Unite The Union v Arjowiggins Scotland Ltd (In Administration): 4106293/2022

EMPLOYMENT TRIBUNALS (SCOTLAND)

Case No 4106293/2022

Between

Unite the UnionClaimant

Arjowiggins Scotland Limited (in Administration)Respondent

Before

Employment Judge M Robison

Date 9 January 2024

JUDGMENT

The Employment Judge has decided to issue the following judgment on the available material under rule 21.

[1]The claimant is entitled to bring this claim because the complaint concerns a failure relating to representatives of a trade union, and the claimant is the relevant union.

[2]The respondent is in administration, but the administrator consented to the continuation of these proceedings in a letter dated 15 March 2023.

[3]The response to the proceedings was struck out under Rule 37(1)(a) on 4 October 2023 although the respondent stated an intention to defend the claim.

[4]The respondent proposed to dismiss as redundant more than 20 employees at one establishment, namely Stoneywood Mill, within a period of 90 days or less.

[5]Employees covered by the collective bargaining unit (manual workers) were dismissed as redundant on 22 September 2022 by the respondent at their site at Stoneywood Mill.

[6]The complaint that the respondent failed to comply with the requirement of section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 to consult the union which represents employees affected by proposed dismissals before the first dismissal took effect is well founded.

[7]The Tribunal makes a protective award. The respondent is ordered to pay remuneration for the protected period. The protected period begins 22 September 2022, the date on which the first of the dismissals to which the complaint relates took effect and is for 90 days. M. Robison

REASONS

[1]This hearing was listed following an application to reconsider the judgments in these three cases, issued 18 December 2023 (in respect of case number 4102652/23 and 4102543/23) and 9 January 2024 (in respect of 4106293/22). In respect of the judgment dated 9 January 2024, the claim included an additional 51 claimants, all understood to be members of the claimant union, but whose claims have been sisted pending decisions being made by the Redundancy Payments Service (RPS).

[2]The original decisions related to a protective award for “employees covered by the collective bargaining unit (manual workers)” who were dismissed as redundant on three different dates.

[3]The primary application, set out on page 148 of the productions lodged, is for a reconsideration of the three judgments, included at pages 176-181, by reference to paragraph 5 of the judgments, the application being only to replace the word “manual” with “all” workers.

[4]At a previous hearing to consider this application, which took place on 4 July 2024, the hearing was adjourned to intimate the request for reconsideration to the Redundancy Payments Office, an organisation with an interest in the outcome.

[5]At that hearing Mr Crammond explained that he is only instructed by Unite the Union. For that reason (among others) a request was granted for consideration of a second application, which was an “esto” argument, to be deferred pending consideration and conclusion of the primary submission. The esto argument was essentially in the event that the primary submission was refused, to add 26 claimants to another claim relating to the same subject matter (a multiple, number 4100319/23); and to add three claimants to another similar claim (a multiple, number 4100444/23). Although the 29 prospective claimants are members of the union (as I understood it), Mr Crammond is not currently instructed by or to act on behalf of the 29 claimants seeking to amend claims lodged relating to the issue at the centre of the dispute, as consideration was to be given by the union as to next steps should the primary submission have been refused.

[6]At this hearing, the Tribunal heard from three witnesses, namely Ms Ruth Harris, former HR Director for the respondent; Mr Ernest Sang, former employee of the respondent, union representative and “father of the chapel”; and Mr Callum McKay, former employee and also a trade union representative who also subsequently held the role of “father of the chapel”. They made reference during the hearing to a main file of productions and a supplementary file of productions. Findings in fact

[7]The respondent was a paper manufacturer which went into administration in 2022. While in operation, there were three categories of employees, namely manual (hourly paid employees), so-called Urwick Orr employees (who were the office staff) and management employees (called the Hay employees). There was some overlap, specifically that some of the office staff were hourly paid.

[8]The respondent was party to a National Agreement between member companies of the papermaking industry, the Confederation of Paper Industries Partnership Agreement, and various unions, including the claimant, Unite the Union. That agreement was stated to cover production (process) and engineering (craft) workers. They were represented by various trade unions. Subsequent revisions to the national agreement were made through Memorandum of Agreement at the national level.

[9]Negotiations over pay and conditions were therefore conducted for the respondent at the national level through the Confederation of Paper Industries. Further local agreements were entered into between the respondent and Unite the Union set out in Memoranda of Agreement.

[10]In particular an agreement was reached between the respondent and Unite the Union on 18 January 2022. That agreement referenced the annual pay negotiation between Unite and the Confederation of Paper Industries when a pay increase of 4% was negotiated. That agreement went on to state that given difficult trading positions, the respondent could not follow the normal application of the 4% settlement which was agreed that year. The agreement reached was for the pay award to be paid in two stages.

[11]The normal application of any negotiated pay settlement was that it was paid to all employees, and not just those who were specifically covered by the national collective agreement.

