McMeechan v Secretary of State for Employment

A temporary worker’s general relationship with an employment agency and each specific assignment are separate engagements. Either may constitute a contract of service.

For a specific assignment, the tribunal must consider the relationship as a whole. Provisions stating that neither party must offer or accept future assignments have no operation once a particular assignment has been accepted. A description of the worker as self-employed is relevant but not conclusive.

Employment status may arise where the assignment requires personal service under substantial control, imports an employee’s duties, provides hourly wages and permits dismissal, termination, review and grievance procedures.

A temporary catering assistant obtained assignments through Noel Employment Ltd. After the agency entered voluntary liquidation, he claimed £105.17 in unpaid wages from the Redundancy Fund under section 122 of the Employment Protection (Consolidation) Act 1978.

The Industrial Tribunal held that he was not an employee. The Employment Appeal Tribunal allowed his appeal, holding that the agency’s general conditions created a contract of service: [1995] ICR 444. In the Court of Appeal, the worker was permitted to advance the alternative case that his four-day assignment with a particular client was itself performed under a contract of service.

The central issue was whether a temporary worker could be an employee of an agency for a specific assignment even if the general relationship did not amount to employment.

1. Appeal dismissed unanimously. Lord Justice Waite delivered the judgment, with which Lord Justice Potter and Lord Justice McCowan agreed. The worker was an employee of the agency for the specific assignment from which the unpaid wages arose.

2. A temporary worker’s general engagement with an agency and each specific assignment must be considered separately. Either engagement is capable of creating a contract of service. The fact that common standard conditions govern both does not prevent their receiving different significance in their respective contexts. O’Kelly v Trusthouse Forte [1984] 1 QB 90 and Nethermere (St Neots) Ltd v Gardiner and Taverna [1984] IRLR 240 supported that approach.

3. To the extent that Pertemps Group v Nixon (EAT/496/91) held that a specific assignment could not create a contract of service between an agency and a temporary worker, it should not be followed. Its categorical approach was incompatible with O’Kelly and Nethermere. Wickens v Champion Employment [1984] ICR 366 concerned a general engagement and did not govern the status of an individual assignment.

4. For a specific assignment, provisions excluding any obligation to offer or accept future work have nothing upon which to operate. Once the worker has accepted and performed the assignment, the absence of obligations concerning later assignments is irrelevant to the status of that self-contained engagement.

5. The conditions were assessed as a whole. The self-employed label and the worker’s stated freedom to work on that basis pointed towards a contract for services. The agency’s powers to dismiss for misconduct and terminate the assignment, the review and grievance procedures, the imported common law duties of an employee, and hourly pay subject to deductions for poor performance or conduct pointed towards a contract of service. The latter features prevailed despite the contractual label.

6. The Court did not decide whether the worker’s general engagement with the agency was also a contract of service. That question became academic and was left for a case in which it arose directly.

1. Court of Appeal: Dismissed the Secretary of State’s appeal, although for reasons differing from those of the Employment Appeal Tribunal. It upheld the worker’s entitlement on the alternative ground that the specific assignment was a contract of service.

2. Employment Appeal Tribunal: Allowed the worker’s appeal and held that the general engagement created a contract of service: [1995] ICR 444.

3. Industrial Tribunal: Dismissed the claim because it considered itself bound by authority to find that the temporary worker was not employed under a contract of service.