Employment Law Advocates

This case is reported, among other places, in the Industrial Relations Law Reports at [2008] IRLR 302. When it appeared, it frustrated¬†many commentators¬†because it appeared not to resolve a conflict in the authorities between those cases in which a contract of employment was implied between an agency worker and an end user, such as Dacas v Brook Street Bureau, and those in which it was not, such as James itself. It contained an intriguing comment from Lord Justice Mummery that, “as an appeal from the decision of an ET only lies on a question of law, my view is that, in general, it would be very unusual for an appeal to the EAT or to this court to have a real prospect of success if the ET’s conclusion that a contract of employment with the end user should, or should not, be implied, has been reached by applying the correct test of necessity.” This suggested that it¬†continued to¬†be¬†within the discretion¬†of tribunals to imply such contracts and Dacas could¬†still be followed in many circumstances.

I would be interested to know whether anyone else has had a different experience but I have not seen tribunals ever imply an employment contract in this way since the James decision and I am sceptical that an appeal against such a decision would not in fact succeed. Dacas has been heavily criticised and it must be remembered that the Court of Appeal was not in a position to overturn it because it was one of its own decisions. However, the comment by Lord Justice Sedley, in a minority in Dacas, to the effect that a contract would be implied if the arrangement subsisted for a sufficiently long time, was expressly disapproved by the Employment Appeal Tribunal in James. The Court of Appeal more politely denied that this was what he meant. Therefore, Dacas was expressly restricted in the scope of its application.

Even more tellingly, Lord Justice Thomas noted that “employment tribunals must continue to apply the principles of the law of contract” and¬†Lord Justice Mummery¬†also reminded them that,¬†”They are not architects of economic and social policy.”¬†These rather unnecessary observations were clearly veiled criticisms of Dacas and the¬†tribunals¬†who¬†sought to follow it. Although it did not, and could not,¬†explicitly say so, the decision in James had, to all intents and purposes,¬†the effect of¬†a total¬†rejection of Dacas.