The recent dispute between Asda and the GMB union has put legal issues surrounding industrial action back in the spotlight – in particular, the use of agency workers to cover for striking staff. This issue was also raised during the Gate Gourmet dispute, when the unions accused Gate Gourmet of using agency staff to cover for the employees who had been dismissed for going on strike.
But employers who wish to use agency staff in place of their own employees during industrial action should be aware of the relevant legislation.
What regulations were people referring to during the Asda dispute?
The Conduct of Employment Agencies and Employment Business Regulations 2003 and,in particular, Regulation 7. They are enacted under the Employment Agencies Act 1973.
What businesses are covered underthe regulations?
The regulations cover “employment businesses” and “employment agencies”. The term “employment business” is used to describe what is normally called an employment agency and the term “employment agency” is used to describe recruitment consultants. To avoid further confusion, the term “employment business” is used here. The definition of “employment business” contained in the legislation is not very clear but the key identifying factor is that an employment business supplies personnel (work seekers) to a company (the hirer) in circumstances where the work seekers are controlled and governed by the hirer rather than the business which supplied them to the hirer.
Do the laws apply to the hiring business?
No, only to the employment business.
What does regulation 7 prohibit?
Regulation 7 prohibits an employment business from introducing or supplying a work seeker to the hirer to perform the duties normally performed by employees of the hirer who are taking part in industrial action (or to perform the duties of other employees who may be moved by the employer to cover the work of those taking part in industrial action).
Does an employment business have any defence to a claim under regulation 7?
Yes. It has to prove that it either did not know, or had no reasonable grounds to know, that it was supplying a work seeker to cover the work of someone involved in industrial action (or to cover the work of someone who was covering the work of someone involved in industrial action).
Are there any circumstances when the regulations do not apply?
Yes, when the individual employee of the hirer is taking part in a strike or other industrial action which is considered unofficial.
When is it an unofficial strike or unofficial industrial action?
Identifying unofficial industrial action is a complex issue, but it generally occurs when industrial action is taken when the relevant union has failed to ballot its members (as in the Gate Gourmet dispute) or when the union has failed to ballot all of the employees who it believes will be taking part in the industrial action.
An employee taking part in unofficial industrial action loses their right to bring a claim for unfair dismissal if they are dismissed for taking part in industrial action. The employer can dismiss all those taking part in unofficial strike action and then selectively re-engage some of the dismissed employees (effectively removing the ringleaders).
How are the regulations enforced?
This is the tricky question. There does not seem to be any enforcement mechanism within the regulations. However, section 9 of the Employment Agencies Act allows the Employment Agency Standards Inspector (part of the DTI) to carry out investigations following a complaint, or to undertake inspections of and/or visits to any employment business. The agency’s stated intention is not to act bureaucratically, but to regulate employment businesses, ensure they comply with the regulations and the Act and encourage good practice.
However, the enforcement of the legislation would appear to be on an application by the secretary of state either for criminal proceeding or a prohibition notice to a tribunal.
What are the sanctions if there has been a breach?
The DTI can initiate criminal prosecution against the employment business. The maximum penalty is a fine of up to £5,000 per offence and a 10-year ban in carrying out an employment business.
In addition, a tribunal, on an application by the secretary of state, may make an order prohibiting a person (including a company) from carrying on or being connected with the carrying on of an employment agency or employment business for up to 10 years on the grounds that the person concerned is unsuitable because of misconduct or any other sufficient reason.