The EAT has held that no contract of employment existed between an agency worker and an employment agency when the contract between them did not show:

  • An intention to create an employment relationship
  • Mutuality
  • The appropriate degree of control.

The contract itself stated that it was not a contract of employment. The fact that National Insurance and PAYE were deducted from the claimants’ salaries was considered to be a neutral factor because it was necessitated by ss. 44-47 of the Income Tax (Earnings and Pensions) Act 2003.  

Key point: This is one more case in favour of the employment agencies. Determination of employment status depends very much on the facts of the case.  

BIS v Studders