The EAT case of James v Greenwich Council concerned a worker, J, who was supplied by an agency to carry out work for Greenwich Council. She had no express contract with the council but she argued that there was an implied contract, given in particular that she had worked for the council for some 5 years and had been treated in all respects like other permanent staff. The tribunal considered whether there was an implied contract, (following the guidance given by the Court of Appeal in Brook Street Bureau v Dacas) and held that there was no mutuality of obligation and therefore no contract with the council. J appealed arguing that the tribunal had erred in law and reached a perverse conclusion. The EAT rejected the appeal, holding that the tribunal had properly assessed the evidence and was entitled to conclude that there was no mutuality of obligation. The EAT made certain observations about the circumstances in which a tribunal might properly infer an implied contract between the worker and the end user:
It is not appropriate to imply a contract where the end user cannot insist on the agency supplying a particular worker
Where 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 the EAT thought it would 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 a contract is to be inferred there must, after the relationship has started, 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
The passage of time does not justify the implication of a contract
Although these observations were not central to this case, they do provide some welcome and important guidance. If followed they are likely severely to reduce the scope for an agency worker to argue that he or she is an employee of the end user of his or her services. But, given that the EAT has disagreed with the Court of Appeal (by which it is of course bound), users of agency workers may have to wait for a definitive pronouncement from the higher court.