Agency workers seeking to secure employment rights with their end client have been dealt a blow by the Court of Appeal. A contractor, Mr. Tilson, claimed that he had been unfairly dismissed when Alstom Transport, his end client, terminated his contract. Tilson’s engagement with Alstom was via a series of contractual relationships – his service company contracted with a staffing company which in turn contracted with Alstom.
Mr. Tilson was fully integrated into the business in the sense that he worked Monday to Friday, had to ask his manager for annual leave and was authorised to discipline, dismiss and recruit permanent employees. When he initially claimed unfair dismissal an Employment Tribunal did indeed find him to be an employee and that his claim had weight.
However, the Court of Appeal saw the matter in a different light. It has held that Mr. Tilson was not an employee. Whilst Mr. Tilson looked like, was treated as and acted like an employee of Alstom, this was not inconsistent with a finding that he was an independent contractor. Due to a chain of contracts setting out the arrangements for services and the fact that Mr. Tilson had rejected offers of permanent employment from Alstom supported his position as an independent contractor who was merely working for Alstom via a service and staffing company respectively.
The contractual terms stated that Mr. Tilson would not work under the control of the end client and upon review no inconsistencies were found in them. Therefore there was never any need to supply an employment contract to clarify the relationship that had been set in place.
In light of this staffing companies have been urged to review their arrangements with service provider companies and that it should be made clear that the worker has no intention of entering into employment with any end client.
As the new Agency Worker Regulations are set to come into effect in October 2011 the issue of employment status may still be an issue dealt with through the courts by agency workers but this case will probably provide a practical deterrent to this.