Page | 1 Name: Declan Owens Student number: 10840095 Master track: European and International Labour Law Total ECs: 12 31.07.15
Why has EU equal treatment law been unable to
achieve a greater level of equality for temporary
Page | 2
Table of Contents
Chapter 1 Introduction
1.1 The problem: inequality in the United Kingdom (“UK”)………..p. 4
1.2 The existing conceptual framework of equality, hypothesis and limitations…...p. 6 1.3 Structure of the thesis………...p. 9
Chapter 2 Theories of Equality and Justice regarding Labour Law
2.1 The idea of labour law………..p. 11 2.2 Forms of equality and their application in practice………..p. 14 2.3 Critical Legal Studies………...p. 18
Chapter 3 The present position of temporary agency workers (TAW) in the UK
3.1 Are TAW facing inequality and discrimination in the UK?...p. 22
3.2 Employment status, TAW and the conceptual difficulties of applying the
principle of equal treatment in English law………...p. 24 3.3 The Blacklisting of TAW in the construction industry………...p. 26
Chapter 4 Flexicurity and the impact of the free movement of workers within the EU on inequality for TAW in the UK
4.1 Flexicurity………p. 29
4.2 Free movement of workers within the EU and TAW………..p. 30 4.3 Abuse of TAW by ‘Gangmasters’………p. 33
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Chapter 5 Solutions to the inequality of TAW in the UK
5.1 Increased unionisation of TAW and greater collective bargaining generally……..p. 35
5.2 Favourable judicial interpretation………....p. 36 5.3 Policy change………...p. 40
Chapter 6 Conclusion………..p. 42
Bibliography……….………...p. 44
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Chapter 1 – Introduction
Section 1.1 – The problem: inequality in the United Kingdom (“UK”)
The UK is an unequal society and it is becoming more unequal.1 Indeed, the UK is now the most unequal country in Europe, in terms of wages and income distribution, according to Eurofound in a recently released report, which indicates that the rise in inequality is so large that it is partly driving the general rise in inequality in Europe:
“The Great Recession changed the trend of overall EU wage inequality. Between 2004 and 2008, EU wage inequality decreased; after 2008, it increased. The decrease before the crisis was entirely due to a significant reduction in between-country wage differentials (in other words, a process of convergence in pay levels), which came to a halt in 2008 and even started to reverse at the end of the period of this analysis (2011). The main driver behind the increase in wage inequality after 2008, nevertheless, was within-country inequality, which until that point had remained more or less stable. But such increase was to a large extent driven by developments in the UK, without which the overall EU within-country component of inequality remained more or less stable as a result of rather diverse developments at the country level.” 2 The UK now also has the worst Gini coefficient (0.404%) of any EU country.3 Gini is the generally accepted measure of statistical dispersion that represents the income distribution of a nation’s residents. It is the most commonly used measure of inequality.4
Furthermore, the UK’s Office of National Statistics (“ONS”) states that 8% of people in employment in the UK were also in relative income poverty in 2013, equivalent to around 3 million people.5 Amongst the findings of the ONS report was conclusion that,
1 See McKnight & Tsang, Growing Inequalities and their Impacts in the United Kingdom, 2013, p. 39-40
[online]
2
Eurofound, Recent developments in the distribution of wages in Europe, 2015, p. 61 [online]
3 Ibid, p. 1 4 Ibid, p. 47
5 See Office for National Statistics, Poverty and Employment Transitions in the UK and EU, 2007-2012”, 2015,
Page | 5 “People taking up temporary roles are no less likely to leave poverty than those taking up permanent contracts. However, temporary workers are more likely to see their income fall below the poverty threshold the following year.”6
Even the OECD has warned of the problems of the growing inequality in the UK (much of which it finds attributable to part time and temporary employment).7
The reasons for the inequality that prevails in the UK are difficult to explain without adopting a particular view of politics, society and ideology.8 However, it is certainly arguable that capitalism and its modern apotheosis, neoliberalism, require inequality in order to function, and even its most adherent supporters do not deny that capitalism relies on inequality.9 Whereas there is a view among neoliberals that there will be ‘trickle-down’ economics,10
there would be no need for a trickle-down effect if inequality was not an underlying assumption of the capitalist order.11 Indeed, as Keter remarks, “Neoliberals still hope for the happy ending that economic theory has failed to deliver”.12
Of course, the UK is not alone in having this societal characteristic of inequality in light of the increasingly globalised economy.13 Therefore, the solution to the problem14 of inequality in the UK (and globally), if there is one, is undoubtedly complex, and the application of equal treatment law alone is unlikely to provide it. In fact, in relation to individual rights, such as against unfair dismissal and discrimination, the present UK government still appears to
6 Ibid, p. 1.
7 OECD, In It Together, 2015, p. 135-208 [online]. 8
The ‘subterranean superstructure’ to the inequality that is evident on the surface requires an analysis of UK history (especially the Industrial Revolution and colonialism), law, economics and contemporary politics. As I explain in Chapter 2, it is best analysed through the work of Critical Legal Studies scholars.
9 Neoliberal ideology was embraced in the UK by the Thatcher government, partly inspired by Hayek. See
Hayek, Law, Legislation and Liberty, 1980, p. 89–90 and, Harvey, A Brief History of Neoliberalism, 2007, p. 5-38.
10 Harvey, A Brief History of Neoliberalism, 2007, p. 64. See Stewart, Wealth doesn't trickle down – it just floods offshore, research reveals The Guardian, 21-07-12 [online].
11
Ibid, p. 107.
12 Keter, Law or Economy? in Stone et al, New Critical Legal Thinking, 2012, p. 177.
13The structure of inequality on a global scale is explained at length by Piketty. See Piketty, Capital in the Twenty-First Century, 2014, p. 237-470.
14
Page | 6 adhere to the ideas of Epstein, who argued that equality legislation interferes with the efficient incentive structures provided by the law of contracts and the market.15
Section 1.2 – the existing conceptual framework of equality, the hypothesis and limitations
It is important at the outset to distinguish between ‘equal treatment’ and ‘equality’ and then to examine in detail the literature to understand the existing conceptual framework of equality and equal treatment law within it. According to Fiss, the anti-discrimination principle at the heart of EU equal treatment jurisprudence reduces the idea of equality to the principle of ‘equal treatment’, i.e. a prohibition on the drawing of arbitrary or otherwise impermissible distinctions.16 I examine the conceptual difficulties with the application of the principle of equal treatment in Chapters 2 and 3.
