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					                                                                   Case Number: TUR1/541/(2006)
                                                                               13 February 2007



                           CENTRAL ARBITRATION COMMITTEE

         TRADE UNION AND LABOUR RELATIONS (CONSOLIDATION) ACT 1992

               SCHEDULE A1 - COLLECTIVE BARGAINING: RECOGNITION

                DECISION ON WHETHER TO ACCEPT THE APPLICATION




The Parties:


National Union of Journalists (NUJ)
and
The Local Radio Company Ltd


Introduction


1.       The NUJ (the Union) submitted an application to the CAC dated 14 November 2006 that it
should be recognised for collective bargaining by The Local Radio Company Ltd (the Company) for a
bargaining unit described in the following terms: “Staff journalists and the four most regularly used
contract freelances employed in newsrooms in York, Scarborough, Harrogate and Huddersfield.” The
CAC gave both parties notice of receipt of the application on 16 November 2006. The Company
submitted a response to the CAC on 21 November 2006 which was copied to the Union.


2.       In accordance with section 263 of the Trade Union and Labour Relations (Consolidation) Act
1992 (the Act), the CAC Chairman established a Panel to deal with the case. The Panel consisted of
Professor Linda Dickens, Deputy Chairman, and, as Members, Mr D Crowe and Mr R Purkiss. The
Case Manager appointed to support the Panel was Sarah Kendall and, for the purposes of this
decision, Simon Gouldstone.


Issues


3.       The Panel is required by the Act to decide whether the Union‟s application to the CAC is
valid within the terms of paragraphs 5 to 8; is made in accordance with paragraphs 11 or 12; is
admissible within the terms of paragraphs 33 to 42 of Schedule A1 to the Act; and therefore should be
accepted.




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4.      In its response to the CAC, the Company made the following comments:


        a)      It had no information regarding the membership of the Union.
        b)      It believed that there were six employees in the proposed bargaining unit compared
                with the Union‟s estimate of nine. The Company had issued 13 consultancy
                agreements in respect of 10 freelances (who may have an agreement with more than
                one radio station) for the provision of services on an as and when required basis.
                Freelances were paid on the submission of an invoice and were not defined as
                employees.
        c)      Each radio station was a limited company and operated on a geographically separate
                site.
        d)      Each radio station was autonomous and the proposed bargaining unit was
                proportionately small compared with the total number of employees in all the
                individual limited companies.


Membership and Support Check


5.      To assist the determination of two of the admissibility criteria specified in the Schedule,
namely whether 10% of the workers in the proposed bargaining unit are members of the union
(paragraph 36(1)(a)) and whether a majority of the workers in the proposed bargaining unit would be
likely to favour recognition of the union as entitled to conduct collective bargaining on behalf of the
bargaining unit (paragraph 36(1)(b), the Panel proposed a check to be undertaken by the Case
Manager of the level of union membership within the proposed bargaining unit. The parties agreed
that the Company would supply to the Case Manager a list of the names of workers within the
proposed bargaining unit and that the Union would supply to the Case Manager a list of union
members within that unit to enable a comparison to be undertaken. It was explicitly agreed with the
parties that, to preserve confidentiality, the information provided by one party would not be copied to
the other.   The agreed arrangements were confirmed in a letter dated 30 November 2006 from the
Case Manager to both parties. The Case Manager received the information from both parties on
1 December 2006.


6.      The Union provided a list of eight members in the proposed bargaining unit. The Company
provided two tables. One was a list of employees at each radio station with the journalists specifically
identified. The list comprised each employee‟s full name and address, and the station at which they
worked. The second table was a list of freelances with the person‟s full name and address, their station
and the date of expiry of their freelance agreement. Again, the journalists were specifically identified.
In the information provided by the Company, the total number of employees listed was 42, of whom
seven were journalists. It was further stated that two of the journalists had given notice of resignation,




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their last working day being 22 December 2006. In the information relating to freelances, there were
40 freelance agreements listed. However, some of those individuals listed held agreements with more
than one station. Seven individuals were identified as being journalists. The Company was unable to
separately identify, in accordance with the Union‟s proposed bargaining unit, which individuals were
“the four most regularly used” contract freelances employed in newsrooms in York, Scarborough,
Harrogate and Huddersfield. For the purposes of the check the number of workers given by the
Company as falling within the Union‟s proposed bargaining unit accordingly included all those
individuals who were identified as both contract freelance journalists and employee journalists.


