Status Symbols: In Which Situations Can a Long-Term Agency Worker Be Considered an Employee? the Legislation Might Seem Clear on the Matter, Writes Sue Nickson, but of Course It's Not So Simple in Reality

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The Employment Rights Act 1996 defines an employee as "an individual who has entered into, or works under, a contract of employment". It defines the contract of employment as "a contract of service ... whether express or implied and (if it is express) whether oral or in writing". Despite these statutory definitions, the question of a suitable test for determining employment status has been the subject of case law that, although extensive, has not provided a definitive answer.

Two elements that are definitely relevant are "control" and "mutuality of obligation". Recent cases have shown how these remain central to the issue of employment status and have highlighted the importance of considering all the available evidence to gain a realistic view of the situation. This has been particularly relevant in cases involving long-term agency workers, in which tribunals have found employment relationships where both the agency and the client expected otherwise.

In Dacas v Brook Street Bureau (UK) and another, the agency placed Dacas to work in a local authority hostel. The tribunal accepted that the agency had a considerable degree of control over her and that there was a mutuality of obligation: the agency was obliged to pay Dacas for her work and she was obliged to attend work or notify the agency if she was sick or to arrange leave. But her contract also stated that it wasn't an employment relationship, so the tribunal considered itself bound by that. The Employment Appeals Tribunal held that the tribunal had erred in letting this determine her "non-employee" status. It decided that the tribunal's findings of fact as to control pointed too clearly towards employment. It therefore overturned the decision.

The obligation upon tribunals to consider all of the relevant factors was recently highlighted in Franks v Reuters Ltd and another. Franks was placed with Reuters by an agency and worked there for around five years. During this time he was redeployed to different positions within the company, but was paid by the agency. …