Agency worker was not an employee

In Tilson v Alstom Transport the Court of Appeal considered the case of an agency worker who had been fully integrated into the workplace of the end-user and had to decide if he was an "employee" or not. He had a company phone and computer and was even authorised to discipline and dismiss permanent employees.

The court accepted that it would have treated him as an employee, if it had not been for a complex agency arrangement involving three contractual relationships: between the worker and his own service company; between that service company and a contractor company (in which it was stated that neither the contractor company nor the end-user should have control over the worker – although this was clearly not the case in practice); and between that contractor company and the end-user.

Were these contracts a sham, so that the worker could call himself an employee of the end-user? Was he entitled to bring an unfair dismissal claim when the arrangement was terminated?

The Court of Appeal agreed with Employment Appeal Tribunal that the claimant was not an employee. The fact that the contractual documents differed from what was happening in practice did not necessarily mean that there was a contract of employment between the worker and the end-user.

Points to note:

  • The Court of Appeal accepted that agency workers must often be integrated into the end-user's workforce to be able to provide their services effectively.
  • It was also relevant that the claimant had turned down the opportunity to become an employee, preferring his status as a self-employed contractor.
  • The Agency Workers Regulations which are scheduled to come into force in October 2011 will not affect the employment status of agency workers, who will still not be entitled to bring unfair dismissal claims. However the regulations will affect their basic working conditions in terms of pay and working time.