Scottish Court of Session Decisions

[1] This petition arises from an attempt by the Iron and Steel Trades Confederation ("ISTC") which are compeared as an interested party to gain trade union recognition for the purposes of collective bargaining from the petitioners. As no agreement could be reached between the employer and the trade union, the matter was referred to the Central Arbitration Committee ("the respondent") under and in terms of the Trade Union and Labour Relations Consolidation Act 1992 as amended ("the Act") and in particular Section 263(a) and Schedule A1("the Schedule"). Certain decisions were taken by the respondent which are the subject of a challenge by way of Judicial Review in this petition.

[2] The petitioners are an electronic manufacturing company with a number of plants, this case being concerned with employees at its plant in Ayrshire.

[3] During October 2000 the petitioner announced potential redundancies amongst employees in Ayrshire by letter dated 7 November 2000. ISTC sought recognition from the petitioner to be entitled to conduct collective bargaining on behalf of the employees of the petitioner in Ayrshire. The petitioner was not prepared to agree and did not in fact respond, being more interested in an arrangement with a rival union, AEEU, which also had employees in the relevant plant. On 7 December 2000 ISTC applied to the respondent for recognition in respect of a bargaining unit under Part 1 of Schedule A1 to the Act. A panel was established by the chairman of the respondent in accordance with Section 263(a) of the Act, to discharge the functions of the respondent in connection with the application. A case manager was assigned to assist the panel in that respect. On 13 December 2000 the petitioner received a letter from the respondent purportedly dated 29 November 2000 indicating that an application had been received from ISTC on 8 December 2000. In that letter the respondent set out inter alia the procedure that would be followed and stated inter alia as follows:

[4] Thereafter certain information was provided both by the petitioner and ISTC. By letter dated 19 December 2000, the case manager issued to the petitioner a decision by the panel that the application was accepted by CAC, and the letter went on to explain that if an agreement could not be reached between the parties it would be for the CAC to determine the appropriate bargaining unit in terms of the process laid down in the Schedule. No such agreement was reached and by letter dated 15 January 2001 the respondent notified the petitioner that the hearing would take place on 1 February 2001 to decide the appropriate bargaining unit. Representations were invited as was attendance at the hearing. On 2 February 2001 the respondent issued the panel's decision that the appropriate bargaining unit at the relevant plant was all hourly shop floor employees excluding supervisors and clerical staff. This was the bargaining unit that had been proposed by ISTC.

[5] In accordance to the provisions of the Schedule, the panel was then required to make certain decisions firstly in relation to the date when the issue of a majority of workers belonging to the union within the plant was to be determined ("the relevant date decision"), secondly, whether such a majority existed ("the majority decision"), and thirdly whether there was in any event the need for a ballot ("the ballot decision"). These are the three decisions that the petitioners now challenge.

[6] In relation to the relevant date decision there was initially some dispute at the Bar as to how it had been struck, but counsel reached an agreed position which was accepted by the petitioner that at the meeting on 1 February the question of the relevant date was discussed and the date of 2 February was suggested by the panel, no contrary view having been expressed. It follows that although there was not precise agreement there was at least acceptance that the relevant date would be 2 February. Overall, it can thus be seen that the legality or otherwise of this decision is overtaken by events in the sense that its limited relevance at the end of the day was to reflect the concern by the petitioners that having regard to the fact that there was an ongoing redundancy situation, and at the same time a recruitment policy being undertaken by the union, there was effectively a fluid situation ("the moving target") which should not be realistically assessed on 2 February, but rather called for the matter to be assessed at the date of the application. Although Mr Truscottt appearing for the petitioner did not therefore abandon his attack on the selection of the relevant date, it becomes merely part of the overall picture relevant to the context of the other two decisions.

[7] Thereafter the case manager asked both parties to provide lists of employees, as far as the employer was concerned of all those comprising the bargaining unit and as far as the union was concerned a list of its members at the plant. A comparison exercise was carried out by the case manager and she so advised the petitioner by letter dated 13 February 2001 that the relevant figure was 49.3% at the relevant date. By letter dated 15 February 2001 ISTC wrote to the case manager requesting that the panel and she reconsider whether or not her conclusion was correct, the union believing that they had incorrectly excluded twelve employees from the list of members at the plant. By letter dated 21 February 2001 the case manager informed the petitioner that the panel wished to undertake a further check, to be satisfied about the level of the union membership. This process was challenged by the petitioner but was nevertheless implemented. By letter dated 1 March 2001 the case manager wrote to the petitioners stating inter alia

That is categorised as the majority decision.

