Employment Relationship between Agency Worker and End-User?

In James v London Borough of Greenwich [2008] EWCA Civ 35, the Court of Appeal held that an employment relationship will be implied between an agency worker and an end-user only when it is necessary to do so. A mere passage of time is not enough to create an employment relationship.

Whether an agency worker is an employee of an end-user must be decided in accordance with common law principles of implied contract and, except in cases where the agency agreement is a sham arrangement or where the worker was previously the end-user's employee, there will rarely be enough evidence to substantiate a finding that an employment relationship between the agency worker and the end-user exists.

Many businesses rely on agency workers and benefit from the less onerous obligations that apply to them. In order to minimise the risks of a contract of employment being implied, businesses should ensure that agency workers are not treated like employees, for example, by providing them with benefits such as holiday or sick pay, involving them in employee events and dealing with appraisal or disciplinary issues directly with them.