Decision

Bargaining Unit Decision

Updated 10 December 2021

Applies to England, Scotland and Wales

Case Number: TUR1/1211(2021)

12 July 2021

CENTRAL ARBITRATION COMMITTEE

TRADE UNION AND LABOUR RELATIONS (CONSOLIDATION) ACT 1992

SCHEDULE A1 - COLLECTIVE BARGAINING: RECOGNITION DETERMINATION OF THE BARGAINING UNIT

The Parties:

United Road Transport Union

and

Eddie Stobart Limited

1. Introduction

1) United Road Transport Union (URTU) (the Union) submitted an application to the CAC dated 22 February 2021 that it should be recognised for collective bargaining by Eddie Stobart Limited (the Employer) for a bargaining unit comprising “Core worker warehouse operatives up to (but not including) the level of supervisor” and the location was given as Eddie Stobart DC420, Kilsby, Rugby CV23 8YL. The application was received by the CAC on 25 February 2021. The CAC gave both parties notice of receipt of the application on 26 February 2021. The Employer submitted a response to the CAC dated 3 March 2021 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 Professor Kenny Miller, Panel Chair, and, as Members, Mr Tom Keeney and Ms Fiona Wilson. The Case Manager appointed to support the Panel was Linda Lehan.

3) By a decision dated 26 March 2021 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 hearing via zoom was held on 16 June 2021 and the names of those who attended the hearing are appended to this decision. The Panel is required, by paragraph 19(2) of the Schedule to the Act (the Schedule), to decide whether the Union’s 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.

2. Matters clarified at the beginning of the hearing

4) The Panel Chair opened the hearing by asking the Employer to clarify that it was now in agreement that the Agency Workers should not be included within the bargaining unit proposed by the Union and that this was not an issue forthwith which the Employer confirmed.

5) The Panel Chair asked the Union to clarify whether the Warehouse Allocators were in their proposed bargaining unit and the Union confirmed that their proposed bargaining unit comprised only of the Warehouse Operatives at DC420 as stipulated in their description and clarified that it also did not include the Warehouse Shunters and Warehouse Team Leader.

6) The Panel Chair also asked the Union if it had any thoughts on the point made by the Employer at the end of their submissions where it made reference to ESL remaining open to agreeing with URTU the bargaining unit that ESL had proposed in their submissions. The Union explained that they had tried to engage with the Employer previously and confirmed that they did not agree with the proposed bargaining unit put forward by the Employer as clarified in their statement of case.

7) The Panel Chairman thanked the parties for their extensive written submissions and confirmed that the Panel had read those closely.

3. Summary of the submissions made by the Union

8) The Union stated that the Employer had made reference to their proposed bargaining unit description as not being very clear and in their opinion it was very clear, and it was intended for Warehouse Operatives as stipulated and did not include the Warehouse Shunters, Warehouse Team Leaders or Warehouse Allocators.

9) The Union explained that the reason why the Warehouse Shunters were being excluded from their bargaining unit was because they had a different role as was confirmed by the Employer in their statement of case where it was stated in the job description that they moved trailers around the yard rather than being involved with the actual picking and packing as described in the job description of the Warehouse Operative. The Union also pointed out that in the job description of the Warehouse Shunter it said that they worked closely with the Team Leaders, Allocators and Administrators but did not state they worked closely with the Warehouse Operatives and nor was it in the Warehouse Operative job description to say that they worked closely with the Warehouse Shunters. The Union said that there were two additional points to be aware of the first being that the Warehouse Shunters were on a 60 hour a week contract whereas the Warehouse Operatives typically worked a 37.5 hour week and although it was not definitely known there was a possibility that the Shunters were HGV Drivers.

10) In relation to the Team Leader the Union said that this role sat at a different level to the Warehouse Operative role and the Union had been told by the workers that previously the Team Leader was in a management role prior to their transfer and had been TUPE’d in on a management role and that the role was then changed to a Team Leader and was considered by the workers to be part of the management team. The Union said that they had also been informed by the workers that the Team Leader was based in the office and had no truck experience and was regarded separately and they felt that was significant in considering whether it was appropriate to include that role in the bargaining unit.

11) Turning to the Warehouse Allocators again the Union said that that was a different role as was made clear from the description given in the Employer’s statement of case and that they had been informed that only one Allocator was contracted to the warehouse and one was not and again they did say that that role fell separately from the Warehouse Operatives.

12) The Union said that it was significant to note that in relation to all 3 of the above roles under the current internal representation structure the current representatives did not represent those roles and therefore their proposed bargaining unit of including Warehouse Operatives only was actually reflective of the way in which there was currently consultation or to the extent that there was negotiation on pay for the Warehouse Operatives separately.