[8] At the same time the case manager informed the petitioner that a hearing had been scheduled for Wednesday 14 March to consider the question of a ballot. Written submissions were again invited. The hearing took place on 14 March where both parties represented. By letter dated 22 March 2001 the respondent issued a document incorporating the ballot decision and the declaration of it, (the ballot decision).

[9] In order to put the legal arguments in context it is necessary to consider the terms of the relevant paragraph which is 22 of the Schedule. It is in the following terms:

"This paragraph applies if -

[10] Before considering the matter any further it is important to note the structure of the provision. The first step of the process after the application is accepted in the absence of agreement and following the establishment of the relevant date is for the CAC to be satisfied that the majority of the workers constituting the bargaining unit are members of the union, that is to say at least 50% or perhaps 50.1%. However, recognition is not automatic if any of the three qualifying conditions which could be described as exceptions to be found in sub-paragraph 4 are met ("the exceptions"). Paraphrasing those, the first one relates to a general question of good industrial relations, but the second and third relate to whether or not, notwithstanding the number in excess of 50% of union members within the relevant plant in the bargaining unit, there is a significant number thereanent who inform the CAC that they do not want the union to conduct collective bargaining on their behalf, or membership evidence is produced which would cast doubt whether a significant number of the union members within the unit want the union to conduct collective bargaining. Thus there is a qualification procedure to an automatic recognition. It has to be observed that both these latter exceptions if to be advanced by the employer, at least raises a question as to his knowledge of the identity of union members among the workforce and presumably thereafter to canvass them. This point is not without significance in the overall debate. It is also necessary to note at this stage that in terms of sub-section 7 of the relevant section of the Act the panel is the master of its own procedures.

[11] The relevant parts of the ballot decision are as follows:

[12] I heard a wide ranging debate in which reference was made to the following authorities.

[13] Barrs v British Wool Marketing Board 1957 SC 72, R v Home Secretary ex parte Doody 1994 1 AC 531, Ritchie v Secretary of State for Scotland 1999 SLT 55, R v Home Secretary ex parte Fayed 1997 1 AER 228, Young v Fife Regional Council 1996 SLT 331, McMurdo v McCracken 1907 SCJ 1, Associated Provincial Picture Houses Ltd v Wednesbury Corporation 1948 1KB, 233, R v Chief Constable of Sussex ex parte International Trailers Ferry Limited 2001 AER 129, R v Civil Service Appeal Board ex parte Cunningham 1991 4 AER 310, Stefan v The General Medical Council 1999 1 WLR 1293, Van de Hurk v The Netherlands 1994 18 EHRR 481, Wordie Property Co. Ltd v Secretary of State for Scotland 1984 SLT 345, Sigurdur Sigurjohnsson v Iceland 1993 16 EHRR 462, Bass Taverns v Clydesdale Bank 1995 SLT 1275, Dombo Beheer BV v The Netherlands 1994 18 EHRR 213, Gallagher v Stirling Council 2001 SLT 94, Selvarajan v Race Relations Board 1979 1 AER 12.

[14] The respondents also referred to Benyon on Statutory Construction, Part 27 and also referred me to two decisions of the Central Arbitration Committee which are only reported in their own records namely Graphical Paper and Media Union and Satex Press Northern Limited, case number TURI/21/00 and GPMU v Red Letter Bradford Limited, case number TU12000.

[15] At the end of the day there was not much in the way of dispute between the parties as to the general law. On the two main issues of fairness in the context of natural justice and adequacy of reason in relation to an administrative decision, even on a quasi judicial basis, parties were agreed that the CAC had to act in accordance with the principles of natural justice which essentially required even handed treatment to both parties, an opportunity to make representations in respect of a case disclosed against a compearing party and generally a recognition of the need for there to be equality of arms. Although a passing reference was made to Article 6 of the European Convention on Human Rights again it was recognised that that provision added nothing to the principles of natural justice enshrined in the common law of Scotland.

