Agency Staff
Do you hire staff from an agency? Many local businesses do this and assume that those people are employees of the agency, not their own company. However the Court of Appeal has held that an agency worker was not employed by the employment agency that supplied him with work but with the company for whom he did the work.
Paul Seath, an Associate in our Employment Department says:
“In Bunce v Potsworth Ltd (t/a Skyblue) the Court of Appeal considered whether Mr Bunce was an employee and therefore able to bring a claim for unfair dismissal. Mr Bunce had brought his claim against the employment agency (Skyblue) that provided him with work on a regular basis, mainly for a rail company but also for other companies.”
In the Court of Appeal, Mr Bunce argued that he was an employee of the agency because he had an overall “umbrella” agreement with them. He also said that each time he was sent on an assignment, a further contract between him and the agency existed. Although the Court of Appeal did not accept Mr Bunce’s arguments worked in his case, the Court did say that such contractual arrangements could exist. However, this was not the main point. Even if there was such a contract, it may not be an employment contract.
When looking at this issue, the Court emphasised that day-to-day control over what the worker does and how he does it is the key factor. The Court said it was clear that the end-user had such power and control. This is a worrying point for clients of employment agencies. This is the same test the tax authorities have always used – control. With your employees you tell them where and when to work and they cannot send an alternative person in to do the work. A self employed plumber, for example and by contrast, decides on which days and times he works (so controls that aspect which an employee would not) and could send another of his employees to do the work instead, whereas employees are obliged to provide their services personally and cannot delegate.
We can advise you on how to protect yourself. You could include an indemnity in your written contract with the employment agency for example, that they will pay all employment costs etc arising from any decision that the person in question is later deemed to be your employee”.
For further information contact Paul Seath on 0117 9290451 or e-mail pseath@metcalfes.co.uk
This press release summarises the law on issues which we believe may be of interest to your business. It is not a comprehensive review of the subjects and accordingly is published without responsibility for loss occasioned to any person(s) acting or refraining from action as a result of information published