THE INDUSTRIAL TRIBUNALS

CASE REFS:   1103/06
1106/06
1107/06

CLAIMANTS:		Lorraine Elizabeth Fitzpatrick
				Enid L J Ambrose
				Karen Jane Hetherington

RESPONDENT:		Department of the Environment

DECISION ON A PRE-HEARING REVIEW
The decision of the tribunal is that:-

(1)	The title of the respondent is amended, by consent, from Department of the Environment for Northern Ireland to that set out above, namely Department of the Environment.

(2)	The claimants were not employees of the respondent.  The tribunal therefore does not have jurisdiction to hear the claims of the claimants pursuant to the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations (Northern Ireland) 2002 and the claims are therefore dismissed.

Constitution of Tribunal:
Chairman (sitting alone):		Mr N Drennan QC

Appearances:
The claimants were represented by Mr A Colmer, Barrister-at-Law, instructed by Holmes & Moffitt, Solicitors.
The respondent was represented by Mr J O’Hara, Queen’s Counsel, Mr Wolfe, Barrister-at-Law, instructed by The Departmental Solicitor’s Office.

Reasons

1.1	The parties agreed at the commencement of the hearing, and I so ordered, that the title of the respondent should be amended from Department of the Environment for Northern Ireland to that set out above, namely:-

Department of the Environment

1.2	Notice of Hearing in this matter had been issued by the tribunal on 26 March 2007.  The said Notice was for a substantive hearing and not, as previously agreed and ordered, for a pre-hearing review to be conducted pursuant to Rule 18 of the Industrial Tribunals Rules of Procedure 2005 to consider the following issue, namely:-

“Whether the claimants are employees of the respondent.”

Although the Notice of Hearing was incorrect for such a hearing, the representatives of the parties agreed that this hearing should be a pre-hearing review and further should be conducted by a Chairman Sitting Alone.

1.3	By an Order of Consolidation made, by consent, dated 21 December 2006, the claims of each claimant were ordered to be considered together.

2.1	The claimants each presented a claim to the tribunal on 24 August 2006, in which each brought a claim against the respondent pursuant to the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations (Northern Ireland) 2002 on the grounds that each had been less favourably treated by her employer as compared to a comparable permanent employee contrary to the said Regulations.  The respondent, in its response to the said claims, presented responses to the tribunal on 12 October 2006, in which it denied the claim of each claimant; but, in particular, for the purposes of the issue to be considered at this pre-hearing review, the respondent contended that the claimants were not employees of the respondent and therefore each claimant was an agency worker and each claimant was not entitled to the protection sought by the claimants, pursuant to the said Regulations.  

2.2	For the purposes of this pre-hearing review and the issue to be determined at the said hearing, it is necessary, firstly, to set out some statutory background.

The Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations (Northern Ireland) 2002 (the 2002 Regulations) insofar as relevant and material provide:-

“1(2)	In these Regulations:-

… ‘contract of employment’ means a contract of service or of apprenticeship, whether express or implied, and (if it is express) either oral on in writing.  

‘Employee’ means an individual who has entered into or works under or where the employment has ceased worked, under a contract of employment.

‘Employer’, in relation to any employee, means the person by whom the employee is or where the employment has ceased, was employed.

‘Fixed-term contract’ means a contract of employment that, under its provisions determining how it will terminate in the normal course, will terminate –

(a)	on the expiry of a specific term, 

on the completion of a particular task, or

(b)	on the occurrence or non-occurrence of any other specific event other than the attainment by the employee of any normal bona fide retiring age in the establishment for an employee holding the position held by him,

and any reference to ‘fixed-term’ shall be construed accordingly.

‘Fixed-employee’ means an employee who is employed under a  fixed-term contract.

‘Permanent employee’ means an employee who is not employed under a fixed-term contract, and any reference to ‘permanent employment’ shall be construed accordingly.

…

Less favourable treatment of fixed-term employees –

3(1)	A fixed-term employee has the right not to be treated by his employer less favourably than the employer treats a comparable permanent employee – 

(a)	as regards the terms of his contract;

(b)	by being subjected to any other detriment by any act, or deliberate failure to act, of his employer.

…

			‘Agency workers’

18(1)	These Regulations shall not have effect in relation to employment under a fixed-term contract where the employee is an agency worker.

(2)	In this Regulation ‘agency worker’ means any person who is supplied by an employment business to do work for another person under a contract or other arrangements made between the employment business and the other person.

(3)	In this Regulation ‘employment business’ means the business (whether or not carried on with a view to profit and whether or not carried on in conjunction with any other business) of supplying persons in the employment of the person carrying on the business, to act for, and under the control of, other persons in any capacity.”

2.3	The parties were therefore agreed that, in order for each of the claimants to pursue their individual claims, the subject-matter of these proceedings, pursuant to the 2002 Regulations, it was necessary for each of the claimants to establish that each was an employee of the respondent and not, as contended by the respondent, an agency worker and, as employees, were therefore able to avail of the provisions of the 2002 Regulations.  If the claimants were not employees of the respondent, the tribunal would not have jurisdiction to determine the claims of the claimants, pursuant to the 2002 Regulations, which would have to be dismissed.

The issue therefore to be determined by the tribunal at the pre-hearing review was as follows:-

“Whether the claimants were employees of the respondent?”