[16] Secondly with regard to the question of adequacy of reasons, again there was little dispute between the parties on the general law. In general terms, a party had to know why he had won or lost from the content of the relevant decision. The decision in question must not take into account, on the face of it, matters that should have been left out of account nor leave out of account matters that they should have taken into account (Wordie supra). On the other hand there will be cases where the decision maker was not required to give any reasons at all. However, it was also recognised that if he did give reasons then they could be scrutinised against the general adequacy test, albeit with some refinement.

[17] In this respect I would adopt with gratitude the analysis of Lord Macfadyen in Gallagher supra where he says at paragraph 36:

[18] His Lordship is thus drawing a distinction between the situation which applies when reasons are required and a situation where they are not required but nevertheless given. In the latter context, the decision in question will only fall to be reduced if the reasons given disclose a flaw in the reasoning, rather than just being inadequate to support the basic decision. I completely agree with that approach.

[19] Certain parts of the debate also addressed the extent to which the administrative law has moved on as to perhaps loosening of the fairness test originally stated fairly bluntly by Lord Greene M.R. in Wednesbury but restated by Lord Mustill in Doody supra. I do not consider the point arises for any further consideration in this case since at the end of the day I consider Mr Truscott's criticisms of the decisions in question were adequately encompassed within the passage I have quoted from Gallagher supra.

[20] As I have indicated previously the issue in relating to the relevant date has been somewhat overtaken by events given the agreed position accepted by the parties as to how it was struck. But nevertheless it is important to bear in mind that it did not reflect the concern as I have stated of the employer that there was effectively "a moving target" by reason of ongoing redundancies and recruitment. To strike an artificial date was accordingly artificial and so submitted the petitioners. As I have again indicated previously, this may reflect upon the nature of the decision to be made in relation to the legality or otherwise of the ballot decision, but does not in itself render the decision as the relevant date reducible and I pass from that point.

[21] Mr Truscott's attack upon the majority decision was mounted on two separate fronts.

[22] In the first place he said a proper construction of the decision in its amended form as found in the letter of 1 March 2001 (6.10 of process), quite clearly indicated that the decision had been taken by the case manager and not by the panel at all. While it might be competent, it was submitted, for the panel to delegate what could be described as "legwork" to the case manager, the decision had to be that of the panel having regard to the terms of the Schedule which required "the panel to be satisfied" upon the issue. The decision if delegated was thus beyond the powers capable of being exercised by the panel and was therefore ultra vires and reducible.

[23] Secondly, quite separately, Mr Truscott submitted that his clients had been unfairly treated in the way in which the matter had been handled. Against the background of the confidential basis of the arrangements, they had provided the panel with lists of employees and equally the union had provided with lists of members but that latter was not disclosed to the employer. The employer accordingly had no means of ascertaining what the correct result ought to be. It was therefore essential for the matter to be handled carefully and fairly, and in fact it was not, upon the basis that having struck in the original decision of 49.3% the resulting figure of 51.3% was struck after receiving additional information from the union which indicated to the employer that there were only an additional twelve people which could be eligible, and yet in the result a figure of fifteen was found. It was stated that the employer had no way of ascertaining how the panel had reached this conclusion and accordingly there was no equality of arms or fair treatment. At the Bar document No. 12 of process was produced by the respondent which on the first sheet indicated the actual numerical calculations involved, and on the second sheet by way of narrative how the additional fifteen workers had been found. The document was not disclosed to the petitioners at the relevant time and certainly not in relation to page 2 which was the vital part of the ingredients of reasoning. However, when Mr Truscott was replying to the submissions of Mr Dewar and Mr Fairley for the respondent and interested party, he accepted that if his clients had seen that the relevant document at the time, they would have been bound to accept the position and this is of a considerable significance. Finally, Mr Truscott however submitted that the concerns that the petitioner had as regards the relevant date and the moving target, again heightened the need for full and frank disclosure of reasons to be given in relation to the majority decision which had not happened.

[24] In response to these submissions, Mr Dewar and Mr Fairley took common ground to the effect firstly, that as a matter of fact the case manager had consulted individually the panel members before issuing the majority decision, although there had been no formal meeting. It was therefore submitted that the panel members had approved the decision. In any event however the letter should not be scrutinised too carefully and it was apparent from the substance of the later decision, that the whole process adopted by the case manager had been supervised by and accepted by the panel which was therefore the decision maker. Reliance should be made upon paragraph 3 of the decision of 22 March which I have already quoted.