This thesis will focus on one aspect of inequality in the UK, namely the treatment of temporary agency workers (“TAW”) as a class of workers.17 The agency sector is considered to be a crucial part of the UK labour market: it includes around 1.3m agency workers (about 5% of the work force), performing a wide variety of roles in a huge variety of organisations, and supplied through about 16,000 agencies.18 The sector can provide opportunities for workers, potentially including an important route into permanent employment, as well as flexibility for many employers, such flexibility being deemed to be particularly important as the UK economy emerges from the recession.19
The main issue that arises is whether TAW are receiving equal treatment in the UK and enjoying the benefits of so-called ‘flexicurity’ promised by the EU. Therefore, the necessary first step in the analysis is to examine in Chapter 2 the various legal and political theories of equality and the utility of the distinction between formal and substantive equality as an analytical tool, particularly in the context of TAW. My hypothesis is that EU equal treatment law is a necessary but not sufficient tool to achieve the requisite level of equality for TAW
15 See Epstein, In Defense of Contract at Will (1984) 51 U.Chi.L.Rev. 947 and Epstein, Forbidden Grounds: The Case Against Employment Discrimination Law, 1995.
16
McColgan, Discrimination, Equality and the Law, 2014, p. 90.
17 As will be shown in Chapter 4 below, TAW, particularly in the construction and agricultural sectors, may be
transnational temporary agency workers, which invites consideration of the PWD.
18 Parliament Publications, Explanatory Memorandum to the Agency Workers Regulations 2010, p. 2 [online]. 19
Page | 7 (and other workers) in the UK, an outcome which is only possible through radical political reform and an abandonment of the present neoliberal policies of its government.
Accordingly, my hypothesis requires, in particular, the examination of the transposition of the Temporary Agency Work Directive (“TAWD”) into UK law through the Agency Workers Regulations 2010 (“AWR”), i.e. as the aspect of EU equal treatment law in issue. According to Article 3(1)(c) of the TAWD, a TAW means “a worker with a contract of employment or an employment relationship with a temporary-work agency with a view to being assigned to a user undertaking to work temporarily under its supervision and direction”. In contrast to the relative simplicity of the definition in the TAWD, agency workers are elaborately defined in Regulation 3 of the AWR as follows:
In these Regulations “agency worker” means an individual who— (a) is supplied by a temporary work agency to work temporarily for and under the supervision and direction of a hirer; and (b) has a contract with the temporary work agency which
is— (i) a contract of employment with the agency, or (ii) any other contract to perform work and services personally for the agency. (2) But
an individual is not an agency worker if— (a) the contract the individual has with the temporary work agency has the effect that the status of the agency is that of a client or customer of a profession or business undertaking carried on by the individual; or (b) there is a contract, by virtue of which the individual is available to work for the hirer, having the effect that the status of the hirer is that of a client or customer of a profession or business undertaking carried on by the individual. (3) For the purposes of paragraph (1)(a) an individual shall be treated as having been supplied by a temporary work agency to work temporarily for and under the supervision and direction of a hirer if— (a) the temporary work agency initiates or is involved as an intermediary in the making of the arrangements that lead to the individual being supplied to work temporarily for and under the supervision and direction of the hirer, and (b) the individual is supplied by an intermediary, or one of a number of intermediaries, to work temporarily for and under the supervision and direction of the hirer. (4) An individual treated by virtue of paragraph (3) as having been supplied by a temporary work agency, shall be treated, for the purposes of paragraph (1)(b), as having a contract with the temporary work agency. (5) An individual is not prevented
Page | 8 from being an agency worker— (a) because the temporary work agency supplies the individual through one or more intermediaries; (b) because one or more intermediaries supply that individual; (c) because the individual is supplied pursuant to any contract or other arrangement between the temporary work agency, one or more intermediaries and the hirer; (d) because the temporary work agency pays for the services of the individual through one or more intermediaries; or (e) because the individual is employed by or otherwise has a contract with one or more intermediaries. (6) Paragraph (5) does not prejudice the generality of paragraphs (1) to (4).
My hypothesis is based on the objective assumption that there is a growing level of inequality in the UK, and the subjective assumption that it is unacceptable and that it is unnecessary, the methodological implications of which are also explored in Chapter 2. Although some argue that the AWR have failed to properly implement the TAWD,20 I contend in Chapters 3 and 5 that greater equality (in the sense of enhanced legal protection for TAW) can and should be (partly) achieved through a purposive interpretation of the common law and AWR in the light of EU equal treatment law, though it is more likely going to occur through greater unionisation and through policy change.
Part time and fixed term workers and the corresponding EU directives encompassing the corpus of EU equal treatment law will not be considered, except where the application of the evolving UK case law may apply to TAW, and as it pertains to the concept of equal treatment. Ideally there should be an analysis of the ongoing reform of social security in the UK (the so-called ‘Universal Credit’ scheme), as TAW will be affected by it during periods when they are not in work, i.e. in terms of their ability to claim social security. However, an examination of this contentious policy will not be possible within the scope of this thesis, especially as the reforms are still at the pilot stage and will be further rolled out in accordance with the ideology of the new UK government elected in May 2015.21 Similarly, in the aftermath of the election, the increasing number of zero hour contracts is likely to prompt reform following criticism from the Commission22 and the precarious position of those
20 See Chapter 3.
21 See Department for Work & Pensions, 2010 to 2015 government policy: welfare reform, 2015 [online]. 22
Page | 9 workers will not be considered in detail, but it has been considered and, in this sense, the compartmentalisation of the inequality for workers in the UK is an unsatisfactory, but revealing, pursuit, as it serves to reveal the complexity of the issues.23 Again, while there may be an overlap between the paid and/or unpaid work of TAW in the informal economy, or as domestic unpaid workers or carers (particularly in periods when they are between assignments, whether voluntarily or of necessity), this thesis shall not consider the informal sector or unpaid work due to the limitation in scope.
Section 1.3 – Structure of the thesis
Although important aspects of what I consider to be the necessary ‘equality agenda’ largely fall outside the limited scope of this thesis, Chapter 2 will commence in Section 2.1 with an exploration of ‘the idea’ of labour law and why labour lawyers and academics should even be concerned with equality. It is necessary to examine the purpose of labour law and, indeed, equal treatment law, to discern why the latter is used at all, because it is only then that we can establish principles through which it is applied in practice. In applying those principles, it is, of course, important to then remember the underlying rationale. Therefore, once the premise that equality is something that a labour lawyer should aim for is accepted (at least for the purposes of this analysis), Section 2.2 considers the various theories of equality in the literature and, in particular, the application of the principle of equal treatment, which will be explored through, inter alia, notions of ‘formal’ and ‘substantive’ equality.24
Whether equality is actually achievable at all in the present political epoch is the subject of discussion in Section 2.3, which draws upon the approach of Critical Legal Studies (‘CLS’),25
an approach which pervades my analysis. This is important to emphasise from a methodological perspective because I am starting from the premise that neoliberalism has had a negative impact on UK workers and society generally, which presupposes that there is a need to consider the impact of neoliberalism on TAW in the UK because while temporary
23 Adams & Deakin, Re-regulating Zero Hours Contracts, 2014, p. 2.
24 As Riesenhuber explains, “As regards temporary agency work, the question of proper comparison arises:
should the comparator standard be the workers of the temporary work agency or those of the user undertaking?” Riesenhuber, European Employment Law, 2012, p. 418-419.