3.1	Prior to the hearing of this pre-hearing review, and subsequently, there were a series of decisions in the Employment Appeal Tribunal, which although not binding on this tribunal, were clearly relevant and persuasive to the issue to be determined by the tribunal at this pre-hearing review.  This series of decisions included what may now be considered as the ‘leading’ decision in the case of James  v  London Borough of Greenwich [2007] IRLR 168.  Following the hearing of the pre-hearing review, the representatives of the parties provided to the tribunal, in light of the said decisions, a series of submissions.  However, whenever the decision of the Employment Appeal Tribunal in the James case was appealed to the Court of Appeal, it was agreed that the decision in this matter should await the conclusion of the said appeal.  In doing so, regard was also taken of the fact that, in England and Wales, following a direction of the President of the Employment Tribunals in England and Wales, all cases raising the same or similar issues were ‘stayed’ pending the judgment of the Court of Appeal.  The said judgment of the Court of Appeal in the case of James  v  of Greenwich Borough Council [2008] IRLR 302, having been issued, and after it was confirmed that it was not to be the subject of further appeal to the House of Lords, I am now giving this decision in relation to the said issue, as set out above, the subject-matter of this pre-hearing review.

3.2	In determining this matter, I considered and had regard, in particular, to the various decisions referred to in the judgment of the Employment Appeal Tribunal and the Court of Appeal in the case of James  v  London Borough of Greenwich, including, in particular, Aramis [1989] 1 Lloyds Reports 213 CA, Cable and Wireless PLC  v  Muscat [2006] IRLR 354 CA and Dacas  v  Brook Street Bureau UK Limited [2004] IRLR 358 CA; but also the series of Employment Appeal Tribunal decisions referred to above, including, in particular, the cases of Cairns  v  Visteon UK Limited [2007] IRLR 175, Astbury  v  Gist Ltd [2007] UKEAT 0619, Craigie  v  CB of Haringey [2007] AER(D), Kulubowila  v   Heatherwood and Wrexham Park Hospitals NHS Trust [2007] AER(D), Wood Group Engineering Limited v  Robertson [2007] UKEAT 181/06 and Wood  v  National Grid Electricity Transmission plc [2007] AER(D) 358.  Having considered the said decisions and, in particular, the said series of decisions in the Employment Appeal Tribunal, referred to above, there is no doubt that the    subject-matter of those decisions contain many similarities, but also distinctions, with the factual situations of the claimants, as found by me, in these proceedings.  It is equally apparent that, prior to the decision of the Court of Appeal in the case of James  v  Greenwich Borough Council [2008] IRLR 302 that there had been felt to be some conflict arising from the said decisions in this area of law.  I consider that any such conflict has now been clarified by the decision of the Court of Appeal in the case of James  v  London Borough of Greenwich.  Indeed the Court of Appeal disputed there was any conflict and stated the said decisions were merely applications of the relevant principles in particular factual situations.  Although the decision of the Court of Appeal is not binding in this jurisdiction, I am satisfied that it is appropriate for this tribunal to follow the guidance set out in that decision.  In the circumstances, in light of the clarification of the law in this area by the decision of the Court of Appeal in the James case, I do not consider it is necessary to refer to in any detail to the other decisions, to which I have made reference above.  Those decisions, in essence, are applications of the principles in particular factual situations, which have now been confirmed, insofar as was necessary, following the judgment of the Court of Appeal in the James case.

3.3	In the decision of the Court of Appeal in the James case, the Court of Appeal resolved the line of authorities in relation to whether it is possible to imply a contractual relationship between a worker and an end-user client, such as the respondent, where no express contract exists, by concluding a tribunal must determine, as a question of fact, whether it is necessary [tribunal’s emphasis] to imply a contractual relationship between the agency worker and end-user in order to give business reality to the situation.  

In the James case, the Court of Appeal held that no implied contract was necessary as the three-way relationship between the parties was explained by the express contracts between the worker and the agency and the agency and the end-user.  The Court also emphasised that the length of time for which the worker has worked for the end-user was not determinative of the issue.  The Court of Appeal made clear that Dacas  v  Brook Street Bureau UK Limited [2004] IRLR 358 is not authority for the proposition that the implication of a contract of service between the end-user and the worker in such a tripartite agency situation is inevitable in a       long-term agency worker situation.  It only pointed to it as a possibility, the outcome depending on the facts found by the Employment Tribunal in the particular case.  It was necessary for the tribunal to consider, in these particular proceedings, whether the way in which the contract was performed was consistent with the agency arrangements and, if it was not, whether it was only consistent with an implied contract between worker and end-user.  Indeed, the Court of Appeal concluded that it would be unlikely that it would ever be considered necessary to do so where the express arrangements were genuine and accurately reflected the  relationship of the parties and was not in the nature of a ‘sham’ arrangement.  

It was apparent from his judgment that Mummery LJ, who gave the ‘leading’ judgment of the Court, the Court was fully aware of the various issues relating to the lack of legal protection for agency workers in such tripartite relationships; and stressed that it was not for the Courts to ‘express views about a change or to initiate a change’.  In his view this was a task for Parliament.

Lord Justice Mummery stated in his judgment:-

“30.	The real issue in ‘the agency worker’ cases is whether a contract should be implied between the worker and the end-user in a tripartite situation of worker, agency and end-user rather than whether, as in the ‘casual worker’ cases where neither the worker nor the end-user has an agency contract, the irreducible minimum of mutual obligations exists.  In the agency worker cases the problem in implying a contract of service is that it may not be necessary to do so in order to explain the worker’s provision of work to the end-user or the fact of the       end-user’s payment to the worker via the agency.  Those facts and the relationships between the parties are explicable by genuine express contracts between the worker and the agency and the      end-user and the agency, so that an implied contract cannot be justified as necessary.