[12]Accordingly, following the agreement being reached in January 2022, the percentage wage increase was applied to Urwick Orr and Hay employee groups as well as the manual workers, as the custom and practice was to apply any agreement to all employee groups once the outcome of the collective bargaining on pay negotiations was concluded.

[13]On the conclusion of the annual wage deal each year, all employees at Stoneywood paper mill received the same percentage pay rise as a result of the collective bargaining process. This was the position which was implemented from at least 2012, and almost certainly before that. The union was thus recognised by the respondent as negotiating for all of the employees employed by the respondent. Deliberations and decision

[14]This is an unopposed application, the administrator for the respondent having been informed of this hearing, but not having lodged any defence to the claims and with no application to be heard at this hearing. Further, the reconsideration request now having been intimated to the Redundancy Payments Office, their response, at page 32 of the supplementary file of productions, indicates that the Secretary of State’s position is neutral.

[15]Notwithstanding, Mr Crammond recognised that he had to persuade me that the tests laid down for reconsiderations in rules 70-73 were met. Should the application be allowed, although late?

[16]The first matter to be addressed is the fact that the application is made outwith the fourteen day period to lodge such reconsideration applications.

[17]By reference to the decision of Baisley v South Lanarkshire Council

2017 ICR 365

, Mr Crammond asked the Tribunal to use its discretion under rule 5 to hear the application although it had been lodged late.

[18]I accept that the key factor for consideration is the balance of prejudice. I was prepared to accept that the balance of prejudice favours hearing the reconsideration application although late, based on the following submissions made by Mr Crammond.

[19]Mr Crammond explained that the union openly admits that it now takes a different position from that which was initially intimated by the union to the Tribunal. With regard to the reasons why that arose, I was told that this involves issues which are not straightforward relating to the interplay between union recognition and collective bargaining. While initially reliance had been placed on the relevant documents, there were local agreements and different practices on the ground which were not fully investigated before the judgments were issued.

[20]Mr Crammond explained that once the judgments had been issued the claimant looked again at the circumstances of the collective agreement and liaised with Ruth Harris who was the HR Director at the material time. Mr Crammond relied on the fact that throughout the case management stage even the administrators were not clear about the position, but further not much enquiry had previously been made of the administrators or of Ruth Harris to ascertain the correct collective bargaining unit.

[21]It has been ascertained that there was a tension between what the documents said and the position on the ground. Mr Crammond submitted that the documents themselves are not in any event completely clear either way but could be read to suggest that they only cover manual workers. However, he submitted that what was clear is that they allowed for a local agreement and they do not take account of custom and practice. While there are no new documents post-dating the judgments, the position pertaining prior to the judgments being issued has now become clear following investigation after the judgments were issued.

[22]Mr Crammond argued that in terms of the balance of prejudice, and in considering whether the late application should be allowed, it would be in the interests of justice to allow the reconsideration application to be considered.

[23]I accept, bearing in mind the above, that it is in the interests of justice to allow the application to be considered. That is not least because this is not a case which is contested and in particular the Secretary of State has been intimated but takes a neutral stance. I accept that not to allow the application late would mean prejudice to the claimants but little prejudice to anyone else.

[24]For these reasons, I have decided that the application should be considered, although late. Should the application for reconsideration be granted?

[25]Turning to the second question, and whether it is in the interest of justice to grant the application to amend the judgments, Mr Crammond relied on the principles summarised in the decision of the Court of Appeal in Phipps v Priory Education Services Ltd

2023 IRLR 851

, which emphasises the wide discretion of the tribunal and the importance of weighing the injustice to a claimant if reconsideration is refused, with any injustice to a respondent if granted.

[26]Mr Crammond pointed out that this is not a case where former employees will get a windfall when one is not due. Further he argued that it is in the interests of justice for those who were not manual workers to be entitled to the protective award, particularly in circumstances when Unite the Union is the correct claimant and this is not a route to circumvent an appeal.

[27]Mr Crammond submitted, and I accept, that while the test now is only what is in the interests of justice, the previous case law is still relevant, and there is no exceptionality test.

[28]On the issue of new evidence, Mr Crammond relied on the decision of the EAT in the case of Outasight VB Ltd v Brown

UKEAT/0253/14

, which references the Ladd v Marshall principles which, he argues, favour the claimant.

[29]There was some discussion during the hearing about whether the position in Scotland may be different from that set out in Ladd v Marshall; and I now realise, contrary to what I may have indicated during the hearing, that it is arguable that the test in Scotland may be slightly stricter. However, I noted that those principles were referenced by the EAT in Scotland in the case of Lawrynowicz v Bidvest Noonan (UK) Ltd

2024 EAT 13

, so I am content to follow those principles, not least in light of the decision of the President in Outasight.

[30]With regard to the application of those principles, Mr Crammond relied on the fact that during case management there were attempts to get information from the administrators but the replies were not helpful. After the judgments were issued, further information was subsequently supplied by the HR Director, Ms Harris, specifically in the form of an e-mail. This, he pointed out, precipitated prompt application thereafter.

