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PREVIOUS SPEAKERS:
Sir Michael Burton

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Title: Statutory Recognition - role of Central Arbitration Committee

September 15 2000

What the CAC is - independent tribunal with statutory powers, whose overall remit is to achieve fair and lasting solutions to disputes, having regard to continuing relationships between the parties. The CAC’s approach is flexible and seeks to be problem-solving.

History of CAC - origins go back to the Industrial Court set up in 1919 and was renamed the Industrial Arbitration Board in 1971, and became the CAC in 1976.

The new CAC

Work of CAC - The main duty is adjudicating applications for statutory recognition under Schedule A1 of the TUL(C)R Act, as amended, which was brought into force on 6 June this year. Other duties include European Works Council arrangements (from January this year although no applications received as yet) as well as its existing duties - determine claims from trade unions on disclosure of information for collective bargaining purposes, and, in theory, provide voluntary arbitration in industrial disputes (though it has not done so since 1989).

CAC members - 9 Deputy Chairman and 32 members, 16 with experience of representing employers, and 16 with experience of representing employees. Major expansion of both committee and staff (especially case managers) to take on new statutory recognition work. We have a strong committee with wide range of experience.

Since the CAC’s main work - and the reason for its expansion - is dealing with applications for statutory recognition, I would like to talk about recognition today.

proceedings

Recognise that Schedule A1 is complex, with a mix of formal processes and decisions as well as stages where the CAC has to try to help the parties reach agreement. We have prepared a Guide for the Parties which is available on request, and CAC officials are happy to explain the procedures. We want the process to be as user-friendly as possible for both trade unions and employers.

The statutory process involves strict timetables. The CAC will attempt to keep to these but if an extension is required in order to be fair to the parties or to achieve a satisfactory settlement of a case, we will not be afraid to extend. We have already agreed some extensions in the early cases.

Schedule A1 offers a number of opportunities for the parties to step back from the statutory process and reach a voluntary agreement with each other. The CAC’s approach is to encourage voluntary agreements wherever possible, and if appropriate to advise the parties to seek the assistance of ACAS.

use of panels

Each application to the CAC will be heard by a panel of 3 CAC members. The panel will be chaired by a Deputy Chairman (or in some cases myself) and the other members will be one with experience of representing employees and one with experience of representing employers. The panel will take all decisions on the application. They will be supported by a CAC official, termed the "case manager" who will act as the contact point for the parties and will support the panel. Where possible, the same panel will hear an application through all its stages. As chairman, I select the panels for each case. The parties are informed of the names of the panel members.

application form

We have devised an application form for unions making applications to complete, together with guidance notes for its completion. The form is designed to provide the panel as much information as possible on the admissibility of the application, and on the bargaining unit. The union has to send a copy of the application form, together with any supporting documents, to the employer, and we have prepared a questionnaire for the employer to complete so that the panel is aware of any areas of dispute between the parties. The employer’s response is correspondingly copied to the employer.

approach to confidentiality

The CAC will operate a three phase approach in terms of confidentiality. While the union’s application and the employer’s response will be copied to the other party, each party can discuss matters in confidence with the case manager or with members of the panel. However if any information given to the CAC in confidence is relevant to a decision the panel has to take, the panel may need to reveal that information to the other party. It would not be fair for the panel to take a decision on the basis of information open only to one of the parties. Obviously we would warn the party concerned before disclosing any information given in confidence. I should add that names of addresses of individuals or the identity of trade union members will not be disclosed to the other party, unless they are supplied with the application form, in which case the Schedule requires them to be so disclosed.

hearings: access, cross-questioning, standards of evidence

Where facts concerning an application for recognition are challenged by either party, the CAC panel will usually call either an informal meeting of the parties or a hearing. Preliminary meetings will generally be used to set out procedures and identify issues in dispute while hearings will decide issues. One application could generate a number of hearings as the panel is require to take decisions at several points in the process. Hearings will normally be held in public, although it is open to the panel to hold a hearing in private if there are issues of particular confidentiality or if the panel judge it necessary in order to achieve a satisfactory conclusion.