		…

51.	In conclusion, the question whether ‘an agency worker’ is an employee of an end-user must be decided in accordance with the common law principles of implied contract and, in some very extreme cases, by exposing ‘sham’ arrangements.  Just as it is wrong to regard all ‘agency workers’ as self-employed temporary workers outside the protection of the 1996 Act, the recent authorities do not entitle all ‘agency workers’ to argue successfully they should all be treated as employees in disguise.  As illustrated in the authorities there is a wide spectrum of factual situations.  Labels are not a substitute for legal analysis of the evidence.  In many cases agency workers will fall outside the scope of the protection of the 1996 Act because neither the workers nor the end-users were in any kind of express contractual relationship with each other and it is not necessary to imply one in order to explain the work undertaken by the worker for the end-user.”

In the James case, the Court of Appeal was satisfied that it was not necessary, in the particular facts of the case, to imply a contract between Ms James and the Council.  Mere passage of time did not generate a legal obligation on the part of the Council to provide her with work, any more than it generated a legal obligation on her to do the work.  The provision of work by the local authority, its payments to the employment agency and the performance of work by Ms James were all explained by their respective express contracts with the employment agency, so it was not necessary to imply the existence of another contract in order to give business reality to the relationship between the parties.  

3.4	The Court of Appeal in the James case expressly approved the guidance set out in the decision of the Employment Appeal Tribunal (Paragraphs 53 – 61) in the James case, in relation to the determination of the question of whether a contract of employment between the worker and the end-user should be implied.  In view of the Court of Appeal’s approval I have set out below, in some detail, the said guidance of the Employment Appeal Tribunal, which was given by Elias P in the course of his judgment in the James case in the Employment Appeal Tribunal [2007] IRLR 168:-

54	“ …

The issue is then whether the way in which the contract is in fact performed is consistent with the agency arrangements or whether it is only consistent with an implied contract between the worker and the end-user and would be inconsistent with there being no such contract.  Of course, if there is no contract then there will be no mutuality of obligation.  But whereas in the casual worker cases the quest for mutual obligations determines whether or not there is a contract, in the agency cases the request for a contract determines whether there are mutual obligations.  

55.	If there were no agency relationship regulating the position of these parties then the implication of a contract between the worker and the end-user would be inevitable.  Work is being carried out for payment received, but the agency relationship alters matters in a fundamental way.  There is no longer a simple wage/work bargain between worker and end-user.

56.	In Dacas, Munby J was surely right when he observed that in a tripartite relationship of this kind the end-user is not paying directly for the work done by the worker, but rather for the services supplied by the agency in accordance with its specification and the other contractual documents.  Similarly, the money paid by the end-user to the agency is not merely the payment of wages, but also includes the other elements, such as expenses and profit.  Indeed, the end-user frequently has no idea what sums the worker is receiving.  

57.	The key feature is just not the fact that the end-user is not paying the wages, but that he cannot insist on the agency providing the particular worker at all.  Provided the arrangements are genuine and the actual relationship is consistent with them, it is not then necessary to explain the provision of the worker’s services or the fact of payment to the worker by some contract between the end-user and the worker, even if such a contract would also not be inconsistent with the relationship.  The express contracts themselves both explain and are consistent with the nature of the relationship and no further implied contract is justified.

58.	When the arrangements are genuine and when implemented accurately represented the actual relationship between the parties – as is likely to be the case where there was no pre-existing contract between worker and end-user – then we suspect that it will be a rare case where there will be evidence entitling the tribunal to imply a contract between the worker and the end-user.  If any such contract is to be inferred, there must subsequent to the relationship commencing be some words or conduct which entitle the tribunal to conclude that the agency arrangements no longer dictate or adequately reflect how the work is actually being performed, and that the reality of the relationship is only consistent with the implication of the contract.  It will be necessary to show that the worker is working not pursuant to the agency arrangements but because of mutual obligations binding worker and end-user which are incompatible with those arrangements.

59.	Typically the mere passage of time does not justify any such implication to be made as a matter of necessity, and we respectfully disagree with Sedley LJ’s analysis in Dacas on this point.  It will no doubt frequently be convenient for the agency to send the same worker to the end-user, who in turn would prefer someone who has proved to be able and understands and has experience of the systems in operation.  Many workers would also find it advantageous to work in the same environment regularly, at least if they have found it convivial.  The mere facts that the arrangements carry on for a long time may be wholly explicable by consideration of convenience for all parties; it is not necessary to imply a contract to explain the fact that the relationship has continued perhaps for a very extensive period of time.  Effusion of time does not of itself establish any mutual undertaking of legal obligations between the worker and end-user.  This is so even where the arrangement was initially expected to be temporary only but has in fact continued longer than expected.  Something more is required to establish that the tripartite analysis no longer holds good.”

In his judgment in the Court of Appeal in the James case, Thomas LJ commented in Paragraph 63 of the judgment:-

“ … Those who need the services of persons to work in their business can within that legal regime enter into arrangements with others to provide the services of persons without those persons becoming their employees … they have, in essence, the freedom to contract in these respects within the ordinary principles of law.”

Lord Justice Mummery in the James case also approved Elias J’s summary of the relevant legal principles as set out in Paragraph 21 of the decision of the Employment Appeal Tribunal in the case of National Grid Electricity Transmission  v  Wood [2007] AER(D).

In the said paragraph, Elias J had approved Mummery LJ’s observation in Dacas (Paragraphs 49 – 51), namely that the parties are entitled to arrange their relationship so as to exclude the creation of any contracts of employment, and tribunals must resist the temptation of finding a contract of employment merely because the worker is not in reality self-employed or in business on his or her own account.

	As Mummery LJ in Dacas pointed out (Paragraph 51):-

“ … I should make it clear that there is nothing unlawful or wrongful in what Brook Street Employment Agency and the Council, as the end-user, are evidently seeking to achieve for their own mutual advantage: that, if possible, Mrs Dacas works as a cleaner but not under a contract of service with either of them.  They are entitled to arrange their affairs with that lawful aim in mind … .”