13) In respect of the Admin and Junior staff the Union submitted that it was significant that the admin staff were not part of the current national negotiations on Warehouse Operatives terms. The Union stated that the Employer in their submissions stated that the only difference in relation to terms, conditions and pay, which the Employer said was immaterial, was that there were different, but very similar, rates of pay which reflected the difference in role content and the Union said that they would dispute that even a small difference in pay was immaterial. It was the Union’s understanding that the admin and junior staff at Crick and DC420 were on different contracts of employment to which different terms and conditions applied and that they carried out different work to the Directly Employed Warehouse Operatives at both depots. Given that there was very little interaction between the two groups the Union had found it difficult to get a sense of exactly what difference there were between Directly Employed Warehouse Operatives and the junior/admin staff operating out of DC420 and Crick. The Union stated that they also felt it very significant, as set out by the Employer in their submissions, that the Administrators were not subject to the same pay review system as the Operatives and that their pay award was normally identical to the pay award in percentage terms given to the Operatives. The Union said that there was nothing to stop the Administrators’ conditions following what was negotiated if the bargaining unit covered the Warehouse Operatives in the same way as currently happened. The Union said that the Admin staff were clearly a very distinct group and were treated differently for current negotiation on pay and it was entirely appropriate that they be excluded from the proposed unit as put forward by the Union.

14) In respect of the two depots out of which the Employer operated: DC420 and Crick the Union stated that both sites were managed by a separate team at the lower tiers of management and its management was only shared from Area Manager level upwards. The Union believed that the Manager’s below Area Manager level i.e. Operation Managers, were specific to either DC420 or Crick and were treated as separate depots, with their own management team and the only crossovers occurred from the Area Manager level upwards. The Union disputed that staff at Crick regularly worked at DC420 (and vice versa). It was the Union’s belief that the two depots were very much viewed as separate workplace units by the staff that worked at them and any transfer of staff from one depot to another was only for the purposes of covering holiday, sickness or other absence. The Union believed there was certainly no cross over of staff on a daily basis as the Employer had tried to suggest. The Directly Employed Warehouse Operatives the Union had spoken to on that matter had stated that they would have known when staff were coming across from Crick and contrary to what the Employer was trying to suggest at DC420 they rarely saw staff from Crick. The Union also believed that staff were transferred in from other warehouses and therefore from the Operatives point of view going to Crick or having people from Crick at DC420 was no different from people being drafted in from other warehouses.

15) In respect of the data supplied by the Employer regarding hours worked by the Operatives when required to move between the two sites the Union said that they acknowledged that the Warehouse Shunters spent 30% of their time at Crick and pointed out that therefore the figures would indicate a lower percentage of transfer hours for just the Warehouse Operatives.

16) The Union said that the two warehouses DC420 and Crick were not as closely as aligned as the Employer had suggested but they did acknowledge that there was a Crick “campus” and, certainly as far as the Operatives were concerned, that referred to what was known as a ‘glass house’ which consisted of Operatives at Crick and 3 warehouses A, B and C and the Operatives at DC420 did not regard themselves as part of that “campus”.

17) The Union further believed that DC420 and Crick did not share a budget for the purposes of their operations. It was also the Union’s understanding that the staff at Crick had not expressed a need for Union representation.

18) The Union said that in their submissions they had said that they only had members who worked out of the DC420 depot but had since discovered that they possibly had 3 members operating out of Crick. The Union said that it currently represented 23 employees at DC420 out of the 39 full time warehouse operatives directly employed by ESL (‘Directly Employed Warehouse Operatives’) and in the last year that number had increased significantly from 0 to 23.

19) Whilst it was accepted by the Union that Warehouse Representatives from DC420 sat in on national pay consultations, it was due to their and their members frustration with a process that did not allow for effective negotiation which had led them to seek recognition in their own right.

20) The Union stated that whilst the following submissions will address each of the individual factors under 19B(3) of the Schedule, it is recognised that the overriding need is for the unit to be compatible with effective management and maintained that their proposed bargaining unit was consistent with that need. The employees covered by such a proposed bargaining unit were an appropriately self-contained and defined group which the Union believed were sufficiently distinct from other workers. The Union stated that it was also compatible with effective management for the unit to be organised by depot, and that was supported by the fact that the present Warehouse Representatives were organised by depot, with each being classed by their own “constituency”. The Union believed it also helped indicate that having a unit that included the Warehouse Operatives, but not the administrative and other junior staff, was compatible with effective management, as the present representative system only included warehouse employees and not the administrative and other junior staff.

21) The Union stated that given how the unit proposed by ESL was not in line with the way in which the present representatives were organised, the unit proposed should be viewed with scepticism and the Panel would no doubt be conscious of the potential motivation of ESL in trying to make the unit as wide as possible in those circumstances in order to minimise the chance of statutory recognition being achieved.

22) As to the location of workers the Union stated that this was particularly significant in relation to whether the bargaining unit should include the workers from Crick or not. The Union stated that Crick was a separate depot from DC420, and it was disputed by members of staff from DC420 that staff at Crick regularly worked at DC420 (only for holiday cover), a point which was also relevant to other factors above. The Union said that the differences in characteristics between the DC420 and Crick workers highlighted above are also relevant and it was not as simple as saying that the depots were geographically close. The Union pointed out that interestingly, the staff at Crick were not mentioned in ESL’s initial objections to URTU’s description of the bargaining unit.

