MPloy Group Ltd v Denso Manufacturing UK Ltd

A contract incorporating specified standard terms does not ordinarily incorporate revised terms issued from time to time unless clear language provides for that result. A significant oral variation must be proved with particular care where the contract prescribes formalities. In temporary-worker arrangements, transfer fees and extended hire provisions must be construed as distinct contractual mechanisms and consistently with the regulatory framework. A period of extended hire ordinarily means hire on the same basis as before, but a failure to provide the full period may give rise to damages rather than an agreed transfer fee where the contract does not provide for one. A sole-supply clause is construed according to its natural meaning.

MPloy Group Ltd, an employment business, supplied temporary workers to Denso Manufacturing UK Ltd under contracts containing specified terms of business. Following several extensions, Denso terminated the relationship and appointed another employment business.

MPloy claimed transfer and introduction fees, damages for alleged misrepresentation, loss of an opportunity to fill vacancies, and damages under a separate sole-supply contract. Denso counterclaimed for losses allegedly caused by MPloy’s rejection of an earlier extended-hire notice. The central issues concerned the applicable terms of business, construction of the transfer-fee provisions, the validity and effect of extended hire, and the alleged misrepresentation.

1. Applicable terms. The APW Contract incorporated the terms attached as Appendix 11, namely the old terms of business. Clause 1.3 did not provide for Mploy’s terms from time to time. Clear language would have been required for that effect, and no such language could properly be implied (paras [64]-[66], [80]-[82]).
2. Variation. The evidence did not establish an express oral agreement incorporating the new terms. Contractual formalities requiring close scrutiny reinforced that conclusion (paras [68]-[78]).
3. Transfer and introduction fees. Clause 7 contained separate mechanisms for temp-to-perm, temp-to-temp and temp-to-third-party situations. Clause 7.5 concerned workers introduced to a third party who then engaged them, not a transfer to another employment business supplying the same hirer. Reading it otherwise would create overlapping liabilities and undermine the extended-hire option required by Regulation 10 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (paras [104]-[112]). Entry into a contract permitting future work did not itself constitute an “Engagement” where no services had yet been rendered (para [112]).
4. Extended hire. Clause 7.4 applied to workers who chose not to complete the extended-hire period, including drop-out workers. For reduced-hours workers, the extended hire was required to operate on the same basis as the prior hire, including the contractual requirements for ordinary full-week orders. However, the contract did not provide for a transfer fee when the extended-hire period was incompletely performed. The appropriate remedy was damages measured by the lost margin, less the margin actually earned (paras [113]-[127]).
5. Other claims. The misrepresentation was not false. Mploy established a 50% chance of filling one permanent vacancy and recovered 50% of the relevant fee. The separate Quality Department contract imposed a sole-supply obligation, and Mploy had not waived that right by accepting the extended-hire lists (paras [84]-[95], [130]-[141]).
6. Disposition. The third-party introduction-fee and misrepresentation claims were dismissed. The transfer-fee claims based on the new terms were dismissed. Claims concerning drop-out and reduced-hours workers, the lost vacancy opportunity and the Quality Department contract succeeded only on the stated bases. The counterclaim was dismissed, and the admitted debt remained payable. The parties were invited to agree the order (paras [142]-[148]).