At Work: Human resources - It's the law - Agency workers

Emma Burrows, partner and head of the employment group at Trowers & Hamlins solicitors

If you exercise a large degree of control over agency workers, be aware of the obligations you have.

The vexed question surrounding the employment status of agency workers has caused widespread confusion for some time. Is a worker employed by the employment agency or by the client to which they provide their services?

This issue was considered by the Court of Appeal in the case of Dacas v Brook Street Bureau. In this case there were two agreements in place: a temporary worker agreement between Mrs Dacas and recruitment agency Brook Street, and a contract between Brook Street and Wandsworth Council for the provision of agency staff.

The court established that if an individual has a contract of service in a triangular situation - such as that governing the use of many agency staff - the individual may be contracted with the end-user, the employment agency or with the end-user and the employment agency jointly.

The court identified as crucial "the objective fact and degree of control over the work done by Mrs Dacas" and concluded that the council exercised the relevant control. The council was under an obligation to pay for the work that she did for it and, so far as dismissal was concerned, it was the council that was entitled to take the initiative in bringing Mrs Dacas's work to an end.

The decision in Dacas was followed earlier this year in the case of Cable & Wireless v Mr P Muscat. The case found that, although the agency was responsible for paying Mr Muscat, there was an implied contract of employment between Muscat and Cable & Wireless because the company exercised day-to-day control over him.

As a result of these decisions, employers exercising control over the day-to-day activities of agency workers will need to be aware that an employment relationship may well exist.

Employers will need to keep a careful eye on their contracts with agencies and on the period of time for which they use agency staff in order to avoid any implied contracts arising that would allow workers to bring unfair dismissal claims.

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