Ultraframe (UK) Ltd, R (on the application of) v Central Arbitration Committee

LORD JUSTICE BUXTON:

As to the specific provisions of schedule A1, it is only necessary at this stage to set out those most directly in issue in the present case, that is paragraph 29 which concerns the duties of the CAC on being informed of the result of a ballot. The relevant part of paragraph 29 provides:

Two trade unions, including the GMB union who were a party in the court below, sought recognition on behalf of a group of workers employed by Ultraframe (UK) Ltd ("Ultraframe"). In a case which is opposed by the employer, and the CAC is not satisfied that a majority of the workers constituting the bargaining unit are members of the unions concerned, it must arrange for the holding of a secret ballot in which the workers constituting the bargaining unit are asked whether they wish the unions to conduct collective bargaining on their behalf (paragraph 23 of Schedule A1). The ballot arranged in this case, the result of which was delivered by the Qualified Independent Person ("QIP") on 28 April 2004, revealed a majority of workers in favour of recognition, but the numbers voting in favour fell short by four votes of the required 40 per cent of all members of the bargaining unit. The unions complained to the CAC that some of their members had not received ballot papers. The CAC panel seised of the application instituted an inquiry, in which it judged that five employees had not been given sufficient opportunity to vote; found that if given an opportunity they would have voted for recognition; and as a result ordered the ballot to be re-run.

Ultraframe contended and contends that the CAC had no jurisdiction to go behind the result of the ballot as delivered to it by the QIP. Its duty, and its only power at that stage, was to make the declaration of non-entitlement to recognition set out in paragraph 29 (4) of Schedule A1. Ultraframe also contended that the CAC's decision that the five employees had not had a sufficient opportunity to vote had been irrational. In judicial review proceedings Davis J agreed with both arguments. He quashed the decision of the CAC to order a new ballot, and ordered it forthwith to make the declaration under paragraph 29 (4). His order in detail was as follows:

The parties opponent to Ultraframe in the court below were the CAC and the GMB union. The CAC fully argued the jurisdiction point, but remained neutral on the issue of irrationality, in respect of which argument in support of the decision of the CAC panel was presented only by the GMB. The GMB has not appealed against the decision of Davis J, though it has indicated informally that it supports the appeal brought by the CAC. The CAC sought to argue both the jurisdiction and the irrationality points. That circumstance caused Ultraframe to submit that it was not open to the CAC, the only appellant, to appeal against the decision of Davis J on the irrationality issue, because it did not present argument on that issue in the court below; and, if that was correct, the whole appeal must fail in limine, because a decision on the jurisdiction point in the CAC's favour would be academic, granted that it would already have lost on irrationality.

That issue therefore stood for resolution at the opening of the appeal. However this morning the court was presented with a statement agreed by both sides as to the future conduct of the appeal. That read:

The effect of those intentions or proposals is that the CAC concedes the finding of Davis J that its panel's decision was irrational. Any determination by the court that Davis J had been wrong on the jurisdiction issue would therefore be academic as between the two parties as it could not affect the result of the appeal: which must be that because of the concession on irrationality the judge's decision to quash the CAC's order remained in place. We nonetheless decided to review the judge's decision on the jurisdiction of the CAC and, if appropriate, make a declaration in respect of it. We considered that the point was one of considerable and general public interest, and thus one that in public law proceedings we had jurisdiction to entertain, however academic the court's decision might be between the immediate parties. We took particular notice of the guidance given by the House of Lords in R v Secretary of State for the Home Department ex p Salem [1999] 1 AC 450, accurately set out in the headnote to the official report in the following terms:

We informed the parties that that was our intention, at the same time noting that if we were minded to make a declaration that differed from the view taken by the judge we would not necessarily see ourselves as bound by the form of words proposed in the document already referred to. Although they offered as a matter of courtesy to the court to remain, Mr Hochhauser QC and Miss Mountfield then, with the court's permission, withdrew. We had in mind that we had the benefit of detailed written submissions from them in support of the judge's conclusions, to which we have sought to give full weight in our judgment. We proceeded to hear submissions from Mr Linden, to some extent expanding on the very detailed written arguments that he also had already submitted.

Paragraph 171 of Schedule A1 provides:

None of those considerations can be relied on to give the CAC powers or functions that are not within its powers under the statute, however much the court might think that the exercise of such powers by the CAC would encourage fair and efficient practices in the workplace, or be appropriate to its overall role as the decision making body in this specialist area. In the judge's graphic phrase, in paragraph 63 of his judgment, they do not authorise the court to engage in statutory trench-filling. At the same time, however, these considerations must be borne clearly in mind as potentially illuminating what Parliament did intend by the language that it used and the structure that it provided in Schedule A1.

