Facts
Ms James had been working for Greenwich Council since 2001, providing her services through a series of temp agencies. During this time, she did not enter into any written contract with Greenwich Council, and was not entitled to sickness or holiday benefits. She did, however, sign a contract with the temp agency, which described her as a self-employed worker.
In 2004 this arrangement with the council came to an end, and James initiated proceedings for unfair dismissal. She relied on the Court of Appeal decision in Dacas v Brook Street Bureau (UK) Ltd [2004] IRLR 358 to argue that the extensive period of her engagement meant she should have the same status as other council employees.
The tribunal disagreed. It concluded that the agency was free to substitute James with another agency worker at any time, and that there was no obligation on James to provide services to Greenwich, or on the council to provide James with work. In the absence of any mutuality of obligation, the tribunal held there could be no implied contract.
Decision
The Employment Appeal Tribunal (EAT) upheld the tribunal’s decision, and proceeded to provide some useful insights into how a tribunal should approach the question of implying a contract between an agency worker and an end-user.
It observed that where the agency relationship is genuine, which is likely to be the case where no pre-existing relationship exists between the worker and the client, the tribunal should rarely find sufficient evidence to imply a contract of employment. If such a contract is inferred, there would need to be some words or conduct to indicate that the relationship was no longer consistent with an agency arrangement.
The EAT also concluded that the mere passage of time would not typically justify the implication of a contract. Where there is a pre-existing contractual arrangement and the agency is merely acting as an agent for the purposes of paying wages to the temp, it believed the tribunal would be entitled to conclude that these arrangements were a sham, and that the original contract was never brought to an end.
Key implications
This decision is welcome news for employers. It means that temp workers employed through agencies will usually find it extremely difficult to establish unfair dismissal protection when their placement ends, regardless of its duration.
Tribunals will look carefully at the written contracts in place between the parties, and will usually imply an employment contract with an end-user only where other circumstances are inconsistent with an agency arrangement. Employers must, however, act with caution. The Temporary and Agency Workers (Prevention of Less Favourable Treatment) Bill receives its second reading on 2 March and, while this is a Private Member’s Bill, it could still increase pressure on the government to improve the position of temps.
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Michael McCartney is an assistant solicitor in Lovells’ Employment Group