4.1	Oral evidence was given to the tribunal by each of the claimants and various supervisory staff employed by the respondent at the properties of the respondent where each of the claimants had worked; together with Mr Robert Bleakley, the Assistant Director of Regional Operations of the respondent.  

Insofar as relevant and material, the tribunal found the following facts, as set out in the following paragraphs of the decision.

5.1	In or about early October 1996, the second-named claimant registered for secretarial work with the Grafton Recruitment Agency (Grafton) and entered into a contract with Grafton to enable her to do such work.  After taking the second-named claimant’s personal details and employment history, she was, within a few days, asked by Grafton to attend for interview at Scrabo Country Park (Scrabo).  The second-named claimant had an interview with the then warden, Mr George Hutchinson, for the post of Administrative Officer/Receptionist at Scrabo which also involved carrying out, when open, on occasion, receptionist duties at Scrabo Tower.

5.2	Mr Hutchinson as warden worked for the Environment and Heritage Service (EHS), which is an agency of the respondent.  There was no dispute between the parties that, if the tribunal found that the claimants or any of them were employed by EHS then, for the purposes of these proceedings, the said claimants were employed by the respondent; and no distinction was to be drawn by the tribunal between the respondent and EHS, for the purposes of these proceedings.  

5.3	Shortly after the said interview, the second-named claimant was informed by Grafton, not Mr Hutchinson or EHS/the respondent, that she had obtained the above position.  She started work on 17 October 1996.  It was not disputed by the second-named claimant that, in order to obtain the said post, it was essential that she registered with the said agency and that she would not have obtained the work otherwise; and also that there had been no public advertisement for the position by EHS.  Whilst there was an interview by Mr Hutchinson, before she started, I was satisfied this was in the nature of an informal interview by him to ensure that the person who was to be subsequently sent by the agency to Scrabo appeared to him to be suitable.  It was not the type of formal interview which would normally have taken place in a selection and recruitment process that might have followed such a public advertisement by the respondent, to which further reference shall be made later in this decision.  

5.4	It was not disputed that, at the relevant time, the respondent’s procurement service had a contract with Grafton to provide staff for receptionist services at EHS’s properties; and I am further satisfied that the second-named claimant, having registered with Grafton, was sent by Grafton, pursuant to this contract, to the informal interview with Mr Hutchinson to see if she was suitable person to be sent by Grafton to Scrabo, pursuant to the contract Grafton had with the respondent.  I am satisfied that, if she had not been suitable to Mr Hutchinson, Grafton would have been required to send another person by the respondent, pursuant to the respondent’s contract with Grafton.  I am equally satisfied if, on starting the job, the   second-named claimant had proved to be unsuitable, Grafton would have been asked to replace her.  In fact the contrary was true; the second-named claimant was an excellent worker and was clearly very good at her job.  She got on very well with all the EHS employees, as they did with her.

5.5	There was no dispute between the parties that the respondent had a series of contracts with various employment agencies to supply such staff to EHS properties.  Grafton were the relevant agency until or about 1997.  At that time, it appears the respondent’s contract with Grafton had come to an end and there was some form of ‘Tendering process’ carried out by the respondent to which various recruitment agencies were invited.  Following the process, Grafton lost the contract with the respondent.  Lynn Recruitment (Lynn) then entered into a contract with the respondent in succession to Grafton.  Significantly, in order for the second-named claimant to continue her work at Scrabo, she was informed by Mr Hutchinson it was necessary for her to register with Lynn in order to continue working at Scrabo.  The second-named claimant then immediately registered with Lynn and carried on working at Scrabo.

Lynn continued as the relevant agency contracted to the respondent to supply staff at EHS properties until in or about 2002, when Lynn was replaced by Select Recruitment (Select), who entered into a contract with the respondent to supply such staff to the respondent.  During the term of Select’s contract with the respondent it suddenly went into liquidation in or about April 2006 and the respondent entered into a contract with Diamond Recruitment (Diamond) to supply such staff to the respondent.  After each said change, the second-named claimant was required to register with the ‘new agency’, and did so entering into a written contract with each said agency to enable her to continue her work at Scrabo.

5.6	The third-named claimant in or about 1999 answered a newspaper advertisement by Lynn for the post of Receptionist at Roe Valley Country Park (Roe Valley).  She was also sent by Lynn for an interview with Mr K McLarnon, the then Warden at Roe Valley.  He clearly found her suitable for the job and, whilst I am satisfied he informed her, at the conclusion of the interview, that she had got the job of Administrative Officer/Receptionist at Roe Valley, it was on the basis that she had to register with Lynn, which she did, before she would be able to commence at Roe Valley.  Again, the third-named claimant did not dispute that, before she could commence her work at Roe Valley, she had to register with Lynn, and that she was required to register with the ‘new’ agency, whenever the respondent entered into a contract with the successor agencies, as set out above.  I am also satisfied that the interview with Mr McLarnon was similar to the interview the second-named claimant had had with Mr Hutchinson, as set out above, and was a similar attempt by him to ensure the person sent by the agency was suitable and would thereby avoid the practical difficulty where a person sent by the agency was found to be unsuitable and who would require to be replaced by another worker by the agency.  

5.7	I am also satisfied that, if the respondent had been appointing persons to carry out these posts as employees, it would have been required to publicly advertise and fill the posts in accordance with the statutory requirements of the Civil Service Commissioners (Northern Ireland) Order 1999.

