Smith v Carillion (JM) Ltd & Anor

For an agency worker seeking to establish a contract with the end-user, implication is permitted only where necessary to give business reality and create enforceable obligations. Integration, an interview, intended duration, termination by the end-user, absence of written agency terms and the passage of time do not by themselves satisfy that test. A tribunal’s conclusion is not appealable where it directed itself correctly and reached a sustainable result. Statutory protection deliberately confined to employees cannot be extended to limb (b) workers merely because the boundary appears unjust or irrational. Nor can Human Rights Act 1998, section 3, retrospectively rework legislation for pre-commencement acts; disclosure is not a continuing act merely because its detriment persists.

David Smith claimed that Mowlem, later acquired by Carillion (JM) Ltd, had supplied information about his trade union and health and safety activities to a blacklisting organisation. The Employment Tribunal accepted several concessions but rejected his case because there was no contract between him and Mowlem. The Employment Appeal Tribunal dismissed his appeal under UKEAT0081/13. Before the Court of Appeal, the central questions were whether a contract could be implied between an agency worker and the end-user, and, if so, whether employee-only protections under the Trade Union and Labour Relations (Consolidation) Act 1992 and the Employment Rights Act 1996 could be extended through section 3 of the Human Rights Act 1998 to cover pre-commencement disclosures.

Appeal dismissed. Lord Justice Elias gave the judgment, with which Lord Justice Fulford and Dame Janet Smith agreed. The Employment Tribunal was entitled to find that no contract existed between Smith and Mowlem, and the EAT had correctly declined to interfere.

1. Implied contract. In an agency arrangement, the claimant bears the burden of proving that a contract between worker and end-user is necessary to give business reality to the arrangements and create enforceable obligations. If the parties would or might have acted in the same way without such a contract, implication is impermissible. The approach in James v Greenwich London Borough Council [2008] EWCA Civ 35; [2008] ICR 545, Modahl v British Athletic Federation [2001] EWCA Civ 1447; [2002] 1 WLR 1192, The Aramis [1989] 1 Lloyd’s Rep 213 and Tilson v Alstom Transport [2010] EWCA Civ 169; [2010] IRLR 169 supported that conclusion. Integration, an interview, an intended lengthy engagement, termination by the end-user, lack of written agency terms and employee-like appearance did not make implication necessary. Agency arrangements are not contrary to public policy merely because they may avoid obligations arising from direct employment.
2. Appellate restraint. Where the Tribunal directed itself correctly and had an evidential foundation for its conclusion, neither the EAT nor the Court of Appeal could interfere merely because another inference was possible.
3. Statutory scope. At the relevant time, sections 146 and 44 protected employees, not the wider category of limb (b) workers. That distinction was deliberate. Extending section 44 because the distinction appeared unjust or irrational would amount to legislation, not interpretation. The drafting-error principle in Rowstock Ltd v Jessemy [2014] EWCA Civ 185; [2014] ICR 550 and Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586 applied only where Parliament’s intended purpose was certain and the correction could be stated confidently.
4. Convention rights and continuing acts. Section 3 of the Human Rights Act 1998 could not be used retrospectively for acts occurring before the Act came into force, following Wilson v First County Trust Limited (No.2) [2003] UKHL 40; [2004] 1 AC 816. The disclosures were one-off acts; continuing detriment did not convert them into continuing acts. The reasoning in Okoro v Taylor Woodrow Construction Ltd [2012] EWCA Civ 1590; [2013] ICR 580 applied.
5. Elias LJ made a conditional obiter observation that former-employee status would not itself defeat a post-termination claim, preferring Woodward v Abbey National [2006] EWCA Civ 822; [2006] ICR 1436 and Rhys Harper v Relaxation Group plc [2003] ICR 867 to Fadipe v Reed Nursing Personnel [2001] EWCA Civ 1885; [2005] ICR 1760. That issue was unnecessary to the result.

1. Court of Appeal (Civil Division): Appeal dismissed.
2. Employment Appeal Tribunal: Under UKEAT0081/13, the appeal from the Employment Tribunal was dismissed.
3. Employment Tribunal: The claim failed because Smith had no contract with Mowlem and was neither its employee nor a limb (b) worker.