According to the Recruitment and Employment Confederation, a pool of 1.4 million
agency workers is available to undertake work each day in the UK, and the industry
supplying agency workers generates £20 billion per annum. Yet recent
cases demonstrate that there is a considerable degree of uncertainty as to
the employment status of such individuals who obtain work through employment
agencies. Employers who think that agency workers are a risk-free and relatively
low cost means of flexible labour should perhaps think again.

In the latest of a series of cases on agency workers, the Court of Appeal
in Bunce v Skyblue has further considered the correct approach to be taken
to determine employment status. Here it was held, in line with Dacas v Brook
Street Bureau, that the correct approach is to assess whether there is an obligation
to provide work on the one hand and an obligation to do the work on the other
alongside a consideration of the amount of day-to-day control either the end-user
or the agency exerts. Where the Court of Appeal in Bunce departed from the
Dacas approach however was in refusing to consider the presence of an implied
contract of employment with the end-user company.

Mr Bunce argued that the written agreement between himself and Skyblue (the
employment agency), which expressly provided that there was no obligation on
either Skyblue to provide work or on him to do the work, was in effect an umbrella
agreement covering the relationship generally between the parties. Each time
that Skyblue offered Mr Bunce an assignment and he accepted it, an implied
contract of service came into existence. While this argument could in theory
succeed where the facts supported it, this was not the case in the present
proceedings and only likely to be applicable where the umbrella agreement did
not contain detailed terms relating to specific assignments.

In practical terms the real uncertainty for employers is the risk that individuals
taken on through an employment agency and expressly stated not to be employees
of the end-user company are subsequently found by the court to in fact be employees,
thus exposing the employer to previously unforeseen potential liabilities such
as an agency worker having the right to bring a claim for unfair dismissal.

Clearly, the current position is unsatisfactory for employers and agency workers
alike and it is interesting to note that the court in Bunce called for legislation
to determine the status of such agency workers rather than 'judicial creativity'.

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