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Business Update

Statement made on 23 June 2022

Statement UIN HCWS137


Government will shortly lay before Parliament two Statutory Instruments: the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022, and the Liability of Trade Unions in Proceedings in Tort (Increase of Limits on Damages) Order 2022.

Removal of regulation 7 of the Conduct Regulations 2003

The recruitment sector is regulated by the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (“the Conduct Regulations”). Regulation 7 of the Conduct Regulations makes it a criminal offence for an employment business to knowingly (or having reasonably grounds for knowing) provide temporary workers to an employer to perform the duties of workers taking part in an official strike or other industrial action.

Repealing these burdensome legal restrictions, will give businesses impacted by strike action the freedom to tap into the services of employment businesses who can provide skilled, temporary agency staff at short notice to temporarily cover essential roles for the duration of the strikes.

We believe the changes we are making will help mitigate the impact of future strikes, such as those seen on our railways this week, by allowing trained, temporary workers to carry out crucial roles to keep trains moving. The change in law, which will apply across all sectors, is designed to minimise the negative and unfair impact of strikes on the British public by ensuring that businesses and services can continue operating. For example, strikes in public services such as education can often mean parents have to stay at home with their children rather than go to work, or rail sector strikes stopping commuters getting to work or to other businesses.

It should be noted that removing this regulation does not put in place any new barriers on an individual’s right to take part in lawful industrial action. Employment Businesses will not be required to supply agency workers to businesses, rather the change that we are making simply provides the freedom to do so should they wish to. Similarly, a key part of our protections for agency workers is that they cannot be compelled to take on assignments and removing this regulation does not alter existing health and safety requirements.

Increase to the damages cap for unlawful strikes

When they are considering legal claims against unions which organise or authorise unlawful strikes, employers may decide to bring a claim for damages against the union. The Trade Union and Labour Relations (Consolidation) Act 1992 sets the upper limits to the damages that can be awarded based on the size of the union that organised the unlawful strike action. The levels of damages have not been reviewed since 1982 and are significantly out of date.

Increases the existing caps for damages awarded against trade unions for organising unlawful strike action in line with inflation, using the Retail Price Index (RPI) as the measure of inflation.

Unions who comply with the statutory balloting framework and wider trade union legislation will be unaffected by this change. This statutory instrument does not affect the right to strike. So long as unions follow the law, they will continue to be protected from damages claims as they are now. The Government is simply increasing the damages caps for unlawful strike action to broadly the levels they would have been at, had they been updated regularly since 1982.

Linked statements

This statement has also been made in the House of Lords

Department for Business, Energy and Industrial Strategy
Business Update
Lord Callanan
Parliamentary Under Secretary of State (Minister for Business, Energy and Corporate Responsibility)
Conservative, Life peer
Statement made 27 June 2022