Can an agency worker bring a claim for unfair dismissal?

No. Only employees can bring claims for unfair dismissal. A decade ago, a landmark decision of the Court of Appeal, Brook Street Bureau (UK) Ltd v Dacas ([2004] IRLR 358), raised the possibility of agency workers being employees of the hirer. The case concerned a Brook Street agency cleaner, Mrs Dacas, who worked for a local authority for four years until she was replaced while on sick leave. The Court of Appeal suggested Mrs Dacas could be an employee of the hirer — the council — on the basis of an implied contract of employment.

However, more recent cases (for example, Muschett v HM Prison Service [2010] EWCA Civ 25) have drawn back from this suggestion, confirming that a contract of employment will only be implied between the agency worker and the hirer where this is “necessary”.In particular, mere passage of time will not suggest a contract of employment. In James v London Borough of Greenwich ([2008] EWCA Civ 35), the Court of Appeal said that where clear contractual terms had been agreed between the worker and the agency, there was no ambiguity in the agreed contractual documentation or the parties’ intentions. Consequently, there was no need to imply a term making the local authority the employer. This was followed in Tilson v Alstom Transport ([2011] IRLR169). In that case, the fact that Mr Tilson looked like, behaved like and was treated like an employee — for example, asking for permission from his line manager to take annual leave — did not make him an employee. There was no need to imply a contract of employment.

In a genuine standard agency relationship between hirer, worker and agency, it is now highly unlikely that a contract of employment will be implied between the worker and hirer — even if the agency worker goes to work every day for years, sitting alongside a permanent employee doing exactly the same job.

However, the key word is genuine. If the signed contractual documentation does not reflect the parties’ true intentions, the tribunal will look at the surrounding context to decide on the real nature of the employment relationship (Autoclenz Limited v Belcher [2011] UKSC 41). A tribunal is most likely to conclude that an individual whose status, according to the contract, is that of an agency worker, is really an employee where there is evidence that the documentation is a sham, designed to conceal an employment relationship, for example in order to avoiding employment rights or PAYE tax liabilities.