Neutral Citation Number: [2008] EWHC 115 (Admin)

Case No: CO/8174/2007

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 4 February 2008 

Before :
Mr Justice Collins
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	R(Cable & Wireless Services U.K. Limited)	Claimant	
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	Central Arbitration  Committee
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The Communication Workers Union	Defendant

Interested Party	
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Mr Nigel Giffin, Q.C.  (instructed by Herbert Smith LLP) for the Claimant
Mr Paul Nicholls (instructed by Messrs Pattinson & Brewer) for the Interested Party
The Defendant was not represented

Hearing date: 18 January 2008
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Judgment
Mr Justice Collins : 
1.	This claim challenges a decision of the defendant given on 7 September 2007 whereby it confirmed that the bargaining unit which the interested party (IP) specified in its application was the appropriate one within the meaning of Schedule A1 to the Trade Union and Labour Relations (Consolidation) Act 1992 as amended by the Employment Relations Act 1999 (the 1992 Act).
2.	Schedule A1 to the 1992 Act sets out a mechanism whereby a trade union can obtain recognition for the purpose of collective bargaining for particular employees.  That mechanism is triggered by a trade union requesting such recognition (Paragraph 1 of the Schedule).  Such a request will identify a proposed ‘bargaining unit’ which is, as paragraph 2(2) states, ‘the group of workers concerned’ or, if the request was on behalf of more than one group of workers, ‘the groups taken together’.  This claim concerns only one group.  If the employer agrees that the unit requested is appropriate, the matter need go no further (Paragraph 10).  But if the request is rejected and negotiations do not succeed in identifying an appropriate unit, the union may apply to the defendant to decide:-
“(a) whether the proposed bargaining unit is appropriate;
 (b) whether the union has … the support of a majority of the   workers constituting the bargaining unit”. (Paragraph 12(2)).
3.	The defendant must when it accepts an application try to help the parties to reach within a period which is normally 20 days an agreement as to what the appropriate bargaining unit is (Paragraph 18(1)).  If such attempts fail (as was the position in this case), the defendant must decide whether the proposed bargaining unit is appropriate.  If it decides that the proposed bargaining unit is not appropriate, it must decide on a bargaining unit which is appropriate (Paragraph 19(2) and (3)).
4.	Paragraph 19B sets out the matters which the defendant must take into account in deciding whether a bargaining unit is appropriate.  19B(2) to (4) provides as follows:-
“ (2) The CAC must take these matters into account –
(a) the need for the unit to be compatible with effective management,
(b) the matters listed in sub-paragraph (3), so far as they do not conflict with that need
(3)(a) the views of the employer and of the union (or unions),
(b) existing national and local bargaining arrangements
(c) the desirability of avoiding small fragmented bargaining units within an undertaking;
(d) the characteristics of workers falling within the bargaining units under consideration and of any other employees of the employer whom the CAC considers relevant;
(4) In taking an employer’s views into account for the purpose of deciding whether the proposed bargaining unit is appropriate, the CAC must take into account any view the employer has about any other bargaining unit that he considers would be appropriate.”
Paragraph 171 specifies a general duty on the CAC to “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”.
5.	While the Schedule is lengthy and detailed, it is careful to leave to the defendant a very wide discretion as to how it should approach its task.  It is enjoined to take the matters set out in Paragraph 19B into account, but Parliament has not dictated further (subject to one qualification) how it should weigh the various matters.  The only qualification is that the need for compatibility with effective management (Paragraph 19B(2)(a)) is clearly regarded as of great importance since the matters listed in Paragraph 19B(3) must not conflict with that need.

