On 3 and 4 May 2023, the High Court heard a case brought by the Trade Union Congress (‘TUC’) and 11 other trade unions, challenging the Government’s revocation of Regulation 7 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (‘the Conduct Regulations’) last year. As the case concluded yesterday, we expect to hear the High Court’s Judgment in the new few weeks, which will likely impact millions of workers engaged across the UK. We have summarised below the Government’s legislative changes in July 2022, as well as the public response.

What is Conduct Regulation 7 and why was it repealed by the Government?

Regulation 7 of the Conduct Regulations prevented employment businesses from supplying workers to end clients during period of industrial action, with the view to replacing the end clients’ workers who were partaking in such action. The Regulation further prevented employment businesses from supplying workers in direct replacement of other workers who had been transferred by the end client business to cover work for striking individuals. The legislation did not however prevent businesses from directly engaging with staff, to plug gaps during period of industrial action. The prohibition was solely on employment businesses supplying agency workers, which was significantly beneficial for businesses who could tap into an extensive labour pool on short notice. Employment businesses could have defended a breach of Regulation 7 by demonstrating that they were unaware of the industrial action taking place, or that the workers being supplied would be covering for striking staff.

On 21 July 2022, new Regulations enforced by the Government unilaterally repealed Regulation 7. The effect of this was to permit employment businesses to utilise the workers on their books, and supply them in direct replacement of striking workers, to their clients. Considering that it was a criminal office for an employment business to breach Regulation 7, the revocation received widespread criticism from trade unions.

The Department for Business, Energy & Industrial Strategy (‘BEIS’) announced on 21 July 2022 that businesses can now, ‘provide skilled agency workers to fill vital staffing gaps caused by industrial strike action’. The rationale provided was that industrial action threatened to ‘disrupt crucial public services’ and that the Government’s action, ‘will help to mitigate the disproportionate impact strike action can have both on the UK economy and society by allowing crucial services, that we all use on a daily basis, to continue functioning.’

What was the public response to the revoking of Regulation 7?

Legal challenges have been brought by the TUC alongside 11 trade unions, as well as UNISON and NASWUT. The Recruitment and Employment Confederation (‘the REC’), which represents employment businesses across the UK, has called the legislative changes ‘unworkable’.

The challenge is partially based on human rights-centric rationale, and specifically that the repeal of Regulation 7 violates Article 11 of the European Convention of Human Rights. Article 11 prescribes that ‘everyone has the right to freedom of peaceful assembly and to freedom of association with others, including the right to form and to join trade unions’. The judicial review will also consider the Government’s supposed failure to gather evidence demonstrating that the repeal will positively impact the labour force, and the lack of consultation with trade unions across the UK.

The Strikes (Minimum Service Levels) Bill, which is currently at the 3rd reading stage in the House of Lords, further intends to tackle increased industrial action by permitting employers to ensure minimum service levels in their workforce. This could include specifying which workers are required to work, and for what specific purpose as to why this will ensure minimal business interruption. The Bill was introduced in January 2023, and therefore it seems that the Government is attempting to utilise multiple legislative channels to streamline disruptive striking action. However, it is understandable that trade unions are concerned about the impact of planned and lawful action, if employers are allowed to (a) directly replace them with skilled agency workers, and (b) dictate that specific individuals are required to work instead of strike.

The highly anticipated Judgment from the High Court could prove controversial no matter the outcome. A win in the High Court could mean that the balance is thrown more in favour of employee-centric rights, which consequently could improve the ability of trade unions to have meaningful negotiations with businesses. It may also serve as a warning to the Government, that such draconian measures cannot be enforced without input from the affected sector. However, a rejection of the trade unions’ case could reinforce the lawfulness of future Governmental measures which aim to protect business needs, and ensure public services are provided.

This blog was co-authored by Simon Bloch and Emma Salkin.