Brook Street Bureau (UK) Ltd v Dacas [2004] EWCA Civ 217

Mrs Dacas (D) was a cleaner with Brook Street, an employment agency.  She entered into a written agreement with them which provided that they were under no obligation to offer work opportunities to her and she was under no obligation to accept any offer.  The agreement also provided that Brook Street would pay her a minimum hourly rate on a per assignment basis for each hour worked, to be paid weekly in arrears.

Brook Street had entered into a contract with Wandsworth Borough Council (WBC) for the provision of agency workers.  That contract provided for WBC to pay Brook Street on being given invoices, which were calculated from the time sheets which workers supplied to WBC.  D worked as a cleaner for 4 years until WBC asked that she be withdrawn from the assignment.  D claimed unfair dismissal against Brook Street and WBC.  The employment tribunal found that D was not an employee of Brook Street or WBC.  D appealed the decision that she was not an employee of Brook Street but not the decision as it related to WBC.  The Employment Appeal Tribunal held that she was an employee of Brook Street.

The Court of Appeal was unanimous in holding that D was not an employee of Brook Street, because of the lack of sufficient control and the presence of express terms negativing mutuality of obligations between the parties.  However, it also held that had WBC been a respondent in the appeal they would have remitted that part of the case back to the tribunal, on the basis that it had failed to consider whether an implied contract of service had in fact arisen between D and WBC.  While agreeing that the case should be remitted, their Lordships indicated that they each would have reached different conclusions had they been asked to decide for themselves whether D had been an employee of WBC.

The principal disagreement arose on the issue of mutuality of obligations.  It is established that mutuality, in the sense of mutual legal obligations of remuneration in exchange for personal service is one of the pre-requisites for the existence of a contract of service.  In a long line of cases it has been held that the absence of mutuality between the end-user and worker has meant that there was no contract at all between the parties.  In order to constitute a contract the obligations have to be mutual in the sense of being owed by the parties to each other and not by the parties to a third party.  In this case, the respective obligations were set out in the contract between WBC and Brook Street and Brook Street and D.  On the face of it, the documentation indicated no intention by WBC and D to enter into legal relations with one another.  Despite this, 2 Lords Justice of Appeal (Mummery LJ and Sedley LJ) suggested on those facts that they would have found D to be an employee of WBC.  WBC was under an obligation to pay for D’s work and she was under an obligation to attend work punctually and carry out its instructions.  However, Munby J disagreed that there was mutuality since WBC had no obligation to pay D and did not set her rate of pay and Brook Street’s obligation to pay her arose independently of whether or not WBC paid Brook Street.

Comment

It is not suggested that this case departs from the requirement of mutuality.  However, it is suggested that the potential existence of an implied contract of service should always be considered by tribunals in such cases.  The probable practical effect of this case is that employment tribunals will be more astute to conclude that the worker and the end-user intended to enter into mutual legal obligations, although it by no means provides a settled solution to the question of whether agency workers are employees of the end-user.

This could have serious implications for agency social workers doing work for social care departments, or agency nurses doing likewise for the NHS.

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