• Tar Tumber
  • 9 August 2018

Joint employer status - the future of outsourcing?

We had another twist in the case of outsourced workers versus client organisation on 7 August 2018, when the Independent Workers Union of Great Britain (IWGB) was granted a judicial review against a decision that had been made against them by the Central Arbitration Committee (CAC).

Flashback to November 2017 when the IWGB launched a legal challenge over the rights of 75 outsourced workers based at the University of London.  The receptionists, security officers, post-room staff and porters all worked for facilities management company, Cordant Security, but were seeking to negotiate their pay and conditions directly with the University.

The IWGB wanted to negotiate terms and conditions directly with the University on behalf of the outsourced workers, rather than with Cordant who was the actual employer.  The argument was that the University ‘called the shots’ when it came to the most important elements of pay, rather than Cordant, and therefore the University was the ‘de-facto’ employer.  IWGB argued for a ‘joint employer’ concept to be introduced and filed an application with the CAC to be recognised as the union that could undertake collective bargaining on pay and conditions on behalf of these outsourced staff.  Outsourced staff fully supported this argument, highlighting the huge disparity in pay and conditions they received versus colleagues doing the same job in the same building who were directly employed by the University.

Forward to April 2018, and the biggest organised strike of outsourced workers in UK higher education history, where circa 130 outsourced staff downed tools, and the University announced a commitment to bring some services ‘back in house’.  The IWGB claimed this as a small victory stating the University had acknowledged the on-going disparity was untenable.  However, this was not enough and the IWGB continued to push for the CAC to recognise it as the union to bargain with both the University and Cordant on behalf of the workers employed there.

The CAC made the decision not to hear the application for the IWGB to be recognised as the union with the University of London because the University argued the staff could join Unison, which is recognised and already represents many of its workers.  However the perception is that Unison has a ‘cosy’ relationship with the University meaning it is less likely to push the rights of a minority of the workforce it is meant to represent.

Fast forward to this week, 7 August 2018 to be precise, and the IWGB announced that the High Court had granted it permission for a judicial review of the CAC decision.  IWGB had effectively argued that the CAC was breaching the workers’ human rights.  No date has been scheduled for the High Court review but if successful, this test case could allow 3.3 million outsourced UK workers to collectively bargain with their de-facto employers as well as their direct employers, bringing the joint-employer concept to life in the UK. 

The CAC, University of London and Cordant Security are all clearly going to argue against this, but the High Court has also allowed the Department for Business, Energy and Industrial Strategy (BEIS) to wade in on the argument.  The Government, which indirectly employs hundreds of thousands of outsourced workers clearly has an interest in the outcome of this case and is challenging the IWGB reference to human rights legislation in this matter, given the workers have access to Unison already.

The High Court has also denied the union cost protection so if it loses the case, IWGB could be liable for the legal costs for all four bodies it is facing - a cost that could run into hundreds of thousands of pounds.  The IWGB has launched a crowd funding campaign to help it cover such an eventuality.

So we wait and see what happens – the IWGB has been campaigning steadily since late 2017 and is committed to this cause.  It will need to convince the High Court that the outsourced workers are truly employed by the University as well as Cordant in order to push for joint-employer status.  Having been successful in recent high profile cases including Deliveroo, Uber and City Sprint, IWGB is dedicated to securing the rights of the outsourced staff. 

The implications of an IWGB win for outsourcing organisations, and their clients are hugely significant – both financially and in terms of the future of outsourcing as a whole.  Why would you outsource if there is no difference in what your direct employees ‘cost’ you and what you pay the outsourcing company for their staff?  Why outsource if you have to be involved in joint collective bargaining along with the direct employer?  Where is the convenience?  What are the benefits?  Will outsourcing remain an attractive form of flexing your workforce?  There are lots of questions being raised and with outsourcing affecting most industry sectors in some way, there’s huge focus on the outcome of this test case.  We all watch this space…


If you feel your business could be affected by any of these latest developments, get in touch with the Employment relations experts, Workplace Law.