25 Critical Legal thinkers believe that law does not have any existence outside of ideological battles within
society: according to Kelman, liberalism in the eyes of these critics is a “system of thought that is simultaneously beset by internal contradictions … and by systematic repression of the presence of these contradictions”. See Freeman, Lloyd’s Introduction to Jurisprudence, 2014, p. 1018.
Page | 10 agency work is not inherently precarious, “there is clear evidence” that this is the reality faced by most TAW.26 To do so, I will firstly draw upon the ideas of CLS and outline in Section 2.3 how and why CLS is an appropriate academic school in general when analysing issues of law, equality and human rights, and especially in relation to labour law (i.e. ‘human rights at work’) 27
when analysing the transposition of the TAWD by the AWR.
Chapter 3 considers the present position of TAW in the UK in Section 3.1 and examines whether they face inequality. After concluding that there is evidence of inequality, Section 3.2 explores what I consider to be one of the key explanatory factors within the neoliberal labour market, namely the employment status of TAW, and proceeds to analyse the conceptual difficulties of applying the principle of equal treatment in English law as a result. The transposition of the TAWD in the UK in light of the Equality Act 2010 and the AWR is critically analysed. Adopting elements of the critique offered by CLS, I will consider the role of political factors at play in shaping the equality agenda following the 2010 and 2015 UK general elections.28 I will, in particular, consider the abuse29 of agency contracts by employers30 in the UK in Section 3.3 and provide an example of a major human rights scandal that occurred through discriminating against TAW in the form of the blacklisting of trade unionists.
Chapter 4 will consider the evolving concept of flexicurity within the EU in Section 4.1 before analysing in Section 4.2 how the transposition of the TAWD in the UK has meant that EU posted agency workers are subject to even greater discrimination in light of, inter alia, the ‘Swedish Derogation’ and the impact of the Posted Workers Directive (“PWD”). I shall also consider the potential impact of the Posting of Workers Enforcement Directive (“PWED”), which was enacted partly to address problems in the PWD’s interaction with the TAWD,31
26 Strauss & Fudge, Temporary Work, Agencies And Unfree Labour, 2014, p. 150. 27 Bellace, Human Rights at Work, Int.J.Comp.L.L.I.R. 30, no. 2, 2014, p. 175–198.
28 McColgan, Discrimination, Equality and the Law, 2014, p. 57: “the Equality Act 2010 (s14) provides for
claims of ‘combined discrimination’ where discrimination is alleged to have taken place on two (but not more) combined grounds. In March 2011 Chancellor George Osborne announced that section 14 would not be brought into effect.”
29 This abuse will now be facilitated by the new laws restricting strikes proposed by the UK Government
whereby they also plan to allow agency workers to replace employees that are on strike: Unions furious at Tory
plan to make it more difficult for workers to strike, The Guardian, 18-07-2014 [online]. 30 Whether an employer is defined as an ‘end user’ or ‘agency’.
31 Department for Business, Innovation & Skills, EU proposal for a Posting of Workers Enforcement Directive,
Page | 11 but its effectiveness will of course depend on the forthcoming transposition legislation. Accordingly, I will analyse the impact of the PWD in the UK, which has increased the amount of TAW, and also consider the political restraints on the effectiveness of the EU’s ability to legislate on certain aspects of equal treatment law that would benefit TAW. In a related matter, I will also examine in Section 4.3 the issue of TAW recruited abroad by agencies in the construction and agriculture sectors by agencies and ‘gangmasters’.
Chapter 5 will reflect upon the theories of equality outlined in Chapter 2 as they pertain to TAW and will suggest potential solutions that may need to be adopted in the UK in order to hope to achieve a greater level of equality for TAW. The solutions offered include increased unionisation of TAW and greater collective bargaining generally (Section 5.1); enlightened judicial interpretation of the common law (Section 5.2); and political reforms (Section 5.3). I reflect upon the obstacles to such solutions and the impact of the May 2015 general election on the future direction of labour law in the UK.32
Chapter 6 briefly outlines conclusions on the hypothesis and opines as to whether, in the absence of suitably favourable judicial interpretation of existing EU equal treatment law in the UK courts, greater equality for TAW can be achieved in the UK without a recalibration of the role of collective labour law in the political settlement and significant legislative reform.
Chapter 2 –Theories of Equality and Justice regarding Labour Law
2.1 The idea of labour law
As outlined by Kohler, one of the outstanding theorists and founding fathers of labour law, Sinzheimer, considered labour law as,
“… informed by a ‘singular mix’ of goals, intended both to protect and to emancipate employees. In his conception of it, the field represents the law of ‘dependent’ work. Its special task, Sinzheimer insisted, consists in upholding human dignity and through its processes, to bring our ‘real humanity’ to realization in the workplace.”33
32 Wintour, Cameron's immigration bill to include crackdown on illegal workers, The Guardian, 20-05-15
[online].
33
Page | 12 This is an idea of labour law to which I subscribe and which informs my analysis of the situation of TAW, which is a special class of dependent workers, in the UK and the EU. Hepple is a prominent contemporary legal scholar who has studied the ‘making’ and ‘transformation’ of labour law in Europe.34
He observes that,
“Labour law is not an exercise in applied ethics. It is the outcome of struggles between different social actors and ideologies, of power relationships.”35
When considering the ‘idea’ of labour law and its role in informing the debate regarding its infringement into the realm of addressing inequality, Hepple is well placed to offer an insight into the purpose of labour law and the concerns it should have for the future in the face of globalisation.36
Hepple identified two important issues that threaten labour law which it needs to adapt to and which have particular relevance to TAW. Firstly, he analyses the consequences of the pace of technological change (where he criticises the flexible British model that means “firms wanting to develop new products can hire and fire workers with relative ease, using non-standard forms of employment relationship”).37 Secondly, he noted the uncertainty as to whether the traditional bank-based financial system could survive the growing competition from new markets in securities (concluding that they were unwilling “… to finance long-term corporate investments and the development of human resources including on-job training. This threatened to make it harder for firms to offer employment security and other forms of labour protection).”38
Accordingly, Hepple identifies why so much of legal scholarship in labour law misses the key factor of power as the determinant of labour law (whether it is domestic, international or supranational): thus it is not enough for lawyers to apply the law as it is, but rather civil
34 Hepple, The Making of Labour Law in Europe, 2009; Hepple & Veneziani, The Transformation of Labour Law in Europe, 2009.
