High Court blow to agency labour

A recent Court of Appeal decision is being described as a major threat to the economics of agency labour with huge implications for the construction industry.
It means that contractors using agency labour may already be legally regarded as the employers of such workers. This is before a proposed European Temporary Agency Workers Directive specifically extends employment rights to agency workers.
In the case of Dacas -v- Brook Street Bureau, the appeal court held that, where there is a "triangular relationship" between a worker, an agency, and an end-user employer, there could be an employment relationship between the worker and the end-user.
In this particular instance, Patricia Dacas was supplied as a cleaner under a temporary worker agreement to Wandsworth Borough Council. She later claimed unfair dismissal by
the council.
The agreement stated that its provisions "shall not give rise to a contract of employment between Brook Street and the temporary worker, or the temporary worker and the client".
Nonetheless, the Court of Appeal concluded that: "In cases of triangular arrangements of this kind, the outcome which would accord with practical reality and common sense... is that the applicant has a contract, which is not a contract of service, with the employment agency, and that the applicant works under an implied contract, which is a contract of service, with the end-user and is therefore an employee of the end-user with a right not to be unfairly dismissed."
The ruling was a majority decision. The dissenting judge said the decision "puts in question the most basic assumptions upon which the whole of the employment agency business has hitherto been conducted".
Dacas was represented in court by the TGWU.
Fergus Whitty, the union's director of legal services, commented: "No doubt the agency business industry will try to challenge this case in the House of Lords. As it stands, there
is little point in employing
workers through agencies
over long periods as they can claim employment rights against the end-user. This could cause severe loss to the
agency industry."
TGWU national construction officer Bob Blackman said: "Obviously we welcome this decision on the basis that people do have rights at work, however they are engaged."