EU Agency Workers Directive

The EU Agency Workers Directive (“the Directive”) has been a controversial topic rattling around the EU for several years, and is back on the agenda this month, as EU Ministers have considered the extension of legal rights for temporary workers. The Directive, originally proposed in 2002, has been the subject of extensive delays and wranglings between the member states, as the result of lobbying by business groups and unions.

The key principle of the proposed Directive is the equal treatment of permanent employees, and temporary agency staff. The proposal is that basic working and employment conditions of temporary workers would have to be no less favourable than their permanent employed counter-parts. As currently drafted, the Directive aims to give temporary workers full employment rights after just six weeks.

The EU Council, in considering the Directive, linked the rights of agency workers to the Working Time Directive, and had put pressure on Britain to sign up to the Directive in exchange for guaranteeing the continuation of the 48-hour week opt-out. To date, Britain has persuaded EU Ministers to reject the Agency Workers Directive, but the majority of EU Nations are pushing for the measure to be introduced within weeks. We will keep you updated on the progress of negotiations.

Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2007 (“the Regulations”)

In the meantime, the UK Government has published new regulations with the aim of increasing employment protection for agency workers. The Regulations are the result of the Protecting Vulnerable Agency Workers Consultation, conducted by the DBERR, and which closed at the end of May this year. The Regulations are due to come in to force on 1 April 2008 and, in summary, provide that:

		agency workers have the right to cancel or withdraw from the services of an employment agency or employment business, without penalty or detriment;
		employment agencies or businesses must give workers a statement of their right to cancel or withdraw from additional services;
		agency workers are protected from being charged fees by employment agencies or businesses, where the worker has not been provided with information regarding fees.

More details on the Regulations will be covered in Employment Eye, nearer the date of implementation.

Employment status of agency workers

In the courts, the status of agency workers continues to be subject of judicial interpretation, following the 2004 landmark ruling in Dacas that workers engaged through an agency can be found to be employees of the end-user company, rather than the agency.

The case of James v Greenwich Borough Council was heard by the Court of Appeal on 30 October 2007, and a written decision is expected imminently. In this case, Mrs James was working for Greenwich Council, providing her services through an employment agency. When her engagement with the Council came to an end after three years, she claimed that there was an implied contract of employment between herself and Greenwich Council and that she had been unfairly dismissed.

The Employment Tribunal and the Employment Appeal Tribunal (“EAT”) found that Mrs James was not an employee of the Council, on the basis that there was no mutuality of obligation between the parties and therefore no contract of employment. The requirement for there to be a mutuality of obligation refers to a reciprocal relationship between an individual and a company, whereby the company is obliged to provide work and the individual is obliged to undertake that work when requested. The EAT confirmed that the simple the passage of time (Mrs James’ 3 years’ service) was not, of itself, sufficient to imply a contract of employment. The EAT held that, for an agency worker to successfully assert that they are an employee, they must go further than showing an extended period of engagement; they must also show that mutuality of obligation exists between them and the end-user client, which is incompatible with an agency arrangement.

Mrs James appealed to the Court of Appeal and we will update you when the written decision of the Court is published. Currently, claims by agency workers claiming employment status are stayed, pending this decision.

If the Court of Appeal upholds the decision of the EAT, then agency workers will find it harder to establish that they are employed by an employment agency’s client / end-user. This would be good news for organisations using agency workers; however, the outcome of the current negotiations in Europe might mean that this good news is relatively short lived.