35
Hepple, Factors Influencing the Making and Transformation of Labour Law in Europe, in The Idea of Labour
Law, Davidov & Langville, 2011, p. 30. 36 Ibid, p. 30.
37 Ibid, p. 41. 38
Page | 13 society must examine the reasons why the law is as it is and, if it is unhappy with it, seek to reform it.39 Indeed, the status quo is not inevitable, as Hepple astutely observes:
… in the future as in the past, the crucial element in both the making and the transformation of labour law will be the power of capital, and the countervailing power of organised labour and civil society – workers, consumers, and active citizens.40
With this in mind, one cannot analyse the UK labour market, and the place of TAW within it, without taking into account that its economic model operates as ‘the high priest’ at the ‘alter’ of neoliberalism and globalisation. In this context, as Sheppard has argued, “Globalisation appears to have in fact further entrenched socio-economic inequities and restructured inequality in the workplace.”41 When multinational companies look at the ‘need’ for regulatory arbitrage throughout the EU, the UK offers a friendly environment.42 Indeed, as Supiot explains, labour interests have lost ground against capital for reasons that have even moved beyond the purely ideological to the extent that regulatory arbitrage and financialisation have undermined the rule of law.43 This is because neoliberalism sought to dismantle the institutional guarantees of the law in matters of contract and property ownership that markets actually rely upon through “financial deregulation and the promotion of competition between different systems of labour and environmental law.”44
In considering the ‘idea of labour law’, Rogowski criticises the “internal reconstruction of the logic of labour law development” offered by contemporary labour law scholars and argues (in line with his theory of reflexive labour law) that, “For a proper understanding of modern labour law it is necessary to move beyond retrospective analyses or using memory as a means of regaining a lost world of pluralist labour regulations (Arthurs 1998). What is needed is an assessment of labour law’s changing role in the world society.”45
For Rogowski,
39
Beckett, Faith and Resignation, in New Critical Legal Studies, 2012, p. 145-166.
40 Hepple, Factors Influencing the Making and Transformation of Labour Law in Europe, in The Idea of Labour Law, Davidov & Langville, 2011, p. 42.
41 Sheppard, Mapping anti-discrimination law onto inequality at work, Int'l Lab.Rev., Vol. 151 (2012), No. 1–2,
p. 14.
42 Supiot, A Legal Perspective on the Financial Crisis of 2008, (2010) 149(2) Int'l Lab.Rev. p. 151-162. 43 Ibid, p. 152.
44 Ibid, p. 152. 45
Page | 14 labour law is part of ‘industrial relations’ which has constituted itself as a “fully fledged autopoetic function system operating within the world society” so that labour law exists alongside (but conceptually distinct from) other function systems, such as economics and politics.46 Labour law functionally borrows or incorporates concepts or ‘communications’ from economics and politics through ‘intersystemic relations’ or ‘structural coupling’ where these can be self-referentially adopted within labour law’s cognitive framework.47
Accordingly, while the ‘idea of labour law’ is contested, the above analysis is helpful to understand the complex context in which TAW face inequality and how difficult it may be to resolve. It can be concluded that globalisation and neoliberalism play a key role in how inequality manifests in the workplace for TAW in the UK. Therefore, I shall proceed to consider in Section 2.2 how various typologies of equality operate within this global framework and how principles of EU equal treatment law are applied in practice in the UK.
2.2 Forms of equality and their application in practice in the UK
As the preceding section has outlined, the application of labour law in line with the underlying idea of labour law is now even more difficult in a globalised economy, especially in the case of seeking equality for those dependent workers that are represented by the category of TAW. As Amartya Sen observes, all social contractual offerings must select a basis of equality to remain socially plausible.48 Accordingly, in the changing global economic environment in general, and the Internal Market of the EU in particular, it has become even more necessary to consider the unequal legal and financial position of the growing number of atypical workers, which of course include TAW in the UK.
Keter is sceptical of the idea of equality in contemporary neoliberal society. For him, “The necessary axis of equality for neoliberalism is portrayed as being ultimately a question of equality of opportunity and freedom to pursue social mobility; which may be progressed through education, experience and personal merit.”49 Keter thus rightly questions the capacity of such an understanding of equality to be successful in practice, which of course
46
Ibid, p. 54.
47 Ibid, p. 83-84.
48 Sen, The Idea of Justice, n2 in Keter, Economy or law? in Stone, Wall & Douzinas New Critical Legal Studies, 2014, p. 169.
49
Page | 15 also undermines the ability of labour law to protect TAW within that paradigm. As Sheppard argues, it is important that ‘equality’ (in the form of anti-discrimination law) expands to take into account systemic discrimination, structural inequities, the informal economy and family work,50 i.e. where many TAW operate.
Indeed, the oft-lauded distinction between substantive and formal equality is only partly addressing this problem, though it does recognise that the ‘equal treatment’ law in the UK failed to achieve equal pay between men and women.51 Barnard and Hepple concluded in 2000 that “a new framework is needed [to]… encourage fair participation of under-represented groups and fair access to goods, facilities and services, through measures such as a duty on public authorities to promote equality, and employment and pay equity plans.52 Unfortunately, writing some 14 years later, even after the so-called ‘Equality’ Act of 2010, Hepple still did not see sufficient progress towards substantive equality and, indeed, he predicted that the “… failure to bring about significant changes in the gender pay gap will continue, particularly in a time of recession and pay freezes.”53
In any event, the effective implementation of equal pay law is undoubtedly complex and difficult to apply in practice, especially for TAW. As Hepple explains, external bodies such as the Equality and Human Rights Commission (“EHRC”) have an important role in advising and in enforcement of equal pay.54 Burton provides a further analysis of the dislocation between equality legislation in theory and in practice, identifying the reasons for the ongoing failure of the UK to narrow the pay gap.55 She persuasively argues that the neoliberal economic and political hegemony that prevails in the UK meant that there was a failure to grasp the opportunity for gender justice provided by the Equality Act 2010 and identifies one of the more recent and obvious reasons for the failure:
… as it was pushed through Parliament on the eve of a general election, the subsequent Coalition Government’s decision not to implement certain key provisions
50Sheppard, Mapping anti-discrimination law onto inequality at work, Int'l Lab.Rev., Vol. 151 (2012), No. 1–2,
p. 14.
51
Barnard & Hepple, Substantive Equality, C.L.J., 59, p. 562-585.