23) The Union stated that as previously highlighted there were existing consultation arrangements in force, of which it was significant to note how they were composed as dealt with above, but as recognised in the Panel’s previous decision they did not involve an independent union. Therefore, they posed no difficulty to URTU’s proposed bargaining unit, particularly as the scope of the Recognition Agreement of the Negotiation Group explicitly excluded those warehouse employees represented by another collective bargaining agreement. The Union stated that it would therefore simply be a matter of the Warehouse employees covered by the new bargaining unit falling outside of the scope of the existing arrangements. The Union said that it also indicated that this was something anticipated by ESL when entering into the recognition agreement, thereby suggesting that it was something that was thought could be accommodated alongside and compatible with effective management. Further, albeit that there were national consultations with the Warehouse Representatives under the current system, the Union maintained it did not allow for effective negotiation.

24) In relation to the desirability of avoiding small fragmented bargaining units the Union stated that it was firstly significant to note that neither URTU or ESL had suggested the appropriate bargaining unit be wider than just one or two depots. Any fragmentation argument therefore would relate to within the one or two relevant depots rather than on a wider basis. The Union said that even more significantly, there was no evidence that the groups whom ESL had tried to include within the bargaining unit would be looking to set up their own bargaining units. For example, the Union stated that the agency staff had not expressed a need for representation and similarly, the warehouse staff at Crick had not expressed a need for representation. The Union stated that as mentioned above, given the present warehouse representative set-up, even if the warehouse staff at Crick did in the future wish to have their own bargaining unit, that would not result in an overly small or fragmented bargaining units: such units would be compatible with effective management as demonstrated by the present forums. The Union said there was definitely no indication of any other union involvement, and further, there would be no risk to say that adopting the narrower bargaining unit contended for by the Union would result in multiple bargaining units arising.

25) The Union stated that therefore the bargaining unit put forward did not unduly risk small fragmented bargaining units and was an appropriate one which was compatible with efficient management.

26) As to the characteristics of the workers the Union stated that the administrative and other junior staff whom ESL sought to include in the bargaining unit were on different contracts, they carried out work of different descriptions and were subject to different terms and conditions. Turning to consideration of the workers at Crick the Union stated: Crick had its own management staff and there was no crossover with DC420 until the level of senior management i.e. at Area Manager. There were approximately 20 people in the dedicated leadership team at DC420, which the Union maintained were not shared with Crick. Further, the relevant operatives did not believe that DC420 shared a budget with Crick, and although the Union were not entirely sure on this, their belief arguably demonstrated how little impact any shared budget had on those workers and the matters relevant to representation and bargaining on their behalf.

27) The Union stated that considering the “culture of the workplace” it was important that the directly employed Warehouse Operatives at DC420 regarded themselves as a distinct group from the others sought to be included in the bargaining unit by ESL and this was especially so in relation to not only the agency workers, but also in relation to the admin/junior staff and also the personnel at Crick.

28) The Union disputed that, as ESL apparently asserted but without evidence, URTU’s proposed unit would create division amongst staff as there was already a certain amount of natural division amongst staff, particularly between the agency and directly-employed warehouse personnel at DC420. The Union gave as an example the existing resentment due to key differences arising such as with the rates of pay and perceived leniency regarding disciplinary and attendance issues. The Union believed that by having a bargaining unit as proposed by them would not inappropriately increase any such divisions or create new ones.

29) The Union stated that as an alternative argument if URTU’s proposed description was not accepted, they would argue that alternative wording should be used to identify the bargaining unit which encapsulated the Warehouse Operatives which it sought to include but exclude the others. The Union put forward that if neither of those arguments were accepted, as very much a secondary position, URTU considered there to be a hierarchy as to the appropriateness of including the groups contended for by ESL. The URTU considered that Crick warehouse operatives directly employed by ESL came closest; followed by administrative and other junior staff.

30) The Union stated that for the reasons set out above, the URTU’s proposed bargaining unit was appropriate and the Directly Employed Warehouse Operatives who operated out of DC420 operated as entirely distinct staff to those that operated out of Crick (a separate workplace) and were admin/junior staff employed by ESL (who undertook a very different role).

31) Finally, the Union stated that for the reasons set out above, the CAC is primarily invited to decide that the URTU’s proposed bargaining unit was appropriate under paragraph 19 of the Schedule and if the Panel were against URTU on this, then URTU’s position as to alternative bargaining units was as above.

4. Summary of the submissions made by the Employer

32) The Employer explained that it was part of a wider group of companies. and was wholly owned by GreenWhiteStar Acquisitions Limited (“GWSAL”). One of its sister companies and which it worked closely with, was The Logistics People Limited (“LPL”). This was also wholly owned by GWSAL. As a group, the Employer/GWSAL was the United Kingdom’s most comprehensive provider of supply chain, transport and logistics services employing approximately 6,500 staff. On its own, the Employer employed 3,388 staff and, through LPL, it engaged approximately 2,000 agency workers to work at its sites.

33) The Employer stated that warehouse operations formed one division within the Employer’s group and that there were 31 warehouses based in the United Kingdom. The Director of Contract Logistics and Warehousing had overall responsibility for the warehousing division and the Distribution Centre Managers, who were responsible for each of the individual warehouses, reported to him. The Employer confirmed that there were 653 employees employed across the warehousing division and currently two of the 31 warehouses had trade union recognition agreements in place.

