Page last updated at 14:16 GMT, Monday, 16 February 2009

Q&A: Rights for agency workers

Workers at the mini car production line at the Cowley plant in Oxford.
Rights for agency workers are probably very limited

BMW is cutting back production at its Mini factory in Oxford and 850 contract workers have been sacked with immediate effect.

What employment rights do they have, if any?

And where can they, and workers in a similar position, go for help?

Richard Nicolle, a partner in the employment law practice of London law firm Denton Wilde Sapte, looks at the issue.

What rights do they have to complain, or to receive redundancy money?

The right to claim unfair dismissal and to receive a redundancy payment is limited to employees - and unfortunately for them, agency workers are probably not employees of BMW.

Prior to an Appeal Court decision last year, there was considerable uncertainty about when agency workers might turn into employees of the company where they were actually working.

However, that decision has significantly restricted such circumstances.

It will now be relatively rare for an employment tribunal to agree that the agency worker has acquired employee status with the end user of their services - in this case BMW.

This may apply even if the agency worker has spent several years working on behalf of a given client.

An agency worker would need strong evidence about the facts of his or her case to show that an employment contract with the end user had been created.

Can they complain to their employment agency?

It would be necessary to look at what their contract with the agency actually said, and in particular whether they are stated to be employees of the agency.

In the current economic climate, it is unlikely that their agency would be able to find alternative work.

If they are employees, they would have the right to a redundancy payment - subject to having two or more years' continuous employment - and to claim unfair dismissal if the agency had not followed a fair redundancy procedure.

In view of the numbers of agency personnel being dismissed, this may mean the agency is obliged to consult formally with employee representatives.

However, it is possible that the workers may in fact be described as be self-employed.

Whilst this may not reflect the reality of their working relationship, it would still be a big hurdle to showing they were really employees of the agency.

And they would have to show that they were its employees, before being able to pursue any claims for unfair dismissal and a redundancy payment.

Why do employers use agency or contractual staff for a long time?

Sometimes agency personnel are used to cover a short-term need for additional staff.

However, frequently agency personnel are retained for relatively long periods and the principal reasons for this are to reduce head count and costs and to increase flexibility.

Sometimes the agency company may also take on responsibility for PAYE and compliance with immigration legislation etc which would reduce the administrative burden on the end user.

Some contract workers have been there for several years - are they not really employees of BMW?

As indicated above, the recent Appeal Court decision means that it is unlikely that the agency workers will be deemed to be employees of BMW.

That may seem unfair when the agency personnel have worked for BMW for relatively long periods.

For example, one individual is quoted as saying that he had worked for BMW continuously for four years.

Because of this unfairness trade unions have been pressing the government for additional protection for agency workers.

However, this has been a significant area of dispute between business and trade unions.

Would they be wasting their time going to an employment tribunal?

Not necessarily.

Depending on the contracts between agency workers and their agency, and between their agency and BMW, there may be scope for individuals to argue they had become employees of the car firm.

Nevertheless, this would be very much the exception rather than the norm.

It would involve the worker identifying specific circumstances of the working arrangements to justify such a conclusion.

And simply having worked for BMW for long time would not be a sufficiently strong reason on its own.

Where can they go for help and advice?

The agency workers will almost certainly be non-unionised.

Therefore, if they wish to seek advice, they should either go to a local solicitor specialising in employment law or the Citizens Advice Bureau.

Their starting point should be to seek clarification from their agency as to what their status is and what compensatory payments they will receive.

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