Fragmented Bargaining

The law states that unions can request recognition for collective bargaining purposes if the proposed bargaining unit is deemed to be “appropriate”. In Lidl Ltd v CAC and GMB, the Court of Appeal held that, when determining recognition claims, courts must focus on the need to avoid fragmentation between bargaining units and/or fragmented collective bargaining, as opposed to the size of the bargaining unit per se. 

Basic facts 

The GMB made a request to Lidl for recognition on behalf of a group of category 6 “warehouse operatives working in the following sections: goods in, goods out and selection”. 

The company refused the request on the basis that, as it only covered some “category 6 employees” at one location, the degree of fragmentation was not compatible with effective management and would not avoid small fragmented bargaining units within an undertaking as required by Schedule A1 to the Trade Union and Labour Relations (Consolidation) Act 1992. 

Relevant law 

Schedule A1 states that if an employer refuses the request for recognition, then the union may apply to the CAC to decide whether the proposed bargaining unit is appropriate.  When making its decision, the CAC has to take into account the need for the unit to be compatible with effective management and a number of other “matters”, including the “desirability of avoiding small fragmented bargaining units within an undertaking” under section 19B(3)(c). 

CAC and High Court decisions 

The CAC agreed that the bargaining unit was appropriate as there was already a management structure in place which reflected the geographical scope of the proposed unit. Although all category 6 workers were on a single pay scale, some operatives received additional allowances, indicating that Lidl could accommodate these within its structures and payroll systems. In addition, the company treated warehouse operatives as a distinct group, making them easily identifiable; and finally the union’s proposed bargaining unit would be the sole existing bargaining unit in the company and there was no evidence of a demand for recognition elsewhere. Therefore the application was not inconsistent with avoiding small fragmented bargaining units. 

The High Court agreed and dismissed Lidl’s application for judicial review. 

Court of Appeal decision 

The Court of Appeal acknowledged that it was clearly undesirable for employers to have to negotiate in more than one forum and with more than one trade union with regard to parts of their workforce who were essentially the same. Conducting two or more sets of negotiations where one would do was wasteful of time and effort, could result in inconsistent outcomes as well as disruption because of competition between trade unions. It was therefore much better for a group of employees to be in one bargaining unit represented by a single trade union in order to avoid any “fragmentation of collective bargaining”. 

However, although the Court could understand how the current situation could be regarded as undesirable by Lidl not least because of the size of the bargaining unit, the Court of Appeal held that the union’s proposals in this case did not involve fragmentation between bargaining units or fragmented collective bargaining which was “the mischief” that the legislation was trying to avoid. 

That did not mean that Lidl's concerns about having a “small island of union recognition in a sea of non-recognition” were irrelevant to the issue of whether the proposed unit was appropriate, but rather that they should be considered under the more general heading of their compatibility with effective management. It therefore dismissed Lidl’s appeal.