In the second part of this alert, our expert Employment team considers in detail the primary issues an employer faces once a Central Arbitration Committee (the CAC) application has been accepted.

The story so far

Although you might have tried to avoid it, by resisting the requests to talk and by hoping that the number of employees does not meet the threshold, you have now been told by the CAC that an application has been received by them evidencing enough support to claim recognition.

Is there hope?

Acceptance of the application by the CAC, even with material levels of union membership and support is not an end to the process. There are further challenges that can be made - and in some cases it may be that what the Union seems to have on paper is not borne out on the shop floor.

A CAC application has been accepted

The application for recognition has been accepted by the CAC which means that:

  • You have to provide stipulated employee information to the Union within a week;
  • If the bargaining unit has not been agreed the CAC must decide what it is to be;
  • The union can ask the CAC for a "Suitable Independent Person" through whom information is to be channelled; and
  • Acceptance prohibits any new application by the union for three years - so getting it rejected after this point gives you clear water to work on an alternative solution.

The big issues here are going to be about the identity of the bargaining unit, whether that leaves a valid application and finally, whether there needs to be a ballot of the employees concerned.

What is an appropriate bargaining unit?

In many cases the parties will have agreed what is appropriate. But sometimes, and this does happen, an employer decides not to agree as a tactical device or because it really does not work for them. In that case the CAC has to make the decision within four weeks if the employer provides the workforce information or immediately if it does not.

The starting point is - "What did the union suggest?" and then "Is it appropriate?" This is not the same as being ideal, a good idea, or the best way of doing it. The CAC does not have to consider whether the employer has a preferable proposal - it is not a choice between two alternatives.

If the CAC decides the union's proposal is appropriate then that is an end to the matter - so, as the employer, you have one chance to point out the problems and why it does not meet the statutory criteria.

These criteria become the battleground and are:

  • whether the proposed unit encourages and promotes fair and efficient practises and arrangements in the workplace;
  • is it compatible with efficient management of the undertaking? This compels them to consider any other bargaining
  • arrangements within the wider business, the desirability of avoiding lots of fragmented bargaining groups;
  • the characteristics of the workers within the proposed unit and other relevant employees of the employer; and
  • location.

These are pretty wide grounds on which to base a decision and leave a lot of room for argument and evidence. It may be that the union sees this " unit" as a starting point for a wider campaign, or is trying to group together various workforces with little real connection other than the identify of their employer.

If that is the case then the employer can fight its corner on any and all points. Similarly, if it would cut across how the business is set up - whether functionally or not - and would make management inefficient then it can and will be defeated.

The CAC is pragmatic and worldly wise - both sides are going to get pressed to justify their arguments and will be suspected of using these criteria simply to disguise either a weakness in their case or the fact that they do not want recognition at all. Any case will be, and must be, analysed and presented on its merits.

What about an example?

A company operates a one company approach to its business. A bargaining unit for only part of the company may represent an inefficient way of doing things, and may be rejected. Equally, common terms and conditions across a company, for all sites, may not prevent one site being a bargaining unit or it may justify the rejection of an application because having different terms for one site is inefficient.

If you can show that having shop floor engineering staff on one site who work 24/7 with rotating shift patterns, and sales/admin on another who work a standard five day week with fixed hours, results in wildly different issues and people being lumped together then the "characteristics" aspect of the test may get the application rejected. The same issue would arise when the union is pushing for a unit which includes, for instance, management and shop floor. Each case, in this area, is going to be decided on your facts on the ground.

Location can have a deciding effect as well simply because forcing people across the country to be treated as a single block is not compatible with effective management. Again, if you want to run the argument, it will depend on the facts of the case.

Can the union get what it wants without anyone being required to vote?

Possibly, and in many cases, yes. To get through the application stage the union has to show 10% membership when the application is made. If it can show that it has more than 50% membership once the bargaining unit has been approved then the union is entitled to a declaration without a ballot unless the employer can show that one or more of three exemptions applies.

If it is above 50% there is only a ballot in limited cases (as below) - membership is the issue not whether the membership support the call for recognition. These are question on which the CAC is going to have to make a factual finding on the information on the day - so, no delays for getting a few more people to sign up.

So, if there is a majority, what triggers a vote?

"The need for good industrial relations" - getting this far can leave a pretty hostile atmosphere with allegations all round. If the CAC thinks that this would be improved by having a ballot then one can be ordered. As this happens only when there is a majority it is going to be for the employer to push the issue - presumably with the hope that the time will allow it to lobby staff or that it is the union rather than the workforce pushing the issue. Both of those issues can make the atmosphere worse rather than better as it stops being an issue about recognition but about winning the vote.

"Opposition of union members"- this comes about quite rarely but will arise if the CAC accepts that a significant number of union members do not want recognition. Case law suggests that this could be enough to take it below 50% or where it is the proportion of the union members that is the key factor. There have been cases where allegations have been made about the use of "union-busters" to persuade members to petition for a ballot. If you are looking for an argument to pick to force the ballot this is going to be the hardest of the three to win.

"Membership evidence" - superficially this seems to duplicate "opposition" but it is really about malpractice and people being duped in to joining the union - examples have included bullying or blackmailing people to join, being misled, reduced rates and cut prices being offered in order to get the numbers above the threshold.

Ballot time - some rules

As you would expect, neither side can be found buying votes, making "outcome specific offers", coercing voters, dismissing them or threatening to do so (or discipline them), subjecting them to a detriment or exercising undue influence.

Someone caught doing any of these things can be penalised by the CAC, if they did it with the intention of influencing the ballot AND it had or was likely to have a significant effect (i.e. it changed or was likely to change a worker's intention to vote or abstain or his intention to vote or his actual vote the CAC).

So, we fought, we lost - what have we got?

If recognition is granted then the parties are free to agree whatever they want - and in particular they can go beyond ( and the union will want to go beyond) the statutory items of pay, hours and holidays - and how they go about it from year to year.

If you do not reach an agreement then you go back to the CAC and they are obliged to assist if you do not sort things out. All of this takes time - six weeks for the first stage of the reference back and then another three. At that point the CAC specifies the method to be used which is likely to be the Model Method laid down in 2000. It is this factor that usually results in the parties resolving things themselves.

It is worth noting that any procedure imposed by the CAC becomes legally binding on the parties unless it is agreed otherwise in writing.

What happens if things change?

A change in the underlying business can make the whole arrangement pointless, so where the bargaining unit has ceased to exist the employer can give notice to the union to terminate. The Union can then challenge this on the basis that is has not ceased to exist or that it has not ceased to be appropriate. This last point is really to prevent employers from removing one of the elements simply with a view to terminating the arrangement.

Can an employer derecognise when CAC has granted recognition?

Yes, but only in limited circumstances. The first is that it cannot be done in the three years after the CAC decision.

If the timing is right then the process is the reverse of the recognition process and begins with an application to derecognise; CAC gets involved; there is likely to be a ballot. To get any of this off the ground the employer has to show that at least 10% of the workers favour derecognition and that a majority are likely to do so. Getting evidence of the second point is going to be hard unless the workers either see a benefit in direct negotiations with their employer (or have not been induced to that view by the employer) or the union has really annoyed them.

There are provisions which allow the workers themselves to make an application for derecognition and slightly different rules where there was overwhelming evidence of membership when recognition was granted.