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Collective Bargaining Rights of Outsourced Workers - Case Update

on Friday, 16 March 2018.

It has been a long established principle that outsourced workers have no collective bargaining rights with the user of their services. However, this was recently challenged...

...by the Independent Workers Union of Great Britain (IWGB) which launched a legal claim on behalf of workers based at the University of London (University) amidst much publicity.

The Facts

The IWGB submitted an application for recognition by the University for collective bargaining purposes. The application related to a bargaining unit of 75 workers based at the University, including security staff, post room workers and porters. Although the staff all work at the University, they are employed by a facilities management company, Cordant Security (Cordant).

IWGB argued that whilst Cordant is their primary employer, the workers should have the right to discuss their pay and conditions of employment with the University (their 'de facto employer') direct.

The Decision

The claim was considered by the Central Arbitration Committee (CAC) which decided that outsourced workers are not entitled to collectively bargain with their 'de facto' employers.

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. IWGB argued that the University was the 'de facto' employer of the workers because it substantially determined the terms and conditions under which they worked.

In considering this argument the CAC looked to the definition of 'worker' in TULRCA which 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 case was 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, the workers did not have the right to collective bargaining with the University.

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 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 concern that allowing such a situation would result in "chaotic workplace relationships".

Best Practice

The decision will come as a relief to Higher Education Institutions 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.

The claim follows plans by the Treasury to extend a crackdown on sham self-employment arrangements, potentially by ensuring that the organisation hiring the worker is responsible for any shortfall in tax, where that worker should have been taxed as an employee. This perhaps demonstrates a push towards end-users taking more responsibility for those working for them.


For more information, please contact Jane Byford in our Employment Law team on 0121 227 3712.

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