Penn Legal warn staffing companies to consider the impact of a recent Tribunal decision.

Summary

Penn Legal warn staffing companies and end-users to consider carefully the impact of a recent Employment Appeal Tribunal decision.

Background

Ms Bushaway was engaged to work as a PAYE temp for the Royal National Lifeboat Institution (RNLI) on a standard ëtempingí arrangement. The staffing companyís contract with Ms Bushaway provided that she was not to be an employee of the staffing company, or the RNLI, but that she was rather to be a self employed temp. The contract also contained an ëentire agreement clauseí which provided that no other terms were to be inferred into the contractual relationship. Ms Bushaway was told that there was a possibility that she would be offered permanent employment with the RNLI when their recruitment freeze came to an end.



What happened next?

Ms Bushaway worked as a temp for the RNLI for 5 months and was then taken on as a permanent employee in the same role which she performed for another 11 months before resigning and claiming to have been unfairly constructively dismissed.

When did she become an Employee?

The RNLI contended that Ms Bushaway lacked the necessary 1 years employment to bring a claim for unfair dismissal arguing that her case was quite different from that of Dacas v Brookstreet (which suggested that an end user might be the employer of a temp) on the basis that the ëentire agreement clauseí prevented any other terms from being inferred into the contract.

What did the Employment Appeals Tribunal (EAT) decide?

The EAT ruled that the ëentire agreement clauseí would not always be conclusive, and that the Court could ëlook behind ití when it was clear that the written contract did not represent the whole bargain between the parties.

The EAT pointed to several key factors when deciding that Ms Bushawayís employment with the RNLI started on the first day she worked for them (as a temp). The factors were:

-It had always been the RNLIís intention to recruit permanently to the role.

-This intention had been communicated to Ms Bushaway.

-Ms Bushawayís permanent duties were the same as those when she was a temp.

-There was no gap between the temporary work ending and the permanent work beginning

-Ms Bushaway had to arrange holiday leave with the RNLI directly (rather than via the staffing company).

-Ms Bushaway did not have an unfettered right to turn away work.

The EAT did not consider it relevant that:

-Ms Bushaway had improved benefits (e.g. holidays and notice entitlement) upon taking permanent employment.

-References were only taken up by the RNLI when she accepted permanent employment.

Opinion & Advice

This case highlights the difficulties that end users face when trying to avoid giving employment rights to agency workers. Although it is wise to include an ëentire agreement clauseí, this and other contractual formulae can certainly assist, such clauses cannot be relied upon where the contract does not represent the real arrangement between the parties.

There are practical steps that end users, and staffing companies, can take to help avoid employment rights being inadvertently created. In particular:

-The end user, and temp, should reminded that their contractual relationship is with the staffing company and matters such as agreeing holiday leave and disciplining the temp should be conducted via it.

-Try to avoid treating temps as employees. Although it may seem harsh to refuse to allow a temp to the office party if you treat them as an employee they are likely to think of themselves as such.

Staffing companies are reminded of the dangers of agreeing to indemnify end users in respect of employment rights claims brought by the temp. In reality the staffing company will always be limited in the steps they can take to prevent the end user from treating the temp as an employee; such risks are uninsurable and due to their relationship with the temp it is only fair that the end user runs the risks entailed.

For further information contact Gareth Williams
Email: gareth.williams@pennlegal.co.uk