Eric Muschett signed a contract with the Brook Street agency on 15 January 2007. From 22 January 2007 until 10 May 2007, he was supplied to HM Prison Service (HMPS) to work as a cleaner at Feltham Young Offenders Unit. When HMPS terminated his assignment, Muschett brought employment tribunal claims for unfair dismissal, wrongful dismissal, and sex, racial and religious discrimination against both Brook Street and HMPS.
The tribunal dismissed his claims against HMPS at a pre-hearing review on the basis he was neither an employee of HMPS as defined in s.230 Employment Rights Act 1996 (ERA), nor in the ’employment’ of HMPS in the wider sense under the Sex Discrimination Act 1975 (SDA) or Race Relations Act 1976 (RRA), nor was he a ‘contract worker’ under the relevant discrimination legislation.
Muschett appealed to the Employment Appeal Tribunal (EAT) and subsequently to the Court of Appeal.
Under section 230 ERA, an employee is defined as someone working under a contract of employment, which means a contract of service or apprenticeship.
Under s.78(1) RRA (and other discrimination legislation), ’employment’ means employment under a contract of service or a contract personally to execute any work or labour.
Under section 7 RRA (and similar provisions in other discrimination legislation), a ‘contract worker’ is someone who works for a principal, but who is employed not by the principal but by another person, who supplies them under a contract made with the principal.
The tribunal found Muschett had no written contract with HMPS, and that he worked in accordance with a contract for services for temporary workers between him and Brook Street. He had undergone a CRB check and induction process before working for HMPS, and was supplied with a copy of the staff handbook. While he was under HMPS’s control when carrying out his work and required to carry it out personally, he was paid by Brook Street and he had no contractual obligation to provide services personally to HMPS.
The tribunal judge held there was no mutuality of obligation between HMPS and Muschett, and therefore no contract of employment. In the absence of mutuality of obligation, the tribunal judge also held there was no contract personally to do any work. Muschett was not a ‘contract worker’, as he had no contract of employment with Brook Street. Accordingly, all his claims failed.
The Court of Appeal held there was no basis on which to question the tribunal’s finding that Muschett was not an employee of HMPS. The Court of Appeal also held there was no implied contract for services between Muschett and HMPS. There was nothing in the evidence that necessitated the implication of such an agreement, and, following James v Greenwich BC, only necessity will do.
In many cases, agency workers will be able to bring discrimination claims on the basis they have a contract of employment with the employment agency and consequently fall under the ‘contract worker’ provisions.
However, there is no doubt that this case does significantly reduce the ability of agency workers to bring discrimination claims. It would potentially be open to employers to insist that agencies only supply workers who are not employed by the agency, to avoid the risk of discrimination claims.
In addition, this case further reinforces the position following James v Greenwich BC, that where there is a valid tripartite contractual relationship between agency, worker and end-user, the courts will rarely imply a contract (whether of service or to provide services personally) between the worker and end-user.
Susan Fanning, employment partner, DLA Piper