The claimant in Smith v Carillion (JM) Ltd worked in the construction industry through an employment agency.  He brought a claim against three end user companies of detrimental treatment on grounds of his trade union and safety representative activities.  He did not have an express contract with the end users but argued that a contract should be implied, based on a number of factors he claimed were indicative of a contract.  The Tribunal and EAT agreed that no contract could be implied; so his claims could not be heard.

The Court of Appeal has now dismissed his further appeal, which related to just one of the three end users.  The Court dealt with the factors put forward as evidence of a contract:

  • The claimant was fully integrated into the managerial set-up.  Where the work is of a managerial nature, the worker will have to fit into the management team; in fact, it will often be impossible to give satisfactory service without being integrated into the business.
  • He was interviewed before the appointment was approved; in other words, his identity was critical to the business.   The fact that the employer is indifferent to the personal identity of the worker provided by the agency will reinforce a conclusion that there is no contract in place with that worker, but the converse does not follow. Relatively senior staff may be provided by agencies, particularly where staff are needed for particular time limited projects, and the contractor will necessarily be concerned to ensure that the individual is able and suitable for the job. Hence the need for an interview.
  • The appointment was on a long-term project.  The period of the relationship is not decisive.  In any event, there was no evidence that the claimant had contracted to stay for the whole project and in fact the relationship was terminated by the end-user without any notice (and he could have left at will).

The principle established back in 2006 in James v Greenwich Council that a contract can only be implied between an individual and the end user where it is a "necessity" continues to apply in employment status cases. This may be something that will be reconsidered as part of the Government's on-going review of employment status.