[31]The claimant thus relies on this “new evidence” referenced in the e-mail and the oral evidence given by Ms Harris, which fleshes out the content of the email. Ms Harris’s evidence is supported by that of Mr McKay, who worked for the respondent from 2012.

[32]In support of the application, Mr Crammond relies on the following provisions of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULCRA):a. s.178 which sets out the definition of a collective agreement, that is an agreement made between a trade union and an employer, relating among other things to terms and conditions which includes “pay and wages”;

b. s.178(3) which states that a trade union may be recognised by an employer “to any extent”;

c. s.188 which sets out the duty to consult appropriate representatives where an employer is proposing to dismiss as redundant 20 or more employees;

d. the representatives of the trade union are the appropriate representatives of any affected employees where the employees are of a description in respect of which an independent trade union is recognised by their employer;

e. s.190, the key section, which states that where a tribunal makes a protective award, every employee of a description to which the award relates is entitled to be paid remuneration for the protected period.

[33]Given therefore in this case on the evidence now heard that the trade union was recognised as representing all employees, and not just manual workers, at least to the extent of negotiations over pay, the original judgments, in restricting the scope of affected employees to manual workers were incorrect. For that reason, he argues, those judgments should be amended.

[34]Mr Crammond relies on two authorities to support his position, namely National Union of Tailors and Garment Workers v Charles Ingram Ltd

1977 IRLR 147

and USDAW v Sketchley Ltd

1981 IRLR 291

. In the former, the EAT held that where there was neither a written agreement that the union should be recognised, nor an express agreement which was not in writing, it was sufficient if the established facts are clear and unequivocal and give rise to the clear inference that the employers have recognised the union. The EAT stated that would normally involve conduct over a period of time and the longer that state of facts had existed the more likely a conclusion would be reached that the employers had recognised the union.

[35]This he argues supports his proposition that the absence of a formal document is not fatal, and it is necessary to look at the facts. Here, Mr Crammond argued it was clear that the custom and practice, based on the evidence of Ms Harris and Mr McKay, was that whenever pay negotiations took place, provisions relating to pay and wages applied to all employees. While it might be said that some employers do that just to be fair, Mr Crammond argued that was not the case here. Rather it is the case that the union was recognised for everyone, because the consequence of any negotiations was that everyone would get a pay rise.

[36]As Mr Crammond stated, noted above, the written documents are unclear. They might be said to cover only manual workers, but they do not preclude local agreements. Looking at what happened on the ground, he submits that there was an implied agreement that the union was recognised as negotiating for all employees.

[37]I take account of the above, and in considering the balance of prejudice, I accept that the prejudice is to those employees who are currently, wrongly on the facts found, excluded from the judgment and thus from the right to claim a protective award. While concerns were raised about the prejudice to the public purse, I take account of the fact that there is no opposition from the administrators, and having specifically consulted the RPS because of those concerns, it is clear that there is no express objection from the Secretary of State. What about any other judgments in respect of individual employees?

[38]This was a matter of concern because I was aware that other decisions had been issued to individual employees, who were at one point believed not to be covered by the collective agreement. These were claims pursued by individuals who, it now seems wrongly, believed they were entitled to pursue individual claims in terms of section 189(1)(d) TULCRA, as affected employees who were not covered by employee representatives or a trade union.

[39]Mr Crammond suggested that the key question was how such other claims might impact on this judgment in regard to the Unite the Union claims. He made the following submissions.

[40]Mr Crammond’s position was that the Tribunal should not be concerned about those other claims when considering this application because these individuals are different claimants; if their own claim is rejected that cannot preclude the Unite claim from succeeding. His position is that their claims for protective awards were pursued on a different basis from the trade union. They are different claims, with different parties, relying on different provisions of TULCRA. Either claim would lead to the same result and the same remedy, simply placing reliance on a different provision.

[41]While an individual’s claim will fail if there is a union negotiating on their behalf, if there were to be simultaneous claims brought, that is not relevant for the claim pursued by the Union. The claim, he argued, by the recognised trade union should take precedence.

[42]If other judgments are successful, that cannot impact on this decision; and it would be wrong for those other judgments to be taken into account in deciding this case. Where a judgment has been issued on the back of incorrect facts, that cannot impact on the considerations of this application and an incorrect judgment cannot trump what would be a correct judgment. Further, those judgments, even if incorrect, will stand until someone makes an application relating to them; and it is not incumbent on the Tribunal to do anything about that.

[43]Further, it is not and cannot be the case that a claimant will be paid twice: if a claimant presents a second judgment to the RPS, the RPS will have a record of them having been already paid. There is thus no prejudice to the Secretary of State in granting this application.

Conclusion

[44]Taking account of the above, I accept that there will be prejudice to the claimant if this reconsideration application is not granted, and little or no prejudice to the respondent or the Secretary of State. I accordingly grant the application, and amend the judgments issues on 18 December 2023 and 9 January 2024 as requested.

[45]Those acting for the additional 51 claimants referenced in paragraph 1, and the 29 claimants referenced in paragraph 5, will require to make application to the Tribunal in light of this decision. M. Robison