Brook Street breathes a sigh of relief, but questions remain

The long awaited decision in the Court of Appeal case Dacas -v- Brook Street has at last been announced. The case relates to a claim by Mrs. Dacas, an agency worker signed up on a contract for services, that she was an employee of Brook Street which had supplied her to work for the end user Wandsworth Borough Council over a period of several years.

The Court of Appeal has found that Mrs. Dacas was not an employee of Brook Street, but in reaching that conclusion two of the three Appeal Court judges stated that she may have been an employee of Wandsworth under an implied contract of employment. This is a matter that should be decided by an Employment Tribunal. However because Wandsworth were not a party to the appeal the matter could not be referred back to the Employment Tribunal.

Whilst agencies can take some solace from this decision, in that provided they have the right contracts in place with their agency workers they should not be held to be an employer, end users are likely to be more concerned. Although one of the three Appeal Judges strongly disagreed that the end user could be an employer of the agency worker in the usual tripartite arrangements between worker, agency and end user, the other two disagreed. The majority concluded that any Employment Tribunal in such cases must consider whether any employment contract with the end user could be implied.

It is not known at this stage whether Mrs. Dacas will appeal the decision.

This now leaves agencies exposed to the risk that end users may, more than ever, want the agencies to cover the costs of any claims by agency workers for employment rights. It also raises the possibility of successful claims by long term agency workers against the end user for unfair dismissal. To minimize the risk all agencies should ensure that their clients are aware of the circumstances which could lead to employment being found, take steps to avoid them where possible, and include provisions in their contracts with both the workers and end users that minimise liability. It should be remembered that unfair dismissal cases can be brought by an employee at any time where statutory rights are infringed (e.g. discrimination), and the normal 12 month qualifying period may not necessarily apply.

Adrian Marlowe, MD of Lawspeed said "Brook Street should be commended for fighting this case because the result clarifies the status of an agency worker vis a vis the agency, and serves to remove a major cloud from the sky for now. However the horizon is by no means clear, given the reference to implied employment contracts between end user and worker, the Government’s ongoing review of the status of agency workers, and the Agency Workers Directive. Storms ahead cannot be ruled out! But with properly drawn contract for services terms, agencies can be suitably protected”.

Adrian Marlowe

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