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James v London Borough of Greenwich, Court of Appeal, 5 February 2008

7 March 2008
The issues

(1) Agency workers
(2) Employment status
(3) Tripartite relationship

The facts

Ms James began working in 1997 on a full-time basis in the Council’s Asylum Seekers Team. She provided help at a hospice which provided semi-independent accommodation for under 18 year old asylum seekers. In 2001 she began working for the Council through the Greenwich Social and Care Staff Agency. In 2003 Ms James changed agencies and started to work through an agency called BS Project Services Ltd. According to the terms of the agreement between the agency and Ms James, she was a self-employed worker under a “contract of services”. The contract stated that it did not give rise to a contract of employment between Ms James and the agency or between Ms James and any ultimate client. She was not entitled to holiday or sick pay from the Council, and was not subject to their disciplinary or grievance procedure.

Late in 2004 she was absent from work through sickness. When she returned to work she found that another agency worker had arrived to cover the same shift. She found herself without any work.

On 12 November 2004, Ms James presented her complaint of unfair dismissal against the Council. Her former agency was later joined as a respondent although she did not allege that she was employed by that agency. She alleged that she had been dismissed on the termination of her work with Council as a consequence of her raising health and safety issues.

The Employment Tribunal found that there was no mutuality of obligation (i.e. no obligation on the authority to provide work and no obligation on Ms James to accept it) between Ms James and the Local Authority. They felt this was required to support the existence of a contract between the two. In their view, there were no facts from which a contract could be implied. Her claim was dismissed.

The decision

Ms James appealed the decision, largely relying on her length of service and her view that she was treated the same as the other Council employees, in support of her allegation that she was, in fact, an employee. When the matter reached the Court of Appeal it was held that the Tribunal was entitled to find that Ms James was not an employee of the Authority. This was because there was no express or implied contractual relationship between the parties. Her only express contractual relationship was with the agency itself. There were no facts which suggested that the expressed contract could be treated as anything other than a genuine contract.

Comments

The issue of a tripartite relationship between an agency worker, the agency and the client has been running through the Tribunals for some time, culminating with the case of Cable & Wireless Plc v Muscat, which held that it was possible for a contract to exist between agency worker and end user. With this judgment a more cautious approach has been adopted giving greater clarity on the issue. The judgment acknowledges that Muscat was exceptional on its own facts. Unlike in this case, in Muscat, the arrangements on the ground did not reflect the reality of the situation. The contract was implied to correct this.

It was confirmed that the relevant question in this situation was whether or not it was necessary to an employment contract between the end user and the worker. In this case, it was not necessary to do so because an effective contract already existed between Ms James and her agency. There was no need to imply a contract with the Council on this basis.

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