Fifteen further education colleges in the West Midlands have admitted breaking the law over part-time lecturers' rights and have backed off from a costly legal battle.
The University of Central England, however, is likely to continue the dispute.
The decision has national implications because there are some 100,000 part-time lecturers in new universities and further education.
It followed industrial tribunal cases lodged by Natfhe, the university and college lecturers' union, against the 15 colleges plus the university and an adult education institution.
Natfhe alleged they had failed to comply with section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 in respect of some 3,000 hourly paid lecturers who were dismissed this summer without any consultation with the recognised trade union.
Handsworth College estimated that protective awards, that is, money paid in lieu of salaries lost, for its 200 part-timers would have cost more than Pounds 250,000, which it proposed to find through more redundancies.
The Colleges Employers Forum initially responded with threats of dismissing current part-time employees but has now agreed that each college should make a declaration that it had failed to comply with the Act.
It has also agreed to set up a joint working party with the union to review part-timers' terms and conditions of employment as well as to agree procedures on compliance with the law.
Paul Mackney, Natfhe's regional official for the West Midlands, said: "We hope that the working party will put an end to the disgraceful exploitation of this group of staff who between them teach 20 to 50 per cent of all courses, yet are treated as if they have no employment rights."
UCE's solicitors say it has no case to answer because at the time, Natfhe was not the recognised union in respect of hourly-paid lecturers.
The union says it can find no record of having been derecognised at any stage. Because the staff in question were employed on fixed-term contracts of less than three months duration, section 188 did not apply.
The university also denies it is an "emanation of the state", and claims that this makes the European directive on collective redundancies unenforceable.