By definition, agency workers are workers who take on jobs that are short-term and temporary in nature. So far, so simple. But their status as workers has been anything but straightforward to determine. Little wonder, then, that employers have been left scratching their heads following a number of conflicting court decisions as to whether agency workers are employees or not.
This is partly because, unlike other EU member states, the UK does not require agency workers to be treated as employees of the temporary work agency or by the client company. Unfortunately, the recently agreed Temporary Agency Workers Directive has not resolved the issue.
Court decisions
That leaves matters more or less in the hands of the courts which, it has to be said, have not helped much either. Indeed, they seem to have been in disarray with a recent crop of conflicting decisions (although the trend has currently been to confirm that they are not employed by anyone).
For a number of years, the courts seemed to be of the view that there was an implied contract between the agency worker and the end user (in other words, the employer).
Take the 2004 decision of Dacas v Brook Street Bureau as a good example. In this case, the Court of Appeal said that an end user could be the employer of an agency worker, due to an implied contract of employment between them and the agency worker. The Court came to a similar conclusion in Cable and Wireless plc v Muscat, and also confirmed that Dacas was correctly decided.
However, a number of Employment Appeal Tribunals have subsequently decided (James v Greenwich Council; Craigie v Haringey Council; Wood Green Engineering v Robertson) that tribunals should only imply contracts of employment when it was necessary to reflect “business reality”.
This approach was confirmed last year when the Court of Appeal decided in Consistent Group Ltd v Kalwak that generally temps and agency workers were not employees of an employment agency nor of the end user.
This case concerned Polish workers hired by an employment agency on a self-employed basis. Their contracts (for services) stated that they were not obliged to accept work from the agency, nor was the agency obliged to give them work.
The tribunal said this clause was a sham, but the Court of Appeal disagreed, saying that to be rejected as a sham, both parties must have intended the term to misrepresent their true contractual relationship at the time the contract was entered into.
Temporary Agency Workers Directive
So will the Temporary Agency Workers Directive help to clarify matters? Probably not, at least as far as the employment status of agency workers is concerned.
The directive, agreed last year by EU member states after many years of negotiation, says that agency workers should be treated equally as of day one in terms of pay, maternity leave and holiday. However, the directive also allows member states to “derogate” or modify its terms through collective agreements or agreements between social partners at national level.
The UK Government has taken advantage of this to agree a deal with its social partners (unions and employers) whereby agency workers will only have the right to claim the same pay and holidays as those they work alongside after twelve weeks on the job (as opposed to day one under the directive itself).
Temporary staff will also have to work the same length of time as full-time workers to enjoy paid maternity leave. Although it covers pay, overtime and holidays, the UK agreement does not extend to rights such as occupational pensions and sick pay.
The directive will give temporary agency workers the right to be informed about permanent employment opportunities in the “user enterprise” and equal access to collective facilities (such as canteens, child care facilities, or transport services).
It also requires member states to improve the access that temporary agency workers have to training and child care facilities in the periods between their assignments so as to increase their employability, and ensure penalties for non-compliance by temporary agencies and enterprises.
Following the approval of the European Parliament in October last year, EU countries now have to incorporate the provisions of the directive in their national law. It will then come into effect within three years. The UK government anticipates that it will become law in either April or October 2010.
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Tribunals usually decide if a disciplinary policy has contractual status by looking at whether it has been expressly incorporated into someone’s contact. In Lakshmi v Mid Cheshire Hospitals NHS Trust, the High Court held that the implied term to act in good faith required the employers to comply with it unless they could show they had a good reason not to.
What happened?
Dr Lakshmi, a consultant physician at the hospital, was responsible for signing statutory cremation certificates, which involved visually examining the body and discussing the death with the treating doctor.
However, in August 2006 the Trust found out that she had signed 46 forms without doing this (a criminal offence as well as professional misconduct). The Trust started an investigation in October which continued until May 2007 when they passed their file of papers to the Crown Prosecution Service.
