Agency Workers and Zero Hours Contracts

Most UK employment lawyers have been closely following the litigation around Employment status and the ‘gig’ economy, concerning the true Employment status of individuals such as cycle couriers, taxi drivers and delivery drivers who use ‘apps’ to accept packages of work. However, another recent case in the Employment Appeal Tribunal which top London employment lawyers may have spotted, has looked at agency workers and considered the Employment status of an individual on a zero hours contract.

Agency workers and the Agency Workers Regulations 2010

As the best employment lawyers in London will recall, the Agency Workers Regulations 2010 implement an EU Directive - EU Directive (2008/104/EC), and were introduced to offer some protection to individuals who were supplied to the ‘end employer’ through an agency. This way of securing staff was used by some unscrupulous employers to get around the need to have in place basic Employment protections for the individual workers concerned. The Agency Workers Regulations changed that by introducing a requirement that, subject to a 12 week ‘qualifying period’, agency workers should be entitled to the same basic terms and conditions as if they had been recruited by the ‘hirer’ (the end employer).

The individual must be “supplied by a temporary work agency to work temporarily for and under the supervision and direction of a hirer” (Regulation 3(1)(a)). If you are in need of advice on whether you are working with agency workers or not, an experienced UK Employment lawyer will be able to assist.

The facts in Brooknight Guarding Ltd v Matei

This case concerned a security guard, Mr Matei, who was employed by Brooknight Guarding Ltd on a zero hours contract. The contract included a flexibility clause. Mr Matei usually worked for Mitie Security, pursuant to an agreement between Brooknight and Mitie, filling in as ‘cover’ when a security guard employed by Mitie was unavailable, but he worked elsewhere too. He was dismissed after 21 months. He argued that he was an agency worker and so should have been given the same basic terms and conditions as if he had been employed by Mitie, once he had worked for 12 weeks.

Did the zero hours contract affect his status as an agency worker?

The Agency Workers Regulations stipulate that the individual must be working ‘temporarily’ for the hirer (in this case, Mitie). Brooknight argued that the fact that Mr Matei was on a zero hours contract did not mean he could not be a permanent worker. Brooknight argued that the Employment Tribunal had focussed on the ‘zero hours’ aspect of the contract, and the fact that he had only been working for 21 months – a relatively short period of time. Brooknight contended that the Employment Tribunal had (wrongly) viewed these as determinative. The Employment Tribunal had not properly applied the guidance in Moran & others v Ideal Cleaning Services Ltd & Another.

The Employment Appeal Tribunal disagreed with Brooknight. It found that the Employment Tribunal had not misdirected itself. The key issue on appeal was whether Mr Matei had been ‘supplied temporarily’ to Mitie.

Terms of the contract not necessarily determinative

Agreeing with Brooknight, the Employment Appeal Tribunal held that in general, the terms of the contract could not of themselves be determinative of whether an individual was an agency worker or not. As is the case with the gig economy cases, it is necessary to consider the reality of the situation. A contract which includes a flexibility clause which in practice is never used, meaning that an individual is effectively supplied to work on an ‘indefinite basis’, could well result in ‘permanent’ status. However, in this case, the zero hours contract gave Brooknight complete flexibility over Mr Matei – and this option was used. In addition, Mr Matei had to wait to be assigned every day once it was clear where he would be needed. He was supplied as ‘cover’ – and was not “assigned on an indefinite basis to carry out particular ongoing work”.

Although the Employment Tribunal could take notice of the terms of the contract (and had done so), it had also considered evidence from the agreement between Mitie and Brooknight which referred to services being supplied on an ‘as required’ basis, and “connected to additional cover that our customer base has requested”.

What does the decision mean for agency workers – and those who use them?

As with many of these cases, the decision in Brooknight v Matie, and the conclusions drawn by the Employment Appeal Tribunal, are very much fact specific. Having analysed the contractual position and the reality of Mr Matei’s situation with respect to both Brooknight and Mitie, the Employment Tribunal was able to conclude that Mr Matei was indeed an agency worker. In other cases, a different decision might have been reached, depending on the circumstances of the case. As a result, the case does not have huge significance for employers generally but does highlight that the existence of a zero hours contract will not preclude someone being an agency worker.

For support and advice on any aspect of employment law, OTS Solicitors can help. Our employment law team can assist with all areas of employment law including questions of Employment status, discrimination and discipline and grievance matters. Our team are well-placed to provide practical training for both managers and HR professionals, and to assist with staff handbook and policy drafting. For more information or to talk to one of our London Employment lawyer, please call 0203 959 9123.