Can Agency Workers claim Unfair Dismissal?

To claim unfair dismissal, agency workers need to establish that they are an employee of the agency, or the end-user business. At the time of writing employee’s need two years service to claim unfair dismissal (though that is changing)

Whilst there is a direct relationship with the Agency, it is normally as a ‘Worker’ and not as an ‘Employee’. In any case can rely on the defence that the dismissal was fair for ‘Some Other Substantial Reason’ if it was the end-user’s decision to stop using the agency worker, and not theirs.

The agency worker would therefore need to argue that there is an implied contract of employment with the end-user business. In practice, this can be quite a challenge. This might arise if the worker has worked there for years, and to all intents and purposes in a manner identical to any regular employees there. The devil is in the detail though – and a careful analysis of how the worker works in practice, as well as their terms of employment would be required. It is not inevitable that a long term worker situation will give rise to an implied employment relationship with the end-user.

In James v LB Greenwich, the court of appeal said there can be a wide spectrum of factual situations, and legal analysis of the evidence is required. An implied employment contract may be deduced from the conduct of the parties and the work done, but only where it is necessary to give effect to the business reality of a relationship between the worker and the end user.

It is not necessary to imply a contract between the agency worker and the end user where the actions of the parties can be fully explained by an express contract (between the worker, the agency, and the end user) and if the end user is not under any obligation to provide work to the worker. The mere passage of time does not create an obligation to provide work. It’s irrelevant that the agency worker believes themselves to be an employee of the end user, or that that is how they appear to others.

In practice, whereas it is not impossible for an agency worker to argue that there is an implied contract of employment with the end user, it may well be quite difficult.

Please note however that if the worker is discriminated against by the end user for example, they may well still be able to pursue a claim under the Equality Act 2010 against the end user, even if there is no direct employment relationship.