UK: Collective bargaining – no obligation on ‘de facto’ employer; risks of direct negotiation with employees

In Independent Workers Union of Great Britain v University of London the Central Arbitration Committee has decided that a union representing employees of an outsourcing company was not entitled to collectively bargain directly with the university to whom their services were supplied. This was so even if the university “substantially determined” the workers’ terms: recognition can only be sought from an employer in respect of its ‘workers’ and to be ‘workers’ individuals must have a contract with the employer. There was no contract here between the university and the individuals (and indeed their employer already recognised a different union for collective bargaining on their behalf). The CAC did not rule on the union’s argument that this is incompatible with Article 11 of the European Convention on Human Rights, as it has no power to make a declaration to that effect.

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Updated HSF multi-jurisdictional guide to employee issues in business transfers

Employment law issues rarely determine the strategy for a multi-jurisdictional business acquisition, but they can certainly give rise to significant avoidable costs and delay if issues are not spotted in advance. In the Herbert Smith Freehills 2016 global survey, 57% of respondents cited employment regulations as one of the reasons a deal had failed to complete. The temptation may be to assume that employee issues will be broadly similar in each country, but in practice employment law varies significantly from jurisdiction to jurisdiction and it is not even safe to assume that a particular continent will have a broadly similar approach.

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Thailand: Outsourced workers’ protection

Sub-contracting arrangements have often been favoured by business operators in Thailand to address fluctuating workforce needs and reduce labour costs. In 2008, following a string of complaints by outsourced workers alleging exploitation at the hands of business operators, a new section 11/1 was introduced into the Labour Protection Act B.E. 2541 (LPA) to clarify the rights of outsourced workers and the responsibility of business operators. The purpose of the 2008 amendment was to provide clarity for outsourced workers and business operators alike.

However, it generated further questions in respect of the scope of business operators' responsibilities to outsourced workers. Despite an interpretative Thai Supreme Court decision in 2012 on section 11/1, business operators using outsourced workers continue to operate in an uncertain environment, without clear guidance on how to comply with their section 11/1 obligations. Continue reading

Indonesia: Update on outsourcing

In our April e-bulletin, we provided an update on recent regulatory developments in Indonesia that limit outsourcing by companies by restricting the occupations in which outsourcing may be implemented. Here we consider how Ministry of Manpower Regulation 19 of 2012 (Regulation 19) restricts companies outsourcing and subcontracting parts of their activities. Continue reading

UK: TUPE – Government plans for reform and the impact on outsourcings

One of the key issues on any outsourcing is what happens to the employees involved in the service.  The answer will be determined largely by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).  Government plans to reform TUPE were announced in early September 2013 and, although not as significant for outsourcing as originally envisaged, make material improvements for contractors.  New regulations are expected to be laid before Parliament in December 2013 and in force from January 2014 subject to transitional provisions.  Continue reading

Case law developments on outsourcing and contract labour in Indonesia and Korea

The ability to use atypical workers through outsourcing or labour hire as a device for employers to avoid employment costs and liabilities is becoming more limited in Asia through increased regulation and also through case law developments.

In Indonesia, outsourcing has been restricted by the Constitutional Court declaring the use of fixed term employment agreements by outsourcing providers as unconstitutional unless workers employment rights are guaranteed upon a change of service provider. The Korean Supreme Court has recently held that the common practice of ‘in-house sub-contracting’ was not a lawful means of avoiding employees’ entitlements to employment protection under Korean law.

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