With businesses becoming ever more demand-ing in terms of flexibility to cope with an increasingly competitive market, many employers have looked to agencies to supply them with workers to cover periods of absence, short-term projects or for any other reason where flexibility is needed.
Temps themselves often specifically want the flexi-bility so they can determine how and when they work.
However, the precise status of the agent’s employment relationship has often led to problems.
Two well reported cases have given different opinions on this point. Having a look at the reasons why shows why this is an important issue.
We have looked at employment status and the problems involved in getting this wrong in recent features. Bluntly, employers pick up the tab for unfair dismissal claims and not knowing a temp is actually an employee and ending the relationship without following due process means an automatic unfair dismissal.
In a case brought against the Brook Street Bureau, Mrs Dacas was engaged as an agency worker and placed with Wandsworth Council as a cleaner. She worked in that capacity for more than four years.
In 2001, she was allegedly rude to a visitor. Following a complaint by the local authority, Brook Street Bureau dismissed Mrs Dacas. She then claimed unfair dismissal against Brook Street Bureau and the local authority, on the basis that she must have been employed by one of them.
She initially lost her claim but, on appeal, she won on the basis that the written contract between Brook Street Bureau and her was an employment contract.
However, in a further appeal to the Court of Appeal, it was decided that Brook Street Bureau was under no obligation to provide work and Mrs Dacas was under no obligation to accept work.
To use the legal phrase, there was no “mutuality of obligations” – that is, no duty for her to be provided with work, and no duty for her to undertake it so far as the agency was concerned.
Conversely, control over her day-to-day activities had been exercised by the local authority. The Court of Appeal therefore found that the employer had, in fact been Wandsworth Council, given the fact that it had day-to-day control of her activities.
This was not unanimous, however, with one judge disagreeing with the other two.
This case was well reported and sparked a lot of debate in the legal press about whether the decision was the right one from 2004 onwards.
This case contrasts with a ruling from February this year in James v Greenwich London Borough Council, which stated that there is no relationship between the worker and the business that employs them as an agent.
In this case, the Court of Appeal said there was no implied relationship between a local authority and an agency worker where the provision of work by the local authority and the performance of that work by the agency worker was explained by their respective written contracts. Unless the contracts are a sham, then the contracts will be taken as read. In this case, Mrs James had been supplied by an employment agency to carry out work for the local authority. She worked under that arrangement for two years but then changed to a different agency and signed a “temporary worker agreement” with it.
During three years that she worked for the local authority, she was, not surprisingly, subjected to a degree of control over her work and conditions by the authority but she was paid by the agencies on the basis of weekly timesheets completed by her.
She then went off sic to find that when she returned, someone had taken over her job. She claimed unfair dismissal.
She ultimately lost her case against the authority on the basis that she was not its employee.
She only had a written contract with the agency, and the local authority’s only written contractual relationship was also with the agency.
There were no grounds for treating the express contracts as other than genuine contracts.
This is good news for businesses and, to be fair, has to be the right decision. Just as employment contracts and self-employed arrangements will not be interfered with unless they are not representative of the true position, the same rule will apply in the case of agency workers.
On the back of the James’ decision, however, agency workers will be acquiring new rights following recent Government press release that will see temporary and agency workers in the UK receive equal treatment after 12 weeks of engagement. They will be entitled to the same pay as permanent workers, but not to sick pay or pension rights.
With an estimated 1.4 million agency workers in the UK, this is far-reaching legislation indeed.
However, any new law is not likely to be introduced before October 2009. The agreement still has to be rubberstamped by European employment ministers before being subject to further scrutiny by the European Parliament in the autumn. It will be interesting to see the details and assess precisely how much protection is afforded in due course.