6.	It is not in the least surprising that Parliament has left a broad remit to the defendant.  Members are appointed by the Secretary of State and are confined to ‘persons experienced in industrial relations, and they shall include some persons whose experience is as representatives of employers and some whose experience is as representatives of workers’. (S.260(3) of the 1992 Act).  While the chairman is a High Court judge, individual panels do not need to be chaired by or to include a lawyer.  The defendant is thus an expert body whose approach to determining disputes as to whether a group of workers should be permitted to have collective bargaining carried out on their behalf by a union is not to be legalistic.  This means that the court will be most reluctant to intervene and, although judicial review is obviously available as a remedy, it will only be if the defendant has either acted irrationally or made an error of law: see per Buxton LJ in R(Kwik-Fit GB Ltd) v CAC [2002] ICR 1212 at 1214.  It may be said that this does no more than state what is the general scope of judicial review in relation to any decision making body.  But it underlines the importance of the court not entertaining an attempt to dress up a challenge to the merits in the garb of judicial review proceedings: see Elias J in the Kwik-Fit case at first instance (Paragraph 23).  This means that the weighing of evidence and the balancing of conflicting factors which are likely to be delicate, sensitive and controversial is for the defendant alone and (unless the very high threshold of perversity is shown to have been crossed) is not for the court.  But irrationality in this context covers a failure to have regard to a material matter or the taking into account of an irrelevant matter and, if either is established and the result may have been affected, the court can intervene.  Equally, and obviously, if an error of law is established, the court can intervene.  In this context, an error of law will usually constitute a failure to construe and so to apply a statutory provision correctly.  That is what is alleged in this case with particular reference to Paragraph 19B(3)(c) of the Schedule.
7.	The claimant is a provider of telecommunication services.   It has some 4600 employees at various branches throughout the United Kingdom.  The proposed bargaining unit was described as ‘all U.K. Field Service employees (except Managers)’.  These numbered some 370 and so constituted no more than about 7% of the total workforce.  The IP contended that Field Service employees were within a particular directorate and constituted a distinct organisational group under the Director of Field Services.  Thus it would form an effective and appropriate bargaining unit.  The claimant disagreed.  It pointed out that the group did not contain only field engineers but also engineers and non-engineers who were desk based.  Thus it did not include many field engineers who worked in different groups.  Furthermore, members of the group were employed in various parts of the country and sometimes would number no more than one or two of the employees in a particular branch who would be doing similar work.  In his statement prepared for the hearing before the defendant’s panel,  Mr Buckley, the Global Human Resources director of the claimant, said this (Paragraphs 63 to 66):-
“63.[T]he workforce within Field Services is fragmented because colleagues are based at so many different locations (either at customer sites, home or one of 20 Cable and Wireless offices) throughout the U.K.  At many of these sites, colleagues from Field Services are within single figures and make up a negligible proportion of the total numbers at those sites …
64. As well as being a geographically dispersed team, Field Services is far from the homogenous unit as suggested by the [IP].  In fact it is also fragmented by reference to the work that people within the team actually do.  The team is split between both engineers and non-engineers … Moreover, it would be incorrect to characterise all colleagues with Field Services as simply those who work “in the field”.  Out of the whole of U.K. Field Services, 245 work in the field and 125 are desk based.
65. It would also be wrong to characterise Field Services as the directorate containing all engineers who work in the field … there are 179 engineers who are members of other directorates but who work in the field.  Moreover, the vast majority of field engineers from Field Services could do the same work as the field engineers who operate outside of Field Services and vice-versa.
66. Moreover, if Field Services could in principle be treated as a separate bargaining unit, by application of the same reasoning so, too, could many of the other 29 directorates within Cable & Wireless that are at the same organisational level.  This would be unworkable.”
8.	I have said that the claim focuses on an alleged misconstruction and misapplication of Paragraph 19B(3)(c) of the Schedule.  It relied on three alleged errors of law in the decision.  Permission was refused by Dobbs J on the papers.  Stanley Burnton J granted permission limited to the second of three grounds, namely a misunderstanding of what was meant by a ‘small fragmented unit’.  The Court Order does not accurately record his decision since it places no limitation on the permission, but Mr Giffin, Q.C. has not sought to argue the grounds upon which permission was refused but has accepted the limitation imposed by Stanley Burnton J. I need say no more than he was clearly correct to do so.