[25] With regard to the attack based on the general question of fairness and natural justice Mr Dewar emphasised strongly that the confidential nature of the arrangement which had been agreed to by the employer, was bound to tie hands to some extent as to how he could check the relevant figures. While it would have been preferable perhaps to let the employer see both sheets of document 12 of process, the failure to do so did not invalidate the process. In any event the complaint was without substance on the hypothesis that had it been proffered, the petitioner would have held himself satisfied upon its terms.

[26] I can deal with these points quite shortly.

[27] As regard to the question of delegation, while of course I accept at once that the statute does not contemplate the decision maker being any person or persons other then the panel on the question of being "satisfied", I feel bound to take a practical view of the situation. The delegation to the case manager is a perfectly legitimate way for the panel to set about its work and indeed from the practical point of view it is hard to see how it could do other unless the members themselves are individually going to embark upon the exercise. I am entirely satisfied that as a matter of general proposition in the absence of any attack on the integrity of the case manager, it is inconceivable that she would have propagated the decision without consulting the panel members. I am therefore not prepared to construe the relevant paragraph of the relevant letter on the narrow basis contended for by Mr Truscott, but in any event even if on the face of it, it would bear such a narrow interpretation, the whole matter is fleshed out in paragraph 3 of the main decision and accordingly I do not consider that it is appropriate to hold as a matter of fact that the decision was taken by the case manager alone.

[28] The issue of unfairness is more difficult although complicated by the question of confidentiality. However it has to be noted that the second page of 12 of process does not actually breach confidentiality since it only specifies numbers and does not disclose names. On the face of it against the background of their concerns about the moving target, it is not without significance that the employer having initially been told that there might be an additional twelve people, is confronted with a decision without further representation which produces a total of fifteen. It could be said therefore there had been some reasons given for the decision which was not adequately vouched. I have to confess that if the matter was still material it would have caused me some difficulty since on one view the test stated in Gallagher, about flawed reasoning, might be met even, if there was no duty to give reasons in the first place, because of a fundamental inconsistency. However, as soon as Mr Truscott accepted that if his clients had received that information contained in number 12 of process, they would have been satisfied or at least been bound to accept the position, the position changes. It follows that I do not consider that there is any material issue to be determined as regards the lawfulness of the majority decision in a practical sense. In my opinion, while natural justice depends upon the notion that justice must be seen to be done and the principle can be breached if the opportunity of an injustice to occur exists even if such in practical terms has not apparently occurred, the position in my opinion is different when the evidence discloses that the complaint has had positively no substantive effect. The substance of the complaint thus evaporates.

[29] Lest I be wrong in this approach, I would also venture the view with some hesitation that at the end of the day the principles of natural justice with regard to unfairness were not breached in this case since at the end of day the exercise was bound to be one that had to be conducted against the background of confidentiality by the panel comparing two lists which were by agreement not being disclosed to the opposite party. I therefore accept Mr Dewar's contention that while it might have been better to have provided the additional information contained in No. 12 of process (Sheet 2) at the time the failure to do so does not render the decision flawed against the test stated in Gallagher. They might be inadequate, but they do not disclose a flaw of reasoning.

[30] I accordingly consider the attack upon the majority decision fails.

[31] In this respect Mr Truscott's attack upon the decision was entirely based on rationality or lack of it in the context of Wednesbury supra and Wordie supra, his basic proposition being that in the essential paragraphs of the decision that is to say 14, 15 and 16 where the panel was considering the applicability or otherwise of the exceptions in paragraph 22 of the Schedule they had taken into account matters they should not have taken into account and have left out of account matters that they should have taken into account, this attack being permissible notwithstanding the fact that in terms of the paragraph they were not obliged to give reasons. They had nevertheless done so which could therefore be scrutinised on the Gallagher approach. In general terms the reasoning was flawed rather than inadequate in those particular respects. Those were failure to recognise the divisive nature, it was submitted, of exceptions (b) and (c) requiring the employer not only to ascertain who are members of the union, but also canvass them on a pitch contrary to the interests of the union; that in any event, the panel appeared to be influenced by the suggestion that it was inappropriate to increase a threshold over 50% when determining upon the need for a ballot. They had failed to take into account the marginal nature of the majority decision against the problems of the moving target, and they had in any event reached a decision on industrial relations in the context of this company without taking into account the factors in question and the possibility that the ballot might have stabilised and improved situations rather than cause them to deteriorate. They have therefore speculated only as to the present state of affairs at the time of the decision and had not looked at the long terms effect that a ballot might have in the future. This was something that if endeavouring to assess good industrial relations on the first exception (a) the panel was bound to take into account and their reasoning was flawed by reason of the fact that they had left it out of account.

