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Regulations allowing agency workers to cover striking employees ruled unlawful by High Court

Posted: 20/07/2023

The High Court has held that legislation enacted by the government in 2022 to allow employers to use agency workers to cover staff who are on strike is unlawful.

Since 1976, it had been a criminal offence for an employment business to knowingly introduce or supply workers to an employer to carry out the work of employees who were taking part in official industrial action. However, in 2022, in the face of a tidal wave of strikes crippling industries and services, from the postal system to the train network, the government hurriedly introduced the Employment Agencies and Employment Businesses (Amendment) Regulations 2022, intended to revoke the law that had made the supply of agency workers during a strike unlawful.

Perhaps unsurprisingly, there was considerable disquiet and outrage among the UK’s unions, especially those with ongoing strike action which could be significantly undermined by the new law. Recruitment agencies were also concerned about agency workers being required to cross picket lines. A group of 13 trade unions sought to challenge the government’s decision in the High Court, on the basis that the new regulations were unlawful.

The unions (including Unison, ASLEF and the NAS/UWT) argued that the government had failed to comply with its statutory duty to engage in meaningful consultation before making the regulations. In addition, they argued that the government had acted in breach of Article 11 of the European Convention on Human Rights (ECHR) to prevent unlawful interference with the rights of trade unions and their members. 

The government denied both arguments, submitting that a previous consultation had taken place in 2015 and that further consultation was unlikely to have changed the outcome. It is worth noting that, according to the High Court judgment, the majority of responses to the 2015 consultation did not agree with proposals to change the law in this manner. In response to the ECHR point, the government argued that any interference, if it was found to have interfered, was proportionate.

The High Court reviewed the legislative history and the consultations that had been undertaken in previous years, along with the decision-making and analysis undertaken by the government, including Kwasi Kwarteng, the then-Secretary of State for Business, Energy and Industrial Strategy (BEIS).

The court held that the government had acted in a way that was so unfair that it was unlawful and irrational, and made an order quashing the 2022 regulations with effect from 10 August 2023. The court agreed that section 12(2) of the Employment Agencies Act 1973 prevented the Secretary of State from making any regulations under the 1973 act, except after public consultation. It agreed with the unions’ argument that the 2015 consultation was insufficient, and that the government should have consulted further before enacting the 2022 regulations.

The 2022 regulations sought to amend regulation 7 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003, which were made pursuant to the 1973 act, and consultation was therefore required. Having made this finding, the High Court did not have to consider whether the government was in breach of Article 11 of the ECHR.

The High Court’s decision marks a significant victory for the unions, and an embarrassing defeat for the government, whose actions were heavily criticised in the judgment. Given the ongoing industrial unrest, it would have been unsurprising if the government had attempted to appeal the decision to the Court of Appeal. Lawyers for the unions involved have confirmed, however, that there will be no appeal. This is of course good news for the unions; however, they may have welcomed the opportunity to see the ECHR argument tested, the High Court having confirmed that, if there were an appeal, this argument could be considered by the Court of Appeal.

For employers, after a brief period where they were allowed to engage agency workers to plug holes in labour during strikes, from 10 August when the quashing order comes into effect, they will be back to square one. 

Employment agencies, who have been caught in the crossfire in the dispute between the government and the unions, will also be looking for certainty. The Recruitment and Employment Confederation, which represents many recruitment and employment agencies, in a statement issued on 13 July 2023, urged the government to remove the 2022 regulations from the statute book and introduce certainty for its members. This decision does go some way to providing certainty for employers, unions and agencies, though it is unlikely to mark a slowdown in ongoing industrial unrest. This seemingly puts the issue to bed and may well embolden the unions in further legal challenges.

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