Muschett v HM Prison Service

Court of Appeal finds that an agency temporary worker does not have discrimination and unfair dismissal protection.

Brook Street (an employment agency) supplied Mr Muschett as a temporary cleaner to HM Prison Service (“HMPS”) under a common tri-partite arrangement for temporary workers. The Court of Appeal found that Mr Muschett was neither an employee of Brook Street nor HMPS. It also endorsed the previous Court of Appeal decision in James v London Borough of Greenwich, that a contract should only be implied between a temporary worker and end-user if it is necessary to do so (i.e. the relationship has developed from one of agency to one where there are “mutual obligations binding the worker and end user which are incompatible with those arrangements”). In respect of discrimination protection, this only applied to Mr Muschett if he was “employed”, as more widely defined under the discrimination legislation, or he was a “contract worker” (i.e. employed by Brook Street to supply work to HMPS). The Court held that Mr Muschett was neither (contradicting previous case law) and had no such protection.

Implications

Agency workers are unlikely to be employees of the end-user client, provided the arrangements between the parties is clear and the relationship between agency worker and end-user has not developed so that there is a different set of obligations which necessitate an implied contractual relationship.

Agencies should set up clear documentation and make clear the expectation of the parties to the relationship in order to reduce the risk of a contract being implied. End users should seek to limit the risk by ensuring that the work of their temporary workers does not develop in to obligations such that a court would find it necessary to imply a contractual relationship.

Agency workers should be aware that they may well not have protection against discrimination by end-user clients as a result of this decision. This may be an unintended "loophole" in the legislation and, if so, may be addressed by the courts or Parliament in the future.

Background

Mr Muschett personally provided services to an end user, HM Prison Service (“HMPS”) via an employment agency (Brook Street). He worked at HMPS from January to May 2007. He was paid by Brook Street and he had no entitlement to receive any payment from HMPS. Mr Muschett’s contract with Brook Street stated that each of Brook Street, HMPS and Mr Muschett had the right to terminate the assignment without notice or liability. After he ceased working for HMPS, Mr Muschett worked for other organisations under the terms of his contract with Brook Street.

It was submitted to the Court of Appeal, on behalf of Mr Muschett, that he had carried out extra duties, over and above those he was originally assigned to undertake, and that the only explanation for this was that there was a contract between him and HMPS, which must have been one of employment.

The Court of Appeal unanimously dismissed the appeal on this ground and commented that the Employment Tribunal’s (“ET”) original finding that Mr Muschett had at no point become an employee was unimpeachable. Mr Muschett’s two training courses for his assignment and his expression of interest, and application for, a permanent job with HMPS was held to be a “meagre collection of facts” that did not “begin to justify a finding that Mr Muschett became an employee of HMPS”.