34) The Employer stated that the Panel would be very familiar in terms of assessing the matters under paragraph 19B(3) of the Schedule and how to look at the business organisation and the way it functioned in practice and referred the Panel to the CAC’s decision dated 19 February 2005 in respect of TGWU & Royal P&O Nedlloyd.

35) The Employer explained that some warehouses worked more independently than others, for example, those which had their own recognition arrangements, whilst others worked more closely together as a “campus” with shared management, resources, customers and staff. The Employer adopted this approach in a number of locations including in London, where two warehouses were only a few miles apart. The Employer submitted that the two warehouses that adopted the “campus” approach were relevant to their submissions: DC420 (CV23 8YL), which was within the scope of the Union’s proposed bargaining unit; and Crick (NN6 7ES), which was not.

36) The Employer submitted that the Union’s proposed bargaining unit still remained unclear because the idea of dividing DC420 between Warehouse Operatives and the non-Warehouse Operatives was an entirely artificial construct and it was artificial because as set out at length in their submissions they had indicated the commonality that existed in some of those roles. In particular the notion of dividing between non-Warehouse Operatives and Warehouse Operatives the Employer said was simply wrong and the reasons for that are set out below in the job descriptions.

• Warehouse Shunters of whom there were currently two. Their duties were to move trailers around the yard. They also performed trailer checks and kept good order in the yard to ensure safety. They worked closely with team leaders, allocators, administrators and clerks and also worked at Crick on a 70/30 basis.

• One Warehouse Team Leader whose role was to monitor performance against key performance indicators and ensure Warehouse Operatives and Warehouse LGV Shunters were where they needed to be in the warehouse so KPIs were met. The job involved dealing with subcontractors and receiving trains, when required. Frequently the job required undertaking the role of Warehouse Operative alongside substantive warehouse operatives. The Team Leader did not carry out any managerial tasks such as dealing with disciplinary and grievance matters or matters that would fall within the scope of collective bargaining. The individual also worked at Crick as required. It would be compatible with effective management to include this role.

• Warehouse Allocators (currently two) who monitored stock movements and assisted with the movement of stock within the warehouse. They worked very closely with operatives, shunters and team leaders to pick, pack and prepare goods for distribution, in accordance with customer orders. They did not hold any managerial responsibilities and it was an operational role. They undertook Warehouse Operative tasks from time to time, when demand required. They also worked at Crick as and when required.

• Administrators (Warehouse/Transport) (Five) and clerks (two). Both DC420 and Crick shared the same customers and stock. Administrators/Clerks worked on both sites to ensure knowledge in respect of those customers and stock was shared with operational staff and other Administrators/Clerks and Managers. They worked with operational roles at DC420 and Crick on a daily basis within the warehouse to ensure product and transport availability and dealt with any administration and queries from the operational team and customers. Some roles across both sites also compiled a labour plan based on customer forecasts, compiled a MHE training plan (along with the Warehouse Operative who performed the training), supported Operatives and Administrators with payroll matters, ensured compliance with internal and external audits and kept inventories. Multi-skilled Administrators undertook Warehouse Operative duties from time to time. They worked on the same shift system as the above staff.

37) The Employer contended that the appropriate bargaining unit that was compatible with effective management was one consisting of Warehouse Operatives; Warehouse LGV Shunters; Warehouse Team Leaders; Warehouse Allocators; Warehouse and Transport Administrators; Warehouse and Transport Inventory Controllers; Account Handlers; and Clerks employed at DC420 (CV23 8YL) and Crick (NN6 7ES). The Employer stated that the reason they felt that the bargaining unit should encompass Crick was because there was interchangeability in terms of individuals moving between the two sites not simply in relation to what they described as Warehouse Operatives of whom there were 56 at DC420 and 23 at Crick. The Employer stated that the sites were 1 mile apart and it came as news to them the statement made by the Union that there was a self-standing Crick “campus” which they disputed and said that the “campus” was of the two sites which had common costings, common customers and common management and Warehouse Operatives and other employees including the Warehouse LGV Shunters as clearly set out above. The Employer confirmed that the Shunters were not HGV drivers as suggested by the Union.

38) The Employer explained that 20 additional Warehouse Operatives had recently been recruited in response to an increase in demand. The Panel asked whether any of the workers taken on were from the agency workers already working on site and the Employer answered ‘yes’. The Employer stated that one of the Warehouse Operatives also provided training to other warehouse operatives at both Crick and DC420 as a Campus MHE Trainer. The Employer also confirmed for the Panel that there were 12 agency staff employed by LPA who were working between both sites.

39) The Employer stated that the Union’s proposed bargaining unit excluded the 36 workers at Crick, five at management level and 31 below management level and excluding the 23 Warehouse Operatives, the five administrators and three Controllers and Account Handlers at Crick rendered the Union’s proposed bargaining unit incompatible with effective management on the basis that, essentially, the two warehouses operated as a “campus” and staff on both sites worked closely and interchangeably at both sites. The Employer stated that those workers carried out the same roles as their colleagues at DC420 and worked at DC420 as and when required.

