Articles
Agency Workers - Another Nail in the Coffin?
The Court of Appeal has now handed down its judgement in the case of Tilson v Alstom Transport, which is a further "nail in the coffin" for agency workers claiming the same statutory rights and protections as employees.
It was previously thought that a high degree of integration on the part of an agency worker in the business retaining their services indicated an employment rather than an agency relationship. Tilson turns that notion on its head.
The Claimant alleged that he was an employee because he was fully integrated as a Manager in the business. He reported to a Line Manager and had employees reporting to him. He worked regularly, Monday to Friday each week, and was authorised to recruit full time permanent employees. He was responsible for business and operational aspects and authorised to discipline and dismiss permanent employees. He signed timesheets for permanent employees, ordered materials and even represented Alstom Transport in contractual negotiations. He was supplied with a company phone, computer and network access and had to apply to his Line Manager before taking annual leave. He was also given full access to the company's confidential technical information and operational reports. Neither was he at liberty not to turn up to work or to submit a substitute to replace himself.
Mr Tilson, not unreasonably, believed that his working pattern and responsibilities displayed the characteristics of an employment relationship. He was fully integrated into the organisation and subject to control in the way in which he performed his duties and there appeared to be mutuality of obligation. These are the key tests and characteristics of employment.
In an interesting and significant decision Lord Justice Elias found that Mr Tilson was an agency worker and not an employee.This reversed the previous finding of the Employment Tribunal that Mr Tilson was an employee. The judge said that it was "not enough to form the view that because the Claimant looked like an employee of the Trust, acted like an employee and was treated as an employee, the business reality is that he was an employee and the ET must therefore imply a contract of employment".
The judge also commented that it was not legitimate for a Tribunal to imply that there was a contract of employment merely because the Tribunal objected to the practice of employers entering into agency arrangements to avoid incurring statutory obligations that they would otherwise owe to employees. The judge therefore reaffirmed the primacy of contract over the traditional test of control and mutuality of obligation used to establish whether or not an individual is an employee.
It is possible that this case may turn on its specific facts. Mr Tilson specifically requested an agency arrangement rather than a contract of employment because he was on a significantly higher rate of pay under the agency arrangements than he would have received as an employee. Nevertheless, the decision in entirely consistent with other recent decisions in this area which show that the Courts are increasingly reluctant to imply an employment relationship where there are clear contractual arrangements in place which indicate an agency contract.
The practical lesson for employers is that when agency workers are used ensure that there is a clear agency contract in place specifying that the relationship in an agency one and not a contract of employment. Then, and as long as the parties act consistently and in accordance with the terms of the contract, an agency worker should find it difficult to argue that they were an employee.
For more information on the above or for advice on any other employment issue please contact our employment department on 020 7354 3000 or e-mail employment@colmancoyle.com
Author Profile: David Malamatenios
Date: December 2010