9.	Before dealing with the submissions made, I should say that it is common ground (indeed, Kwik-Fit in the Court of Appeal makes clear) that the defendant is concerned only to decide whether the unit proposed by the Union is appropriate.  It cannot reject the Union’s request because it feels that a different unit would be more appropriate nor, in considering whether it is compatible with effective management can it consider whether it is the most effective or desirable unit in that context.  If it is persuaded that it is an appropriate unit, it must find in favour of the Union’s request.
10.	The defendant’s decision sets out in the first 34 paragraphs the rival submissions. It has not been suggested that there was a failure to refer to any relevant matter which was germane to the contentions of the parties.  I have summarised the claimant’s evidence relevant to 19B(3)(c).  The IP  submitted that the unit proposed was a defined unit within the employer’s Employee Council Forum (ECF), which was the body used by the claimant for the purpose of consultation with its employees.  More and more of those employed in the Field Services unit had expressed dissatisfaction with the ECF and had joined the IP.  The claimant believed that the bargaining unit should be company wide, but in reality this unit would not result in operational problems since the Union would not agree to or seek to impose working patterns or arrangements which would jeopardise team working across different directorates.  The Union would work with the claimant to avoid any fragmentation.  The fact that members were spread across the U.K. was not a real problem having regard to modern methods of communication.  The group remained distinct albeit work was shared with other workers in multi-skilled teams.
11.	In Paragraphs 38 to 45, the panel sets out what it describes as ‘considerations’.  These constitute the reasons for its decision that the unit specified by the IP was an appropriate bargaining unit.  In Paragraph 35, it recites the relevant paragraphs of the Schedule.  It directed itself correctly in Paragraph 36 that a critical question for it to determine was whether the proposed unit was compatible with effective management and that it was not for it to go further and decide whether it was the most effective bargaining unit judged by management effectiveness.  In Paragraph 37, it made the point that potential problems which might be created by the outcome of collective bargaining for one group of workers should be discounted since such problems were in reality likely to be avoided by the employer and there was, having regard to the existence of some discretion in determining distribution of pay at directorate level, a reality in applying collective bargaining at the level of Field Services.  It did not believe that to grant a group of workers collective bargaining rights would necessarily conflict with the one company ethos.  It was relatively commonly to be found in other companies which placed emphasis on inclusive corporate values.  It noted that cases referred to  by the claimant which were alleged to be similar and in which decisions favourable to its case had been made had to be assessed on the basis of their own facts.
12.	Having summarised its reasons so far, I think I should set out in full what is said in Paragraphs 41 to 43.  The claimant’s submissions focus on Paragraph 42 which, it is said, contains the errors of law which should lead to the quashing of the decision reached and a requirement for reconsideration based on a correct approach in law.  They read as follows:-
“41. The Panel noted the Employer’s argument on the instability of the proposed bargaining unit i.e. that groups of staff had been taken out of Field Services in recent years but no groups of workers had moved into the Directorate, only individuals.  The Panel accepts that there may be a reorganisation in the future but the Panel cannot take into account the undefined.  Field Services is a Directorate with its own management team.  It has a section in the ECF with constituents belonging to Field Services electing their own dedicated representative, currently Mr Duffy.  Field Services seems to have been a recognised unit for some time and appears to be more stable than other areas.  It is the Panel’s view that it is a core group within core skills and core identity.  This fact that not all engineers are grouped with Field Services does not deny the central organisational logic.  If it did the company would have changed its structure.  It would appear that within the telecommunications industry field service engineers are generally a recognisable occupational group.