7.      The result of the membership check was that there were 14 workers in the Union‟s proposed
bargaining unit of whom eight were members of the Union; a membership level of 57.14%.


8.      The Case Manager‟s report of the result of the check was circulated to the parties and the
Panel on 8 December 2006. The Union responded in a letter dated 11 December 2006 stating that it
trusted a membership level of 57% was sufficient for the CAC to accept the application. It further
commented that it was inappropriate for the Company to supply the names of seven freelances; these
workers did casual shifts so it would be a simple process for the Company to find the four who had
worked the most regularly in recent months. It also disputed the Company‟s statement that it
employed seven, rather than six, staff journalists in the newsroom in question. In view of those
factors, it believed the true membership level was 80%. The Company responded in a letter dated 12
December 2006. It stated that it did not accept that members of the union constituted 10% of the
workers in the proposed bargaining unit as the numbers included self-employed individuals who were
not defined as “workers” as they had no mutuality of obligation. It also stated that it remained of the
opinion that each business was a stand alone business for the purpose of collective bargaining and
therefore the majority of employees within the stated bargaining unit would not vote in favour of
recognition.


9.      In view of the issues raised in the Union‟s application, the Company‟s response, the Case
Manager‟s report of the membership check and the parties‟ comments on that check, the Panel
decided to arrange a hearing to enable it to hear evidence as to whether the Union‟s application should
be accepted. At this point, Professor Gillian Morris was appointed as Panel Chairman in view of
Professor Dickens‟ non-availability.


10.     On the instructions of the Panel, the Case Manager wrote to the parties on 9 January 2007
with details of the arrangements for the hearing and to invite their written submissions on any issues
they wished to address in relation to whether the Union‟s application should be accepted. In addition
to any other points that the parties wished to make, the Panel asked the parties specifically to address
three groups of issues raised in the documentation. These were as follows:




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        a)      Whether all or any of the newsrooms specified in the Union‟s application to the CAC
                were separate legal entities and, if so, who were the shareholders in each company
                and what was the relationship of each company to the others and to the Local Radio
                Company Ltd;
        b)      The identity of the employer of the workers in the Union‟s proposed bargaining unit;
                and
        c)      Whether the contract freelance staff were „workers‟ within the definition in s 296 of
                the 1992 Act.


The Panel also requested that the Union should address the issue of how “the four most regularly used
contract freelances” were to be identified for the purposes of paragraph 36 of Schedule A1 to the Act.


11.     To assist the parties, the Case Manager supplied them with an opinion given to the CAC by
John Bowers QC, acting as amicus curiae, in relation to the case of GPMU & Derry Print Ltd and
John Brown Printers Ltd (TUR1/113 & 115/(2001). For the sake of completeness the parties were
also supplied with a copy of the CAC decision in that case dated 17 January 2002, although it was
made clear to the parties that the decision of one CAC Panel does not bind another. The parties were
also provided with two extracts from the 1992 Act, namely paragraph 2 of Schedule A1 to the Act and
section 296 of the Act.


12.     The hearing took place in London on 7 February 2007 and the names of those who attended
are appended to this decision.      Prior to the hearing, the parties supplied the Panel with, and
exchanged, written submissions.


