Since the Court of Appeal's suggestion, in Dacas v Brook Street Bureau, last year, that an agency worker might be an employee of the firm at which they actually work, companies have viewed agency staff with increasing trepidation.

Three recent decisions now confirm the eagerness of courts and tribunals to find implied contracts of employment and to help those staff in enforcing their new-found rights.

In Cable and Wireless v Muscat, the employment tribunal followed Dacas and determined that Mr Muscat, who described himself as a designated contractor and operated his own limited company, which in turn had a contract with an employment agency for the provision of Mr Muscat's services to Cable and Wireless (C&W) was, in fact, C&W's employee. Despite this elaborate structure and specific insistence by all concerned that Mr Muscat was not a C&W employee, he worked under the direction of C&W's managers, he arranged his holidays to suit C&W, he was provided with a C&W mobile phone and laptop and was described as an employee in company documentation. The commercial reality, said the tribunal, was that he was an employee. Accordingly, he could bring an unfair dismissal claim.

In Bunce v Skyblue, the Court of Appeal decided that Mr Bunce was not the employee of the employment agency through whom he worked. Importantly the agency did not have sufficient control over what Mr Bunce did on a daily basis for an employment relationship to arise. By process of elimination, therefore, Mr Bunce may well have been the employee of the end user. Happily for that company, the court was not asked to decide that question.

Finally, in Astbury v Gist, tribunals were reminded of their power to add in, without being asked, any end user or agency not originally a party to the proceedings. An employee who picks the wrong party to sue can therefore be assured of appropriate assistance from the tribunal in identifying the correct opponent.

* Stephen Elliott is a solicitor in the employment team of North-East law firm Ward Hadaway. He can be contacted on 0191-204 4000 or by email at stephen.elliott@wardhadaway.com

Published: 24/05/2005