40) The Employer stated that the Union had not included within its proposed bargaining unit Warehouse Allocators, Warehouse Shunters and Team Leader at DC420 who worked alongside and very closely with the other Operatives and who performed other Operative functions from time to time. They worked alongside each other and interchangeably when required to work across both warehouses managed by the same Distribution Centre Manager and both serving the same customers. The Union also excluded the few remaining workers (i.e. the Administrators) who were at a similar level to the Operatives, on similar terms, worked the same shift systems and who worked very closely with those within the proposed bargaining unit (and interchangeably with Operatives from time to time if the Administrator was multi-skilled). Without the Administrators, the Operatives would not be able to perform their duties and vice versa.

41) The Employer contended that given the way DC420 and Crick operated and the similarity and interdependence of the roles on each site as well as their terms and conditions of employment, it was not compatible with effective management to exclude these roles.

42) In addressing the characteristics of the workers, the Employer argued that it was important for the Panel to consider the characteristics of those workers excluded from the Union’s proposed bargaining unit namely the remaining Operatives at DC420 (i.e. the Warehouse Allocators, Warehouse Shunters and Team leader), the Operatives at Crick and the Administrators at DC420 and Crick (who were the only other workers at both warehouses below managerial level and who had common characteristics to those within the proposed bargaining unit).

43) The Employer said that the Panel should consider the shared objectives, the interchangeability of roles and team working of the two warehouses. The Employer explained that unlike a number of other warehouses, DC420 and Crick were very close neighbours and had the same Distribution Centre Manager, who ultimately made the decisions on the management of workers at both sites, and management support team. The Employer stated that the two warehouses also shared the same performance targets and customers and as a consequence, the two sites operated together as one “campus” and shared warehouse space and work was regularly moved between the two warehouses to manage peaks and troughs in business needs.

44) The Employer stated that the Administrators worked closely together and across both sites, despite being based at one of the two sites, in order to ensure customer demand was managed. As such, the Administrators worked very closely together and with the Operatives to ensure stock and transport was available at the correct location and goods were picked and distributed correctly and on time. They worked with the Operatives on a daily basis, on the same shift system, and were often involved in problem solving and dealing with customer queries together. From time to time, multi-skilled Administrators also performed some of the tasks of an Operative when customer or business needs required this.

45) The Employer explained that Operatives at both sites carried out the same role and as work was moved between the two warehouses to meet customer or business demands, Operatives were required to move between sites too. This meant that Operatives at Crick worked alongside Operatives at DC420 in an interchangeable way. Data provided by the Employer showed that over the period 5 December 2020 to week ending 12 June 2021 (28 weeks) Operatives had been transferred between the two warehouses for a total of 5,443.25 hours which averaged 194.4 hours per week. This data included LPL/agency workers that had been transferred. Excluding these agency workers, a total of 4,854.5 hours had been transferred between sites over the same period, which was an average of 173.38 per week. The Employer stated that it was important to consider the data as a whole, rather than consider LPL/agency transfers separate to the Employer’s transfers, as the workers were selected for transfer at random rather than by which part of the group employed them.

46) The Employer stated that the two Warehouse Allocators at DC420 worked very closely with the other Operatives and performed operational work. They also performed the duties of the other Operatives, when customer or business needs required, interchangeably with the other Operatives.

47) The Employer stated that except for those warehouses with their own collective bargaining arrangements, all workers employed as Operatives within the warehouse division (including DC420 and Crick) enjoyed the same rate of pay relative to their job role, including the same rate for any shift premiums. They received the same pay award each year; received the same pension entitlement; and worked under the same contract of employment. The Employer included a copy of this contract with its submissions. They had the same holiday entitlement; had the same maximum hours of work; worked on very similar shift systems; and were subject to the same employment policies, procedures and performance management processes.

48) The Employer stated that the Administrators also worked under the same contract as each other and the Operatives, received the same pension and holiday entitlement, had the same maximum hours of work, worked on the same shift patterns and were subject to the same employment policies procedures and performance management processes as the Operatives and other Administrators. The only difference, which was immaterial, was that there were different (but very similar) rates of pay which reflected the difference in role content. Further, whilst the Administrators were not subject to the same pay review system as the Operatives, their pay award was normally identical in percentage terms to the Operatives to ensure there was equity.

49) The Employer submitted that those workers within the proposed bargaining unit and those Operatives at DC420 and Crick that were not in the Union’s proposed bargaining unit, were essentially working as one team, to the same terms and conditions and so closely together in a flexible, interchangeable way that it would be wholly inappropriate and unworkable to exclude them from the bargaining unit. In a similar fashion, it would be unworkable to exclude the small number of Administrators (seven at D420 and eight at Crick), who would be left behind if the Operatives were to form their own bargaining unit. The Employer stated that they worked as a close team with the Operatives to achieve local performance targets and customer needs, and in the main worked to identical terms and conditions. As regards pay, this was very similar to the pay given to Operatives and annual pay awards were normally identical.

