Tighter law needed on “temps”

Citation

Pitt, M. (2007), "Tighter law needed on “temps”", Human Resource Management International Digest, Vol. 15 No. 1. https://doi.org/10.1108/hrmid.2007.04415aab.001

Tighter law needed on “temps”

Tighter law needed on “temps”

Mike Pitt is an employment-law partner at UK solicitors Pearson Hinchliffe.uk

Many people don’t work permanently for one firm at one place of work, but for an agency hiring them out to other organizations. The assistant behind the counter at a store might not be directly employed by the company that runs the shop. He or she could be there temporarily, and be working at another shop in another town the following week.

Although temping has fallen from its 1998 peak, when almost 8 percent of the UK workforce was made up of agency workers, the UK Government estimates that there are still around 700,000 agency workers in Britain at any one time. Employers like the flexibility of combating staff shortages by using workers who do not have to be on their regular payroll, while many temporary workers like to be able to use short-term assignments to accommodate career and business goals.

Despite the widespread use of temps by companies in Britain, the law is surprisingly unclear about who the temp actually works for. In the event of disputes, temps have tended to bring tribunal claims against their employment agency. But now it appears that the client firm may in some cases be the employer, even where this expressly contradicts what was provided by written contract.

In a case considered by the Employment Appeal Tribunal, the contracts between the various parties stated that the temp was not an employee of the agency, RHG, or the Royal National Lifeboat Institution, its client. But when the temp brought an unfair-dismissal case against the RNLI, the tribunal examined the extent to which it was possible to look behind the written contracts to establish the true nature of the working relationship.

The Employment Appeal Tribunal ruled that the temporary worker, whom the RNLI later made permanent, was an RNLI employee from the time the organization first employed her as a temp. This meant that she had enough continuous service with the RNLI to claim unfair dismissal.

The tribunal was particularly influenced by the fact that the RNLI always intended to appoint the woman permanently to the job she had taken through the employment agency. Once appointed permanently, she continued to do exactly the same job she had done as a temp, albeit on different terms and conditions.

In another case, a doorman got involved in a quarrel with someone who had just left a nightclub, hitting him in the face and causing him to bang his head on the pavement. The victim began legal proceedings against both the nightclub management and the security firm they hired the doorman from. The High Court had to decide whether either or both could be vicariously liable for the attack.

Although the court accepted that “for all normal employment purposes” he was an employee of the security firm, he had become a “temporary deemed employee” of the nightclub. It decided that “the paramount test is that of the nature and extent of control which (the nightclub) had over the door supervisors supplied”. The High Court’s opinion was that the nightclub had control of what the door supervisors’ duties were and how they carried them out. The fact that the contract between the two companies clearly said the door supervisor was the agency’s employee, rather than the nightclub’s employee, was “neither here nor there”, said the court.

When the High Court’s judgment was upheld on appeal, the Court of Appeal noted that the security firm paid and had the power of hire and fire over the doorman. However, when he was working for the nightclub, where he took his orders from the manager, the nightclub had enough practical control over him to make it the “temporary deemed” employer.

Neither ruling means that tribunals can always disregard written contracts and look at what actually happened. An important factor in the RNLI case, for example, was that there were discrepancies between the various written agreements.

Nevertheless, it will often be impossible for “employers” to know where they stand regarding temporary workers, so long as disputes over employment status are being resolved by the courts on a case-by-case basis in this way. New legislation is needed to clarify the situation.

In the meantime, it is important for both companies who lend and those who hire employees to make sure contracts are as clear as possible about who is responsible, and to have the appropriate insurance cover in place.