London Underground ‘must pay twice’ to compensate agency workers

London Underground has found itself in the unusual position of having to pay twice to compensate agency workers in a dispute over back pay.

The issue arose following the introduction of the Agency Workers Regulations 2010.

After it came into force on 24 December 2011, workers employed by London Underground through an agency became entitled to the same rates of pay as workers employed directly.

The company failed to provide the correct pay rates to the agency until August 2012. It realised its mistake and paid the arrears. However, the agency did not pass the back pay on to the workers and went into involuntary liquidation in November 2013.

The Employment Tribunal concluded that liability for back payments should be apportioned 50:50 between the company and the agency, but the company was not liable to pay compensation because it had already paid the sums to the agency.

The Court of Appeal has now overturned that decision. It said it was understandable for the employment judge to baulk at the idea that London Underground should have to pay twice.

However, that did not render it just and equitable to deprive the workers of compensation otherwise due. There was no question of any misconduct on their part.

London Underground chose to deal with the agency and it should bear the burden of the agency’s dishonesty. It was ordered to pay 50% of the compensation to which the workers were entitled.

Please contact Sorcha Monaghan if you would like more information about the issues raised in this article or any aspect of employment law.