It then restarted its own internal disciplinary process in June 2007, despite police objections. This decision was also contrary to the Trust’s own disciplinary policy which said it should only proceed in such circumstances if it confined itself to aspects of the case not related to the police investigation. The Trust then invited Dr Lakshmi to attend a disciplinary hearing in November at which she was summarily dismissed.
Dr Lakshmi sought a declaration that the Trust’s decision to go ahead with a disciplinary hearing constituted a breach of contract (arguing that the policy was incorporated into her contract) and that her dismissal therefore had no effect.
She also argued that even if the provisions of the procedure were not expressly incorporated, they still amounted to guidance that the Trust should have adhered to, unless it had a good reason not to. For its part, the Trust argued that the policy was not incorporated and it just had to have “due regard” to it.
The Court decided that although the policy was not incorporated into Dr Lakshmi’s contract (as the language used was not contractual in nature), there was an implied term (from the duty to act in good faith) that the Trust would comply with the policy unless it had a good reason not to.
In this case, although Dr Lakshmi was guilty of gross misconduct, that did not mean the Trust did not have to comply with the provisions of its disciplinary process fairly.
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The religion or belief regulations state that employers cannot apply a provision, criterion or provision (PCP) if it puts people of a certain religion or belief at a particular disadvantage compared to others. In Eweida v British Airways, the Employment Appeal Tribunal (EAT) said that an employee has to provide actual evidence that the PCP disadvantaged a group sharing their religion or belief.
What happened?
Nadia Eweida was a devout Christian for whom wearing the cross was an important symbol. BA’s uniform policy, however, prohibited staff from wearing anything visible over their uniform, unless it was a “mandatory” religious item. When she insisted on wearing a small, silver cross (which she accepted was not mandatory) outside her uniform, Ms Eweida was sent home where she remained for several months.
She brought a number of claims, including indirect discrimination under the Employment Equality (Religion or Belief) Regulations 2003. This was dismissed by the tribunal which said that, although BA had applied a PCP to her, it did not put Christians as a group at a particular disadvantage compared to anyone else.
It also criticised BA, saying that although the uniform policy achieved the legitimate aim of brand uniformity, it was not a proportionate means of achieving that aim. The EAT agreed with the tribunal. It made clear that that the protection offered under the law to people holding a religious or philosophical belief is a broad one, which can be very personal and subjective.
But to prove indirect discrimination, the onus is on employees to show that a particular PCP put a particular group (in this case, Christians) at a disadvantage because of that religion or belief. The court stressed that the particular disadvantage relied upon should stem from the religious beliefs held by the claimant and that it is not sufficient that people of the same religion and belief are fortuitously affected by the provision.
As Ms Eweida had not provided any evidence that others shared her religious conviction about openly displaying a cross, she could not claim indirect discrimination even though she personally had suffered a particular disadvantage (of not being able to go to work and earn money).
It was not enough for her to claim that there was bound to be other Christians who felt the same way as her. She had to show that was the case in order to prove indirect discrimination.
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The long-running saga about whether workers on sick leave are entitled to paid annual leave is one step nearer to being resolved. The European Court of Justice (ECJ) has just ruled in Stringer and ors v HM Revenue and Customs that workers do not lose their right to take paid holiday just because they have been off sick.
If someone is off sick, the Court said that member states cannot require them to have actually worked during that year to accrue their annual leave entitlement. They can only deny paid holiday at the end of a leave year or of a carry-over period if the worker concerned had had the chance to exercise their right to the leave.
The Court also ruled that workers do not lose their right to paid annual leave at the end of the leave year (or of a carry-over period) if they had been off sick for the whole or part of the leave year and lost their job at the end of it, if their incapacity was the reason for losing their job.
And if the worker’s employment does come to an end, the ECJ said that they are still entitled to an allowance in lieu of the leave that they could not take and employers must ignore sickness absence when calculating what they are owed.
The case will be considered by the House of Lords probably later this year.
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