The panels will follow some broad principles in conducting hearings.

There will no doubt be occasions where evidence is disputed. This is likely to occur when the panel are considering whether the union’s application has passed the validity and eligibility tests. For example, it may not be clear whether or not the majority of workers in the bargaining unit is likely to support recognition. In such cases, the panel has to take a decision on the basis of the information available to it, even if this evidence is not conclusive. In such cases, the panel can seek further information and hold a hearing to enable the evidence on both sides to be tested.

all cases treated on own merits according to the Schedule.

It is important to recognise that each case has to be judged on its merits in accordance with the very detailed procedures set out in the Schedule. Since no two cases will be identical, this means that we will not be looking, at least in the short term, to establish case law or precedents. Equally we will of course approach all cases from an impartial, neutral stance and, by applying the provisions of the legislation, all applications will be judged from a consistent standpoint with different outcomes depending on the particulars of the case.

reporting of cases

The CAC’s decisions are publicly available, although of course, the parties will be informed first. We will not generally use Press Releases to publicise decisions unless applications raise issues of wider public interest.

CAC website

The main vehicle for CAC announcements will be our website. Check it out on if you haven’t already done so. Those who have been following it will see that the site contains a summary of each application received, together with brief details of the decisions taken and of forthcoming hearings. The list of decisions offers the opportunity to obtain the full text of the decision if you click to get further details. The website also contains information about CAC members and staff, and a booklet explaining the statutory recognition and derecognition process.

media interest shown so far

As you may have seen, media interest in the CAC’s work on statutory recognition has so far been confined to the specialist press. One or two of the parties seem to have attempted to use the early applications to raise policy questions about the Schedule. Such issues are not for us. The CAC’s job is to consider each case on its merits, according to the legal procedures. Talk of test cases is therefore both premature and inappropriate.

Decision points for CAC panels

Validity/admissibility tests

The panel first needs to decide whether an application can be accepted. Most of the tests are factual (eg does the union have a certificate of independence) but some are matters of judgement (eg whether a majority of the workers in the bargaining unit is likely to support recognition). Even the factual tests could prove contentious and open to dispute (eg there may be arguments about whether an employer has 21 or more workers, especially if some are employed by agencies). There have already been arguments about whether there is an existing recognition agreement in place. I will return to this issue later on.

The most difficult test however is probably whether a majority of the workers in the bargaining unit are likely to support recognition. While some inferences can be drawn from the level of union membership, the research available on the relationship between union membership and support for recognition is not conclusive. CAC panels will have to judge the level of support for each application based on the evidence before them, holding hearings to test that evidence where necessary.

Competing applications - Under the statutory recognition provisions, the CAC cannot get involved in inter-union disputes. So if there are overlapping or competing applications (and if just one worker is covered by both bargaining units, then the applications are competing for this purpose) the CAC has to test the level of union membership in the bargaining unit for all the applications. If only one application has 10% membership, then the CAC considers that application and rejects all others. If more than one application has 10% union membership, then the CAC must reject all applications. The way is then open for the unions concerned to get together and make a joint application if they wish.

Once the CAC has accepted an application, that union is are barred for three years from making applications for that bargaining unit (or one substantially the same). This makes it essential for the union to put forward a well-founded initial application.

Deciding the bargaining unit

The first duty of the CAC is to try to help the parties reach agreement on the possible bargaining unit. In doing so, members of the panel may discuss options with parties, alternatively the panel may suggest that the parties seek ACAS assistance. If the parties cannot reach agreement, then the CAC panel has to decide the appropriate bargaining unit. In doing so, the CAC has to take into account the factors set out in the Schedule, of which the need for the bargaining unit to be compatible with effective management takes precedence. The panel will consider both the bargaining unit proposed by the union and any counter-proposals by the employer. The CAC panel needs to be careful to ensure that in trying to help the parties reach agreement, it does not prejudice its eventual decision.