The hearing


13.     At the beginning of the hearing, the Panel Chairman explained that on the basis of the written
submissions there appeared to be common ground between the parties that the four newsrooms in the
Union‟s proposed bargaining unit were separate legal entities. The parties confirmed that this was the
case. The Panel Chairman then referred the parties to Mr Bowers‟ opinion that, to be accepted, an
application for statutory recognition could only be submitted in respect of a single employer. She
asked the parties whether they wished to contest this conclusion. The parties confirmed that they did
not. The Panel Chairman then explained that, in the light of this, the Panel intended to invite the
parties to make initial submissions on the issue of whether the Union‟s application related to a single
employer. The Panel would then adjourn to decide that issue and would communicate its decision
orally to the parties. If the Panel decided that the application did relate to a single employer it would
proceed to invite submissions on the remaining issues relevant to the acceptance stage of the
application. If it decided that the application did not relate to a single employer, the application would




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not be accepted.


Summary of the submissions made by the Union


14.     The Union stated that it was important to explain the background to its application to the
CAC. The Union had been approached by members at four radio stations: Home FM (Huddersfield),
Stray FM (Harrogate), Minster Sound Radio (York) and Yorkshire Coast Radio (Scarborough). These
members had been told that the Company was going to pool the news rooms at these stations into one
“news neighbourhood” or “news hubbing” operation covering all four stations, whereby one
journalist, on a rota basis, would provide a news service to all four stations. The Union members had
not been consulted on this measure, which they regarded as a substantial change in their terms and
conditions of employment. As a result, five journalists submitted an individual grievance. The
grievances were heard together by a panel of three: Mr Vetti, described by the Union as Regional
Programme Controller, Mr Carter, described as Group Head of News, and Mr Booth, described as
Regional Managing Director. The Union said that in the event the Company decided that the news
“hubbing” operation should be introduced only at weekends and some of the journalists received a
pay increase.


15.     The Union submitted that, despite being separate legal entities, the four radio stations were
operated, in reality, by a single employer, which was the Company. It submitted that this was
demonstrated by the way that the grievances referred to in the paragraph above had been handled.
Firstly, all the grievances were heard at the same place by the same people and were effectively
handled as a „collective‟ issue. Secondly, the panel hearing the grievances comprised two regional
managers and one manager from the Company‟s headquarters in High Wycombe. Thirdly, there was
one outcome which was applied across the four stations, namely news “hubbing” at weekends only,
and pay increases for certain individuals at the various stations. The Union submitted that it had
therefore been shown that the Company could dictate what happened at the local radio stations. It
submitted that the line management system for all four radio stations ran through Minster Sound
Radio (with news editors on the other three stations reporting to staff based in York), up to the
Company centrally.


16.     The Union submitted that there was other evidence of the Company exercising control over
the subsidiary companies consistent with there being, in reality, a single employer. The Company
had provided with its written submission a copy of a statement of terms and conditions of
employment relating to an employee at Huddersfield FM and a statement of particulars of
employment relating to an employee at Yorkshire Coast Radio. At the hearing the Union sought to
submit in evidence a statement of particulars of employment relating to employment at Minster Sound
Radio. The Company said that it had no objection to this statement being admitted in evidence and




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the Panel Chairman therefore agreed that it could be. The Union compared the statement relating to
Minister Sound Radio with that relating to Yorkshire Coast Radio and maintained that they were
almost identical, including an opt-out from the maximum weekly working time set out in the Working
Time Regulations. (The Union submitted that the statement relating to employment at Huddersfield
FM was no longer current.) In addition, the Union pointed out that details of the disciplinary and
grievance procedures were contained in a handbook which included, for example, a facility for
employees to take grievances ultimately to the Chief Executive of the Company. The Union stated
that job descriptions were also issued in a standard form; those attached to the statements relating to
employment at Minster Sound Radio and Yorkshire Coast Radio were each headed “The Local Radio
Company PLC” rather than giving the name of the radio station at which the employee worked.
Finally it stated that the statement relating to Minister Sound Radio provided that, although the
employee‟s usual place of work was at Minster, the employee could be required to work “at any
station owned by the Local Radio Company”. The Union submitted that this reinforced its argument
that the Company, and not the local stations, was the employer.


