In the case of James v Greenwich Borough Council Mrs James worked for Greenwich Council for 5 years via an employment agency. She argued that an implied contract of employment had arisen between her and the council. The Employment Appeal Tribunal upheld the Tribunal’s decision that there was no implied contract, as no mutuality of obligation existed, and gave the following guidance on when it is appropriate to imply a contract between a worker and the end user:

  • It is not appropriate to imply a contract where the end user cannot insist on the agency supplying a particular worker.
  • Where the arrangements are genuine and implemented accurately and represent the actual relationship with the parties, then it will be rare for there to be sufficient evidence to entitle an Employment Tribunal to imply a contract between the agency worker and end user.
  • If such a contract is to be inferred then there must be some evidence which demonstrates that the agency arrangements no longer dictate or reflect how the work has been actually performed. It will be necessary to show that the worker is no longer working pursuant to the original agency arrangements but such that mutuality of obligation has arisen between the parties.
  • The passage of time does not justify the implication of an employment contract.

While the above guidance appears to be clear it should be remembered that it is not in line with cases decided in the more senior Court of Appeal (Dacas v Brook Street Bureau and Cable & Wireless v Muscat). It therefore remains to be seen whether this approach will be adopted in future cases.