Re-applying the initial tests

The initial tests have to be re-applied if the bargaining unit agreed or decided differs from that in the original application. If the new bargaining unit does not satisfy the re-applied tests, then the application is rejected. Where an application is rejected at this stage, the three year bar applies to the bargaining unit originally proposed by the union, but not to that agreed between the parties or decided by the CAC.

Deciding whether to call a ballot

The first issue for the CAC to decide is whether the majority of the workers in the bargaining unit are union members. The panel may seek a membership check to determine this. If the union does not have a majority of members in the bargaining unit, then the CAC has to hold a ballot. If the union does have over 50% membership, the CAC has to declare the union recognised unless it is satisfied that one of three conditions applies:

In the absence of evidence of one of these factors, the CAC will declare recognition without a ballot. At this stage, it is impossible to estimate how often ballots will take place.

CAC’s role during a ballot

When a ballot is called, the CAC has to decide the form of ballot (whether it should be a workplace or postal ballot, or in certain circumstances, a combination of the two. The CAC also has to select a qualified independent person (QIP) to conduct the ballot. The QIP has to be chosen from those persons named in the Recognition and Derecognition Ballots (Qualified Persons) Order 2000.

During the ballot the employer has three duties;

What constitutes reasonable access is set out in the Code of Practice on Access to workers during Recognition and Derecognition Ballots.

Where the CAC receives complaints that an employer has not fulfilled these three duties, the CAC can (assuming it is satisfied that the complaint is justified) order the employer to remedy the failure. If the employer fails to comply with such an order, the CAC can declare the union to be recognised without a ballot. As you will appreciate, this is a very serious consequence. In considering whether an employer has complied with the duty to give the union access, the CAC can take account of the behaviour of the union. The CAC may decide that the employer has complied with the duty if, as a result of the union acting unreasonably, access has been denied. So there are incentives for both sides to behave reasonably in what may be a sensitive situation.

Establishing the bargaining procedure

Once a union has been recognised under the statutory process, the union and employer need to agree a procedure for collective bargaining. Without an agreed procedure, recognition is of little value. If the parties cannot agree a procedure, either of the parties can seek the CAC’s assistance in establishing a bargaining procedure. As with establishing the bargaining unit, the CAC has two duties, first to try to help the parties reach agreement, and if they are not successful, to specify a procedure. In trying to help the parties, members of the panel may discuss options with the parties, or may suggest that the parties involve ACAS. If agreement cannot be reached, and the CAC has to specify a method, the panel must take into account the method specified by the Secretary of State in the Trade Union Recognition (Method of Collective Bargaining) Order 2000. The panel can vary the method or depart from it where the circumstances of the case make it appropriate to do so.

It is worth making the point that while, the CAC can specify a method of collective bargaining it cannot force the parties to bargain.

A procedure specified by the CAC is normally legally binding, but enforcement is a matter for the courts with specific performance as the remedy. The CAC has no powers of contempt and cannot enforce its decisions.

 First cases:

As those who have scanned our website will appreciate, the first cases have come at a slower rate than we might have anticipated, partly due to the holiday season. Time will tell how far this is also because unions and employers are reaching voluntary agreements, unions are being cautious in the cases they bring to the CAC because the process is so complex and the three year bar is a powerful incentive to unions to get their application as well prepared as possible. Either way, I expect the pace to quicken through the autumn.

problems of getting process right,

As we all know the statutory process is complex (even to lawyers). A number of unions and employers have been in touch with CAC staff to ask questions about the process and CAC officials have given presentations, mainly to unions but also to employers’ organisations to explain the process. Inevitably there will be problems with applications where one or both parties are not entirely familiar with the process but we are doing our best to address this by providing guidance and advice on the processes. I should also add that it is clear that some unions and employers have a very good understanding, judging by the detailed and searching questions being put to us.

primacy of voluntary agreements.