52 Ibid, p. 585.
53 Hepple, Equality, 2014, p. 121.
54 Hepple, Agency Enforcement of Workplace Equality in Dickens, Making Employment Rights Effective, 2012. 55
Page | 16 [of the Equality Act 2010 (“EqA”)] has dramatically reduced its potential clout ... the EqA has failed to achieve gender equality [because of] … the negative impact of neoliberalism on the policies of both the New Labour and the Conservative parties.56 Burton explains how ideology and politics impacts equality in the UK:
The influence of neoliberalism has been fatal to gender equality in the EqA. Progressive measures have been rejected unless they coincide with neoliberal aims and promising ideals of equality have been subsumed into an underlying neoliberal agenda.57
Burton offers some valid solutions including ‘the reconceptualisation of the welfare state’ so that childrearing is not pitted against wage-earning, and welfare mothers are not contrasted with taxpayers.58 Other ideas non-legal solutions could therefore include training, mentoring, women-targeted membership drives, women support networks and increased childcare provision during meetings, as well as more political activism by women and representation of women in Parliament. It is perhaps not coincidental that the majority of precarious workers (including TAW) in the UK are women.59
Accordingly, Burton is correct when she argues that the,
“… most important goal for feminists now is to abolish the restrictive breadwinning/caregiving dichotomy, which arguably underpins the whole notion of gender inequality in our society ... There is still undoubtedly a long struggle ahead but, once we are freed from the ‘shackles’ of neoliberalism, a better future might yet be possible.”60
In any event, the way to achieve more [substantive] equality in UK labour law in the context of equal pay, whether for women, TAW or other groups of precarious workers, is perhaps to adopt the approach proffered by Renton, involving a reform movement for equal pay, “… a
56
Ibid, p. 123.
57 Ibid. p. 124. 58 Ibid, p. 146.
59 Parliament Publications, Explanatory Memorandum to the Agency Workers Regulations 2010, p. 38 [online]. 60 Burton, Neoliberalism and the Equality Act 2010, I.L.J., Vol. 43, No. 2, July 2014, p. 148.
Page | 17 massive levelling-up of pay, simplifying pay, reducing the number of grades, and consolidating the various kinds of bonuses which give rise to equal pay claims into a much smaller number of pay bands, so that various negotiating advantages achieved in the past by male workers would be extended to all women workers as well.”61
However, a further difficulty in addressing unfair discrimination or inequality against TAW as a class is that there is often an overlap in their constituent members of other groups who are discriminated against.62 As argued by McColgan, except in the case of disability, the grounds-based approach to the Equality Act 2010 “tends in practice to produce one-dimensional, ‘flattened’ claimants who are identified by reference to a single characteristic for the purposes of making a discrimination claim.”63 Therefore, a TAW may be discriminated against because she is a black lesbian, but reference to more than one ground may jeopardise the chances in litigation by making it more difficult to convince fact-finders that the treatment complained of was causally related to any one or more particular ground(s). She may also be discriminated against because she is too young or too old, though age is an amorphous concept.64
Indeed, it is significant that the UK does not have a written constitution capable of facilitating such an articulation of complex claims under an asymmetrical constitutional equality/anti-discrimination provision such as section 15 of Canada’s Charter (1982) or section 9 of South Africa’s Constitutional Bill of Rights (1996), which protects against unfair discrimination in an open list of grounds.65 McColgan concedes that in order “to function fairly as between employers and employees … there must be a degree of clarity as to whether requirements for reasonable adjustment and prohibitions on less favourable or disparately impacting treatment apply, or do not apply, in connection with (for example) caring responsibilities or political belief.”66 This is particularly important when one considers that a finding of differential treatment on a protected ground is only the starting point for the analysis of the
61 Renton, Struck Out, 2012, p. 68. 62
Parliament Publications, Explanatory Memorandum to the Agency Workers Regulations 2010, p. 2 [online].
63 McColgan, Discrimination, Equality and the Law, 2014, p. 59.
64 A consideration of the complexities of inter-generational bargaining is beyond the scope of this thesis. 65 McColgan, Discrimination, Equality and the Law, 2014, p. 49 and p. 59.
66
Page | 18 discrimination/equality claim, because, as Article 14 of the ECHR shows, even direct discrimination is capable of justification.67
As Haslanger points out, “[T]he question is whether the structure (the policy, practice, institution, discursive framing, cultural norm) is unjust and creates or perpetuates illegitimate power relations …”68 For O’Cinnede, equality’s “… ultimate raison d’etre is as a tool of social transformation, as part of the unfolding logic of a commitment to an ideal of equality of status … to alter social structures to secure greater equality of respect or status for disadvantaged groups.”69 However, after an exhaustive analysis of the ongoing debates, McColgan concludes that the “choice of a model for the conceptualisation of equality/discrimination is a normative rather than an analytical exercise: which approach fits best with the work that equality analysis should and can perform?”70
I agree with McCrudden that, in relation to English public law, equality is “essentially pluralistic in its sources, in its origins, in its meanings, in its application, and in its functions.”71 Accordingly, from a methodological perspective, when considering whether EU equal treatment law can achieve greater equality for TAW in the UK, this conception of equality embraced by McColgan and McCrudden (amongst others) leaves me free to choose the source, origin, meaning, application and function for doing so. I shall proceed to explain in section 2.3 below why the methodology of CLS focussing on addressing the neoliberal hegemony appeals and is appropriate.
2.3 Critical Legal Studies
While I have researched and drawn upon statistical analysis of inequality in the UK, as outlined in Chapter 1, the purpose of this paper is normative and the methodology is to be considered in that context. The methodology of CLS takes into account the effects of inequality, globalisation and the Crisis, and its impact on labour law, suggesting that,
67 Ibid, p. 63. 68
Haslanger, Oppressions Racial and Other in n120 in Levine & Pataki (eds), Racisim in Mind, 2004 in McColgan, Discrimination, Equality and the Law, 2014.
69 Ibid, p. 34-35. 70 Ibid, p. 36. 71
Page | 19 “In periods of crisis, the taken for granted ‘natural’ or objective premises of the dominant discourse and practice come to the surface and are seen for what they are: artificial, provisional, ideologically charged … the rule of law and human rights are ideological constructions that seek to turn legality into legitimacy. They give limited protection to vital interests and promote formal conceptions of equality and social justice. This way they attract the approval and even devotion of ordinary people. At the same time, the rule of law and rights both formally and in substance promote a socio-economic system radically opposed to the interest in emancipation … The contemporary situation is marked by the increasing role played by law in the political, social and economic spheres … [requiring lawyers and legal scholars] to think critical legal theory, to think again about the relation between law and the political, and to think radically about a politics of transformation”72 [emphasis added].
