In a case highlighting a gap in discrimination legislation, the Court of Appeal has held that a temporary agency worker could not pursue discrimination claims against either the end user client for whom he performed work or the agency that supplied him (Muschett v HM Prison Service).

Mr Muschett entered into a contract for services with Brook Street agency and was supplied to HM Prison Service (HMPS) to carry out a temporary role as laundry assistant at a young offenders' unit. At the end of his assignment he brought claims against both Brook Street and HMPS for unfair dismissal, wrongful dismissal, race, sex and religious discrimination.

The Court found that Mr Muschett was not an employee of either the agency or HMPS. Applying the test in James v Greenwich Borough Council, there was no need to imply a contract of employment between Mr Muschett and HMPS. The contractual terms between the parties were clear and this was a genuine tri-partite employment agency relationship. He also was not employed by HMPS under the wider definition of "employment" in the discrimination legislation because he did not have a contract to do any work personally for HMPS. Finally, because Mr Muschett did not have a contract with Brook Street personally to do any work for them, the agency also did not "employ" him and he therefore could not claim protection from discrimination as a "contract worker".

Impact on employers

  • This case highlights a gap in the protection of agency workers. Neither the Equality Bill nor the Agency Workers Regulations in their current forms will address this gap.
  • However, employers should be wary of placing too much reliance on this decision. The Court of Appeal's conclusions flowed from the tribunal's finding that Mr Muschett was not employed by the agency. Earlier Court of Appeal decisions have found that similar circumstances did not prevent the agency worker being employed by the agency for discrimination law purposes. Where that is the case, an agency worker can bring a discrimination claim against a client as a "contract worker".
  • The decision also confirms that, in a genuine tri-partite agency relationship, it will be rare for agency workers to succeed with a claim that they are employees of the end-user client. Employers should continue to ensure that their relationships with agencies are properly documented and that the agency has written contracts with the workers supplied to them.