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Outsourcing: TU recognition application against service provider and client thrown out

05 April 2019

The High Court has dismissed a judicial review of two decisions of the Central Arbitration Committee (CAC) in relation to outsourced workers based at the University of London. The CAC had rejected applications by the Independent Workers Union of Great Britain (IWGB) for recognition for collective bargaining.

Legal framework

Article 11 of the European Convention on Human Rights (ECHR) gives everyone a right of freedom of assembly and association, including the right to form and to join trade unions. It is given effect in the UK by the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA). Schedule A1 to TULRCA provides a mechanism for trade unions to obtain statutory recognition from an employer.

Background

The IWGB applied to the CAC in 2017 for recognition in respect of approximately 70 workers at the University of London, including security guards, post room workers and porters. It sought recognition both from Cordant, the outsourcing company that employed the workers, and the University of London itself.

The CAC ruled that both applications were inadmissible. The application in respect of Cordant failed because that company voluntarily recognises Unison. Recognition under Schedule A1 to TULRCA cannot be granted if another independent trade union is already recognised in respect of any of the workers in the proposed bargaining unit (First Decision). The application in respect of the University of London failed as it was not the workers’ employer as required under Schedule A1 to TULRCA (Second Decision).

High Court Judgment

The IWGB pursued a judicial review of the CAC’s decisions. It relied on Article 11 of the ECHR, arguing that the CAC should “read down” Schedule A1 and grant recognition. In the alternative, it sought a declaration that Schedule A1 was incompatible with Article 11.

First Decision

The IWGB argued that the block on workers seeking statutory recognition in respect of a second union breached Article 11 ECHR as collective bargaining is an essential element of that right.

The High Court rejected this. It held that “there is no universal or unqualified right to compulsory recognition” and that the statutory block did not prevent the IWGB also seeking voluntary recognition from Cordant. It also considered the Government’s aim of “avoiding a multiplicity of competing collective bargaining arrangements with different unions in respect of one bargaining unit” arising from the statutory recognition framework and upholding the principle of giving primacy to “consensual arrangements” such as that between Cordant and Unison. Its conclusion was that the statutory block “is proportionate and strikes a fair balance between the competing interests at stake”.

Second Decision

The IWGB argued that the right to collective bargaining must be exercisable with the entity which effectively controls the terms and conditions of employment. It argued that, whilst Cordant had the actual contracts of employment with the workers, the de facto employer was the University of London.

The High Court also rejected this argument. It concluded that there are “relevant and sufficient reasons for limiting the right to compulsory collective bargaining to workers and their employers”. The High Court noted that the concept of a de facto employer does not exist in the UK and that for Schedule A1 to TULRCA to be so construed would undermine the University of London’s freedom to take advantage of legitimate means of organising its activities by outsourcing certain services.

Implications

This case helpfully upholds the principle that the courts will respect consensual arrangements established between employers and independent trade unions such as Unison. As importantly, it confirms that the concept of a de facto employer does not exist in UK law given the far wider implications that such a decision would have had, particularly within the UK’s substantial outsourcing sector.

R (IWGB) v CAC and others - judgment available here

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