Indeed, the validity of the term, ‘Crisis’, and the need for austerity measures, are questionable after seven years of linguistic misappropriation.73 As Keter explains,
“Ideology may still serve to project the view that the economic crisis is a ‘natural’ disaster rather than a consequence of political decisions that enjoyed widespread popular support at the time. But such propositions are now more a question of securing popular compliance with a web of contingency rather than a question of rational belief.”74
In any event, accepting the invitation of CLS scholars to think critically about the relation between law and the political, I consider that an appreciation of political factors is an essential prerequisite to understanding labour law generally and, in particular, the effect of politics on equal treatment law in the UK since the 1970s, as exemplified by the above discussion regarding equal pay for women. As Hepple argues in the context of global trade,
72 Stone, Wall & Douzinas, New Critical Legal Thinking, 2012, Preface and p. 1-7.
73 The term ‘Crisis’ is not hereby accepted as legitimate, but is adopted for ease of reference due to its
ubiquitous usage by certain economists, labour lawyers and politicians.
Page | 20 “The crucial element in the making of labour laws is power. Many of the demands by labour movements and reformers were unsuccessful because they were unacceptable to those with greater economic and political power. It is in power relationships, which are rooted in social structure, that we may find a key to the achievement and denial of rights at work.”75
Significantly, Hepple also identifies that labour markets are themselves social institutions structured by law and that these laws can be made to reflect a different set of social values than from those drawn solely from economic self interest.76 Indeed, the way in which power works in the UK is astutely analysed by Monbiot77 and by Jones78 who both demonstrate the disproportionate impact and unaccountable contemporary influence of the City of London on society and the economy of the UK, which necessarily affects its labour law.79
While there are of course other schools of legal theory80 that one could adopt when considering the issue of inequality and TAW in the UK and, indeed, in the EU (and the effects of neoliberalism and austerity policies thereon), which would result in different conclusions, it is the CLS school of legal theory which I believe offers the most appropriate tool of analysis. A detailed analysis of alternative methodological choices is not possible within the scope of this paper, except to acknowledge that the conventional approach to UK law will of course take a positivist approach to the question of inequality in line with Bentham and Austin.81 In summary, that approach postulates that law should be approached purely as a set of rules existing separately and in its own right, and containing within itself the seeds of its own development so that lawyers should apply the law as it is promulgated by
75 Hepple, The Comparative advantages of labour laws, in Labour Laws and Global Trade, 2005, p. 251-265. 76 Ibid, p. 262.
77
Monbiot, The medieval, unaccountable Corporation of London is ripe for protest, The Guardian, 31-10-11 [online].
78 Jones, The Establishment, 2014. For further evidence of the City of London’s influence, see HM Treasury, Government lodges a legal challenge with the European Court of Justice on new EU rules on pay in the banking sector, [online]; the case of UK v Council of the European Union, Case C-209/13; and Waterfield, Boris warns City under threat after European Court dismisses UK 'Tobin tax' challenge, The Telegraph, 30-04-14 [online]. 79 Supiot, A Legal Perspective on the Financial Crisis of 2008, (2010) 149(2) Int'l Lab.Rev. p. 152.
80 See Freeman, Lloyd’s Introduction to Jurisprudence, 2014. 81 Ibid, p. 195-248.
Page | 21 Parliament.82 However, I analyse the negative implications of this approach in Chapters 3 and 5.
In any event, a CLS analysis would suggest that the Thatcherite ideological assault on Keynesism, the post-war economic consensus and, in particular, the trade union influence within the UK, led to a political and economic sea-change that provides the general socio-economic context for understanding how and why the employment ‘protection’ system for TAW in the UK has manifested in its current incarnation. The neoliberal economic agenda pursued since 1979 has ultimately resulted in the financial crash of 2007-2008 and decreasing living standards for workers in the UK.83 The Crisis, and responses of the UK and EU, has had significant consequences for European labour markets and for labour law, especially as labour law protection for workers/employees against dismissal in the UK and in Europe is clearly under significant pressure from right wing politicians and their supporters/funders in the financial markets.84
The responses to the Crisis have varied among the EU Member States, and have come in different phases.85 There was a greater use of TAW and others hired directly on casualised contracts during the Crisis in the UK, as well as an increase in bogus self-employment, especially at the lower end of the labour market.86 However, there was in some ways less of an impact in the UK than in other EU states, as it already had one of the most flexible labour markets in Europe.87 According to the Commission, shifts in the structure of employment across different occupational groups and sectors, an increase in temporary employment and the spread of alternative forms of employment “have combined to create a new socioeconomic environment, thus changing the context to industrial relations.”88 Indeed, in the UK, the Crisis is being used as political cover for deregulation and attacks on workers’ rights, and the ‘villains’ are somehow portrayed to be the public sector, those on welfare
82 Ibid, p. 216-217.
83 See Davies, Perspectives on Labour Law, 2009, p. 3-19 and TUC, Pre-crash living standards still a long way off, says TUC [online].
84
Dorling, Growing wealth inequality in the UK is a ticking timebomb, The Guardian, 15-10.14 [online] and Waterfield, Lord Hill wins financial services post in new European Commission, The Telegraph, 10-09-14 [online].
85 European Commission, Industrial Relations in Europe 2014, 2014, p. 17. See also Barnard, The Financial Crisis and the Euro Plus Pact’, I.L.J. 2012, Vol. 41, 98.
86
ELLN, Protection, Involvement and Adaptation, European Labour Law in Time of Crisis, 2010, p. 7.
87 Ibid, p. 1. 88
Page | 22 benefits and immigrants, rather than the bankers who caused the Crisis.89 It is in this economic and political context that I shall proceed to discuss in Chapter 3 the present position of TAW in the UK, and, in Chapter 4, those EU posted workers and non-EU migrants in the UK who are also TAW.
Chapter 3 – The present position of temporary agency workers in the UK
3.1 Are TAW facing inequality and discrimination in the UK?
The fact that TAW face discrimination and low pay is not seriously in issue, notwithstanding that the Recruitment and Employment Confederation (“REC”), the lobby group for agencies, has sought to extol the benefits of agency work to the UK economy.90 The inequality faced by TAW is the reason that the UK’s trade union confederation, the TUC, after thorough research, has made a complaint to the Commission on the implementation of the TAWD in the UK through the AWR.91 The essence of the complaint is that “tens of thousands of agency workers being paid less than permanent staff despite doing the same job.”92 The TUC claim that the UK government's “flawed implementation of the EU Directive has allowed the abuse of the so-called 'Swedish derogation' - where employment agencies routinely pay agency workers far less than permanent staff doing the same job.”93
The TUC has gathered evidence from workplaces where TAW are paid up to £135 a week less than permanent staff, despite working in the same place and doing the same job.94 Under the AWR, agency workers are entitled to the same pay and conditions as permanent staff
89 Traynor & Neslen, Bonfire of red tape proposed in 'bid to keep Britain in EU’, The Guardian, 12-10-14
[online]. This is perhaps an apt example of Rogowski’s reflexive labour law where we are at a stage in the development of modern labour law when it realises its systemic limits with respect to regulation of other social systems, namely politics and the economy. See Rogowski, Reflexive Labour Law in the World Society, 2013, p. 39. See also Chakrabortty, Cut benefits? Yes, let’s start with our £85bn corporate welfare handout, The Guardian, 06-10-14 [online].
