Small group of Lidl warehouse workers was valid 'bargaining unit', rules Court of Appeal

Lidl had sought to persuade the Central Arbitration Committee (CAC), the government department which deals with applications for trade union recognition, that the group of workers was "statistically insignificant" and "artificial". It argued on behalf of a much larger bargaining unit, consisting of all 18,203 of the company's employees at the time or all 14,675 of its employees at that particular grade.

Trade union law expert Sarah Ashberry of Pinsent Masons, the law firm behind Out-Law.com, said that the case was a reminder of the difficulties employers faced if seeking to challenge or overturn the 'bargaining unit' requested by a trade union.

"The law doesn't require the CAC to find the 'best' possible bargaining unit, but only to judge whether the union's preferred unit is 'appropriate'," she said. "This is a low bar."

"When you think of how much Lidl must have spent on this failed legal bid, paying for a barrister to attend hearings at the CAC, High Court and now Court of Appeal only to be told by the Court of Appeal that the CAC had it right all along, the company might have been better advised to invest that money in employee engagement mechanisms if their ambition was to reduce GMB influence on the business. Lord Justice Underhill said he would 'strongly discourage' legal challenges of this kind, saying decisions on bargaining units fell to the 'expert judgement' of the CAC," she said.

The 1992 Trade Union and Labour Relations (Consolidation) Act (TULRCA) allows an independent trade union to request recognition from an employer for the purposes of collective bargaining, allowing it to conduct negotiations about the likes of pay, hours and holidays for a specified 'bargaining unit' of workers.

Should the employer refuse to agree to recognise the union, it can go on to seek a decision from the CAC which, if successful, would require the employer to recognise it. In reaching its decision, the CAC must decide whether the proposed bargaining unit is an 'appropriate' one. Although the term is not defined anywhere, the CAC is required to consider matters including the need for the unit to be "compatible with effective management".

Responding to an application from the GMB last year, the CAC found that the proposal did not conflict with the 'effective management' requirement. Lidl does not currently recognise any trade union for its employees, and the CAC found no evidence of any conflicting demand elsewhere in the business. The workers in question were "easily identifiable", as they were based at a single location and "treated as a distinct group with a separate contract".

Dismissing Lidl's application for judicial review of the CAC's decision, the Court of Appeal acknowledged that it was "undesirable" for employers to have to "negotiate in more than one forum … in respect of parts of their workforce who [are] not essentially different". However, this was not entirely relevant here, as the facts of the case "did not involve fragmentation between bargaining units or fragmented collective bargaining", according to Lord Justice Underhill.

"Ill-feeling is in practice only likely to be a problem if the terms of those who are collectively bargained for begin to diverge significantly, and for the better, from those whose terms remain set by management," the judge said. "The CAC was certainly aware of [this] argument … It is highly unlikely that if it believed that it did indeed reflect a genuine threat to effective management it would not have said so."