James v London Borough of Greenwich [2008] EWCA Civ 35 CA

employment status | agency worker

The Court of Appeal has held that employment tribunals should imply a contract of employment between an agency worker and an end user only on the grounds of necessity.

Ms James was supplied by an agency to carry out work for Greenwich Council. Following a period of absence, a replacement was appointed and she brought a claim for unfair dismissal. She had to be employed under a contract of employment to be eligible to bring the claim.

She had no express contract with the council but contended that there was an implied contract, given in particular that she had worked for the council for several years and had been treated in all respects like other permanent employees.

An employment tribunal found that there was no basis for implying that a contract of employment existed. The Employment Appeal Tribunal (EAT) agreed. It said that, although there are cases when a contract of employment can be implied between the agency worker and the end user (Dacas v Brook Street Bureau (UK) Ltd [2004] IRLR 358 CA and Cable & Wireless plc v Muscat [2006] IRLR 354 CA), these would be rare. The mere passage of time does not necessarily mean that a contract of employment should be implied. The question is whether or not it is necessary to imply a contract between the agency worker and the end user in order to give business reality to the arrangement.

The Court of Appeal agreed with the EAT approach and expressly approved of its guidance. The issue must be decided in accordance with common law principles of implied contract and, in some very extreme cases, by exposing sham arrangements. The recent authorities do not entitle all agency workers to argue successfully that they should be treated as employees in disguise. A wide spectrum of factual situations can arise and labels are not a substitute for legal analysis of the evidence.

The Court of Appeal went on to say that it was fully aware of the controversy about the absence of job protection for agency workers, but that is not for courts or tribunals to express views about or initiate change. The protection of agency workers is a matter of social and economic policy for debate by Parliament, informed by discussions between the interested parties such as government bodies, employers' organisations and the European institutions.

Case transcript of James v London Borough of Greenwich (on the BAILII website)

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