42. The Panel does not accept the Employer’s argument that the bargaining unit would create a fragmented unit. Fragmentation is not measured numerically as a given proportion of the workforce but in terms of whether a bargaining unit would divide up the workforce into numerous groups prone to compete with each other.  The stability and occupational identity of field service workers, who also have a strong company identity, militates against fragmentation.  The outcome of other groups of workers seeking to gain recognition for their own bargaining unit, should they seek to do so, cannot be predicted by the Panel.  During the course of  the hearing evidence was given of a bargaining unit being extended in another company in the industry as other workers sought recognition.
43. The Panel recognises the level of interaction of multi-skilled teams working together and the operational necessity for this in order to satisfy corporate customer expectations.  The Union is clear about what it wants to achieve and how things would work and what it will do if recognised i.e. to establish one branch of the Union solely for Cable & Wireless.  The Union stated that the branch and any forums established would be elected on a ‘by and from’ basis.  Joint training sessions would be held to build a mutual understanding and an effective partnership.  The Union would also put forward to the Employer a customised recognition agreement.  These are laudable aspirations and the Panel notes the Union’s appreciation of the fast moving nature of the industry and its strong desire not to damage efficiency and effectiveness achieved through multi-skilled, customer dedicated teams.  However, these remain aspirations which the Panel cannot rely upon in making its current decision.  Nonetheless, the Panel is aware of many examples in both the private and the public sector where different types of workers, each with their own trade union and distinct bargaining unit cooperate closely with each other in customer facing teams.  Examples here are frequently found in aviation and the health sector.  The Panel does not accept that union recognition will necessarily inhibit inter-group cooperative team working”.
13.	Mr Giffin, Q.C., attacked separately what he analysed as the three reasons contained in Paragraph 42.  This involved looking at the second sentence, the third sentence, and the final two sentences separately.  Each was said to demonstrate flawed or an absence of proper reasoning and misconstructions of Paragraph 19B(3)(c) in particular.  It is obvious that there is a degree of overlap between 19B(2)(a) and 19B(3)(c) since it is to say the least likely that the establishment of small fragmented bargaining units would not be compatible with effective management.  Certainly, there could be no conflict between the avoidance of small fragmented bargaining units and the need for compatibility with effective management.
14.	Before dealing with the various complaints raised by Mr Giffin, it is important to bear in mind that the decision is not to be treated as a statute whose language can be subjected to detailed analysis.  The panel was well aware of and had summarised in some detail the issues raised and the evidence produced by the parties.  It was telling those who were aware of those issues why it reached the decision and it is in my view wrong to assume that it had not had regard to a matter to which it had referred in its exposition of the background and the contentions of the parties in the reasons given for reaching the relevant conclusion.  It would only be if a reason or a conclusion was obviously inconsistent with a matter to which regard should have been had that an error could properly be assumed.  It is also important to bear in mind that the reasons will be set out in the context that they are responding to the submissions made by both parties but by the loser in particular. 
15.	Mr Giffin’s first complaint is that nowhere in Paragraph 42 does the panel use the word small.  It must therefore, he submits, be that it failed to have regard to that element.  It is clear that the panel has used  the word ‘fragmentation’  in the context of what it is required to take into account by paragraph 19B(3)(c).  It was asserted by the claimant that it was small, being no more than 7% of the workforce.  The word ‘numerically’ shows clearly that the panel was having regard to the size and making the point that, since the paragraph referred to ‘small fragmented’, it was necessary to look at both elements.  It might be small (however that was to be ascertained in a given case), but would not be undesirable unless also fragmented.  Thus in the context of this case it was proper to consider whether it produced fragmentation and the point being made is the proper one, namely that smallness by itself does not result in fragmentation.  Mr Giffin submits that numerically should have been qualified by an adverb such as merely.  However, the claimant had made the point that the small percentage of its workforce employed in the unit would result in fragmentation and the panel was dealing with that point.
