Recruiters, be aware of outsourced workers legal ruling

Recruiters have been urged to be aware of the rights of outsourced workers following a ruling handed down by the High Court earlier this week.

The Shropshire Star reports the Independent Workers Union of Great Britain lost its case after it took legal action in a bid to represent outsourced security guards, post-room workers, audio-visual staff, porters and receptionists at the University of London.

The case rested on the university’s refusal to recognise the IWGB for the purposes of collective bargaining, arguing the affected workers are employed by facilities management company Cordant Security.

In January last year, the Central Arbitration Committee (CAC), a tribunal which looks into union recognition and collective bargaining cases, rejected the IWGB’s application to represent the Cordant employees as the firm already had an agreement in place with trade union Unison.

The CAC also found that the University of London was not one of the outsourced workers’ employers.

Handing down his judgment in London on Monday, Mr Justice Supperstone dismissed the IWGB’s challenge to the CAC’s decision.

Commenting on the implications of the case for recruitment agencies, Stephen Jennings, partner and solicitor at Tozers Solicitors, told Recruiter the case effectively confirms current law, that for the purposes of collective bargaining, only the legal employer of the relevant employees has obligations – not end-user companies who merely contract with the employer.

“This confirms that clients to whom recruitment agencies assign staff are not likely to be in the frame for collective bargaining. ‘Outsourced workers’ in this context clearly means workers employed by a third party (Cordant Security), which then supplied them on to the university – a fairly common arrangement (many recruitment agencies will be in the position of Cordant).

“Agencies employing workers will need to be aware that they themselves as employers are subject to the rules around collective bargaining (eg. agencies may face a request for recognition from a union for collective bargaining purposes, which can be referred to the CAC for determination if not agreed).”

Although Jennings adds the likelihood of an agency facing a challenge of this sort is reduced due the impact of the Agency Workers Regulations 2010, which broadly provide for agency staff to be given the same basic working and employment conditions as directly employed staff after a period of time. 

“The driver of this particular legal challenge was the fact that staff supplied through Cordant were plainly on less advantageous contract terms than directly employed university staff – a situation that is much less likely to exist in the recruitment agency sector,” he added.

Meanwhile Melanie Stancliffe, partner at law firm Irwin Mitchell, told Recruiter workers engaged by agencies and who provide work to a different end-user will still be entitled to collective consultation involvement with the union recognised by their direct employer, ie. the agency rather than the end-user to which the outsourced worker provides their work. 

“However, these workers are left without the ability to engage in collective consultation with the trade union recognised by the end-user. The courts have refused to introduce the concept of a joint-employer to English law, so the agency directly employing the outsourced workers will remain responsible, even though their involvement in the day-to-day activities of the outsourced staff is limited.

“However, outsourced workers who are employees will benefit from the protection of the Transfer of Undertakings (Protection of Employment) Regulations (‘TUPE’). This means that if a company takes a service back in-house or new contractor takes over the activities of another contractor (such as on a re-tendering), TUPE protects those employees’ jobs and transfers them in to the employment of the company or new contractor, on the same terms and conditions as they enjoyed before and with their years of service intact. Outsourced staff can therefore benefit from some legal protections, but the High Court was not willing to extend their rights on the same footing as other employees from a collective consultation with trade unions’ perspective.

“Agencies who employ outsourced employees still need to be aware of their rights and collective consultation protections, particularly if the agency recognises a trade union.”

When contacted for comment, a Cordant spokesperson said in a statement: “The Judicial Review was brought against the Department for Business, Energy & Industrial Strategy and CAC, not against Cordant Security or the University of London, and was in no way based upon any claim that either party had operated unlawfully. 

“We note the decision of the judge and will remain focused on how we can support our staff who deliver an exceptional service for the university and our other clients throughout the UK.”

A University of London spokeswoman said in a statement: “We note the High Court’s judgement and its conclusion that the CAC were correct in determining that the application of the IWGB for recognition by the University of London for collective bargaining in respect of a group of workers not employed by the University but by Cordant Security Ltd was inadmissible.

“We note that in reaching this conclusion the Court determined that the legislation based on which the CAC made its decision was fully compatible with Article 11 of the European Convention on Human Rights.

“The university’s plans for bringing externally contracted services in-house progress to schedule.”

In a statement after the ruling, IWGB general secretary said: “The University of London, with considerable help from the Tory government, may have won the battle.

“But when it comes to the exploitative, discriminatory and fundamentally unfair practice of outsourcing it is the war that the IWGB is fighting to win.

“Outsourced workers at the University of London and elsewhere will continue to fight in both the courts and in the workplace until they are brought in-house and treated equally with their directly employed colleagues.”

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