Court rules that agency workers can be employees of receiving organisation

An agency worker can legally be defined as the employee of the organisation to which they have been supplied, according to a landmark legal ruling.

In its judgment, handed down yesterday in the case of Cable and Wireless v Muscat, the Court of Appeal ruled that Muscat was an employee of the communications firm under an implied, unwritten employment contract.

The ruling robustly supported the statements and guidance made in a previous ruling in 2004, in the case of Dacas v Brook Street Bureau.

Adrian Marlowe, managing director of employment law advisory firm Lawspeed, said: “The unambiguous and powerful judgment makes the position very clear and will have considerable ramifications for employers using both direct staff engaged on contracts for services and agency workers.

“Some hirers may now question the entire concept of agency supply, which has historically protected them against employment claims. As things stand unless the government legislates to change the position, every employer must take heed and take suitable steps to protect against claims being made,” he added.

But law firm Halliwells said that whilst this result will strengthen the rights of temporary workers, it will certainly not be applied to all cases.

Guy Guinan, employment partner said: “The Cable & Wireless decision does not mean that every agency worker will now be the employee of the end user. Mr Muscat was found to be an employee of the company because of the facts of the case.

“The challenge to the earlier Dacas case precedent was not accepted. The Court of Appeal confirmed that the guidance given was not binding but was appropriate to consider. A contract of employment could be implied in some cases with an end user taking into account all the circumstances.

“However it considered that in many cases a worker in a triangular relationship will be found not to be an employee of the end user. The particular facts of Muscat are unlikely to be repeated in the average case dealing with genuine agency workers, so employers need not be overly concerned with this result.”



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