Agency workers or end user employee?

United Kingdom

In the recent case of Astbury v Gist Limited the Employment Appeal Tribunal ("EAT") has examined the question, raised by the Court of Appeal in Dacas v Brook Street Bureau, whether an express contract for services between a worker and an agency precluded an implied contract of employment between the worker and the end user. It also made recommendations about establishing the appropriate respondents for agency workers making claims. This is a particular issue for agency workers who may have difficulty establishing the necessary employment status with the end user, which makes daily use of his services, or the relevant employment agency.

The EAT has accepted that implied contracts of employment can exist between workers and end users provided that there is a very careful factual assessment before any such conclusion is reached. It also recommended that in situations where there were "triangular relationships," the tribunal may order that any person (i.e. the agency or the end user) who may be liable for the remedy claimed should be made a respondent to the proceedings.

In another recent decision, RNLI v Bushaway, the EAT considered the extent to which it was possible to look behind contractual documentation to establish the true nature of the working relationship. It concluded that tribunals can examine all the relevant circumstances, including the parties' conduct and other arrangements, in determining employment status. Here the use of an agency worker to get round a recruitment freeze was therefore a relevant consideration.

Businesses which use agency workers to provide services now need to review their contractual and practical arrangements so that the employment status of any agency workers is certain. End users who do not have a direct written contract with their agency workers should be aware that, depending on the facts of the working arrangement, they could be deemed to be the employer and joined to any subsequent legal proceedings.