Hiring agency staff during strike action: reforming regulation
Submission to the Department for Business, Innovation and Skills
Chartered Institute of Personnel and Development (CIPD)
September 2015
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Background
The CIPD is the professional body for HR and people development. The not-for-profit
organisation champions better work and working lives and has been setting the
benchmark for excellence in people and organisation development for more than 100
years. It has 140,000 members across the world, provides thought leadership through
independent research on the world of work, and offers professional training and
accreditation for those working in HR and learning and development.
Our membership base is wide, with 60% of our members working in private sector services
and manufacturing, 33% working in the public sector and 7% in the not-for-profit sector. In
addition, 76% of the FTSE 100 companies have CIPD members at director level.
Public policy at the CIPD draws on our extensive research and thought leadership,
practical advice and guidance, along with the experience and expertise of our diverse
membership, to inform and shape debate, government policy and legislation for the benefit
of employees and employers, to improve best practice in the workplace, to promote high
standards of work and to represent the interests of our members at the highest level.
Our response
Our response reflects discussions at focus group meetings attended by CIPD members in
both London and Manchester, and we have included direct quotations from these
meetings, in order to illustrate our response to certain questions.
General comments
There is nothing in existing legislation to stop employers from recruiting replacement staff,
providing they hire them directly and not through an employment agency, but we have little
evidence that employers take this option. Some public sector employers might be
interested in recruiting temporary agency workers in order to maintain services during
industrial action. However, it seems unlikely that many employment agencies will
welcome getting involved in industrial disputes.
The UK’s influence with its European partners, and respect for its model of labour market
flexibility, might be damaged by this proposal. The International Confederation of Private
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Employment Agencies (Ciett) has agreed a regulatory framework prohibiting the
replacement of striking workers by temporary agency workers. Its code of conduct says
that “private employment agencies shall not make workers available to a user company to
replace workers of that company who are legally on strike, except where such a provision
is prohibited by national or local law”.
An attendee at our focus group in London explained:
“The large European employment agencies don’t want this reform; it will only benefit
‘back street’ agencies. There are other issues as well – for example procurement in
the public sector in the EU – employment agencies couldn’t tender for contracts if
they were engaged in this type of activity because there is an EU-agreed code on
not hiring temps during industrial action.”
Responses to specific questions in the consultation paper
Question 1.
a) How do you think the removal of Regulation 7 would affect employment
businesses?
The impact would be negligible. Most employment businesses are unlikely to want to risk
their reputation by appearing to take sides in an industrial dispute.
b) How do you think the removal of Regulation 7 would affect work-seekers?
The impact will be negligible. Relatively few work-seekers will be interested in taking on
work that might expose them to allegations of strike-breaking.
c) How do you think the removal of Regulation 7 would affect hirers?
The impact will be negligible. The removal of Regulation 7 will not significantly extend the
options available to hirers for replacing striking workers.
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d) How do you think the removal of Regulation 7 would affect employees taking
part in industrial action?
Most employees taking part in industrial action are unlikely to believe that it will influence
their employer’s behaviour or the effectiveness of industrial action.
e) How do you think the removal of Regulation 7 would affect the wider economy
and society?
It may encourage one or two employers to hire agency workers in an attempt to defeat
industrial action, in which case it may have the consequence of prolonging the dispute.
Otherwise, it seems likely to have negligible impact.
Question 2. The Impact Assessment for this consultation assumes that, between
17% and 27% of working days lost due to industrial action will potentially be
covered by temporary agency workers, based on the limit of availability of suitable
temporary agency workers, and the fact that some stoppages involve a large
number of workers on a particular day. Do you think this assumption, as set out in
the impact assessment, is reasonable?
The statement that “between 17% and 27% of working days lost due to industrial action
will potentially be covered by temporary agency workers” is highly misleading. Annex 1 of
the Impact Assessment makes clear that this estimate is a maximum, but includes only a
couple of constraints on the likely impact of removing Regulation 7. The figures, therefore,
would clearly represent a significant over-estimate of this impact. Paragraph 26 of the
consultation paper lists a number of additional factors that will inhibit take-up, which
paragraph 27 then goes on to disregard.
A realistic estimate of impact would need to take full account of a number of factors, not
limited to those listed in paragraph 26:

