sean McIlveen

Ms Claire Sullivan

26 September 2023

7. Appendix

Names of those who attended the hearing:

For the Union

Amy Roberts - Regional Officer for Unite

Mark Beale - Machine Shop Operator

Chris Royles - Machine Shop Operator

Charlotte Goodman - Barrister

For the Employer

Greg Godfrey-Williams – General Manager UK Supply

Samantha Stew – HR Lead UK Supply

James Hughes – Operations Manager UK Supply

Reut Benedek – Head of HR, Global Supply Chain

Michael Stokes – Solicitor