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Commercial Angles' Newsletter - April 2001 Newsletter

Temporary Employees

Allonby v. Education Lecturing Services

A new angle in the equal pay rules would be a bombshell in the temping market.

A part-time female teacher, employed as a temporary worker by a temping agency and working at Accrington & Rossendale College, brought a case for equal pay with a male teacher who was working at the same college but who was employed by the college. The case went to appeal. The Court of Appeal did not find the temping agency was in breach of the Equal Pay Act 1970 but did find that the case brought in Article 141 of the Treaty of Rome. Under this Article it was argued that the female teacher could compare herself, for the purposes of equal pay, with the male employee of another business provided that both workers were working in the same establishment or service i.e. the same enterprise. This contention moved the case into uncharted waters and the Court of Appeal referred the case to the European Court of Justice.

The implications are huge - the temporary agency market in UK alone is worth £17 billion per year. All kinds of companies in UK and Europe will feel the effects if the European Court of Justice rules in favour of the claimant. Any agency worker who can find a comparator of the opposite sex could force their temping agency to match the remuneration package of the best remunerated worker at the site where he or she works. The cost of using temps would rise, substantially in many cases, and perhaps by enough to bring into question the economic justification for using agency workers.

Another point raised in the case was that the pensions rule of the Teachers' Superannuation Scheme, that members must be employed under a contract of service, may also be discriminatory. Article 141 might uphold this view if a greater number of women than men were excluded from joining the pension scheme. Under the Barber case, the European Court has already ruled that pensions are part of pay. The implications are again important. Temping Agencies may be forced to give occupational pension benefits to agency employees and the costs would be passed on to the businesses using agency staff.

A judgement from the European Court is not expected for eighteen months but could the judgement be effective from an earlier date for other claims? More claims are bound to be registered.

Interlink Express Parcels Ltd v. Night Trunkers Ltd & Another

Control is the main test in temporary deemed employment

Night Trunkers provided some drivers to Interlink to move parcels between Interlink's depots in Interlink's vehicles. The Court of Appeal held that in the context of actual employment the courts had to take into account a wide range of factors, including the right to control the deemed employee's work. But in the case of temporary deemed employment, the paramount test was that of control as laid down in the House of Lords' judgement in Mersey Docks & Harbour Board v. Coggins & Griffiths. In the Interlink case, Interlink controlled: the drivers' qualifications; the routes the drivers took; the frequency of cleaning the vehicles; the completion of drivers' timesheets; vehicle servicing and were able, through Night Trunkers, to institute disciplinary action for failure to observe these instructions.

It was held by the Court of Appeal that ,although the drivers were paid by Night Trunkers, the drivers were the temporary deemed servants of Interlink for the purposes of Goods Vehicle (Licensing of Operators Act 1995. As temporary deemed servants of Interlink, the drivers are similar to contractors coming under the IR35 legislation. In the IR35 Judicial Review, Mr. Justice Burton almost invited test cases to determine whether temporary deemed employees can claim employee rights from their deemed employers. Like the case above, this case raises important questions for employers.

Articles from previous newsletters