17.     The Union also explained that there was a close link between the ownership of the local
stations and the Company. Of the four radio stations in question, their ownership was split between
the Local Radio Company itself, Radio Investments Ltd and Minster Sound Radio Ltd. In practical
terms, there appeared to be a strong element of direction from the Company to its subsidiaries, with
line management operating through a regional structure. The Union cited GPMU & Derry Print Ltd
and John Brown Printers Ltd as an example of the way that the „corporate veil‟ could be lifted to
reveal the true way in which a company was structured and managed. When asked by the Panel
whether it wished to submit that all 27 radio stations within the corporate group were operated by a
single employer, or only the four that were referred to in its application, the Union stated that it could
not comment on all the radio stations but that for the reasons it had provided these four were operated
by a single employer.


18.     In conclusion, the Union submitted that there was one employer, the Company, and that its
application should therefore be allowed to proceed.


Summary of the submissions made by the Company


19.     The Company submitted that it owned a total of 27 radio stations throughout the UK, some of
which had been bought as going concerns. Each company was a separate legal entity and a separate
employer for the purposes of the Act. The fact that they may be associated employers did not mean
that they constituted a single employer. Each of the four radio stations referred to in the application
was registered at Companies House; filed its own accounts; entered into its own leases and other
property agreements; owned its own equipment and other assets; had its own budget and management




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structure; and handled its own staffing issues such as recruitment, discipline, pay and hours of work.
There were no cross-subsidies between the radio stations, they did not share equipment, and an
individual station threatened with closure would not be supported by others within the group or by the
Company itself. An individual who moved between stations would be given a P45 and if employees
of one station were facing redundancy and positions were available in other stations, those employees
would be required to apply for such positions in open competition with external candidates. The
Company stated that each station was a separate company due to the nature of the industry, not in
order to avoid employment legislation. Ofcom awarded licences to each station, not to the Company
centrally, and, in some cases, there was a local board of directors drawn from a radio station‟s
catchment area. The Company denied that the weekend “hubbing” operation constituted a sharing of
facilities by stations. An individual journalist would go to the station at which he or she worked to
read the news; they were not required to go to other radio stations. Participation in “hubbing” was
voluntary on the part both of the radio stations and of the journalists themselves.


20.     The Company explained that local radio stations could purchase services from elsewhere in
the group. For example, local stations were free to use, or not to use, the services of the central
human resources (“HR”) function at High Wycombe (whose staff were employed by Radio Services
Ltd) on staffing issues. The HR department had a template for contracts of employment but it was for
the local management to determine what the terms should be and individual stations were free to
obtain their HR advice elsewhere and not to use the handbook of policies and procedures that the HR
department had produced. The Company said that contracts of employment supplied to staff contained
significant differences. Similarly, job descriptions were written by managers at the individual stations,
although the HR department could assist with this. In response to the Union‟s evidence that the
statement relating to employment at Minster Sound Radio included a requirement to work at any radio
station owned by the Company, the Company said that such a provision had never been used and it
had no intention of using it. It was unable to explain how it had come to be present in the statement.


21.     The Company rejected the Union‟s assertion that the method of handling the five grievances
described in paragraph 15 above supported the Union‟s contention that all four radio stations were
operated by a single employer. The grievance procedure in the handbook provided for a grievance to
be heard in the first instance by the manager at the station, unless he or she was involved in the
matter. As each radio station employed a small number of staff, there were often practical problems in
providing further stages in the grievance procedure which allowed for the consideration of grievances
by an independent person at the radio station. In such cases, it sometimes happened that it was
appropriate for a grievance to be heard by a manager from another station or the Company‟s
headquarters. In the case in question, all five staff raising a grievance had sent a letter directly to a
manager they perceived as having „regional‟ responsibilities rather than their own line manager and
had therefore by-passed the first stage of the procedure. This was the first time that grievances had




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been dealt with in the first instance at regional level. Each grievance had been heard individually. The
fact that each grievance was heard by the same three-person panel was designed to ensure consistency
and did not constitute an acknowledgement by the Company that there was a collective grievance
against it. The Company stated that the pay increases proposed by that panel in respect of certain
individuals took the form of a recommendation to their employer. By way of clarification, the
Company explained that it was erroneous on the part of the Union to describe Mr Vetti and Mr Carter
as „regional‟ managers.      They were both employed by individual radio stations but offered
professional expertise by way of advice and guidance, respectively in the areas of programming and
sales, to other stations. That was undertaken on the basis that those other stations could choose
whether or not to avail themselves of those services and no financial consideration passed between the
stations. There was no „regional‟ line management of the individual radio stations.


