The government has lost a challenge to the lawfulness of its regulations to permit the use of agency workers during strike action. Usage of agency workers to cover for striking workers will once again be unlawful. This article explains the litigation and looks at the implications for employers.

The original ban on using agency workers to cover for striking workers

All staffing suppliers (such as recruitment agencies and temp agencies) operating in England, Wales and Scotland are regulated under which the Conduct of Employment Agencies and Employment Businesses Regulations 2003.

Until last year, under Regulation 7 of those regulations, staffing suppliers were prohibited from supplying any agency workers in the context of official industrial action to perform duties that were either:

• Normally performed by a worker taking part in a strike or other industrial action; or
• normally performed by any other worker who has been assigned by the employer to perform the duties of a worker taking part in a strike or other industrial action.

Breach of this provision was a criminal offence. In practice, this meant that employers facing industrial actions were prevented from mitigating against the disruption to their businesses by hiring agency workers.

The government’s attempt to allow use of agency workers during strikes

In 2015, the government consulted on proposals to repeal this prohibition, but did not progress the idea any further at that time.

Last year, however, in the context of the transport unions’ decision to call national strikes across the railway network, the government announced that it would repeal the restriction on using agency workers during strikes (as we wrote about here). The government then introduced the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022 to repeal Regulation 7 with effect from 21 July 2022.

The successful High Court challenge

A group of 13 trades unions came together to challenge the lawfulness of the Amendment Regulations on two grounds:

1. the government had failed to comply with a statutory duty under the Employment Agencies Act 1973 to consult before making the

2. that the Amendment Regulations breached trade union members’ rights to freedom of association under Article 11 of the European Convention on Human Rights.

On the first ground, the unions argued that the 2015 consultation had been flawed and that, in any event, the considerable lapse of time and material changes in industrial relations and the UK labour market since then meant that it would not be fair for the government to rely on the 2015 consultation.

The government’s position was that it had been entitled to rely on the 2015 consultation. It was rational and fair to conclude that further consultation was unlikely to bring up new issues or objections and there was a high likelihood that the outcome would not have been different if there had been another consultation.

The High Court ruled in favour of the unions. The government was not “highly likely” to have made the same decision had another consultation been run in 2022. It was impossible to predict with accuracy what all of the responses to a further consultation would have said. In addition, there was no evidence that the government had considered the responses to the 2015 consultation when making the Amendment Regulations.

The High Court therefore upheld the judicial review and quashed the Amendment Regulations, with effect from 10 August 2023. From that date, the previous prohibition on the supply of agency workers during industrial action under Regulation 7 of the Conduct Regulations will apply again.

As the judicial review could be decided on the basis of the first ground alone, the High Court made no findings in respect of the second ground relating to Article 11 of the ECHR.

What are the implications for employers facing industrial action?

The government’s defeat means that employers will once again not be able to use agency workers to mitigate the impact of industrial action. Without this alternative option, employers will go back to relying on re-assigning managers and employees from other parts of their business to cover critical functions during future strikes.

However, the practical impact of this decision on industrial relations may be relatively limited. As the High Court itself noted, the Amendment Regulations were likely to have a “negligible” effect on the rail strikes taking place at the time they were introduced.

In the short period the Amendment Regulations were in place, the value to employers of being able to use agency workers during strikes depended on the availability of sufficiently skilled and experienced workers in large numbers at two weeks’ notice. For many employers, this would be unlikely to offer a realistic contingency plan. In addition, the use of agency workers in this context ran the risk of being seen as an inflammatory action by trade union members, potentially exacerbating the underlying industrial dispute.

It remains to be seen whether the government will seek to appeal the High Court’s decision or to reintroduce the regulations after running a fresh consultation process.

R (on the application of the Associated Society of Locomotive Engineers and Firemen & Ors) v the Secretary of State for Business and Trade – judgment available here.