When is an agency worker an employee? ‘Who knows’! seems to be the current answer! The most recent case on this point of James v Greenwich Borough Council was reported on 5 February 2008. The case was widely expected to resolve the conflicting authorities on whether and when agency workers became employees of an end user. A large number of tribunal cases had been stayed pending the decision pursuant to the President’s Practice Direction of November 2007. Unfortunately, the Court of Appeal has not grappled with what many believe to be conflicting authority. Instead, it has asserted that no conflict exists and that all the authorities point in the same way. The correct approach, accordingly to the Court is for an Employment Tribunal to decide – as a question of fact – whether it is necessary to imply a contractual relationship between agency workers and end users.
The facts of that case were that Mrs James had worked full time for the Council and then ceased working for a short while. She subsequently returned to working at the Council through an outside agency. There was no direct contract between her and the Council but she did sign a Temporary Workers Agreement with an agency. The agency via this agreement, attempted to establish a ‘contract for services’ rather than an employment contract. This wording was reflected also in the agreement signed by the agency and the Council. The agency was responsible for the payment of the worker’s salary and any National Insurance or Tax.
The Tribunal found as a matter of fact that certain normal Council procedures, such as disciplinary and grievance procedures did not apply to Mrs James. In addition she was not paid any holiday or sick pay. Any arrangements in this respect were made by the agency. The relationship came to an end when she had a period of absence and on her return she was told that another worker from the agency had replaced her.
The Tribunal found there was no implied employment contract with the Council and this decision was upheld by the Employment Appeal Tribunal.
The case gives some relief to businesses who regularly use agency workers but it is crucial that there is a clear understanding of the workers position at the outset. Employers need to ensure that the agency has created an effective relationship with the worker and that their own agreement with the agency does not give any contractual obligations to the worker. The agency should be responsible for payment arrangements and preferably any formal disciplinary action. Employers must ensure they do not act in any way that would, over a period of time, change the relationship and so give rise to the creation of an implied contractual term.
If you have any concerns about agency workers, please contact the
Employment Team at Follett Stock on 01872 241700.
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