Ultraframe argued, and the judge agreed, that the statutory position was simple. The CAC's function was to "arrange" the holding of the ballot (paragraph 23 (2)). The ballot is to be conducted not by CAC itself, but by the QIP appointed by the CAC (paragraph 25 (2)). The only role for the CAC thereafter is to take action if the employer does not comply with his duty under paragraph 26 (4) to provide the CAC with information as to the workers who constitute the bargaining unit, for onward transmission by the CAC to the QIP. The QIP completes her functions by delivering the result of the ballot to the CAC. The CAC's role then is explicit, clear and limited. It must (that word is emphasised) act on the result of the ballot in the way required by paragraph 29. There is no provision, and no room, for the CAC to act as it did in this case, and question the validity of the ballot, and much less to reject the figures given to it by the QIP and order a substitute ballot. And the conclusion must follow from that general argument that the CAC was obliged to act on the QIP's figures as delivered to it even if it had incontrovertible evidence that they had been produced by mistake, or even by fraud.

I will immediately be apparent that that limitation, if it does exist, presents considerable practical difficulties, and especially in a case such as the present where an objection to the ballot or its outcome was only raised after the delivery of the figures by the QIP. The same would be likely to be the case if there were an allegation, or even clear proof, of fraud: a consideration that particularly exercised the single Lord Justice in giving permission to appeal to this court. It is not suggested that the QIP has any role once she has handed over her results to the CAC; so in the absence of any power to investigate on the part of the CAC, the aggrieved party's recourse, in the argument of Ultraframe, has to be to the Administrative Court.

Leaving aside for the moment the inappropriateness of that course in what has been seen by this court to be a specialist area not suitable for intervention by the courts, there are simple structural difficulties about such proceedings, some of which troubled the judge as indicated in paragraph 62 of his judgment. Take the present case. First, it is not at all clear who would be the respondent to proceedings in the Administrative Court, or what error of public law they could be said to have committed. The employer is plainly not responsible. This argument has as its point of departure that the CAC has no role in the conduct of the ballot, so the CAC equally cannot be responsible for shortcomings in that ballot. The only putative respondent would therefore be the QIP: but, as the judge pointed out, it is difficult in this case (and in a case of concealed fraud would be impossible) to attribute any unreasonable decision to the QIP. That is why the judge suggested that the recourse might rather be through a civil law claim in the Chancery Division or the Queen's Bench Division. Such a claim would presumably be for a declaration of invalidity of the ballot. Again, however, it is difficult to see what would be the structure of such a claim, and more particularly who would be the respondent to it. The CAC remains a non-party, presumably on this argument even without vires to advise the court from the standpoint of good industrial relations. The employer might be an interested party, but he could not serve as the person against whom the claim was asserted. The only respondent therefore would have to be the QIP. That would be reasonable when the complaint was as to her actual conduct, but it is hard to see that she would have any interest in resisting a claim in relation to, for instance, after-discovered fraud. It may indeed be noted, purely by way of analogy, that the returning officer in a Parliamentary or local election can only be deemed to be or be made the respondent to an election petition if his own conduct is complained of: Representation of the People Act 1983, sections 121 (2) and 128 (2).

All of this suggests that it is very difficult to fit the complaints that are likely to be made about the conduct or the result of a recognition ballot into either the methods used for questioning political elections or the orthodox forms of civil litigation. There is however a further reason why litigation, and more particularly litigation in the Administrative Court, is likely to be an ineffective tool in these cases. Disputes about the conduct of ballots are likely to involve very close investigation of the facts, as the present case indeed demonstrated. Authorities are legion warning that judicial review is not a suitable method for deciding factual disputes. The administrative court does have power to determine facts, but essentially as a preliminary to or basis of its supervisory jurisdiction: and not where, as in the case of the delayed ballots, the factual dispute constitutes the whole case. That, again, is no doubt why Davis J suggested the alternative of declaratory proceedings. But it is very difficult to see either that the court process would be a more practical alternative to the comparatively short and informal investigation that is possible on the part of the CAC; or that the decision of a judge as to the implications of the facts found and as to whether the ballot should be quashed is likely to be more reliable or better informed than that of the persons experienced in industrial relations who staff the CAC.

I am therefore quite clear that the construction of the statute urged by Ultraframe and accepted by the judge produces a result that by its inconvenience and encouragement of litigation is unlikely to improve the efficient and economic conduct of industrial relations. It is therefore necessary to consider whether any alternative construction is available.