16.	Mr Giffin complains that the panel were wrong to state that fragmentation was to be measured ‘in terms of whether a bargaining unit would divide up the workforce into numerous groups prone to compete with each other’.  This is not what the paragraph says nor is it a proper limitation on the ambit of the paragraph.  It would be to write into the paragraph words which were not there.  The mischief to be avoided by the establishment of small fragmented bargaining units is obviously material.  While one such unit is no doubt potentially undesirable, it is what it may lead to that is important from the point of view of the employer and the need for compatibility with effective management.  The claimant itself expressed concern that the unit was not self contained, that field engineers who worked with and did similar jobs to those in the particular directorate   would not be included and that the 29 directorates within the company might seek separate bargaining units.  While I accept that, if intended as a general proposition, the limitation expressed may not be entirely apt, in context the panel has focused on the concern expressed by the claimant.  It is what the proposed unit, which was said to be neither self-contained nor to include many whose work was in reality no different from those within the directorate, would be likely to lead to that made it inappropriate.  In the next sentence and in paragraph 43, the panel rejects the concern that there are likely to be attempts to establish other units or that there will be a lack of co-operation and sensible approach to negotiations which will lead to problems in effective management or fragmentation.  Thus, even if the panel was expressing a general interpretation of paragraph 19B(3)(c) (and as I have indicated I do not think it was), in context it was taking the circumstances before it into account and its decision would undoubtedly have been the same.
17.	Mr Nicholls suggested that the use of the plural ‘units’ in 19B(3)(c) indicated that Parliament had in mind that the real undesirability was the existence of a number of such units.  I do not think the plural necessarily points in that direction.  Grammatical English would support a plural whether or not more than one such unit in a particular organisation was contemplated. Small fragmented units are regarded as undesirable in themselves.  However, it is obvious that the real problem is the risk of proliferation which is likely to result from the creation of one such unit.  Hence it is important to see whether such a unit is self-contained.  Fragmentation carries with it the notion that there is no obvious identifiable boundary to the unit in question so that it will leave the opportunity for other such units to exist and that will be detrimental to effective management.  Thus, while, as I have said, I think the panel was applying too narrow a test if it was making a general point in the sentence, in the circumstances of this case and having regard to the expressed concerns of the claimant, the approach was not wrong and did not lead to a result which was flawed.
18.	Mr Giffin attacks the next sentence on the ground that it is unclear and appears to be saying that the unit, if established, would not be prone to fragment further.  I think in context what the panel was saying was that to establish this unit would not produce further fragmentation by attempts to establish other units.  Because of the stability and occupational identity of field service workers, the unit would not be fragmented and would not therefore lead to other units which would themselves be fragmented.  Mr Giffin complains that this is to ignore the evidence of Mr Buckley to which I have already referred.  It is true that the panel does not specifically state that it prefers the evidence of the IP and has concluded that the unit is sufficiently self contained even though there may be others in a  different directorate doing much the same sort of work.  The last sentence of Paragraph 41 of the decision coupled with the sentence under consideration indicates that that was the view of the panel and so it is implicit that it has rejected the claimant’s concerns.  No doubt a reasons challenge is possible, but it will be a very rare case in which such a challenge succeeds where it is clear what the panel must have accepted and what it must have rejected.  That is the position here.
19.	The attack on the final two sentences of Paragraph 42 does not, I think, add anything.  The panel is doing no more than confirming its primary view that the proposed unit was not fragmented and would not be likely to lead to the establishment of other units.  Overall, when the three key paragraphs 41 to 43 are read together, they do tell the informed reader why the decision in question has been reached.  The fundamental reason is that the panel has not been persuaded that the proposed unit is fragmented because of the particular identity of its members within the company and notwithstanding the points made by Mr Buckley and the claimant in the evidence produced.  I am entirely satisfied that it was entitled to conclude as it did on the material before it.  It has the expertise and it decides, relying on that expertise, what weight to attach to the various arguments and pieces of evidence before it.
20.	It follows that I do not accept that there has been any error of law and so I must dismiss this claim.