Article 3(1) of the Order provides:-

“Except or otherwise expressly provided by or under this Order, a person shall not be appointed to a situation in the Civil Service unless:-

(a)	the selection of that person for appointment was made on merit on the basis of fair and open competition; and

(b)	the person appointed satisfies such requirements for appointment that may be prescribed by the Department;

… .”

As already seen in relation to the second and third-named claimants, and later the first-named claimant, at no time did any of the claimants take part, prior to taking up their said posts, in a formal interview with the respondent which was part of a competitive selection and recruitment process (as required under the above statutory provisions) involving, for example, public advertisement, short listing and interview with a panel arranged by or on behalf of the respondent to enable a person as an employee on merit.  

In contrast, in the case of the third-named claimant, in or about 2006, she applied for the position of Ranger, as part of such a selection recruitment exercise, and was subsequently appointed to the position.  There was no dispute that, following her appointment, at the conclusion of such a process in an open and fair competition, she was employed by the respondent as an employee.  No such similar recruitment exercise was required of any of the claimants before they took up their posts.  I am satisfied that the informal interview prior to their taking up their posts, as referred to above, does not equate to selection for appointment on merit on the basis of fair and open competition, as required under the said statutory provisions.

5.8	Unlike the second-named claimant, and as shall appear later the first-named claimant, the third-named claimant did not, apparently, sign a formal written contract with Diamond, albeit she had signed such a contract with the previous agencies.  Certainly, no such contract was able to be produced in evidence to the tribunal.  Equally, however, there was no dispute she had provided all her relevant banking details to Diamond before she resumed work, following the liquidation of Select, and the commencement of the respondent’s contract with Diamond.  She also accepted, upon that change, she had to be registered with Diamond before she could continue her work with the respondent.  Indeed, it was for this reasons she had given her bank details to ensure there was no break in payment upon the change.  I do not think, in the circumstances, the absence of a written contract is relevant and material; and I am satisfied that at all times there was an express or in the alternative implied oral contract between Diamond and the third-named claimant.  I think it has to be remembered that Diamond took over from Select into 2006 in unusual circumstances, when Select had suddenly gone into liquidation.  Diamond, in this emergency situation, had taken over the contract with the respondent.  No doubt there was an anxiety by all parties to avoid as little disruption as possible following Select’s liquidation and to ensure, insofar as possible, a seamless changeover.  The other claimants did enter into formal written contracts with Diamond and all the claimants, prior to the liquidation, had entered into formal written contracts with Select.  

In addition, the third-named claimant had thereafter obtained the post of Ranger, as set out above, with the respondent; and it may be the failure to complete the written contractual paperwork was as a result of the fact that subsequently she no longer required to have any contract with the agency following her said appointment.  However, significantly, the said bank details were provided by her to Diamond and she received payments on the same basis as the other claimants from Diamond for the hours worked by her, following Diamond’s takeover of the contract with the respondent. 

5.9	In or about early 2000, the first-named claimant answered an advertisement by Lynn for the post of Receptionist/Administrative Officer at Oxford Island, another EHS property.  Her appointment followed a similar pattern, as seen above, in relation to the second and third-named claimants and, before taking up the post, she was told by the agency to attend an interview with the then acting warden, Stephen Foster.  Again, she was clearly found to be suitable by him for the said work.  I am further satisfied that, although he informed her she had got the post, it was on the basis that she would be required to register with Lynn, which she did, before she could commence work at the said property.  Again, the first-named claimant did not dispute that in order to commence work in the above position, she had to so register; and further, in order to continue in her said position, she had to continue to register with the successor agencies, namely Select and Diamond, at the relevant and material time.  Again, I am satisfied, as set out above in relation to the second and third-named claimants, that the interview with Mr Foster was to ensure suitability before the agency sent anyone to commence work at the property and to avoid the necessity to require the agency to send a replacement in the event of any unsuitability of the first-named claimant.

5.10	It was apparent, as set out above, that each of the claimants were working at the said properties of EHS for a considerable period of time without any break; but at all times each had a contract with the relevant recruitment agency, with whom the respondent had at the material time a contract to supply such staff.  Each claimant has clearly been a very good worker and have carried out their respective duties in an exemplary manner.  It was apparent that each was held in the highest esteem by all EHS staff and management with whom they worked,  I have little doubt that, at the outset, it may not have been envisaged that the claimants would have remained in these posts for such a period of time.  Indeed, in some contractual documents between the claimants and the agency, the claimants were described as temporary workers.  But this described the reality of the situation.  The claimants, if they had not wished to continue such work, under the contract with the agency, would have been entitled to leave without any legal redress.  However, I am satisfied this was their choice; they preferred to stay, as they enjoyed the work they had been supplied to do, pursuant to the contract each had with the relevant agency.

5.11	Various contracts which each of the claimants had with the various agencies over the said period of time, insofar as they were available to be produced in evidence to the tribunal, contained, not surprisingly, some differences in wording/phraseology; but I am satisfied that each of the said contracts emphasised that there was no contract of employment between the worker and the respondent or indeed between the agency and the agency worker and that there was a contract for services between the agency and the agency worker.  However, as seen below, the terms of the contract and how the said terms were carried out went beyond mere definition or label.

5.12	By way of example, the terms of the contract between Select and the            second-named claimant, but which would have been applicable to all the claimants, provided detailed provisions, for example, in relation to the method of remuneration, conduct of assignments and termination.  I have no reason to doubt that all the relevant contracts between the agency worker and the agency were in similar terms.  

In the said contract, described as terms of engagement the following definitions applied:-

“’Assignment’ means the period during which the temporary worker is supplied to render services to the client; together with any subsidiary or associated companies as defined by the Companies Act.

‘Client’ means the person, firm or corporate body requiring the services of the temporary worker.

