23 Jul 2020
The Employment Appeal Tribunal (EAT) has upheld an earlier decision from the employment tribunal (ET). They found a worker supplied from one company to another met the definition of ‘agency worker’ as defined in the law.
Angard Staffing Solutions and Royal Mail v Kocur
The rules governing the supply and use of agency workers from one organisation to another (the end-user) are found in the Agency Worker Regulations 2010.
Regulation 3 defines an ‘agency worker’ as:
an individual who is supplied by a ‘temporary work agency to work temporarily for and under the supervision and direction of a hirer’.
For clarity, Regulation 4 outlines that a ‘temporary work agency’ is a:
‘person engaged in the economic activity… of supplying individuals to work temporarily for and under supervision and direction of hirers’.
Agency workers are entitled to the same terms and conditions as employees after 12 weeks. This is provided they work directly for the end-user. This means that, if you falsely label an agency worker, this can deny them employment rights. In turn, this leaves you liable to claims.
So when should you consider a worker an ‘agency worker?’ This has been addressed by the EAT in the case of Moran v Ideal Cleaning Services Limited.
Here, the claimants had been employed by one organisation but placed with a separate one. The EAT held that these claimants were not ‘agency workers’ for the purposes of Regulation 3. They hadn’t been supplied to work temporarily – it had been a permanent arrangement.
The EAT clarified that ‘temporary means not permanent’. In other words, if a contract is open-ended in duration, meaning it does not have a definitive ending point, it does not represent that of agency work.
The claimant in this case was employed by one organisation, Angard Staffing Solutions. They were seconded by them to Royal Mail. Throughout this period, Angard would assign him exclusively to Royal Mail on a time-limited basis. This arrangement took place for some time.
The claimant’s argument was this:
They’d reached 12 weeks of service yet was not being provided equal rights to colleagues directly employed by Royal Mail. He saw this in contrast to agency worker law.
This claim eventually reached the employment tribunal. They held that his rights as an agency worker had been breached. However, he’d been compensated due to his higher rate of pay.
The EAT later overturned this ruling, saying his loss of rights could not be compensated in this way.
Following this ruling, both Angard and the Royal Mail brought a separate claim. They argued that the arrangement between them and the claimant called his status as an agency worker into doubt.
What did the ET say?
The tribunal dismissed the arguments brought forward by Angard and Royal Mail. They found that the claimant was an agency worker for the purposes of Regulations 3 and 4.
The respondents argued that the arrangement was potentially indefinite. This was because it was for the single purpose of performing work for the Royal Mail. However, the tribunal took issue with this.
They explained that the claimant had not known if he was to be called into work from week to week. He was supplied to do this work from Angard to Royal Mail. Therefore, he was an agency worker as outlined in Regulation 3, and Angard was a temporary worker agency as outlined in Regulation 4.
The defined periods of work given to the claimant had been, in the tribunal’s words, ‘fatal’ to the argument that the arrangement was not temporary.
What did the Employment Appeal Tribunal say?
Angard and the Royal Mail appealed against this decision to the EAT. The EAT dismissed this appeal. They found that the tribunal had carefully considered the situation and correctly interpreted the law.
The case turned on whether, pursuant to Regulation 3, the claimant had been supplied by an agency to work temporarily for a hirer.
The tribunal had correct found that the clamant had been supplied to work temporarily. This was because each and every assignment had been for a defined period of reference due to being particular shifts. They’d reached this decision by looking at claimant’s original contract and the relationship in practice.
The organisations tried to argue that the claimant had been exclusively supplied to Royal mail via secondment. The EAT rejected this argument.
This didn’t serve to impact the fact that the claimant had been regularly and repeatedly supplied by one organisation to another. Even though this was on a temporary basis, to conduct work. The fact that this was an exclusive arrangement did not serve to breach the requirements of Regulation 3.
This case sends a clear warning of situations when an agency worker situation may arise. Even if this was not the intention of the organisation.
As always, tribunals will work to assess the truth of the relationship. If this suggests that the status of a claimant is different to what was previously understood, the claimant may have been unfairly denied their legal rights.
Secondment situations can be tricky to manage, and you should always approach them carefully. For further support managing agency workers speak to a Croner expert on 01455 858 132.
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