Employers are being warned to take more care over the way they treat
temporary staff following a court ruling that direct dealings over time could
give temps an implied employment contract and therefore full employee rights.
The Court of Appeal ruling in Franks v (1) Reuters Limited (2) First Resort
Employment Limited could expose firms to employment claims from temps, and
possibly also from contractors working through personal service companies.
Franks worked for several years at Reuters as a temp driver and helpdesk
operator. When his assignment ended, he claimed unfair dismissal, redundancy
pay and breach of contract against Reuters.
The Court of Appeal said it was possible he could have a claim if, on
consideration of all the relevant evidence (including what was said and done,
as well as any relevant documents), there was an implied contract between
Franks and Reuters.
It said relevant factors could be that Franks had been allowed to stay
working in the same place for several years, during which time he was
redeployed, and effectively treated as a member of the end-user’s workforce.
"Therefore dealings between parties over a period of years, as distinct
from the weeks or months typical of temporary or casual work, are capable of
generating an implied contractual relationship," said Kevin Barrows,
partner at Tarlo Lyons.
To avoid a similar situation, Barrow advised: "Channel all dealings
with contractors through the staffing company. Do not move temps and
contractors from job to job within your organisation, and do not allow them
access to general employee benefits, do not, for example, fill in their
mortgage application forms."