The Court of Appeal has finally announced its long-awaited decision in the Dacas ñv- Brook Street case. In the action, Mrs. Dacas, an agency worker signed up on a contract for services, claimed that she was an employee of Brook Street which had supplied her to work for its client Wandsworth Borough Council over a period of several years.
In its judgement, the Court of Appeal ruled that that Mrs. Dacas was not an employee of Brook Street. However, the issue of whether she was an employee of Wandsworth remains unanswered. Adrian Marlowe, Managing Director of Lawspeed commented, ëInterestingly, two of the three Appeal Court judges stated their view that Mrs Dacas may have been an employee under an implied contract of employment whilst she was working for them via Brook Street. This would generally be an issue that should be decided by an Employment Tribunal, but because Wandsworth were not a party to the appeal the matter could not be referred back to the Employment Tribunal.í
Adrian Marlowe continued, ëAgencies can take some solace from this decision, which demonstrates that provided they have the right contracts in place with their agency workers they should not be held to be an employer. However, end users are likely to be more concerned. Although one of the three Appeal Judges strongly disagreed that the end user could be an employer of the agency worker in the arrangements between worker, agency and end user, the fact that the other two came to the conclusion means that any Employment Tribunal looking at such cases in the future must consider whether any employment contract with the end user could be implied.í
It is not known at this stage whether Mrs. Dacas will appeal the decision.
Lawspeed are warning that recruitment agencies are likely to find that clients may impose further demands on agencies to cover the costs of any claims by agency workers for employment rights. Adrian Marlowe summarised. ëThis case also increases the probability of claims by long term agency workers against the agencyís client for unfair dismissal.í Lawspeed is advising recruiters that to minimize the risk they should ensure that their clients are aware of the circumstances which could lead to a tribunal reaching such a decision, and that they take steps to avoid them where possible. Lawspeed believe it is possible for recruitment agencies to include provisions in their contracts with both workers and clients to minimize liability. ëIt should be remembered that unfair dismissal cases can be brought by an employee at any time where statutory rights are infringed (e.g. discrimination), and the normal 12 month qualifying period may not necessarily apply,í commented Marlowe.
Adrian Marlowe summarised ëBrook Street should be commended for fighting this case because the result clarifies the status of an agency worker in relation to the agency, and serves to remove a major cloud from the sky for now. However the future outlook is worrying, given the reference to implied employment contracts between end user and worker, the Governmentís ongoing review of the status of agency workers, and the Agency Workers Directive. Storms ahead cannot be ruled out! But with properly drawn contract for services terms, agencies can be suitably protectedí.
Brook Street breathes a sigh of relief, but questions remain
.