The High Court in London ruled today that the UK government’s agency worker regulations are unlawful, after a successful legal challenge by 13 trade unions.

The ruling comes after a controversial law was put into place last year that allows businesses impacted by industrial action to plug staffing gaps with agency workers. Strike-breaking by agency workers is widely outlawed internationally and a number of large staffing firms stated that they would not supply workers under such conditions in the UK.

Last year it was reported that trade unions in the UK, coordinated by the Trades Union Congress (TUC) and represented by Thompsons Solicitors LLP, launched a legal challenge to protect the right to strike.

The unions argued that the regulations are unlawful because the then Secretary of State for business failed to consult unions, as required by the Employment Agencies Act 1973 and because they violate fundamental trade union rights protected by Article 11 of the European Convention on Human Rights.

From 1976 it was unlawful for an employment business knowingly to introduce or supply workers to an employer to carry out the work of employees who were taking part in official industrial action. Regulations made pursuant to section 5 of the Employment Agencies Act 1973, most recently regulation 7 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (SI 2003/3319 – “the 2003 Regulations”), made this a criminal offence.

In 2015, the UK government conducted a public consultation on a proposal to revoke regulation 7. The majority of the responses did not favour this change in the law and, in 2016, it was decided not to go ahead.

However, on 27 June 2022, the draft Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022 were laid before Parliament. The 2022 Regulations were made by the then Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng, on 20 July 2022 and they came into effect on 21 July 2022.

Both of the Union’s grounds for the legal challenge had been contested by the Secretary of State. On the first ground, the then Secretary of State Business, Energy and Industrial Strategy Kwasi Kwarteng relied on the consultation which took place in 2015.

In today’s ruling, the High Court ruled that Kwasi Kwarteng failed to consult unions, as required by the Employment Agencies Act 1973.

The judgment said, ‘the Secretary of State’s approach was contrary to section 12 (2) of the 1973 Act, so unfair as to be unlawful and, indeed, irrational. That would have been my conclusion even if he had conscientiously considered the responses to the 2015 Consultation before the decision of 13 June 2022.’

The judgment goes onto say ‘the approach of Mr Kwarteng was to commit to the revocation of regulation 7 at a time when the advice to him was that it would be of negligible short-term benefit and probably be counterproductive.’

The 11 trade unions that made the legal challenge include, ASLEF, BFAWU, FDA, GMB, NEU, NUJ, POA, PCS, RMT, Unite and Usdaw, come from a wide range of sectors and represent millions of workers in the UK. Furthermore, Unison and NASUWT also brought separate legal challenges against the laws.

Recruitment and Employment Confederation chief executive Neil Carberry said, “This decision comes as no surprise. The law required a level of consideration and consultation that the rushed, politically-driven process of last year simply did not allow for.”

“Government must now act swiftly, while the process has been ruled unlawful the regulations remain on the statute book, putting agency workers, agencies and client businesses into a world of uncertainty about what the law now is,” Carberry continued. “We encourage the Secretary of State to act swiftly to restore the situation that was in place before this ill-judged change was made.”

The Lords Committee charged with scrutinising the legislation said ‘the lack of robust evidence and the expected limited net benefit raise questions as to the practical effectiveness and benefit’ of the new rules.   

TUC General Secretary Paul Nowak said, “This defeat is a badge of shame for the Conservatives, who have been found guilty of breaching the law. Bringing in less-qualified agency staff to deliver important services risks endangering public safety, worsening disputes and poisoning industrial relations.” 

“The government railroaded through this law change despite widespread opposition from agency employers and unions. The courts even found ministers ignored evidence that the measure would be counterproductive,” Nowak added. “This is the same reckless approach behind the anti-strike bill, which has faced a barrage of criticism from employers, rights groups and international bodies, and which has been amended by the House of Lords on three separate occasions during parliamentary ping-pong.”

Earlier this year, peers in the House of Lords voted in favour of amendments to the Strikes (Minimum Service Levels) Bill, known as the ‘anti-strike bill’, which would protect workers from being dismissed for taking part in otherwise lawful strike action.