Thursday 15th March 2012 at 1:50pm
Agency workers: when all the contractual documents are missing
In my book, I criticise the decision of Elias LJ in James v London Borough of Greenwich [2007] IRLR 168, which provides that (where there are documents exclusing employee status) an agency worker is not an employee of the end user, and that a Tribunal should imply a contract of employment only where it is “necessary” to do so. The practical effect of this decision has been that in almost every appellate case since James, the EAT (or the CA) has held that the claimant was not an employee of the end-user.
One case which does not feature in my book is the subsequent decision of Elias LJ (on his promotion to the Court of Appeal) in Tilson v Alstom Transport [2010] IRLR [2011] 169.
When Tilson came out, I did not think it significantly developed the James principles, but I have since heard it argued that I was wrong.
The case where this came up was one in which, unusually, there was no written contract between the agency worker and the end-user, neither was there any written contract between the end-user and the agency itself. The Tribunal was forced to choose between the oral evidence of the claimant that he was employed like any other directly-employed worker, and the evidence of the company, that in general they tried to draft contracts to exclude this possibility.
The Respondent relied on Tilson to say that in such cases there is a presumption against a finding of employee status.
The first point to note about Tilson is its unusual facts: it concerns an agency worker who was engaged on like terms to directly-employed counterparts (paras 3-4) and was offered, but refused, a direct contract with the end-user (para 5). Mr Tilson worked for the end user via two intermediary contracts and there was no contract save for a verbal contract between him and the end-user (para 12), but the contracts between Tilson and the intermediary companies were in writing, and very clearly provided that Alstom was not Tilson’s employee.
At the end of the case, Elias LJ found that Mr Tilson was not an employee. The clearest evidence against, he held, was that Mr Tilson had been offered direct employment and had turned it down (paras 50-1). He did not want to be an employee.
I was somewhat surprised, to say the least, to find Tilson being used outside its narrow facts.
My surprise was for three reasons:
1) The use of Tilson as a general authority covering all cases where the agency-agency worker contract is missing contradicts part of the policy rationale of James (which is that agency worker contracts should be upheld because of the general policy of the courts not to question written contracts) – cf James para 57 (“The express contracts themselves both explain and are consistent with the nature of the relationship and no further implied contract is justified.”), and also para 37, which deals with circumstances where there is not effective agreement (“It may be that the parties intend to regulate or alter their relationship in accordance with the agency contracts but do not in fact do so. In such circumstances, a tribunal will be entitled to find that there is a contract between worker and end-user”).
2) Nowhere is it said expressly in Tilson that agency worker arrangements should be upheld even where none of them are in writing (and in Tilson, the majority of the arrangements were in writing, all that was missing was a written document between Mr Tilson and the first of the intermediary companies).
3) It is very clear from Tilson that the case was decided on different grounds – the key to the case is not the partially missing documentation – but the worker’s signal desire not to be an employee.
But I do invite comments from any colleagues who read this blog; have I misunderstood Tilson, is it more important than I thought?
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