90 Stewart, Agency workers paid up to £135 a week less for same job, says TUC, The Guardian, 02-09-13
[online]. However, the lobby group for the employment agencies would of course differ – see Green, A rebuttal
of criticisms of agency work, 2015 [online]. 91
See TUC, TUC lodges complaint against government for failing to give equal pay to agency workers, 02-09-13 [online] and Meerkamp, Towards equal treatment of temporary agency workers? The Parliament Magazine, 21-11-14 [online]; and, for the latest available information, implying inaction by the Commission, see Socialists and Democrats, Labour MEPs demand EU action over "modern slavery" conditions for agency workers, 21-02-15 [online].
92 TUC, TUC lodges complaint against government for failing to give equal pay to agency workers, 02-09-13
[online].
93 Ibid. 94
Page | 23 doing the same job after 12 weeks. However, the so-called ‘Swedish Derogation’ exempts agencies from having to pay TAW the same rate of pay, as long as the agency directly employs individuals and guarantees to pay them for at least four weeks during the times they cannot find them work. Ironically, as pointed out by Davies, the TUC actually agreed to the implementation of the Swedish Derogation, albeit as part of a compromise with the employers’ federation, the Confederation of British Industry (“CBI”).95
The REC, noting that the TUC are now re-opening this ‘Faustian Pact’ have said that if the Swedish Derogation is abolished, they would seek to re-open all other aspects of the agreement.96 Nevertheless, the crucial difference between the UK and Sweden is that in Sweden workers “still receive equal pay once in post and 90 per cent of normal pay between assignments [but] … in the UK workers have no equal pay rights and are paid half as much as they received in their last assignment, or minimum wage rates, between assignments. Agencies can also cut their hours, so receive as little as one hour of paid work a week.”97 The TUC Complaint alleges that it has evidence that Swedish Derogation contracts are used regularly in the UK, for example in call centres, food production, logistics firms, and parts of manufacturing and the Complaint also seems to be a response to the 15 per cent increase in agency working in the UK since the recession, faster than any other form of employment.98
The Commission’s response to the Complaint is still awaited, but the TUC believes it has evidence that the UK government has failed to provide adequate protection for TAW and that the right to equal pay is being widely flouted, calling for Swedish Derogation contracts to be banned. Around one in six agency workers are now on these contracts, according to a report from the REC.99 Of course, the employers portray these contracts as necessary due to their flexibility but, as the TUC point out, “the reality for many thousands of workers is job insecurity, a lack of basic rights at work and, in the case of many agency workers, pay rates far below that of colleagues who have permanent contracts.”100
95 Davies, The implementation of the Directive on temporary agency work in the UK, ELLJ, 2010, 1 (3), p. 308. 96 Green, A rebuttal of criticisms of agency work, 2015 [online].
97 TUC, TUC lodges complaint against government for failing to give equal pay to agency workers, 02-09-13
[online].
98 Ibid.
99 See REC, AWR Monitor, 2012, p. 5 [online]. 100
TUC, TUC lodges complaint against government for failing to give equal pay to agency workers, 02-09-13 [online].
Page | 24 Accordingly, the question is not so much whether TAW suffer discrimination and inequality, but what are the reasons that the law in the UK allows this discrimination and inequality to remain, and what should be done about it, issues that I examine in Section 3.2 and Chapter 5 respectively, building upon the analysis in Chapter 2. I examine the issue of ‘flexicurity’ raised by the TUC in Section 4.1.
3.2 Employment status, TAW and the conceptual difficulties of applying the principle of equal treatment in English law
Firstly, in seeking to understand the reason for the present position for TAW in the UK, it is important to examine the legal context in which TAW are employed and regulated. Labour law in the UK is derived from three principal sources: common law, domestic legislation and European law. It makes a fundamental distinction between employees, who work under a contract of employment, and independent contractors (or workers), who work under a contract for services. It is important to distinguish the two as an employee enjoys better legal rights than an independent contractor. For example, an employee has statutory protection against unfair dismissal, whereas an independent contractor does not.101
However, rights under the Equality Act 2010102 are notable exceptions, where independent contractors and applicants for jobs, as well as employees, are entitled not to be discriminated against. The Working Time Regulations 1998 apply to all workers who personally perform any work and the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 also apply to workers and not just employees. The TAWD is also applicable to TAW through the AWR.
Accordingly, under English law, it is impossible to draw up a complete list of criteria to be considered when deciding whether a contract is one of employment or one for services.103 Each case must be considered on its own facts, all the more so when TAW are involved. The most significant factor in defining the terms of an employment contract is the degree of
101 Eversheds, EU and International Employment Law, Introduction, 2013 [online].
102 It consolidated and replaced the provisions in the Sex Discrimination Act 1975 (SDA 1975), the Race
Relations Act 1976 (RRA 1976) and the Disability Discrimination Act 1995 (DDA 1995) as well as the Employment Equality (Sexual Orientation) Regulations 2003, the Employment Equality (Religion or Belief) Regulations 2003 and the Employment Equality (Age) Regulations 2006.
103 Maurice Graham Ltd v Brunswick (1974) 16 KIR 158, Div Ct; Warner Holidays Ltd v Secretary of State for Social Services, [1983] ICR 440.
Page | 25 control: the greater the scope for individual judgment on the part of the worker, the more likely he will be an independent contractor or a TAW.104
As Harvey points out, in addition to the many tests for employment status developed by the UK courts, it is usually very relevant to look at the particular terms of the contract in question; for example, a genuine contract for services engaging a TAW would not normally be expected to provide for sick pay or contractual holiday or pension entitlements.105 Many of these factors have traditionally featured heavily in income tax law (where they have tended to be called 'badges of employment'); in the employment law context, they may be seen as consistent with the 'multiple test' adopted in most of the cases.106
Accordingly, the consequences if these “requirements” are not fulfilled will usually be beneficial to the employer. This is because of the inequality of bargaining power in the first instance and, secondly, the inequality of arms when it comes to challenging employers in the courts. There is no legal aid for workers to challenge employers in the employment tribunals; indeed, the Conservative-led coalition introduced fees into the employment tribunal system in 2012, which has reduced access to justice further. Renton and Macey have provided an insightful assessment of the catastrophic impact of these reforms, which significantly reduce the capacity of TAW to seek redress for discrimination.107
In light of the above, it can be safely concluded that under English law there is a key distinction to be made in terms of the consequences when something goes wrong in the employment contract depending on whether you are a worker, a TAW or an employee: you have much less rights as a worker than you do as an employee, and you have even less rights as a TAW than either of these principal categories. Furthermore, by way of example of the unsatisfactory increasing complexity in this area, a new form of employment status came into existence in the UK on 1 September 2013: ‘employee shareholders’. I agree with Prassl’s conclusion108 that, as a result, employment rights have become subject to market forces in
104 Osman & Smith, Harvey on Industrial Relations and Employment Law, Categories of workers, 2013, para 45
[online].
