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8th March 2007

AGENCY AID

James v Greenwich Council

Over the years, the courts have agonized about who is – and is not - an agency worker. 

The issue seemed to have been resolved by the Court of Appeal in Muscat v Cable & Wireless (relying on Dacas v Brook Street Bureau, LELR 88). But an Employment Appeal Tribunal (EAT) has said in James v Greenwich Council (IDS 822) that tribunals cannot rely on “the mere passage of time” to justify finding a contract between a worker and an end user.

Basic facts

Ms James had worked full time for the council until 1997, but following a break she went back as an agency worker in September 2001. In 2003 she changed agencies to get a higher rate of pay.

Her new Temporary Worker Agreement stated that she was a self-employed worker in relation to each assignment. It also stated that the provisions did not give rise to a contract of employment between Ms James and the agency; nor between Ms James and the council.

When she returned to work after being off sick in August and September 2004, she was told she was no longer needed as the agency had sent a replacement. She claimed unfair dismissal, arguing that, as in Dacas, she had an implied contract with the council as she had worked for them for more than a year.

Tribunal decision

Relying on Dacas the tribunal said it had to “consider whether there could be an implied contract operating between Ms James and the Council.” It decided it could not do so in this case because there was no obligation on either party to either provide work or to accept it.

This was because the council did not pay her (this was down to the agency which also deducted tax and national insurance), nor did it provide her with any benefits such as sick or holiday pay. She was not subject to the council’s disciplinary and grievance procedure, and when she was off sick, she did not have to tell the council, as the agency provided them with another worker. And even though she had to work to the council’s rota, she was still not under their control.

She was not therefore a council employee and could not claim unfair dismissal.

EAT decision

And the EAT agreed with the tribunal that there were no facts on which to imply a contract of employment between Ms James and the council. Although Dacas indicated that there might be circumstances which could justify the inference of an implied contract, the EAT emphasized that “the mere passage of time is not sufficient to require any such implication”.

The EAT then went on to provide tribunals with guidance about when to imply contracts between a worker and the end user:

• Tribunals should not focus on the issue of mutuality of obligation when trying to decide if there was an implied contract. This was really only useful in cases concerning casual workers
• Tribunals should focus not just on whether the end user is paying the wages, but on whether they can insist which worker the agency provides
• Tribunals should only imply contracts in situations where there is evidence entitling them to do so. When the arrangements between the parties were clearly genuine and reflected the actual relationship between them, that was not likely to happen very often
• If a tribunal thought it should infer such a contract, then it had to be able to point to “some words or conduct” to show that the worker was working “not pursuant to the agency arrangements but because of mutual obligations binding worker and end user which are incompatible with those arrangements.”
• The mere passage of time did not justify the implication of a contract and the judge’s analysis in Dacas was therefore wrong on that point

Although the EAT recognized that agency workers were vulnerable and needed protection, it said that common law could only “tinker with the problems on the margins”. Instead “a careful analysis of both the problems and the solutions, with legislative protection where necessary, is urgently required.”

Comment

Despite the EAT’s comments in this case, it is still bound by Muscat (as are the employment tribunals). It is clear that the judiciary are in total disarray on this issue and so cases should be handled on an individual basis until legislation clarifies the position.