	‘Employment’ means Select Recruitment NI.

	‘Temporary worker’ means [second-named claimant].

	‘The contract’

These terms constitute a contract of services between Select Recruitment NI and the temporary worker and they govern all assignments undertaken by the temporary worker.  However, no contract shall exist between Select Recruitment NI and the temporary worker between assignments.

For the avoidance of doubt, these terms shall not give rise to a contract of 
employment between Select Recruitment NI and the temporary worker.  The temporary worker is engaged as a self-employed worker, although Select Recruitment NI is required to make statutory deductions from his remuneration in accordance with Clause 4.1.

	‘Remuneration’

Select Recruitment NI shall pay to the temporary worker remuneration calculated at a minimum hourly rate of £5.00.  The actual rate will be notified on a per assignment basis, for each hour worked during an assignment (to the nearest quarter hour) to be paid weekly in arrears …

Subject to any statutory entitlement under the relevant legislation, the temporary worker is not entitled to receive payment from Select Recruitment NI or clients for time not spent on assignment, whether in respect of holidays, illness or absence for any other reason unless then otherwise agreed.

	‘Conduct of assignments’

The temporary worker is not obliged to accept any assignment offered by Select Recruitment NI but if he does so, during every assignment and afterwards he will:-

(a)	co-operate with client’s staff and accept the direction, supervision and control of any responsible person in the client’s organisation;

…

(c)	unless arrangements have been made to the contrary, conform to the normal hours of work in force at the client’s establishment;

…
(g)	familiarise himself with and comply with the client’s policies and procedures on equal opportunities …;

If the temporary worker is unable for any reason to attend work during an assignment, he should inform the client and Select Recruitment NI by no later than 10.00 am on the first day of absence to enable alternative arrangements to be made.

	‘Termination’

The client may without prior notice or liability instruct the temporary worker to end an assignment at any time.

The temporary worker may terminate an assignment at any time immediately by informing the client.  A temporary worker shall also be expected to inform Select Recruitment NI of the termination.

	… .”

In reality, no such termination took place or was required to be considered, as the claimants had no dispute with the relevant EHS staff and management and were more than happy to work with them; as equally the EHS staff and management were more than content with the work carried out by each claimant.  However, I am satisfied if, for example, a claimant had decided she did not like a particular manager or working with him, and that could not be resolved, she would have been entitled to ‘walk away’ and look to the recruitment agency to obtain her other work, if available.  In such circumstances, the respondent would have been unable to bring any action to prevent her leaving.  Equally, if the claimant found other work, for example, on foot of a contract of employment with an employer, she would have been entitled to leave her post at the EHS property, and the respondent would not have been in a position to prevent her doing so.  Equally, if the EHS manager had been dissatisfied with the work of a claimant at any time the respondent could require the agency to replace her with a more satisfactory and suitable worker.  Indeed, in the course of evidence, the tribunal was given a number of examples where an agency worker was required to be replaced by the respondent due to the fact that the respondent was not satisfied with the agency worker’s work.

The contract also provided for statutory leave, pursuant to the Working Time Regulations (Northern Ireland) 1998 and how such entitlement and the amount of payment by the agency was to be calculated.

5.13	In the case of the second-named claimant, in or about March 2005, she raised grievances in relation to a certain manager who was an employee of the respondent with responsibility for Scrabo.  Interestingly, in her grievance, the second-named claimant referred to herself as a ‘contract worker’, which might suggest that she was fully aware at that time that she was not an employee of the respondent.  In raising her grievance, she contended that she had been treated less favourably on the grounds of her sex.  In my judgment, the respondent, under its own equality procedures but also the anti-discrimination legislation, was required to investigate and act upon any such complaint not only from its own employees but also from those agency workers working at its premises.  Indeed the contract with the agency, as seen above, provided for the claimant to familiarise herself with such procedures.

5.14	Although there were some small differences between how precisely the various supervisory staff employed by the respondent at the various properties required the claimants to produce proof of hours worked there was no dispute that the relevant paperwork setting out the hours worked, however prepared, was sent by either the claimant, or in some cases the relevant supervisory staff, to the agency.  Equally, there was no dispute that each claimant was paid on the basis of the hours worked, as set out in the contract between the agency and the agency worker and each claimant was paid by the relevant agency and not the respondent.  Clearly, there required to be some check to ensure that the hours claimed were correct and therefore the amount the agency would pay to the each claimant was correct and in accordance with the entitlement under the contract entered into between the agency worker and the agency; and equally that the agency was paid by the respondent the correct amount to which they were entitled, on foot of the contract between the agency and the respondent for the supply by it to the respondent of such workers.  Whether supervisory staff filled in the claim form for hours worked or whether they or the claimants actually sent on the form to the agency, in my judgment, was immaterial.  The fact the paperwork was sent to the agency was consistent with the terms of the claimant’s contract with the agency and the contract of the agency with the respondent.  The signature by both the claimant and the relevant supervisory staff were proper accounting procedures, and no more then that, to ensure the correct sums were paid by the agency to the agency worker and by the respondent to the agency for the supply of such workers.  

5.15	Initially, prior to the commencement of the Working Time Regulations (Northern Ireland) 1998, there was no requirement for the relevant agencies to provide paid holidays/annual leave.  As seen above, each contract the claimants had with an agency included provisions in relation to statutory leave after the commencement of the Regulations.  The claimants were only entitled to take accrued annual leave whereas the employees of the respondent were entitled to take annual leave at any time in the leave year, subject to the agreement of management.  In fact, throughout their period of work at the respondent’s properties, each of the claimants due to their good working relationship with the various supervisory staff, with whom they worked, at all times were able to satisfactorily arrange their leave, and indeed any other absences, by agreement.  Again, there were differences in how the relevant paperwork was dealt with by the supervisory staff at the various properties in relation to such annual leave and who actually sent it on to the agency.  However, for proper accounting purposes, as seen in relation to the monies due for hours worked, there again required to be the necessary authorisation before the relevant paperwork was sent to the agency to enable such paid leave to be given in accordance with the relevant Regulations.  As with the paperwork for hours worked, the fact the paperwork was sent to the agency was consistent with the terms of the contract of the claimants with the agency and the respondent’s contract with the agency.