50) The Employer believed that to split those workers up into two or three groups (i.e. leave the Administrators out or leave out the other Operatives and the Administrators) would result in two or three separate bargaining arrangements consisting of a very small number of workers for which there would need to be two or three different consultation/negotiation processes and pay systems in addition to the other processes and systems operated for the other 17 warehouses. It would mean different pay and premium rates being applied to bargained roles as compared to other local roles which were exactly the same or very similar, but which were not bargained. This the Employer stated would create unfairness amongst those who performed the same or a similar level role and would result in unequal pay potential and would result in demotivated teams and conflict, neither of which was compatible with effective management.

51) The Employer argued that division in the workforce would also create inconsistencies amongst workers in respect to terms and conditions, holidays and core hours to the extent that they were subject to collective bargaining. Again, this would require the operation and administration of two or three different systems locally and create operational difficulties given the interchangeability of roles between the two sites and between roles. The Employer confirmed to the Panel that notwithstanding that there were differences in pay as far as they were concerned it was a big team.

52) The Employer stated that operating different pay rates and terms within the same or similar level role simply based on whether the role was subject to collective bargaining or not could expose them to equal pay claims. There was also the potential for different hours and holidays being bargained for at DC420 and a real and material risk of rotas or leave systems being put in place which would take DC420 outside of the arrangements agreed for other warehouses nationally, including Crick, if Crick were not part of the bargaining unit. This the Employer contended could result in incompatible rota systems that would make it difficult to transfer staff between the two warehouses which was essential for the functioning of the business. The Employer argued that it would also make it more difficult for Administrators, who were on the same shift systems as Operatives, to work efficiently and effectively with Operatives.

53) The Employer argued that if the pay review systems for each of the separate groups did not produce equal results, this would result in either the collectively bargained roles or the non-collectively bargained roles receiving a larger overall pay raise, which would create discontent. It was the Employer’s experience that different pay/conditions deals were concluded at sites where there were collective bargaining arrangements as compared to those that were not part of collective bargaining. Further, there were different deals concluded as between those sites where there was collective bargaining. As such, the plurality of the arrangements resulted in different terms as to pay, hours and holidays applying across its warehouse network. The two sites that were currently subject to trade union recognition were relatively independent of each other and other warehouses and therefore, whilst not ideal, could be managed separately to a certain extent. However, the Employer considered that it was different at DC420 given the “campus” approach taken with Crick, and the resource and people sharing arrangements between those two warehouses and it would simply be unworkable and unfair to have a split system.

54) The Panel asked the Employer whether there were any other similar sites where workers switched between sites and the Employer stated that there was the London “campus” and also two other sites where Unite the Union had a recognition agreement at Daresbury and that was linked to a site at Appleton. After the hearing the Employer sent to the CAC a document giving clarification of the information provided by them in response to the question from the Panel as to “campus” sites operated by Eddie Stobart Logistics Limited which stated:

The Respondent provided an answer as to the campus consisting of two warehouse facilities: Daresbury (Runcorn, WA7 1NT) and Appleton (Warrington, WA4 4TQ). This clarification of information sets the context of the operation of these two sites. The Panel is invited to take full account of the information clarified herein.

By way of such clarification, the following information is provided:

a) The Daresbury site and its workforce transferred by operation of law to ESL following its assumption of a contract for services (the Transfer) under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE);

b) In consequence of the Transfer and in accordance with Reg. 6 of TUPE, an existing trade union recognition agreement was deemed to be recognised in relation to transferring employees by ESL in respect of employees working at Daresbury;

c) Daresbury is a site managed in accordance with the requirements of the Medicines and Healthcare products Regulatory Agency (MHRA);

d) Appleton is a nearby satellite site which is currently operated on behalf of a client (WS) and has been for the last twelve months. Prior to this time and for the preceding two years, ESL employed one person at the Appleton site as the ‘responsible person’ (the Responsible Person) to cover the relevant obligations placed upon it by MHRA;

e) More recently, 4 additional managerial staff have been allocated by ESL to Appleton specifically to facilitate an increased demand in relation to the provision of services to WS;

f) ESL will shortly be transferring the Daresbury site to a third party under TUPE. The third party will be assuming the relevant contract for services which ESL currently operates at Daresbury on behalf of the client for whom ESL currently provides the services;

g) The only interchangeability of workers between Appleton and Daresbury relates to holiday cover in the event that the Responsible Person at Appleton is unavailable and cover for that role is provided from Daresbury; and

h) Appleton and Daresbury do not share common management unlike DC420 and Crick.

For the purposes of this application and, in particular, the appropriateness of the proposed bargaining unit, the Respondent submits that the specific factual circumstances appertaining to the Appleton and Daresbury sites cannot be illustrative of two sites co-existing in a ‘campus’ setting on the part of ESL where one site has a trade union recognition agreement and the other does not. The point of difference being that Appleton had/has only a minimal workforce presence (i.e. historically a single person) as was mandated under MHRA requirements, no shared management and interchangeability is limited only to the provision of holiday cover by Daresbury in favour of Appleton.

