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Employment Law

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Veale Wasborough Vizards , 13 APR 2015

No implied contract between agency worker and end user

No implied contract between agency worker and end user
Jessica Ryan
Solicitor, Veale Wasbrough Vizards

In a recent decision, the Court of Appeal has confirmed that there was no implied contract of employment between a blacklisted agency worker and the end-user to whom his services had previously been provided.

Mr Smith was an agency worker in the construction industry. He was engaged by John Mowlem Construction Plc, now Carillion (JM) Ltd (Mowlem). Having been unable to find work for several years, Mr Smith discovered that he was on a secret blacklist of construction workers, which had been accessed by Mowlem.

As an active member of the Union of Construction Allied Traders and Technicians and a health and safety representative, Mr Smith brought claims against Mowlem for detrimental treatment on the grounds of his participation in these activities.

The Employment Tribunal and the Employment Appeal Tribunal agreed that they lacked jurisdiction to hear Mr Smith's case, as he was not an employee or worker. Mr Smith appealed to the Court of Appeal (CA).

The CA held that a contract will only be implied where necessary (ie if an agency arrangement is a sham, or if the relationship between parties changes over time). On the basis that there were no such relevant factors in this case, it was not necessary to imply a contract between Mr Smith and Mowlem.

The CA also rejected Mr Smith's argument that the Human Rights Act 1998 requires legislation protecting trade union members to be construed to also apply to workers, in order to give effect to his rights to a private life and to freedom of association. The Court concluded that the alleged wrongdoing occurred prior to the enactment of the Human Rights Act and could not be applied retrospectively.

Best practice

This case provides a useful reminder of the factors that a tribunal will consider when deciding whether a contract should be implied in accordance with the principle of necessity. It builds on previous case law which has shown that courts are unlikely to imply a contract between an agency worker and an end-user even where this results in an apparent injustice for the claimant.

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