In this question I will analyze whether Iqbal is an employee of Ajax or if he is an agency worker. This is an important factor from the point of view of employment protection rights and tax provisions. So firstly I will discuss agency workers. An employer may turn to an agency to provide him with staff for a specific purpose or definite or indefinite period of time. It seems Secretarial Services Ltd falls into the group of those who provide temporary staff or contract workers usually engaged by the agency and supplied to a third party, this seem to be relevant to Iqbal's case.
The area of supply of labour by an employment agency is covered by the Employment Agencies and Employment Business Regulations 2003 and these set out the minimum standards. The position of an agency worker and whether he is employed or not has consistently been a difficult area. In the case of McMeehan v Secretary of State for Employment1, whether an individual is an employee depends on the terms of the contractual agreement with the agency in light of the surrounding factual circumstances.
It seems by looking at the contract Iqbal is controlled by Ajax namely Simone his line manager as he takes orders and follows them. In Serco Limited v Blair and others, the EAT focused on the issue of control. Agency workers brought claims for unfair dismissal against the company hiring them. EAT held the workers were under the control of the company and carried out work at the company's order and subject to disciplinary proceedings, the intervention of the agency prevented the necessary relationship between the client company and employee.
In Iqbal's case it seems that if the agency doesn't intervene he could be classed as an employee. Mutuality of obligation would be important too as is right to control what the worker does and how he does it2 Length of time the worker has worked for the client and dealings between the parties, there is a possibility for an implied contractual relationship to have arisen. Iqbal has worked for Ajax for five years he must follow instructions and communications between the parties.
In Dacas v Brook Street Bureau (UK) ltd,3 the EAT upheld a decision of an employment tribunal that an agency worker operating through a personal service company is the employee of the end user company. This was appealed in Cable and Wireless v Muscat,4 where it was said that express terms in a contract between the agency and the worker cannot affect the existence of an implied employment relationship between the worker and the end user company, as terms between the two are not set out in the agency and worker contract.
The Dacas set a precedent so far as companies using agency workers, they may actually be employees of the end user companies depending on the circumstances of the engagement. According to this Iqbal may be an employee of Ajax due to the role he has in the company and as he is being controlled by Ajax and has also been with them for five years, this implied circumstances of the engagement may be enough to make him an employee of Ajax. An employee is defined under s. 230 (1) of the ERA 1996 as 'an individual who has entered into or works under a contract of service. '
As it is not always clear who an employee is, the courts have developed four tests to assist in determining status, the test are as follow; the control test, this is an important criterion which examines the degree of control the employer has the right to exert over the employee. This will include what needs to be done, the way in which the tasks will be done, and also time and place in which it should be done this will form a contract of service. 5 It is clear that the greater the degree of control which is exercisable by the employer, the more likely it will be that the contract is one of service.
It seems that Iqbal is controlled by Ajax as by the clause in his contract complying with all reasonable and lawful instructions make this point clearer. Iqbal carries out various administrative duties within Ajax's office this can be related to what Denning LJ suggested from the case Stevenson, Jordan and Harrison ltd v Macdonald and Evans,6 under a contract of service, he said a man is employed as part of the business and his work done as an integral part of the business. The more integral his role, the more likely he is to be an employee and this is seen in the organisational test.
The multiple test takes into consideration a number of different factors to asses status. The test was established in the case of Ready Mixed Concrete v Ministry of Pensions,7 which lays down a three stage test firstly, the worker agrees to provide his work in return for a wage, secondly, the worker agrees to be subject to the control of the other party, and the other provisions of the contract are consistent with it being a contract of employment. In relation to Iqbal he is working under the agreement of being paid.
He is working under the authority of Ajax and carries out work with the guidelines given by Simone therefore he fits the requirement of working under a contract of employment. In the case of Market Investigations ltd v Minister of Social Security;8 whether an interviewer who was engaged on a casual basis was employed under a series of contracts of service or under a series of contracts for services. According to Cooke J's judgment there is a fundamental test to be applied, is the person who has engaged himself to perform these services performing them as a person in business on his own account?
It could well be said 'the extent of the control exercised' by Ajax in relation to Iqbal is one of 'being employed under a contract of service,' The last test to be applied is an important one and employee must have mutually legally binding obligations. In the case of O' Kelly v Trusthouse Forte plc,9 the employee is under a continuing obligation not just to do the work given but to take work when it is offered by the employer. Also employer is bound not just to pay for work done but also continue to make work available.
To define status conclusively the courts will consider a host of factors e. g. what degree of control is exerted over Iqbal the more control the more likely he is to considered an employee, how he is paid regularly or sporadically, if payment is for a fixed amount it will indicate employment status. Does Ajax deduct tax or national insurance or is individual responsible for this? If deduction is by Ajax this would be a factor indicating employee status. As I have established Iqbal to be an employee of Ajax I will now move on to talk about how he was treated in the office by Simone.