It is not in essence similar to or akin to campus co-existence of DC420 and Crick for the purposes of this application and, accordingly, cannot be compared.

55) The Employer said that it was clear that to exclude the other Operatives and the Administrators from the bargaining unit in such an artificial way would create unfairness, inefficiency, disharmony/conflict amongst staff and potentially legal risks for the Employer. Therefore, the proposed bargaining unit was inappropriate, unworkable and incompatible with effective management. Further, given the numbers involved, the level of similarity between the roles and the level of team integration the Employer felt it would be entirely inappropriate and unworkable to exclude Administrators. There were seven administrators at DC420 and 8 administrators at DC420 and Crick.

56) As for the location of the workers, essentially, only workers at DC420 (CV23 8YL) were covered by the proposed bargaining unit but the Employer believed it would be inappropriate to draw an artificial line between the workers employed at DC420 and those at Crick (NN6 7ES), given their close proximity.

57) The Employer confirmed that there was in place a national consultative body to which representatives were elected for a three-year term to represent Operatives in consultations on a number of matters and as such, any pay review matters for Operatives were decided as part of this arrangement. A copy of that agreement as well as the employee representative role profile was submitted as part of the Employer’s response form. The Employer informed the Panel that there were three employee representatives for DC420 and two for Crick and that any decisions made following consultation with the national consultative body applied to all Operatives, including those at DC420 and Crick and the only warehouses excluded from this arrangement were those covered by a recognition agreement. The Employer stated that any warehouses subject to union recognition in future would also be excluded from the forum and, instead, be subject to their own collective bargaining arrangements. Accordingly, if the bargaining unit consisted of Operatives at DC420 only, the Operatives assigned to Crick (and the Warehouse Allocators, Warehouse Shunters and Team Leader at DC420 who appeared to be excluded) would be subject to the national arrangement, and the Administrators subject to their own arrangements. The Employer said that would create significant inefficiencies, unfairness and potentially legal risks.

58) The Employer stated that recognition at DC420 alone would result in three out of the 31 warehouses having separate collective bargaining arrangements giving rise to a realistic risk of creating numerous small fragmented bargaining units, all represented by different unions. Recognising a number of small units, each consisting of a single location, was likely to result in more individual warehouses seeking their own recognition arrangements, potentially with the support of another entirely different union. The Employer contended that there was also the risk of administrators at those warehouses forming their own small units and fragmentation of that sort was inefficient, unmanageable and incompatible with effective management.

59) On a more local basis, given how closely that DC420 and Crick worked together, the Employer thought it was very likely that the proposed bargaining unit would cause friction and conflict between workers essentially doing the same or similar jobs. It was very likely that if Crick was excluded, it would seek recognition as a bargaining unit in its own right. The same applied to the Administrators. This the Employer said could result in up to four very small bargaining units in essentially what was one workplace and anything other than one bargaining unit would lead to unacceptable fragmentation locally, and increased unacceptable fragmentation nationally, both of which the Panel must seek to avoid.

60) In summary, the Employer stated that adopting the Union’s proposed bargaining unit would not be to encourage and promote fair and efficient practices and arrangements in the workplace, it would likely achieve the opposite. The Employer stated that, in particular, having collective bargaining arrangements in place for some but not all people who did the same job alongside each other and interchangeably; enjoyed the same or similar rates of pay and received identical pay increases; shared the same core terms and conditions, policies and processes; enjoyed the same holiday and pension entitlements; worked on similar shift systems and with the same maximum number of hours; had roles that were integrated so that they were required to work as one team; and would be artificially split up at the risk of each group forming separate fragmented bargaining units; would be wholly incompatible with effective management.

61) The Employer stated that appropriate bargaining unit that was compatible with effective management was one consisting of Warehouse Operatives; Warehouse LGV Shunters; Warehouse Team Leaders; Warehouse Allocators; Warehouse and Transport Administrators; Warehouse and Transport Inventory Controllers; Account Handlers; and Clerks employed at DC420 (CV23 8YL) and Crick (NN6 7ES). The Employer said that their bargaining unit consisted of 99 workers (84 Operatives and 15 Administrators) as opposed to 59 Operatives within the Union’s proposed bargaining unit. The Employer felt it was not appropriate to carve up the local workforce in any other way as that would lead to undesirable fragmentation, inefficiencies, conflict and unfairness. Further, the Employer was of the opinion that nothing would overcome the fact that it would be plainly incompatible with effective management to have workers performing the same or very similar roles under standard core terms and conditions in different bargaining units or some within a bargaining unit and some not. The Employer thought that there was a lack of understanding on the Union’s part as to the Employer’s operation, how interdependent the warehouses were at DC420 and Crick, how closely and interchangeably the staff on both sites worked and how dependant the Operatives were on the Administrators, and vice versa.

5. Considerations

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

63) 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 so, 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 “[i]n 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”.

64) 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. The Panel should not 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, should it consider whether it is the most effective or desirable unit in that context. There is no requirement on the Panel to seek to identify a more appropriate bargaining unit if it finds that the Union’s proposed bargaining unit is appropriate.