22.     The Company accordingly asked the Panel to decide that the employers of the individuals in
the proposed bargaining unit were the four local radio stations and not the Company, and that, in
consequence, the Union‟s application should not be accepted.


Considerations


23.     As indicated in paragraph 13 above, it is common ground between the parties that each of the
radio stations is a separate legal entity. Paragraph 2 of Schedule A1 to the Act states that
“[r]eferences to the employer are to the employer of the workers constituting the bargaining unit
concerned.” Paragraph 4 states that the union or unions seeking recognition “must make a request for
recognition to the employer”. Neither party disputed the terms of Mr Bowers‟ opinion that, to be
accepted, an application for statutory recognition must be submitted in respect of a single employer
who is the employer of the workers in the proposed bargaining unit. The first issue for the Panel,
therefore, was whether the application in this case had been made to a single employer who is the
employer of the workers in the proposed bargaining unit. The Panel has considered carefully the
written and oral submissions of the parties.


24.     The Panel accepts that, as well as being a separate legal entity, each radio station is
financially and operationally autonomous. Each enters into leases for its own premises, purchases and
maintains its own equipment, and recruits its own staff. Contracts of employment are between an
individual member of staff and a radio station. The Panel regards these factors as persuasive
indicators that each radio station is a separate employer.


25.    The Union submitted that the introduction of the news “hubbing” operation was an indicator
that the Company had exercised a managerial right to implement a process across four radio stations.
In response, the Company explained that the new operation did not entail a journalist working at any




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location other than their normal place of work, and that participation on the part of the journalists, and
of the radio stations themselves, in the “hubbing‟ operation was voluntary. The latter point was not
challenged by the Union and the Panel does not regard this operation as inconsistent with each radio
station being an employer. The Union argued that the provision in the statement of particulars relating
to employment at Minster Sound Radio that the individual could be required to work at any station
owned by the Company pointed to the Company being the employer. However the Panel does not
regard the presence of such a provision as sufficient, of itself, to determine that the Company is the
employer.


26.     The Company stated that certain services were available to individual radio stations from
other companies within the group. For example, the radio stations may choose to use the central
human resources function, staffed by employees of Radio Services Ltd, and some senior radio station
staff, such as Mr Vetti and Mr Carter, provide assistance to other stations. The Company further
explained that, in order to provide a grievance procedure that complied with statute, individual radio
stations need to involve managers from other stations in order to provide an independent appeal stage.
There is therefore a degree of interchange between the radio stations themselves and between the
radio stations and Radio Services Ltd. The Panel does not find this inconsistent with each radio
station being a separate employer. The Panel accepts that the grievance described in paragraphs 15
and 21 above was, exceptionally, dealt with from the beginning at a level beyond the individual radio
station. In the circumstances in question the Panel does not find this inconsistent with each radio
station being a separate employer


27.     The Panel‟s conclusion is that the employer of the individuals in the Union‟s proposed
bargaining unit is the radio station at which the individual works and not the Company. It therefore
follows that the Union‟s request for recognition has not been made to the employer of the workers in
the proposed bargaining unit.


Decision


28.     For the reasons given above, the Panel‟s decision is that the application is not accepted by the
CAC.



Gillian Morris
David Crowe
Bob Purkiss


13 February 2007




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Appendix


Names of those who attended the hearing


For the Union:


Ms J Lennox                   Assistant Organiser, NUJ
Mr M Barter                   Former Northern Regional Organiser. NUJ


For the Company:


Mr D Smith                    Employment Law Adviser
Mr M Vetti                    Programme Controller, Minster FM
Mrs L Wells                   Company Secretary, The Local Radio Company Ltd
Mrs F McCarthy                Head of Human Resources, The Local Radio Company Ltd




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