The Collective Bargaining Rights of Outsourced Workers - a Case Update

Following consideration by the Central Arbitration Committee (CAC) it has been decided that outsourced workers are not entitled to collectively bargain with their 'de facto' employers.

Review of the Facts

The IWGB submitted an application for recognition by the University of London for collective bargaining purposes. The application related to a bargaining unit of 75 workers based at the University including security staff, postroom workers and porters. Although the staff all work at the University they are employed by a facilities management company, Cordant Security (Cordant). It was argued by IWGB, however, that the workers should be able to discuss their pay and conditions of employment with the University of London directly.

Decision of the CAC

Paragraph 4 of Schedule A1 of the Trade Union and Labour Relations (Consolidation Act) 1992 (TULRCA) states that requests for recognition must be made to the 'employer'. It was accepted by both parties in this case that the workers' actual employer was Cordant. The IWGB argued that the University was the 'de facto' employer of the workers in that it substantially determined the terms and conditions under which they worked.

In considering this argument the CAC looked to the definition of 'worker' in section 296 of TULRCA. S.296 requires a contract to exist between an individual and another party under which the individual undertakes to do or perform work personally. The lack of any such contract between the workers and the University in this particular case was therefore fatal. Even if the university played a significant role in determining the terms under which the workers carried out their roles, in the absence of any direct contract, this was insufficient for workers to obtain the right to collective bargaining.

The CAC also considered that in a collective bargaining context, the identification of two or more 'employers' would run contrary to the requirements for fair and efficient practices and arrangements under paragraph 171 of Schedule A1 of TULRCA. Furthermore, if the application was allowed then the way in which collective bargaining is carried out would be notably transformed, with two unions having the ability to bargain with two employers (one actual; one de facto) over terms that were in place for the same group of workers. The CAC expressed concerns that allowing such a situation would result in "chaotic workplace relationships".

Best Practice

The decision will come as a relief to end-users utilising the services of outsourced workers. This case has, however, been followed with some interest by the press, with emphasis being given to the need to avoid end-users being able to evade responsibility for workers entirely.

For more information please contact Nick Murrell in our Employment Law team on 0117 314 5627.