An ‘employment business' is defined under the Employment Agencies Act 1973 as a business that supplies its own employees to act for, and under the control of, other persons, in any capacity. This covers the hiring out of workers on a temporary basis and is frequently called ‘temping'. The employment relationship remains at all times between the employment business and the individual. The individual supplied to the third party to provide the temporary work does not become employee of that third party.
Conversely, ‘employment agencies' are defined in the 1973 Act as businesses that provide the service of finding persons with employment and/or of supplying employers with persons for employment by them - that is, the employment relationship exists between the individual and the third party client, rather than the individual and the agency.
Confusion often arises around the distinction between employment businesses and employment agencies because, rather unhelpfully, the terms ‘temp agencies', ‘employment agencies' and ‘agency workers' are often used synonymously in respect of both employment businesses and employment agencies, which can lead to confusion as to the differences between two types of businesses.
The distinction is clearly an important one in the current dispute between the CWU and the Royal Mail as regulation 7 does not extend to the use of employment agencies during industrial action. As such, in light of the unequivocal wording of regulation 7, as long as the Royal Mail ensures that it engages any temporary workers directly (as it is stating is its intention), then it will not be prevented from taking on such workers to assist it either during the strikes or afterwards, to help clear the back log and deal with the Christmas rush. However, should it ask an employment business to provide some of its employees to assist it, this could potentially be in breach of regulation 7 of the 2003 Regulations.
It should be noted though that regulation 7 only restricts the use of temporary workers through employment businesses when they are required to assume the duties of employees who are taking part in industrial action (or to assume the duties of employees who were themselves brought in to cover those taking part in industrial action). It will therefore actually only extend to the use of temporary workers during the days of the strike. It will not cover, for example, the use of temporary workers after the strike is over to assist with the backlog of work which the strike has caused. The application of regulations 7 is therefore rather limited and, as such, the Royal Mail should be able to ensure with relative ease that no breach of regulation 7 occurs. On that basis it is hard to see how the CWU hopes to bring successful injunctive action against the Royal Mail in respect of this dispute. This begs the question as to whether there is in fact much teeth to this threat or whether it is merely a tactic the CWU is deploying in the larger picture of its ongoing negotiations with the Royal Mail. It will be interesting to see whether the CWU follows through with its threat this Friday.
Rebecca McManus is an associate at Hogan & Hartson