The ONS statistics for 2014 show that only 0.6% of all working days lost due to
industrial action were in disputes lasting for more than 10 days. More than 90% of
workers involved in industrial action were on strike for only one day. It seems highly
unlikely that many employers would seek to take on a temporary member of staff to
cover for a worker missing for a single day.
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
Only a limited attempt has been made in the Impact Assessment to allow for the
skills mismatch between sectors most likely to be affected by industrial action and
the availability of temporary staff qualified to work in those sectors. The figures on
which the estimates in the Impact Assessment are based do not enable any
meaningful assessment to be made of the suitability of temporary agency workers
to undertake specific tasks in place of striking employees.

In some sectors, including, for example, education, the need to screen recruits and
conduct Disclosure and Barring Service (DBS) checks may rule out the option of
recruiting temps.

The Impact Assessment assumes that the current options for recruiting temporary
labour to provide cover during industrial action are used infrequently, due to the
additional costs and administrative burden of hiring staff directly, or contracting
service providers at short-notice (see question 3). This underlines the limited
appeal to employers of taking on short-term staff – directly or indirectly, from any
source in order to replace striking workers.

How many agency temps are likely to be interested in replacing public sector staff
absent from work due to industrial action? As Annex 1 notes, national one-day
stoppages in public administration and defence, education and health and social
work, accounted for most of the working days lost in these sectors, so the financial
or other benefits for agency temps will often be minimal. Many professional staff,
including in sectors such as education and health, which may be affected by
industrial action, will be reluctant to replace striking fellow-professionals, particularly
if they believe this may inhibit their opportunities for subsequent employment.

The recruitment sector has made major efforts in recent years to emphasise the
responsible and ethical nature of its businesses. Many employment businesses,
particularly the larger ones, will be reluctant to see their name publically associated
with an industrial dispute, and possibly charged with “strike-breaking”.
We were also told at our focus group:
“Most industrial action consists of one day stoppages and agencies would charge a lot
to supply workers for temporary cover for striking workers. The biggest impact of
industrial action comes where there are highly skilled workers, but this reform would
have no real impact here as there may not be suitably qualified people available to fill
the gaps. Also we would need notice if we were going to arrange for temps to go in so
it may not be practical: we would need at least 3 weeks to get temps up to speed”.
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Question 3. The Impact Assessment assumes that the current options for recruiting
temporary labour to provide cover during industrial action are used infrequently,
due to the additional costs and administrative burden of hiring staff directly, or
contracting service providers at short-notice. Do you think this assumption is
reasonable?
The assumption that current options are used only infrequently seems entirely reasonable.
However, the costs and administrative burden of direct recruitment of temporary staff can
only be part of the reason: recruitment of temporary labour via agencies also has financial
and administrative costs. Another factor is employers’ reluctance to exacerbate or prolong
the industrial action. Many of the factors listed in answer to question 2 above will also be
relevant.
The likelihood that some employers will take advantage of the repeal of Regulation 7 is
likely to vary significantly between sectors. For example, in the retail sector, where some
larger employers have close ongoing relationships with employment agencies, it is
possible that they may wish to rely on that relationship, in the event of an industrial
dispute, in order to maintain service levels. Large employers can move their existing
agency workers internally in order to meet temporary requirements. Employers will wish to
take decisions about the possible use of agency temps to offset industrial action in relation
to its likely impact on industrial relations, as well as the longer-term interests of the
business.
Question 4) The Impact Assessment estimates that a quarter of the pool of
temporary agency workers would be available for a placement at short-notice to
provide cover for workers taking industrial action. Do you think this estimate is
reasonable?
It is highly unlikely that the 25% of individuals identifying themselves as agency workers
who were unemployed, inactive or employed but away from their job, or waiting to take up
a new job would all be available for a placement at short notice to replace striking workers.
Clearly, some will be sick, others will be engaged in domestic, voluntary work or other
jobs. Some will simply not be attracted by, or suitable for, the placement on offer.
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