Paragraph 29 has to be read with regard to the structure in which it is placed, and to the function and qualities of the CAC. In my view, both policy and commonsense indicate that Parliament must have intended that the CAC should have responsibility for all disputes in and around the ballot process. It has had the conduct of the matter from the start: not just in connexion with the ballot, but earlier in handling the whole process of requests for recognition and the employer's reactions to them. The same panel appointed by the CAC under section 263A performs all of those functions in a particular case. It is expected by Parliament to bring to all aspects of its task its expert knowledge not just of industrial relations generally, but in particular of the circumstances of the case of which it has the conduct, including importantly the composition and characteristics of the workforce. It provides a dispute-settling machinery with which the parties are familiar and which can be brought into operation at short notice. And as this court emphasised in Kwik-Fit, the CAC, not the courts, is intended to be the decision making body in the specialised area of industrial relations.

Under paragraphs 24 and 25 of Schedule 1A the CAC is responsible for the arranging for the holding of the ballot and for selecting the QIP to conduct it. If a question arose during the currency of the ballot which the QIP could not reasonably resolve (for instance, because it involved or allegedly involved her own conduct), it seems inconceivable that the CAC could not intervene, but had to stand by while an unreliable ballot continued, and then be obliged to act on a result that it knew to be wrong. It is difficult to think of anything less likely to secure the arrangement and promotion of fair and efficient practices in the workplace, which is the object of the CAC: Schedule 1A, paragraph 171. If that is the necessary and reasonable assumption as to the CAC's position during the currency of the ballot, the only barrier to that role continuing after the end of the ballot is paragraph 29 which, as we have seen, weighed heavily with the judge.

Mr Linden argued before the judge, as he initially did before us, that a licence or opportunity for the intervention of the CAC before acting on the result of the ballot was to be found in the words "as soon as reasonably practicable" that qualify the CAC's duty in paragraph 29. I cannot agree with that version of the argument. The words plainly do not create any power on the part of the CAC to intervene if that power does not otherwise exist. Mr Linden was minded to agree with that view, but suggested, in my view legitimately, that the words at least provided an indication that powers otherwise existing could be exercised at that stage.

Nor is the general role of the CAC excluded by the wording of paragraph 29. The CAC's duty is stated in emphatic terms, no doubt to emphasise that the CAC has to treat the ballot as definitive and not merely consultative. In that respect, any suggestion of a decision making function on the part of the CAC is specifically withdrawn. But I cannot accept that that exclusion of any general discretion in the interpretation of the ballot at the same time deprives the CAC of any supervisory role as to the validity of the ballot. The proposition that at this stage of the process Parliament has deprived the CAC of any power to investigate, and if needs be to decline to act upon, a ballot that it thinks or knows to be unreliable as an answer to the question posed by it is surprising to the extent that I cannot think that Parliament can have intended it. And the answer that would have to be given to a party aggrieved by the conduct of the ballot, be they employer or worker, that all that they can do is to go off to court should be equally surprising, at least to those who have acquainted themselves with what this court said in Kwik-Fit.

These were considerations that weighed with the CAC in its careful determination. The CAC also pointed to the importance of the ballot being conducted as the statute requires, by paragraph 23 (2) of Schedule A1 being a ballot -

I therefore consider that the overall structure and assumptions of the precognition process, and the general role and standing of the CAC, strongly indicate that the intention of Parliament in Schedule A1 was not as found by the judge. There is nothing in the wording of paragraph 29, properly understood, to displace that conclusion.

I would, for completeness, refer to two further arguments, by neither of which I am persuaded. First, attention was drawn to the specific powers granted to the CAC by paragraph 27 of the Schedule. That, it was suggested, indicated that where Parliament envisaged intervention by the CAC it thought it necessary to say so in terms. The case envisaged in paragraph 27 is where the CAC needs to discipline one of the opponent parties, the employer, for breach of the rules. It is understandable that it was thought prudent in the interests of relations between the parties, including the CAC, specifically to spell out a power that might be thought to depart from the even-handed and conciliatory general role of the CAC. The same can be said of the further disciplinary powers introduced by sections 9 and 10 of the Employment Relations Act 2004.

Second, it was suggested that the issue in the present case really concerned the conduct of a ballot rather than industrial relations as such. The QIP, not the CAC, was the expert in that area. That overlooks that the ballot process is not like a general or local election, but is deeply embedded in an industrial process. Many issues may arise, as indeed they did this case, in which judgements have to be made as to means of communicating with workers and the reasonableness of steps taken. The CAC has an expertise to bring to those questions that goes outside issues of the handling or recording of votes.

I would conclude, differing from the judge, that the CAC did have jurisdiction to investigate and, if appropriate, to annul the ballot. Since I find that jurisdiction in the general powers of the CAC throughout the statute, I would omit the specific reference in the declaration sought to paragraph 24 (4), and declare simply that -

Finally I would record that we were not asked to pass, and did not pass, on the issue of whether the CAC's panel had acted irrationally. It should not be thought that the limited form of this judgment indicates any agreement with that conclusion.