One issue that has arisen in some of the early cases, and in early enquiries, has been the existence of a voluntary agreement already covering some or all of the workers in the bargaining unit. The philosophy behind the legislation is quite clear. Voluntary agreements freely entered into by the parties are the ideal, but the statutory route exists where a majority of the workers wishes to be recognised for collective bargaining purposes and where voluntary agreement cannot be reached.

As a general rule, voluntary agreements take primacy over applications under the statutory process. This of course stops when the CAC has formally accepted an application (in other words satisfied itself on the validity and admissibility tests). These tests of course include checking whether there is an existing recognition agreement. From the point the application is accepted, the CAC has to proceed with that application. At this point the union is barred from re-applying for three years and the employer cannot block an application by recognising another union for any of the workers in the bargaining unit. There is an exception where either the parties agree or the CAC decides a different bargaining unit when the validity tests have to be re-applied.

While I have concentrated on applications for statutory recognition as so far all the applications received have been under Part I of the Schedule. But other parts of the process could also result in applications very soon.

 semi-voluntary approach

As you will be aware, the first step in the recognition process is for the union to make a request for recognition to an employer. The employer may, perhaps after negotiation, agree to recognise the union. Equally, after the union has applied to the CAC, the two parties may decide to withdraw from the statutory process and reach a voluntary agreement. Since such an agreement emerged from the statutory process, we tend to refer to these agreements as "semi-voluntary agreements" to distinguish them from completely voluntary arrangements made with no reference to the Schedule. Under Part II of the Schedule, where the parties agree a semi-voluntary agreement they can ask the CAC to specify the method of collective bargaining. We have yet to receive such a request but I understand that the number of requests made to employers greatly exceeds the number of applications to the CAC so it is likely that a number of semi-voluntary agreements are being discussed. Some of these could come our way anytime.

derecognition of non-independent unions

As I explained earlier, if there is an existing recognition agreement covering any of the workers in the bargaining unit, the CAC cannot accept an application. However if the union recognised does not have a certificate of independence from the Certification Office, a worker in the bargaining unit can apply to the CAC under Part VI of the Schedule to have the non-independent union de-recognised. If such an application is successful, then an independent union can apply to the CAC for recognition. We could therefore get a Part VI application at any time.

changes affecting the bargaining unit.

After a union has been recognised following the statutory procedure, if there has been a change in the structure or the organisation of the bargaining unit, either side can apply to the CAC under Part III of the Schedule on the grounds that the bargaining unit is no longer appropriate. In addition the employer can apply under Part III on the grounds that the bargaining unit has ceased to exist. The CAC has to decide these questions, and where the bargaining unit still exists but is no longer appropriate, has to determine what the appropriate bargaining unit should be. Applications under Part III cannot be made until after the CAC has declared a union to be recognised so we cannot receive any for the time being, but we could in the months following the first statutory recognitions.

derecognition

While Parts IV and V of the Schedule deal with derecognition, applications cannot be made until three years after the CAC has declared a union to be recognised. Given the complexity of the procedures we have to deal with now, you will understand why I am content to leave an explanation of statutory derecognition until it becomes a practical possibility.

 Closing remarks:

still difficult to predict overall workload or timing of peak activity

Although we have now been open for business for three months or so, it is still difficult to predict the number of statutory recognition cases that will come to the CAC. When we started, our planning assumption was 100 to 150 applications a year. As I said at the time, this could only be a best guess. And I still don’t know if it was too high or too low or by how much. It is clear that there has not been an early surge of cases. But whether there is going to be a slow build-up or a surge starting later, I simply do not know. What I do know is that we are going to face a wide range of complex issues; and that we are determined to resolve them satisfactorily in the light of the legislation.

Sir Michael Burton
1 September 2000

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