Employment Law Alert - June 2008: Agency workers
If your organisation makes use of AGENCY staff, then you will want to factor recent legal developments into your human resource planning and policies for the future. A mix of case law and statutory developments – at UK and EU level – have combined to ensure that this major aspect of workforce planning remains a challenging one for HR, Recruitment and Line Managers.
One of the main reasons for engaging staff through agencies is to avoid the need to “employ” the staff supplied by the agency. So, employers should always take care not to treat agency staff as “employees”, otherwise they may find that the law will also treat them as “employees” at the most inconvenient and costly of times – namely when you no longer need the services of those particular workers.
The perspective [and objective] of the agency worker, will be a little different. He or she may be very happy with the freedom to move from company to company without the constraints normally placed upon “employees” – but when the work dries up and the services are dispensed with, there may be a sudden desire to identify an “employer” – either the end-user or the supplying agency - so that advantage can be taken of employment rights, specifically the right not to be dismissed unfairly and the monetary compensation which may attach thereto.
Attempts to clarify the position, at law, of agency workers, have led to a string of cases which have for the most part left employers disadvantaged and everybody confused. So the recent Court of Appeal decision in James v London Borough of Greenwich has been welcomed as making the law clearer and tilting the balance in favour of employers. The Court of Appeal held that there was no express contract of employment between James and Greenwich Council and there were insufficient grounds for claiming that an employment contract could or should be implied. So, no contract, no basis for a claim for unfair dismissal. The leading Appeal Court Judge said that it was the job of the courts and tribunals to interpret the law as it stands – not to re-write it as they would like it to be. He conceded that there may be social and economic arguments in favour of changing the law on agency staff – but that was a job for Parliament, not the Courts.
In trying to establish a contractual employment relationship, agency workers will normally focus on the end-user. But occasionally they will seek to show that an employment contract exists with the agency itself. The Employment Appeals Tribunal accepted that such a relationship existed in the case of Consistent Group v Kalwak. On the facts of this particular case, the Tribunal concluded that the degree of control exercised by the agency was such that an employment relationship existed, in spite of wording to the contrary [“self-employed contractors”] in the arrangements for the supply of Polish workers, whereby the agency provided work, accommodation and transport. However, this decision has recently been overturned on appeal to the Court of Appeal, which has sent the case back for a re-hearing.
This may all sound like good news for employers – but the judge’s invitation in the James case for Parliament to address the issue of agency staff has not gone unheeded. And the EU has, for a long time, had a major problem with the UK’s love affair with agency staff – and the flexibility these staff offer to UK employers. The TUC had sided with the EU and the CBI had backed the Government’s desire to keep the issue firmly in the long grass, where it had been long since kicked. But everything has its price, and the Government’s price for agreeing to do something about agency workers’ rights appears to be the EU’s agreement to the UK keeping its Working Time Directive opt-out, at least for the foreseeable future. There will be a review of the opt-out in the next eight years. A deal has been done. The plan is to give agency workers the same rights as ‘employees’ after 12 weeks. The UK will preserve labour market flexibility on working time but will lose it, to a considerable extent, on agency staff. The detail on this will be important – and we shall report more in a future issue of ‘Employment Law Alert`.
Paul Secher
Managing Director
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JSB is running a half-day workshop in London on 26 June providing a complete update on legal developments concerning Agency Workers. “Avoiding Implied Contracts with Agency Staff” is led by leading employment lawyer, Michael Bradshaw of Charles Russell LLP. For full details, telephone 020 8371 7010.
