Brook Street Bureau (UK) Ltd v Dacas

A contract of service requires an irreducible minimum of mutual obligations and sufficient control by the putative employer. In a triangular agency arrangement, the written agreements and their labels do not necessarily exhaust the contractual relationships. A tribunal should examine the total situation and consider whether the worker and end-user formed an implied contract through their conduct.

An agency is not the employer merely because it pays the worker and administers benefits. Where it need not provide work, the worker need not accept work, and the end-user exercises day-to-day control, the necessary employment relationship with the agency may be absent.

A cleaner obtained work through Brook Street Bureau and worked exclusively for Wandsworth Borough Council at a residential care home for about four years. Brook Street paid her and administered matters such as tax, sickness and holidays. The Council directed her daily work and initiated the termination of her assignment.

The Employment Tribunal held that she was employed by neither Brook Street nor the Council. On her appeal concerning Brook Street alone, the Employment Appeal Tribunal held that she was Brook Street's employee and remitted the unfair dismissal claim.

Brook Street appealed. The principal issue was whether its written temporary-worker agreement, or a separate contract governing the particular assignment, was a contract of service. The court also considered, prospectively, whether tribunals should examine the possibility of an implied contract of service between an agency worker and the end-user.

1. Brook Street's appeal was allowed unanimously. Per Mummery LJ, with whom Sedley LJ and Munby J agreed on the disposition, the cleaner was not employed by Brook Street. Brook Street was under no obligation to provide work, and she was under no obligation to accept work offered. Brook Street did not exercise the relevant day-to-day control over her or her work. Its payment and administrative functions did not make it her employer.

2. The Temporary Worker Agreement was the only contract between the cleaner and Brook Street. There was no evidential or documentary basis for inferring a separate contract of service governing the West Drive assignment. Although a contractual label is not conclusive, the Employment Tribunal was entitled to consider the express designation of assignment contracts as contracts for services. The Employment Appeal Tribunal therefore erred in holding that employment by Brook Street was the only conceivable conclusion.

3. Per Mummery LJ and Sedley LJ, an employment tribunal considering a triangular agency arrangement should examine the total situation. Express agreements between worker, agency and end-user may not exhaust the contractual possibilities. The absence of a written agreement between worker and end-user does not preclude a contract of service inferred from conduct, regular dealings, mutual obligations and the end-user's control.

4. The majority considered that the Employment Tribunal should have addressed whether the cleaner and the Council had formed an implied contract of service. The Council's daily control, receipt of the work, indirect funding of remuneration and initiative in ending the assignment were materially relevant. Sedley LJ considered that the evidence strongly indicated employment by the Council. These observations could not affect the existing dismissal of the claim against the Council because the cleaner had not appealed that decision.

5. Munby J agreed that tribunals should explore a possible implied contract with the end-user, but doubted that one could usually be found where the agency alone was obliged to remunerate the worker. He regarded mutuality of obligation and control as deliberately divided between agency and end-user. This disagreement did not affect the unanimous decision that Brook Street was not the employer.

1. Court of Appeal (Civil Division): Allowed Brook Street's appeal unanimously and restored the conclusion that Brook Street was not the cleaner's employer. The unappealed dismissal of the claim against the Council remained effective.
2. Employment Appeal Tribunal: Allowed the cleaner's appeal, held that she was employed by Brook Street under a contract of service, and remitted the case for determination of unfair dismissal.
3. Employment Tribunal: Held that the cleaner was employed by neither Brook Street nor the Council and dismissed the unfair dismissal complaint on the preliminary issue of employment status.