Even if the company is not the employer, potential liabilitie can remain
when taking on staff through an employment agency
Companies using agency staff may have a nagging fear that one of the agency
workers will, one day, claim they are employed by the company. Esso Petroleum v
(1) Jarvis and (2) Brentvine, 2002, All ER (D) 112 (Jan) is the latest case to
try this argument.
After interviewing Ms Jarvis, Esso selected her to be supplied to it by an
agency, Brentvine. Brentvine sent Jarvis a note engaging her under what was
expressed to be a contract for services, rather than a contract of employment.
This could be renewed, as required but, otherwise, there was little if any
contact between Jarvis and Brentvine.
Jarvis was required to sign various policies by Esso and had induction and
other training. She did the same work alongside Esso employees and was under
the day-to-day control of Esso and asked Esso for any time off.
She also negotiated her pay directly with Esso and although disciplinary
hearings were organised by Brentvine, Esso could remove the entry pass from any
agency worker to prevent them coming to work.
Jarvis was the local safety representative and organised team social events.
She worked for Esso for nine years.
On the basis of this, the Employment Tribunal concluded that Jarvis was
employed by Esso. In the EAT, Esso argued that it was impossible to reach this
conclusion simply because there was no contract of any kind between Jarvis and
Esso and, if there is no contract, there cannot be a contract of employment.
The EAT agreed and decided that despite the long integration of Jarvis into Esso’s
workplace, she was not employed by Esso.
The EAT commented on the case of Motorola v (1) Davidson and (2) Melville
Craig Group, 2001, IRLR 4, in which the EAT alarmed companies by finding that
an agency worker was employed by Motorola on the grounds that the company had
effective control over the worker.
However, this was a one-off decision because the only question the EAT had
been asked to consider was whether Motorola had sufficient control over an
agency worker to be considered his employer. The question of whether there was
a contract between Motorola and the worker was not looked at.
If companies do not want to find themselves employing agency staff, they
should, as a minimum, not issue them with anything that could be construed as a
contract and should check the agency is giving the worker some written
contractual document, even if it is a contract for services.
A company could indirectly find itself liable for claims related to
employment rights if it agreed to indemnify the agency in the small print of
the agency’s contract with the company. But the company will want an indemnity
from the agency in respect to any of the agency’s actions that could result in
a claim against the company. Even when it is not employing them, the company
could face liability for claims from agency workers of sex, race or disability
discrimination. The company could be liable for contravention by the agency of
the Part-Time Workers Regulations.
Depending on the details of the arrangement, the company could also be in the
firing line for non-compliance with the Working Time Regulations and the
National Minimum Wage Act.
Companies should also watch out for the Temporary Workers Directive,
presently at draft stage, which proposes temporary agency workers should have
at least as favourable treatment as comparable workers at the company.
– A worker cannot be an employee of the company unless there is a contract
between the worker and the company
– Contracts can be implied so ensure there is a written contract between the
agency and worker
– Agency workers can sue companies in respect of many ’employment rights’
By Jill Kelly, an associate at Clarks Employment Law Team, Reading