[32] In this context Mr Dewar in reply emphasised that there was no need for reasons to be given at all, compared for example with what was required under paragraph 36. But in any event the reasoning as given did not meet the Gallagher approach in respect of it being flawed even if there were matters which could have been mentioned and were accordingly not contained within the decision. It was not, he submitted, appropriate to assume that the employer was powerless when it came to ascertaining the positions under exceptions (b) or (c). He could canvass his employees with an open letter requiring them to respond directly to the panel, or, poll his hourly paid workers to ascertain what the true position was in relation to sub-section (c). In any event Mr Dewar submitted, this panel was a highly experienced industrial jury entitled to reach its own conclusions upon the evidence available to it as to whether it would or would not be in the interests of good industrial relations to hold a ballot and that is what they had done. Furthermore he submitted, that the employer could have resorted to ACAS, as was indeed suggested by the panel as a possibility in the original letter, for assistance in ascertaining the opinions of the workforce.

[33] Mr Fairley supported Mr Dewar's position emphasising the role of ACAS as a potential conciliator or information gatherer in the context of exceptions (b) and (c).

[34] I feel bound to observe that if I were to be asked to decide this matter de novo and at first instance, I would have been inclined to take the view that a ballot has a stabilising influence and might well improve industrial relations rather than to cause them the deteriorate, even if there is a campaign undertaken by both sides before the ballot is struck. I also, would consider, personally, that exceptions (b) and (c) could have a divisive effect if an employer was forced to go canvassing his workforce against the interests of the union, which would undoubtedly antagonise the union management and might cause friction between them and its members. However, these are only personal observations and are really nothing to the point because I am satisfied contrary to my initial reaction that exceptions (b) and (c) are workable if the employer simply generally encourages his employees by open letter, for example, to respond to the panel with their views as to collective bargaining or alternatively provide, even anonymously, evidence to the employer as to the extent of feeling about whether collective bargaining is a desirable aim of the membership. Accordingly in my opinion the employer is in a position in certain circumstances, speaking quite generally, to address the issues raised by (b) and (c), without canvassing individual workers on a personal basis, which would obviously be divisive in every respect of good industrial relations.

[35] It is also important to note the scheme of the process which is generally that the need for a ballot depends upon there being no majority vote in favour of recognition. If there is such a majority, the exceptions are there to provide a let out in appropriate circumstances by reference to either good industrial relations or the attitude of the membership.

[36] It therefore follows that I do not consider the petitioner can now complain that the panel discussed exception (b) and (c) for want of evidence.

[37] In the final analysis in relation to exception (a) I am satisfied that the attack upon this decision fails also because it has not been shown that what was left out of account on the face of the decision, namely the moving target problem, or indeed the marginal nature of the majority were not nevertheless factors that were bound to be in the minds of the decision maker. I consider that the fact that the decision is silent upon that question does not render it flawed. At best again the reasoning might be said to be less adequate than might otherwise have been desired. It seems to me that the panel have applied their minds to the right test in relation to each of the three exceptions and have reached decisions that which they were entitled to reach without there being any manifest error or flaw upon the face of the record. If I were to hold otherwise, I would be substituting my own view for that of the industrial jury and I consider that to be wholly inappropriate. At the end of the day the decision with regard to the applicability of the exceptions lies in the discretion of the panel and it has not been demonstrated to me that they exercised that discretion in any irrational or flawed way, even if there is room for more than one view. It is perhaps worth observing that consideration as to whether the threshold for the need for a ballot is being raised by the exceptions is perhaps irrelevant since Parliament plainly contemplated that in certain circumstances that could happen. Nevertheless I cannot say that it is not a factor which is irrelevant to the whole issue. Certainly it has to be observed that it does not appear to have been a factor that prevented a ballot being ordered in the Red Letter case. The shoe pinches tightest for the panel, in relation to the legality of the decision, with regard to the marginality of the majority against the background of the moving target. It may be that lessons could be learnt from this case in that respect as regards the future, but for the reasons given I am not prepared to hold that the decision is flawed because it is silent on that question.

[38] I shall accordingly sustain the second and third pleas-in-law for the respondent and dismiss the petition.