THE FACTS

Until 21 July 2022 employers facing industrial actions were prevented from mitigating against the disruption to their businesses by hiring agency workers.

This was because Regulation 7 of Conduct of Employment Agencies and Employment Businesses Regulations 2003, prohibited staffing suppliers 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.

In 2015 the Conservative government proposed repealing Reg 7 so as to lessen the impact of strike action on the wider economy, and a consultation on the matter was commenced in July 2015. Although there was no formal response to the consultation, the government decided not to go ahead at that time. In June 2022, however, the government decided, in the context of industrial action in the rail sector, that Reg 7 would be revoked without further public consultation. The change was made by the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022, which came into force on 21 July 2022.

Thirteen trades unions came together to challenge the lawfulness of the 2022 Regulations on two grounds:

• the government had failed to comply with a statutory duty under the Employment Agencies Act 1973 to consult before making the 2022 Regulations; and

• that the 2022 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 submitted:

• The duty to consult was met by the 2015 Consultation. Alternatively, it was "highly likely" that the outcome would not have been substantially different if there had been further consultation.

• The revocation of Regulation 7 of the Conduct Regulations did not amount to an interference with the rights of trade unions under Article 11 of the ECHR, and that, in any event, any interference was proportionate.

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 even considered the responses to the 2015 consultation when making the 2022 Regulations.

The High Court therefore upheld the judicial review and quashed the 2022 Regulations, with effect from 10 August 2023.

As the judicial review was decided on the basis of the first ground alone, the court decided not to express a view in relation to the arguments over breach of Article 11 of the ECHR.

WHAT DOES THIS MEAN FOR EMPLOYERS?

The effect of the High Court's quashing order is that, with effect from 10 August 2023, the law will revert to the position before 21 July 2022. This means that, from 10 August 2023, Regulation 7 will be back in force and employment businesses will no longer be able supply temporary workers to employers to cover those involved in industrial action. We have lots of experience of advising on what is the right and wrong side of the regulation 7 line where this is an issue for clients.

The High Court's decision is unlikely to be the last word on this issue. The government has decided not to appeal this decision but it could, following consultation, bring this law back before Parliament for approval in the autumn or winter. We are likely to hear whether the government will do this after the summer Parliamentary break. The trade unions may still bring a legal challenge if the government did this given their breach of Article 11 (freedom of association) argument was not decided by the High Court.  We will, of course, keep you updated on developments.