105 Ibid, para 45. 106 Ibid, para 45.
107 Renton & Macey, Justice Deferred, 2013, p. 27-32. 108
Page | 26 negotiation between workers and their employers. It does not seem plausible that a TAW could successfully use an employee shareholder as a comparator.
Accordingly, one of the main causes of inequality for TAW in the UK is, in fact, as Davies points out, “the fundamental problem for all non-standard workers in the UK: the problem of employment status”.109 As Davies observed (and forewarned in advance of the implementation of the AWR), the regulations “are wholly irrelevant to those agency workers who are self-employed (or who are made to seem self-employed) as regards the agency.”110 Merrett agrees, explaining that the issue of employment status is “complex and controversial” and “the difficulty arises because the worker has two separate relationships: one with the agency and the other with the ‘user’ or client.”111
As Merrett further points out, “there is usually no express contractual relationship between the worker and the client”, which means that the putative contractual relationships are very difficult to fit into any of the many tests for employee or worker status and whether a contract exists with an agency or an end user depends on the facts of the particular case.”112 This uncertainty can give rise to injustice and it is instructive to provide a concrete example in Section 3.3 below of an injustice that occurred on an epic scale when TAW in the construction industry were blacklisted for their trade union activities, a major scandal, the consequences of which are still unravelling in the UK courts.
3.3 The Blacklisting of TAW in the construction industry
Blacklisting is the practice of systematically denying individuals employment on the basis of information, accurate or not, held in a database. It was a covert activity of which the Economic League, an organisation founded in the UK in 1919 to combat what its members saw as (communist) subversion and opposition to free enterprise, was accused in the 1980s. The accuracy of the information held by the Economic League and the use to which it was put came under intense scrutiny, and the League was disbanded in 1993.113
109
Davies, The implementation of the Directive on temporary agency work in the UK, ELLJ, 1 (3), p. 330.
110 Ibid, p. 300.
111 Merrett, Employment contracts in private international law, 2011, p. 36.
112 Ibid, p. 37. See also Zappala, Temporary Agency Workers’ Directive, I.L.J., (2003) 32 (4), p. 310–317. 113
Page | 27 Thereafter, an organisation called the Consulting Association (“TCA”) maintained information on individuals and supplied it to companies in the construction industry. TCA grew out of the Services Group, a membership organisation of construction firms, which had had links with the Economic League. TCA was raided by the Information Commissioner's Office and closed down in early 2009.114
Following the raid on TCA by the Information Commissioner's Office, regulations were introduced by the government to strengthen the law against blacklisting. Denial of a job for discriminatory reasons such as trade union membership was made illegal and blacklisting was statutorily prohibited under the Employment Relations Act 1999 (Blacklists) Regulations 2010.115 In the recent blacklisting case of Smith v Carillion (JM) Ltd,116 the problem of employment status and contractual liability for a construction firm that had blacklisted a TAW were in issue (together with related claims for breach of Articles 8 and 11 of the European Convention on Human Rights (“ECHR”)). Although the respondent did not deny that it had blacklisted the appellant, it sought to avoid liability as it had engaged him through an agency. The Court of Appeal found in the respondent’s favour, rejecting the appellant’s argument that a contract should be implied with the end user firm when it had engaged the TAW through an agency, Elias LJ holding that,
“It is also important to bear in mind that it is not against public policy for a contractor to obtain services in this way, even where the purpose is to avoid legal obligations which would otherwise arise were the workers directly employed: James para. 56-61; Tilson paras.10-11. That will frequently but by no means always be the reason why the employer enters into a relationship with an agency. A contract cannot be implied merely because the court disapproves of the employer’s objective.”117
The result of this case was that a TAW who had been blacklisted could not obtain a remedy because it is not possible under English law to imply a contract in such an agency relationship
114 Ibid.
115 For further background on this grave abuse of the human rights of workers by a shadowy conspiracy of
construction multinationals, see Ewing, Ruined Lives, 2009. It should not go unremarked that it took 11 years for the Regulations to be implemented, as they sat idle on the statute books, during which time thousands of workers on the London 2012 Olympic construction sites were checked on the blacklist database. See Smith & Chamberlain Blacklisted, 2015, p. 179-208.
116 [2015] EWCA Civ 209. 117
Page | 28 unless it is “necessary” to do so. It is revealing that even though the Court “disapproves of the employer’s objective”, i.e. the illegal act of blacklisting, it cannot take the interpretative step of implying a contract in an agency relationship. However, such a worker would be found to have a contract under EU law, which has a wider autonomous definition of ‘worker’ and, as shown in Section 5.2, a wider interpretation as to when a contract can be implied.
Indeed, unlike many countries, the formal requirements concerning the employment contract under English law are not usually distinct from other types of contract, even commercial contracts.118 In James v London Borough of Greenwich,119 Mummery LJ had held that a contract of employment could only be implied where “necessary”. The decision in that case was based on the premise that the test should derive from ‘ordinary’ contract law without there being any different principles appropriate to employment cases.120 In ‘ordinary’ (i.e. non-employment) contract cases the leading authority establishing the requirement of necessity is The Aramis121 on which Mummery LJ’s conclusion in James depended.
To understand the persisting deference of the law of contract under English law to commercial considerations, and its impact on TAW, it is helpful to contextualise the economic and commercial environment in which employment contracts are now considered, influenced by neoliberal policies and the so-far unsuccessful attempts within the EU to achieve so-called ‘flexicurity’, a concept to which I turn to in section 4.1 below. Indeed, the ‘liberalisation’ of the UK employment market by EU law to allow for free movement of workers from other EU countries (especially since the 2004 expansion) has been controversial within UK political and legal circles (some of the consequences of which are still being played out in terms of the debate on the referendum on the UK’s membership of the EU and it is now suggested that an opt-out will be sought for the UK regarding the TAWD).122 Accordingly, pertinent issues for TAW which I also consider in this context are the PWD in Section 4.2 and the regulation of so-called ‘gangmasters’ in Section 4.3.
118 The general form of contract may be a detailed document encompassing all eventualities (usually the case for
senior employees) or a short agreement to employ and be employed. It may be oral or in writing.
119
[2008] ICR 302, CA at paras 5-6.
120 See paras 23, 36 and 63. 121 [1989] 1 Lloyd's Rep 213.
122 Wintour, Cameron to include employment law opt-out in EU membership negotiations, the Guardian,