5.16	On a day-to-day basis, I am satisfied the claimants each carried out their duties at their respective EHS properties, not only in a most satisfactory manner, but also followed the instructions, in doing so, of  the various supervisory staff at the said properties.  In my view this was to be expected and was consistent with the terms of their contract, as seen above, with the agency.  Indeed, if a claimant had refused to carry out the instructions or had done so wrongly the agency could well have been asked by the respondent to have the claimant removed and replaced by another agency worker.  It was, in my judgment, inevitable, as recognised by the terms of the contracts the claimants had with the agency, the claimant had to co-operate and accept such relevant supervision, direction and control.  Unlike the employees of EHS, the relevant disciplinary procedures of the respondent would not have been applicable.  As stated above, there were examples given where agency staff were so removed and replaced with other agency staff, and who were not the subject of the respondent’s disciplinary procedures; in circumstances where an employee would have been entitled to the benefit of the said disciplinary procedures.  

5.17	It was apparent that each of the claimants, to a greater or lesser degree, were given training by the respondent.  Such training involved training which was necessary or in some cases essential for the job and the duties they were required to carry out, such as first-aid, use of IT skills and child protection training.  Again, I consider that to provide such training was consistent with their status as agency workers in order to enable the respondent to make the most use it could of them and to enable them to carry out the work in the manner the respondent wished.  Indeed, in some cases, such as child protection, the respondent would not have been able to allow the work to be carried out unless the claimant had carried out the said training.  If, for example, the claimant had refused to carry out such training, then undoubtedly she would have been removed and replaced by another agency worker who had either already carried out the training or was willing to do so.  Of course, in relation to the claimants no such difficulty ever arose.  Indeed, I have no doubt each claimant fully realised the benefit of such training to them and that it also provided to them, at someone else’s expense, additional skills which potentially were highly marketable for them, if they decided to leave to seek alternative work from the agency and/or with someone else.  In or about late 2004, there was undoubtedly a cutback on the training which previously had been made available by the respondent to agency workers; such as the claimants; though equally, it seems Mr Foster, in the case of the first-named claimant, failed to follow the terms of the memorandum, which formalised this cutback, and continued to allow the first-named claimant, for a period at least, to have training opportunities similar to those which were given to employees of the respondent.  Under this change of policy the type of training permitted to be provided for agency workers was restricted to the type of training which was relevant to their current needs to enable them to carry out their duties as such an agency worker.  No longer was training to be permitted for such agency workers as part of future development.  I am satisfied that, prior to 2004 and the change of policy, the claimants had obtained some limited additional training, which was focused on future development rather than the work they were doing at the properties.  I consider the readiness of the supervisory staff of the respondent to authorise such additional training arose out of the good daily working relationship each claimant had with the supervisory staff over a long period of time.  If an agency worker was to be given such training, additional to that which was required to carry out his work and was training geared towards future development, it was clearly of advantage to an agency worker who could leave without warning and the benefit of such investment would have been lost to the respondent.   This cutback on training was made clear in a memorandum from Ms B Harrison, Head of Personnel and Development Services, and was applicable to all agency workers and not these particular claimants.  In taking a much stricter line in relation to provision of training, to the more flexible attitude previously adopted, I am satisfied that this change was consistent with the fact that the reason the respondent made use of agency staff was primarily for budgetary considerations and, at that time, there were pressures on the respondent’s budget.  However, I think that, coupled with such pressures, the opportunity was also taken to ensure the distinction between agency workers and employees was maintained and emphasised by the respondent.  However, whilst the claimants prior to the change of policy did obtain some training not strictly linked to their duties and more related to future development, as referred to above, I consider any such additional training was of a limited nature.  Most training was linked to carrying out the jobs for which they were supplied by the agency.  The fact that, prior to 2004, the claimants obtained such additional training, which was a bonus to them, did not in my view alter their status as an agency worker under their contracts with the agency and was not inconsistent, without more, with the respondent’s policy to employ staff and agency workers at their properties.  Indeed, it was seen by the respondent that by using agency staff as opposed to employees, savings could be made from what was a limited budget.  Evidence was put before the tribunal by Mr Bleakley, the Assistant Director of Regional Operations, that he had sought additional funding to allow him to employ staff directly as employees rather than as agency workers; but to his clear regret he was unsuccessful and the claimants’ position, along with all other agency staff used by the respondent, had therefore to remain the same.  Mr Bleakley frankly acknowledged that given the lengthy period in which the claimants had worked at the various EHS properties without a break that they themselves or indeed other members of staff might have come to think of them as having achieved the status of employee.  However, in evidence, which I accept, he believed this perception was merely a reflection of an ongoing normal working relationship, built up over time, between people successfully working together and did not reflect any actual change in status of the claimants; and the respondent continued, as a matter of policy, to obtain such staff for these positions from employment agencies throughout the period relevant to these proceedings.  

