Brook Street case opens the door for tribunal claims

Following the result in the Brook Street v Dacas case earlier this year in the Court of Appeal we are starting to see evidence of temps ‘chancing their arm’ in tribunal claims against end user clients. Two claims have been notified to us in the last three weeks indicating that the Brook Street judgment may not be as favourable to agencies as first thought.

The Brook Street case related to a claim by Mrs. Dacas, an agency worker engaged 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 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 the Council under an implied contract of employment.

Although one of the 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. In obiter statements the majority concluded that any Employment Tribunal in such cases must consider whether any employment contract with the end user could be implied. Obiter statements are highly persuasive when included in decisions in the Court of Appeal or House of Lords, but are not binding and do not set precedent.

This 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 minimise the risk agencies should:
a) assess the risk of a claim where temps are currently supplied over long periods,
b) ensure that their clients are aware of the circumstances which could lead to employment being found,
c) take steps to avoid them where possible, and
d) include provisions in their contracts with both the workers and end users that minimize 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

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