Outsourced workers at London university launch landmark action to negotiate directly over pay

22 Nov 2017 By Dawn Lewis

Extending rights to contractors’ employees would have ‘significant impact’, say experts

Outsourced workers at a London university have launched a group legal claim to broaden their trade union rights and establish the organisation as their ‘joint’ employer, in the first case of its kind.

The Independent Workers Union of Great Britain (IWGB) has filed a claim with the Central Arbitration Committee (CAC), covering a group including receptionists, security officers and porters who are employed by facilities management company Cordant Security to work at the University of London.

The union claims the group should have the right to collectively bargain over pay and conditions directly with the university.

The IWGB will argue that, by excluding these outsourced workers from collectively bargaining directly with the end employer, article 11 of the European Convention on Human Rights  – the right to freedom of assembly and association, including the right to form trade unions – has been breached.

IWGB general secretary Dr Jason Moyer-Lee said that, when it came to elements such as pay, terms and conditions, it was the University of London and not Cordant that called the shots. “In order for these workers’ collective bargaining and human rights to mean anything, we need to be able to negotiate directly with the university, not the glorified middle man,” he said.

A University of London spokesperson said: “The university does not employ any of these workers and does not accept that the relevant legislation recognises the concept of joint employment. We have therefore not agreed to the IWGB’s request for recognition.”

The university also argued that extending union rights to outsourced workers would “remove the benefits of outsourcing”.

Jessica Foster, associate at law firm TLT, explained that if the case was successful, it would extend the role of an organisation using outsourced employees. Currently, it is the third-party contractor’s responsibility to determine pay and conditions offered to the outsourced employees. “The case would have a significant impact if successful and, in some cases, may remove the benefits of outsourcing the service,” she said.

By bringing the case, the IWGB is arguing that the outsourced workers should be able to collectively bargain with both their employer and their ‘de facto’ employer, the University of London. This would establish the university as a joint employer.  

Foster drew a parallel between the case and previous cases that have considered whether an agency worker is directly employer by the end-user of their services. “There is considerable case law on who is the correct employer in the tripartite relationship between an agency worker, an agency and the end-user client,” she said. “Such case law has rejected a suggestion that a contract of employment should be implied between the agency worker and the end-user where there is already a contract in place between the agency and the agency worker. To succeed with their argument, the IWGB will need to be able to distinguish this case law.”

“It builds on some legal notions of joint employer status from US law and adds measures from our own common law and the European Convention on Human Rights,” added Jolyon Maugham QC, founder of the Good Law Project, which is supporting the IWGB in this case.

“Notionally, it concerns the question of who has the right collectively to bargain on behalf of those staff. But the joint employer principle, if established in UK law, has the potential to apply much more broadly than that. It could fundamentally change the legal regime that protects outsourced workers.”

Daniel Barnett, barrister at Outer Temple Chambers, said joint employment would be very unusual because it would require a contract to expressly create employment rights against two entities – and there is little incentive for an employer to do that.

“Alternatively, it would need a court to say it was ‘necessary’ to imply joint employment, and that has not yet happened. But as the gig economy develops and employers think up increasingly imaginative ways to avoid tax laws and employment rights, we’ll start seeing courts compensating by finding joint employment exists,” said Barnett.

The IWGB will need to persuade the CAC that it is necessary for these workers to directly collectively bargain with the university, establishing the concept of joint employment.

The CAC is different to an employment tribunal as its role is to arbitrate on matters relating to statutory recognition of trade unions. “The CAC's decision will therefore be restricted to whether the IWGB has the right to collectively bargain on behalf of these outsourced workers as part of their collective agreement with the University of London,” said Foster.

Despite this restriction, Sarah Ozanne, employment partner at CMS, warned that if this case was to prevail, it would effectively make outsourcing almost pointless. “Employees supplied to a client by an outsourced service provider and able to claim parity with that client’s own employees’ terms and conditions would undermine one of the key principles of outsourcing, which is to protect the client from employee liabilities,” she said.

Foster added: “If the case is successful, this could open the doors to thousands of outsourced workers arguing that they should be able to collectively bargain with the company that ultimately contracts for their services. Conversely, for the direct employees, allowing the outsourced workers to join the collective bargaining unit may weaken the terms offered to them, as in many cases a middle ground will be reached for all workers.”

The IWGB separately brought an application before the CAC concerning Deliveroo riders, arguing that they were entitled to union recognition because they were workers. However, the CAC found that they were self-employed because they were allowed to substitute other riders to take their place. Despite this finding, the riders have ongoing cases within employment tribunals arguing that they are workers.

“The Deliveroo case highlights that even if the IWGB is unsuccessful at the CAC, we may still see an argument of a joint employer articulated again in the future before an employment tribunal,” added Foster.

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