65) The Panel has considered the matters listed in paragraph 19B(3) of the Schedule so far as they do not conflict with the unit to be compatible with effective management. The views of the Employer and the Union, as described earlier in this decision, have been fully considered. The Panel does not consider that there are any existing national or local bargaining arrangements in this case. The Panel believes that the bargaining unit proposed by the Union consisting of warehouse operatives only at DC420 excluding the agency workers, whom the Employer now agrees should be excluded from the bargaining unit, is a clear and definable unit given the clarification of membership that the Union provided at the hearing.

66) The parties were agreed that there were essentially three issues that had to be determined in order to establish the appropriateness of the Union’s proposed bargaining unit. (1) Warehouse allocators., shunters and team leaders – Having heard the Union’s explanation for their exclusion, the Panel is satisfied that there are sufficient differences in job content to justify their exclusion from the bargaining unit. The Employer argued that this group should be in the bargaining unit because they worked closely with warehouse operatives. However, in the experience of the Panel this is no more than one should expect from a range of staff in this type of workplace. (2) Administrative and junior staff are not part of national negotiations over pay, their pay is not the same as Warehouse Operatives and they are not subject to certain key review processes. In the opinion of the Panel their exclusion from the Union’s proposed bargaining unit can be explained on the basis of the above differences and job content.

67) When we turn to the third issue – the exclusion of the Warehouse Operatives employed at the Crick site - the Panel considers that this bargaining unit is compatible with effective management. It consists of a distinct and identifiable group of workers, the Warehouse Operatives at DC420, who have common terms and conditions of employment, work in identical job roles, share many common characteristics and report to the Warehouse First Line managers who have responsibility for the DC420 warehouse.

68) It is noteworthy that at first line management level there is a clear delineation between those who have responsibility for managing staff at DC420 and those who have responsibility for Crick. The Employer suggested that the two sites were intended to operate on a campus basis. However, according to the Union this is not the experience of the warehouse operatives working on the ground. The Union asserted that these operatives saw themselves very much as a distinct and cohesive group working together to undertake their contractual duties. Despite the Employer’s claims their experience was that there was not a substantial crossover between the two sites and that it really only operated to cover sickness and holiday absences and the like and that any movement was not restricted exclusively to Crick and DC 420. The only obvious crossover is at senior management level where the Distribution Centre Manager has responsibility for both sites.

69) The Panel accepts that the Union’s proposed bargaining unit is consistent with the current representation arrangements for the Employer’s national consultative body. We do acknowledge that the Union’s proposed bargaining unit will present a certain level of complexity for the Employer. However, we note that the Employer has complexity within its existing working practices, not least in managing employees and agency workers doing the same jobs but on different terms and conditions of employment, and the Union’s proposed bargaining unit would not materially add to this. Given that a number of agency workers have transferred to ESL contracts and have, therefore become members of the bargaining unit - with more likely to follow - we believe that this can only encourage fair and efficient practices at the workplace.

70) The Panel is of the opinion that this is an identifiable bargaining unit within the Employer’s undertaking and given the history of this group of workers current national negotiations the Panel considers that it is a sufficiently coherent and distinctive group as not to give rise to fragmentation. The Employer already holds negotiations for the Warehouse Staff excluding the admin staff so it would be no different to manage than it is at the moment and there is still nothing to stop the Employer from giving the same percentage pay rises to other workers as they do presently.

71) The Panel has found this to be a complex case with a range of potential bargaining units. There may well be other bargaining units that are equally appropriate. However, the statutory provisions are clear - our first task is simply to ascertain whether or not the Union’s proposed bargaining unit is appropriate. If it is we are not required to go any further. It is not for us to seek out a bargaining unit that might be more appropriate. So ultimately for the reasons stated we have determined that the Union’s proposed bargaining unit is compatible with effective management and is therefore appropriate.

72) The Panel is satisfied that the Union’s proposed bargaining unit consisting of “Core worker warehouse operatives excluding agency workers up to (but not including) the level of supervisor” located at Eddie Stobart DC420, Kilsby, Rugby CV23 8YL is an appropriate bargaining unit and one which is consistent with the object set out in paragraph 171 of the Schedule as it will involve fair and efficient practices and arrangements in the workplace.

6. Decision

73) We have decided that the appropriate bargaining unit in this case is that proposed by the Union comprising “Core worker warehouse operatives excluding agency workers up to (but not including) the level of supervisor” located at Eddie Stobart DC420, Kilsby, Rugby CV23 8YL.

Panel

Professor Kenny Miller, Panel Chair

Mr Tom Keeney

Ms Fiona Wilson

12 July 2021

7. Appendix

Names of those who attended the hearing:

For the Union

• Rosalie Snocken Counsel, Old Square Chambers

• Kevin Ashby, Regional Officer, URTU

For the Employer

• Mr Martin Palmer, Counsel of Littleton Chambers

• Paul Harding, Director of Contract Logistic and Warehousing for Eddie Stobart Limited

• Angelina Miley, HR Director for Eddie Stobart Limited

• Kimberley Smales, HR Business Partner for Eddie Stobart Limited

• Emma Humphries, Eversheds