Employment Law E-Bulletin

Cases

Heatherwood & Wrexham Park Hospitals NHS Trust v Mr Kulubowila & others

Mr Kulubowila was an engineer who wanted to work at the Hospital. He was advised by a friend that the best way to get started was to join a recruitment agency which had a long term contract to supply the hospital with engineers on a temporary basis. Mr Kulubowila followed this advice and was duly assigned to the hospital in October 2003. All went well until early 2006 when, following a funding shortage, the Hospital stopped paying the agency for Mr Kulubowila’s services. As a result of the failure to pay, the agency withdrew Mr Kulubowila’s services and cancelled their contract with him.

The Employment Tribunal applied the Dacas case test and found that Mr Kulubowila was an employee of the Hospital (the end user). However, in another end user friendly judgment, the EAT stated that just because the employee looked and acted like an employee didn’t necessary mean that he was an employee. The EAT found that the standard tests of mutuality of obligation and control were more important.  Furthermore, the contractual agreement between the parties was just as important particularly when none of the parties appeared to have acted outside the terms of that agreement.

In this case, Mr Kulubowila had a contract for services (as opposed to an employment contract) with his agency and that the terms of his engagement with the Hospital had not supported any type of contractual relationship between the hospital and Mr Kulubowil.  Importantly, there was no date upon which circumstances had changed so as to support direct engagement by the Hospital and, furthermore, Mr Kulubowila had been denied access to important employee rights such as the Hospital’s pension scheme.

The result of this was that the EAT found it impossible to infer a contract between Mr Kulubowila and the Hospital even though Mr Kulubowila had been working at the hospital for more than 2 years.

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Astbury v Gist Ltd

And finally, another case on this important issue of when a contract arises between an agency worker and the end user. In this case the EAT again up held the end user’s argument that there was no contractual agreement, but for very different reasons.

Gist Ltd operated a warehouse storage business for the food retail industry. The bulk of the products handled by the company were chilled with a short shelf life making Gist’s business and, their workforce demands, very seasonal. To combat such seasonal variation in workforce demands, Gist entered into a contract with a recruitment agency. Mr Astbury was sent to work at Gist by this agency.

The agency subsequently issued Mr Astbury with a document attempting to clarify the terms under which he was working at Gist and when Mr Astbury was subsequently dismissed he argued that this document amounted to a contract - not between himself and the agency but between himself and Gist. Mr Astbury alleged that the agency had acted as agent for Gist and had created, on their behalf, a contractual agreement with him under which he was an employee of Gist.

The employment tribunal and the EAT both disagreed. In its recent judgment, the EAT found that the amendment document probably did amount to an employment contract between the agency and Mr Astbury but did not create a contract directly between Mr Astbury and Mr Gist. The main reason for this was that the contract contained an express statement that the agency was not authorised to create such contracts.

This case is useful as it demonstrates once again that length of service alone will not be enough for an agency worker to establish that they are an employee of the end user. However, Mr Astbury’s case was very specifically based on the contract between himself and the agency.

Not many employers have the time, inclination or resources to check such details so we would advise you to focus on the more manageable tasks of ensuring that there are no dealings with agency workers which could result in an implied contract. For example, always talk to the agency if looking to extend an agency workers time with you.

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Back to Employment Law E-Bulletin April 2007

Agency Workers leading article

Apr 07