Ms James was engaged by an agency under a ‘Temporary Worker Agreement’. The agency supplied her services to the London Borough of Greenwich. The agency had a separate agreement with the council for the supply of temporary workers. James’s agreement stated that the terms constituted a “contract of service between [the agency] and the temporary worker” and did not give rise to a contract of employment between them or between the temporary worker and the client.
In 2004, James took a period of sickness absence, and during this time the agency provided the council with an alternative worker. When James sought to return to work, she was invited to attend a meeting at the council. As a result of this meeting, it was decided that James would not undertake any further work for the council.
James then presented a complaint of unfair dismissal against the council.
The employment tribunal and the Employment Appeal Tribunal (EAT) found that James was not the council’s employee and did not, therefore, have statutory protection from unfair dismissal. The EAT set out some useful guidance to assist tribunals with determining when a contract of employment should be implied between an agency worker and the end user:
- Provided the agency arrangements are genuine and the actual relationship is consistent with them, it is not necessary to explain the provision of the worker’s services or the fact of payment to the worker through a contract between the worker and the end user.
- The mere passage of time does not justify the implication of a contract as a matter of necessity.
James appealed to the Court of Appeal, which dismissed her appeal.
Expressly approving the EAT’s guidance, it found that there were no grounds for treating the contracts as anything other than genuine contracts. They fully explained what James did and what the council did. Therefore, it was not necessary to imply the existence of another contract to give business reality to the relationship between the parties. Therefore, James was not an employee of the council.
Implications Employers have been working against a background of considerable uncertainty in this area. In the UK, there have been conflicting court decisions, while in Europe, member states have failed to reach agreement on this issue.
A draft EU directive, which aims to give temporary agency workers equal rights across the EU, has been on the table since 2002. The UK has consistently opposed this, and the last attempt at discussions in December 2007 ended in failure. In the UK, on 22 February, Parliament heard the second reading of a private member’s Bill that aims to give equal treatment to temporary agency workers in the UK.
Although the Bill has little prospect of success, it did get through the second reading stage, and will now be scheduled to be heard at the committee stage. However, for the near future at least, there is likely to be little change in this area, and the decision of the Court of Appeal brings employers some welcome certainty in dealing with agency workers.
By following the EAT’s guidance, employers should now be more confident that, properly engaged, an agency worker will not be deemed to be their employee.
By Susan Fanning, partner, DLA Piper