Employers have been warned they are vulnerable to unfair dismissal and redundancy claims from temporary workers following a landmark Court of Appeal ruling.
In Franks v Reuters, the Court of Appeal allowed an agency worker's complaints of unfair dismissal and redundancy against Reuters to be reheard by an employment tribunal.
The decision was made even though Franks was given the placement and paid by an employment agency for the five years he worked at the global communications business.
Jonathan Chamberlain, a partner at law firm Wragge and Co, said the ruling should act as a wake-up call for employers.
"The ruling means agency workers can be regarded by the courts as employees and employers have to be careful to stop this happening," he said.
Chamberlain warned that the ruling demonstrates the tendency of the courts to examine the nature of the employment relationship between temporary workers, their agencies and employers to determine which is regarded as the employer in the eyes of the law.
The lead adviser on public policy at the Chartered Institute of Personnel and Development, Diana Sinclair agreed that employers should be careful about how they manage their temporary workers.
"This is a grey area of law and needs clarification," she said.
Martin Hinchliffe, HR director at Welcome Break, said in light of the decision he would monitor his firm's use of agency staff.
Employment experts agree that the ruling, together with the forthcoming agency workers directive giving temporary workers the right to the same pay and conditions as permanent staff, means agency staff will have much greater employment rights.
A DTI spokesman said the Government is considering the rights of agency staff as part of its review of employment status.
By Ben Willmott
What HR needs to know
Employers will be vulnerable to claims by agency staff if:
- they wear the company uniform
- they are integrated into the appraisal system
- the employer relies on a particular agency worker