Do your agency contracts do what you want them to?


10 January, 2008

A recent Employment Appeals Tribunal (EAT) decision has highlighted the need for businesses that use agency workers to have the correct paperwork in place. In Wood Group Engineering (North Sea) Ltd v Robertson the EAT held that an agency worker was not an employee of an end-user but also highlighted that the outcome of each individual case will depend on the circumstances in that case.

In this case the EAT held that the worker was not an employee of the end-user because in this case the express agreements in place clearly explained the relationship between the parties. If there had not been an express agreement, or if the agreements had not readily explained the relationship between the parties, then it may have been necessary for the tribunal to imply another form of relationship.

Previous decisions on this area had indicated that an agency worker could be an employee if the end-user had sufficient control over the worker and if the end-user was obliged to provide work to the worker and the worker was obliged to do that work. This case shows that a tribunal will only look at these factors where the relationship between the worker and the end-user is not adequately explained by any express agreement in place.

This case highlights the importance of having the correct contracts in place when using agency workers. With appropriate contracts in place businesses can try to ensure that, if challenged, the arrangements with agency workers are construed as they were intended and that the worker does not end up with employment rights which the business never intended giving them.

Businesses which already have agency workers working for them should check that their existing contracts sufficiently explain the relationship between them and the worker to ensure that a tribunal does not find it necessary to imply another type of relationship.

The implications of not getting these contracts right can be costly. There may be tax implications if an agency worker is ruled to be an employee and the worker will have many more rights as an employee than an agency worker would have. For example the right to sick pay and rights in relation to unfair dismissal.

Forbes Solicitors regularly advises clients on agreements with agency workers. If you are concerned about any issues in relation to agency workers please contact Peter Byrne.


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