LORD JUSTICE MAURICE KAY: I entirely agree, and have nothing to add.

SIR MARTIN NOURSE: I also agree.

It is necessary to set out the statutory background against which this application is made. The legislation was introduced by theEmployment Relations Act 1999 which created a new schedule - Schedule A1 - to the Trade Union and Labour Relations (Consolidation) Act 1992. The schedule deals with recognition and subsequent variations as well as de-recognition. Recognition itself is regulated by Part 1 of the schedule. The provisions are exceptionally detailed; Mr Bean for the CAC accurately described them as being of "byzantine complexity". I will not begin to seek to deal with all the permutations envisaged by the statue but will merely outline the basic structure so that the issues in this case can be placed in context.

The purpose of the legislation is to enable a trade union which is refused recognition by an employer to use the legal process to require the employer to enter into collective bargaining. Recognition means that the union should be "entitled to conduct collective bargaining on behalf of a group or groups of workers": paragraph 1. Collective bargaining in turn is defined as "negotiations relating to pay, hours and holidays", unless the parties agree to a broader range of matters: paragraph 3.

The process commences with the trade union making a request for recognition from the employer. Certain conditions must be met if the request is to be treated as valid within the terms of the legislation. For example, it must be in writing, be made by an independent trade union and identify the proposed bargaining unit. In addition, the employer (together with any associated employer) must employ at least 21 workers: paragraphs 4 to 9.

The employer is given 10 working days to agree the request. If the request is accepted that is the end of the matter. If it is rejected or there is no response, then the union applies for recognition. This is made pursuant to paragraph 11 (2), an important provision in this case which I set out below. (There is a variation of the procedure where the employer agrees to negotiate about the proposed recognition but those negotiations fail to bear fruit).

The second stage is the acceptance or otherwise of the application. The CAC must decide two questions in order to determine whether the application can be accepted. First, it must be satisfied that the original request was valid in the way I have described above. Second, it must decide whether it is admissible within the meaning of paragraphs 33 to 42: see paragraph 15. The most important criterion of admissibility is that members of the union must constitute at least 10 per cent of the workers in the proposed bargaining unit, and that the CAC must be satisfied that a majority of the workers would be likely to favour recognition: paragraph 36.

The third stage is the determination of the bargaining unit. (That, of course, is the principal issue in this case.) In accordance with the general philosophy that voluntarism is preferable to legal regulation, the CAC must try to help the parties reach agreement as to the relevant bargaining unit. But if that is unsuccessful, then the CAC itself must determine the bargaining unit: paragraph 19 (2). Paragraph 19 (3) and (4) set out criteria which must be taken into account in the course of that process. I consider them in more detail below.

Once the CAC has determined the bargaining unit, the fourth stage depends on the outcome of that decision. If the bargaining unit determined is the same as that proposed by the union, then a ballot may have to be held. In general, a ballot will not be required if the union has a majority of the workers in the bargaining unit as members (although even then a ballot may be required if, broadly, there are doubts as to whether the majority does want the union to be recognised, or if good industrial relations makes this desirable): paragraph 22. Otherwise a ballot will be necessary. Where no ballot is required, the CAC simply declares that the union is recognised and entitled to conduct collective bargaining.

The position is more complex if the stipulated bargaining unit is not that proposed by the union. The CAC must then decide whether the application is invalid within the meaning of paragraphs 43 to 50: see paragraph 20. The most significant feature here is that the CAC must be satisfied in respect of the stipulated bargaining unit that the 10 per cent criterion and that relating to the likelihood of majority support are met. If not, the application will at that stage be treated as invalid. If it is valid, then the issue as to whether a ballot is required is determined in the same manner as I have outlined above.

Where a ballot is required it will be carried out by a qualified independent person appointed by the CAC. The employer must co-operate in the process and permit the union to have access to the workers. The CAC must make a declaration of recognition if the result is favourable; this requires both that those who vote in favour constitute a majority of those voting; and that they constitute at least 40 per cent of the workers constituting the bargaining unit: paragraph 29 (2).

If the vote is against then the CAC must declare that the union is not entitled to recognition. Essentially it cannot re-apply for recognition in respect of that group of workers (or a substantially similar group) for three years: paragraph 40.

The consequences of the declaration in favour of recognition are that the employer is obliged to recognise the union in respect of the relevant bargaining unit. In the absence of agreement between the parties, the CAC will be required to stipulate the method by which collective bargaining can be carried out: paragraphs 30 and 31. The ultimate, and only, sanction for failure to comply is specific performance: paragraph 31 (6)."