6.	In light of the facts as found, set out in the previous paragraph, and after applying the legal authorities referred to and, in particular, the guidance approved in the James case, I am satisfied the claimants were not at the relevant and material time employees of the respondent.  Each of the claimants may have been working at their respective EHS properties for some considerable time but the mere passage of time did not justify any such implication to be made as a matter of necessity.  Something more would have been required which was not shown by the claimants.  I am satisfied all the claimants enjoyed their work; and the arrangements entered into from the outset by them continued throughout the period relevant to these proceedings; and did so  because it suited them.  It also suited the respondent, primarily for financial reasons to have such staff supplied to it by an employment agency.  Equally, I have no doubt if either of the claimants had wanted to end their work at the EHS properties they could have done so and the respondent would have had no redress.  The fact the claimants did not wish to do so does not, in my judgment, establish the necessity to imply a contract of employment between the claimants and the respondent.  Equally, if the respondent had decided it no longer wanted either of the claimants to continue working, for any reason, at the said property and wanted them replaced because it felt their work was unsatisfactory; the claimants would have had no redress.  I note that, although the claimants at no time ever fell into this category, that there were examples of agency workers being so replaced and, where applicable, they were not entitled to the advantage of the respondent’s disciplinary procedures, which would have been open to employees of the respondent.  It was not disputed, fairly, by the claimants that before they were able to work for the first time at the EHS property they had to register and therefore to enter into a contractual relationship with the agency and that, as each agency was replaced, they had to enter into a new contract with the successor agency if they were to continue to work at the EHS properties.  This they did and therefore were able to continue their work.  However, in my judgment, if they had not done so they would have not have been able to continue their work and would have had to be replaced by a worker who had registered with the agency.  In relation to the second and third-named claimants there was no dispute that each had entered into relevant written contracts with the relevant agencies.  In the case of the first-named claimant, she did not do so in relation to Diamond; but did provide Diamond with her relevant bank details and continued to be paid in the normal way by Diamond.  Despite the absence of a formal written contract, I am satisfied that in the circumstances an express or in the alternative implied oral contract between the claimant and Diamond was entered into and that the claimant did not change her status at that time.  Subsequently, of course, the first-named claimant did become an employee, following a full and proper competitive selection and recruitment process.  It is correct that each of the claimants, prior to taking up their work at the EHS properties had an interview at the premises.  Firstly, I do not consider that this was similar to the competitive selection and recruitment process which would have been required to be carried out in relation to the appointment by the respondent of an employee.  Rather, I am satisfied any such interview was merely a practical exercise to ensure the person sent by the recruitment agency was going to be suitable on arrival at the premises, and would not require to be replaced by another agency worker; and that at all times the interviewer made it clear that, although he found the claimant suitable and was willing to have the claimant supplied to him by the agency, the claimant had to register with the relevant agency before she could commence such work at the property.  

There was no express contract between the claimants and the respondent, the end-user; but there was such a contract between the respondent and the agency and a further contract between the agency and the claimant.  This was a classic tripartite business relationship, frequently seen in the workplace; and referred to in the legal authorities, to which I have referred.

In my judgment, the claimants have not established that it was necessary to imply a contract of employment between the claimant and the respondent in order to give business reality to their particular situation at the properties of the respondent.

No such necessity arose.  What existed between the parties, in my judgment, was fully explained by the express contract between the worker and the agency and the agency and the end-user and in the manner in which each contract was carried out during the relevant period.  It was not necessary to do so, to explain the work done by the claimants which was an example of the result of such a tripartite relationship working in practice, involving a contract between the worker and the agency and the agency and the end-user.  In so concluding, I took into account, in particular, the following matters, in relation to how the said relationship actually worked.  As stated above, the interviews, prior to the commencement of the work, were not interviews which would have been required for appointment as an employee of the respondent.  The interview was, for good practical reasons, to test suitability and to avoid having to ask the agency to replace a worker supplied.  At all times, it was made clear registration with the agency was essential, despite the suitability, before the respondent would allow a claimant to work.  Payments were made by the agency to the claimant, pursuant to the contract between them, for hours worked, after relevant details were supplied to the agency.  The agency was paid by the respondent for the supply of the agency workers, pursuant to the contract between the agency and the respondent.  Certainly training was provided to the claimants as was required to do their particular jobs.  I am satisfied that any additional training they may have obtained, which was not linked to the ability to do their job, was limited and did not for the reasons set out in Paragraph 5.17 alter their status with the respondent.  In my judgment, the fact such additional training was provided, in such circumstances was not sufficient of itself, without more, to make it necessary to imply a contractual relationship of employment between the claimant and the respondent.  Much of the training was linked to their particular jobs and, in the absence of any other relevant matters which pointed to the existence of a contractual relationship, I was not prepared to come to the conclusion that the provision of such additional training made it necessary to imply such a contractual relationship.  Indeed the change of policy confirmed the distinction between use of employees and agency workers by the respondent at their properties.

I have no doubt that the reasoning by the respondent for entering into such a tripartite relationship was primarily based on budgetary considerations.  The fact that there was such a motive for the arrangement does not demonstrate that it is a ‘sham’, as was made clear by Lord Justice Mummery at Paragraph 51 of his judgment in the Dacas case, and referred to above.  I was not satisfied that subsequent to the relationship commencing there was anything which occurred which entitled me to conclude that the agency arrangements no longer adequately reflected the work carried out by the agency worker and that the reality of the relationship was only consistent with the implication of such a contract.  Indeed, I came to the conclusion that the arrangements were genuine and reflective of the actual relationship between the parties.

7.	I therefore concluded that the claimants were not employees of the respondent and that the tribunal therefore does not have jurisdiction to determine the claims of the claimants and they are dismissed.

Chairman:

Date and place of hearing:	29 May 2007; 30 May 2007; 31 May 2007; and 
29 June 2007, Belfast

Date decision recorded in register and issued to parties: