Related Practices

The landmark test case against the University of London concerning outsourced workers – what does it mean?

December 12, 2017

Outsourced workers are typically used to fill cleaning, security and post room positions for example.  Currently, collective bargaining - negotiations between an employer and a recognised trade union on terms of employment and other matters - can only take place with the direct employer of workers.  Accordingly, any union recognised in respect of certain groups of workers (e.g. cleaners) cannot collectively bargain with the organisation to whom the workers are providing their services (e.g. cleaning services) if those workers are employed by another organisation.  Frequently, such workers are employed by the facilities management company supplying their services to the end user. 

The Independent Workers Union of Great Britain (the IWGB) has filed a landmark test case against the University of London (the University), which seeks to broaden the rights of outsourced workers.  The case has been filed with the Central Arbitration Committee (the CAC), whose role is to arbitrate on cases concerning the statutory recognition of trade unions. 

The IWGB’s application

The IWGB has applied to the CAC for union recognition in respect of 75 security guards, porters, post room staff and receptionists employed by Cordant Security, a facilities management company.  The IWGB argues that the University is the de facto employer of the workers.  As such, it argues that it should be able to collectively bargain with the University, on matters such as pay, on behalf of the relevant outsourced workers.  The University refused an initial recognition request by the IWGB and highlighted that joint employment is not recognised for collective bargaining purposes – an argument put forward by the IWGB.

The IWGB has stated that the University “calls the shots” on pay and other terms and conditions for the outsourced workers.  As a result, it argues that negotiations should be able to take place directly with the University even though the facilities management company, Cordant Security, technically employs the workers.  Denying collective bargaining with the University is, the IWGB argues, a breach of Article 11 of the European Convention on Human Rights – the right to freedom of assembly and association, including the right to form trade unions.

What does the case mean?

If successful, the case would have potentially far-reaching consequences.  It would mean accepting that outsourced workers are entitled to direct collective bargaining with the organisation to whom they are providing their services, thereby seemingly accepting the concept of joint employment in respect of outsourced workers.  This would mark a very significant change to current employment law and have very real, practical consequences for outsourced workers and the organisations engaging them. 

Whilst any decision by the CAC would be restricted to determining whether the IWGB is recognised in respect of the relevant workers, and can collectively bargain with the University on their behalf, the potential implications of the joint employment point should not be underestimated.  If accepted, it would potentially remove many of the benefits of current outsourcing arrangements.  Such arrangements are attractive to the end users of services (e.g. cleaning services) because they – the end users - are able to avoid the associated employment liabilities.

Notably, the IWGB recently lost its application to the CAC to be recognised in respect of Deliveroo riders in North London.  Such initiatives demonstrate, however, that unions are using a range of tactics to seek to protect workers’ rights and are not limiting themselves to pursuing employment tribunal claims.  Set against the current backdrop of a growing “gig economy”, and current initiatives to enforce potentially vulnerable workers’ rights, issues regarding outsourced workers seem unlikely to go away.  Earlier this year, it was reported that cleaners at the London School of Economics (the LSE) would be brought “in-house” and employed directly by the LSE, meaning that the workers would be entitled to the same sick pay, holiday pay and other employment benefits enjoyed by comparable LSE employees.

We will provide a further update once the outcome of the IWGB’s current application is known.