Agency Workers, Employment Rights and the Ebb and Flow of Freedom of Contract

Publication Date01 Jan 2009
AuthorMichael Wynn,Patricia Leighton
AgencyWorkers, Employment Rights and the Ebb and
Flow of Freedom of Contract
and Patricia Leighton
This note discusses two Court of Appeal cases relating to the employment status of temporary
agency workers, James vL ondon Boroughof Greenwich and Consistent GroupvKalwak.InJames the
Court considered the test for implying a contract of service between temp and end user, and in
Kalwak the Court examined the use of ‘sham to set aside contractual documents between the
parties. The authors examine whether the commercial approach adopted towards trilateral
employmentrelationships in these cases is justi¢ed.
Multilateral relationships such as those of agency working, franchising and sub-
contracting prese nt problems for employment law as they do not ¢t the tradi-
tional characterisation of employment contracts as bilateral relationships. As
typical employer functions are distributed across multiple potential employing
entities, the worker may have problems in locating the‘true’ employer. Employ-
ment relationships have become increasingly fragmented and precarious as a
result of vertical disintegration, and the attributionof employmentresponsibility
has become a key issue for both courts and legislatures.
One of the di⁄culties at contractual level is the often complex and con£icting
set of obligations set out in standard formcontracts between agencyand end user,
agency and temp and sometimes between end user and temp.The determination
of employment status in cases of unfair dismissal involves courts in a process
of construction and implication from a tangle of documents. A relatively recent
development has been the judicial construction of an implied contract of
service with the end user of an employment agency, partially as a response to the
failure toestablish the agencyas the appropriate employer.
A classical contractual
analysis of problems resulting from labour market £exibility, however, often
distorts employment issues, particularly where commercial reality is assumed to
be the norm. Notions of freedom and sanctity of contract inevitably clash with
more distributive concerns,
particularly in the context of job security for highly
Principal lecturer in law, Kingston Law School
Professor,Law School, University of Glamorgan.The authors wi sh to thank the anonymous referee
for comments made on drafts of the case note
1 H.Collins,‘Independent Contractors and the Chal lenge of VerticalDisi ntegrationto Employment
Protection Laws’ (1990) 10 OJLS 353; S. Deakin,‘The Changing Concept of the ‘‘Employer’’ in
LabourLaw’ (2001)30 ILJ 72; J.Fudge,‘The Legal Boundaries of the Employer,Precarious Workers
and Labour Protection’ in G.Davidov and B. Langille (eds), Boundariesand Frontiers ofLabour Law
(Oxford:Hart, 200 6); M. Freedland,The PersonalEmployment Contract (Oxford:OUP,20 03) ch 1.
2 on grounds of lack of mutuality of obligation:Wic kens vChampion Employment[1984]ICR 365.
3 See eg A.T. Kronman,‘ContractLaw and Distributive Justice’(1989)Yale LJ 472.
r2009 The Authors. Journal Compilation r2009 The Modern LawReview Limited.
Published by BlackwellPublishing, 9600 Garsington Road,Oxford OX4 2DQ,UK and 350 Main Street, Malden, MA 02148, USA
(2009) 72(1) 91^115

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