Employment Alert No. 103 - Agency Workers
July 27, 2005
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What is the Issue? |
For there to be a fair redundancy dismissal, an employer must show that it has offered suitable alternative vacancies to otherwise redundant employees. Employers do not have to create vacancies or conduct an absolute search. But they must conduct a reasonable search for vacancies to offer otherwise redundant employees. Many employers give a list of vacancies within their business to the employees provisionally selected for redundancy and invite them to respond by demonstrating their interest. If an employee fails to do so, then employers normally proceed on the assumption that the employee is not interested in any of those roles.
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What did the EAT Decide? |
B started providing services to the RNLI through an agency in October 2002. In March 2003, she was taken on by the RNLI as a permanent employee. The EAT decided that she had been employed by the RNLI since October 2002, even though:
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in October 2003, she had signed a contract with the agency expressly stating that she was not employed by it or the RNLI;
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in October 2003, she had signed a short agreement with the RNLI which expressly stated that she was not employed by it and that the RNLI had no obligation to provide her with work;
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when she joined the RNLI as an employee in March 2003 she signed a contract of employment in which she agreed that her period of continuous employment commenced in March 2003.
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What went wrong? |
The following issues were particularly relevant:
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the EAT did not think that it was limited to looking only at the contractual documentation. This was because the documentation did not, in fact, tell the whole story about the relationship between B and the RNLI. For example, the short agreement signed by the RNLI and B in October 2002 provided that B was not obliged to accept work (presumably to bolster any argument that B was not an employee). However, the contract that B had signed with the agency said B was required to work a 37.5 hour week.
Therefore, the EAT decided that, as the documentation did not contain all of the relevant terms (or inconsistent terms) it could look at what had happened in practice, beyond the written agreement.
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when she became an employee of the RNLI in March 2003 B had become entitled to receive benefits and to be paid directly by the RNLI through payroll – whereas she had not been entitled to these things as an agency worker. The RNLI thought the fact that there had been these changes was indicative of a change from agency worker to employee. The EAT did not agree. It was not determinative to show that there had been a change from one set of arrangements to another. It found that an employee’s terms and conditions of employment could very well be different at different times in his employment.
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it had always been RNLI's intention to appoint B permanently to the role which she had undertaken through the agency, when it had headcount room to do so;
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once appointed permanently, B continued doing exactly the same job that she had done as an agency worker.
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What does this mean for employers? |
If an employer decides to take an agency worker on as a permanent employee there is a risk that he/she will have continuous service from day one as an agency worker. However, there are things that employers can do to lessen that risk:
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review documentation, including employment contracts, contracts of service, engagement letters and terms of business, to ensure that there are no discrepancies between written agreements and/or day-to-day arrangements. This will help plug the gap left by RNLI which gave rise to the EAT deciding that it could look beyond what the documentation said.
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leave a gap between an individual ceasing to work as an agency worker and returning as an employee. This would give the company at least an argument, that even if the individual had been an employee, continuity of employment had been broken.
