Blacklisted agency worker – was there an implied employment with the end user?

In a recent case involving the discovery of a secret blacklist used by construction companies, the Employment Appeal Tribunal (EAT) upheld previous rulings that an employment relationship will only be found to exist between an agency worker and the end user where it is necessary to imply a contract of employment, in order to give effect to the reality of the relationship.

Mr Smith was an agency worker who provided services as an engineer to a number of construction company end user clients. He was always engaged through employment businesses and paid according to timesheets which he presented to the employment business. A pattern emerged of engagements being terminated at the request of the end user clients before the conclusion of projects with little or no explanation. Mr Smith began to find it very difficult to get work and suspected that he had been placed on a construction industry blacklist because of his trade union and health and safety activities.  As a result Mr Smith decided to change career which resulted in significantly lower earnings.

In 2009 the existence of a secret blacklist, used by construction companies was discovered. Mr Smith brought claims against various construction companies including Carillion in the Employment Tribunal (Smith v Carillon). The claims were brought for detrimental treatment on the grounds of trade union activities and activities as a health and safety representative under the Trade Union and Labour Relations (Consolidation) Act 1992 and the Employment Rights Act 1996. Claims under both acts are only available to employees.

Mr Smith raised a number of factors, which he felt pointed towards an implied contract between him and the construction company end users such as the fact he was engaged to work on long term projects, was subjected to a significant degree of control by the end user clients, was on some occasions interviewed by the end user client before his appointment was approved and that his “dismissals” were influenced by the end user clients.

The EAT upheld the ET’s earlier decision and rejected Mr Smith’s claim. In doing so the EAT affirmed the key case law in this area of James v Greenwich Borough Council which states that an employment relationship will only be found to exist between an agency worker and the end-user where it is necessary to imply a contract of employment between them, in order to give effect to the reality of that relationship. The EAT found that in many cases where there is a tripartite relationship between agency, agency worker and end user, there will not be any contractual relationship between the worker and the end-user and it will not usually be necessary to imply one.