The London Employment Appeal Tribunal (EAT) has considered the implications for employerment tribunal hearings of the Court of Appeal decision in the case Brook Street Bureau v Dacas. (See Newsletter of 12 March 2004)

In the case Astbury v Gist Ltd, the EAT heard an appeal against the decision of an employment tribunal that Mr. Astbury was not an employee of Gist Ltd. In allowing the appeal and remitting the case to be reconsidered by a fresh tribunal, the EAT summarised the key issues for employment tribunals from the Brook Street Bureau decision.

Mr. Astbury was supplied to work for Gist Ltd by Pertemps. He worked for Gist initially as a "temporary worker" but was later placed on a "fixed term assignment" to provide Gist with a greater level of continuity. Although the intention was for him to work 5-day rotating shifts, in practice he worked consistently for six days a week, often for 48 hours per week or more.

On termination of his contract with Pertemps, Mr. Astbury made a claim for unlawful deductions from his wages, for which it was necessary to show, under the provisions of the Employment Rights Act 1996 that he was a "worker". However, he subsequently also claimed that he had been unfairly dismissed, for which he had to demonstrate that he was an "employee", i.e. engaged under a contract of service. If Mr. Astbury were an "employee", he would also, by definition, be a "worker". His claim of unfair dismissal was stayed, pending the outcome of the appeal.

The employment status of workers in the "triangular" relationship between agency, worker and client has always been difficult to determine. Agency workers have been held, traditionally, to be neither employees of the agency nor employees of the client. The fundamental requirements for a contract of service to exist, mutuality of obligation and control, are not both met in either relationship. However, the Appeal Court's decision in Brook Street Bureau v Dacas raised the possibilty that, in practice, the working relationship between the worker and the client could point towards an implied contract of employment. Whether that was, in fact, true of the working relationship between Mr. Astbury and Gist had not been fully considered by the original tribunal as was one of the reasons why it was remitted for rehearing by another tribunal.

The EAT was somewhat critical that the tribunal had not fully considered some important issues but was sympathetic to the difficulties facing the tribunal in applying what, at the time of the original hearing, were very new and difficult issues raised by the Brook Street Bureau case. In order to help other tribunals when hearing cases involving "triangular" arrangements, the EAT included the following guidelines in their decision:

• the requirement for a contract of employment to be based upon the fundamental bedrock of mutuality of obligation and control remains
  
  
• in the triangular relationship of worker, agency and end-user, the worker may have a contract with either (1) the end-user or, (2) the agency or, (3) the agency and the end-user jointly exercising the functions of an employer
  
  
• the tribunal will fall into error if it does not consider whether an implied or "deduced" contract of employment has come into existence between the worker and the end-user
  
  
• it is necessary for tribunals to look beyond contractual documents and make careful findings of fact regarding what has happened in practice, before reaching conclusions about the legal analysis of the triangular relationship.

The EAT also commented on the problems that arise when a tribunal hears a case involving a triangular arrangement when only two of three parties are involved. In the current case, Pertemps were not involved in the case as Mr. Astbury was not claiming that he had been employed by them. However, if a tribunal were to find that Mr. Astbury were not an employee of Gist, it could not then go on to consider whether he was, alternatively, an employee of Pertemps. That had equally been a problem in the Brook Street Bureau case. The Appeal Court has decided that Mrs. Dacas was not an employee of the agency but could only surmise whether she might otherwise have been an employee of the client company.

The EAT recommended, therefore, that, in such cases, all three parties should be involved. This could be achieved in a number of ways:

• it would be reasonable for the worker to claim against both the agency and the client in the alternative
  
  
• the tribunal has general powers to add anyone who may be liable for the remedy claimed as a respondent.

In remitting the case to be reheard by a fresh tribunal, the EAT was overturning the original tribunal's decision that Mr. Astbury was not an employee of Gist Ltd. This did not mean that he was an employee of Gist Ltd. It is now for another tribunal to reconsider the case in the light of the EAT's guidance and to decide whether or not it should hear both the unlawful deductions claim and the unfair dismissal claim together.

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...back to 28 April 2005

Sources:
Employment Appeal Tribunal