Who employs the agency worker? Some relief for end-users

The courts continue to grapple with the question: who employs the agency worker? Are they employees of the agency, the end-user, or neither?

In the landmark Court of Appeal (CA) decision of Dacas v Brook Street Bureau (2004), the concept of an implied contract of employment existing between an agency worker and an end-user was explored. In 2006, the CA decision in Cable and Wireless plc v Muscat swung the pendulum further in favour of finding an implied contract of employment with the end-user when an individual had worked under the day-to-day control of the same end-user for a significant period of time. However, 2007 saw several Employment Appeal Tribunal decisions which swung the pendulum back away from the end-user, including the case of James v London Borough of Greenwich.

The CA has now handed down its long-awaited judgment in James v Greenwich. To the relief of end-users, Mrs James' appeal has been rejected by the CA. Simply because an agency worker had worked for the same end-user for several years does not inevitably lead to an implied contract of employment being found. The question is one of necessity: is it necessary to imply a contract of employment to give effect to the business reality of the relationship between the worker and the end-user?

Although not providing a definitive guide, the CA also used the opportunity to comment on the state of authorities and therefore went some way towards answering the question: who employs the temp? Is the agency, the end-user, or no-one at all?

We have put together an analysis of this much-debated topic, as well as suggestions for preventative action.