Lidl Ltd v Central Arbitration Committee & Anor

Under Schedule A1 to the Trade Union and Labour Relations (Consolidation) Act 1992, the CAC must decide whether a proposed bargaining unit is appropriate, taking into account effective management and specified statutory matters. The reference to small fragmented bargaining units concerns fragmentation of collective bargaining between units, or the risk of proliferation. It does not impose a general objection to a small unit or to union recognition for a small group while other employees remain unrepresented. Those concerns may still be considered under effective management and overall appropriateness, but they are not automatically undesirable under paragraph 19B(3)(c). Courts should show considerable caution when reviewing the CAC’s expert assessment.

The GMB applied to the Central Arbitration Committee for recognition by Lidl for collective bargaining in respect of warehouse operatives at Lidl’s Bridgend Regional Distribution Centre. The CAC decided that the proposed bargaining unit was appropriate under Schedule A1 to the Trade Union and Labour Relations (Consolidation) Act 1992.

Lidl’s judicial review claim was dismissed by Lewis J in the Administrative Court on 10 August 2016. Lidl appealed, arguing that the CAC had misconstrued paragraph 19B(3)(c), concerning small fragmented bargaining units, and had failed to give adequate reasons for rejecting arguments about fragmentation and employee tensions. The central questions were the proper scope of paragraph 19B(3)(c) and whether the CAC’s reasoning justified intervention.

Appeal dismissed. Underhill LJ gave the leading judgment and Longmore LJ agreed.

1. The determinative question under paragraph 19(2) of Schedule A1 was whether the proposed bargaining unit was appropriate. The CAC had to take into account the need for compatibility with effective management and the matters listed in paragraph 19B(3), so far as consistent with that need. The broad statutory criterion and the CAC’s expert role required the court to be cautious about legal challenges. Underhill LJ endorsed the approach in R (British Broadcasting Corporation) v Central Arbitration Committee [2003] EWHC 1375 (Admin) and R v Central Arbitration Committee, ex p Kwik-Fit (GB) Ltd [2002] EWHC 277 (Admin), approved on appeal in [2002] EWCA Civ 512.
2. Paragraph 19B(3)(c) addressed fragmentation of collective bargaining between bargaining units, or the risk that recognition of one unit would lead to proliferation. The word fragmented naturally connoted a whole broken into parts and therefore implied plurality. The provision was not directed to a single small unit merely because it represented a small part of the workforce. The reasoning discussed in R (Cable & Wireless Services UK Ltd) v Central Arbitration Committee [2008] EWHC 115 (Admin) was consistent with, and helped explain, that approach.
3. The CAC had proceeded on the basis that paragraph 19B(3)(c) was not engaged where Bridgend was the only bargaining unit and there was no risk of proliferation. Although Lewis J had interpreted its decision differently, that interpretation was not sustainable. The CAC’s conclusion on the facts nevertheless disclosed no error of law. Lidl’s concerns about an isolated area of union recognition could be considered under effective management or overall appropriateness, but were not automatically undesirable under paragraph 19B(3)(c).
4. The CAC had not expressly addressed Lidl’s arguments about tensions between employees within and outside the proposed unit. It had, however, addressed the broader one-company and effective-management arguments. In any event, the reasons challenge had not been pleaded below, the opportunity to clarify the CAC’s reasons had been lost, and it would not be proportionate to permit the challenge to be pursued for the first time on appeal.

• Court of Appeal (Civil Division) — The appeal was dismissed: [2017] EWCA Civ 328.
• High Court, Queen’s Bench Division, Administrative Court — Lewis J granted permission for judicial review but dismissed Lidl’s claim on 10 August 2016.