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‘Zero-hours’ employee deemed to be agency worker due to nature of assignment

Written by Brabners LLP

IMPORTANT CASE UPDATE: Brooknight Guarding Limited v Matei

The Employment Appeal Tribunal (‘EAT’) has recently passed down a hugely important judgment in the case of Brooknight Guarding Limited v Matei (‘Matei’). The EAT upheld the tribunal decision that a security guard (employed on a ‘zero-hours’ contract) was an agency worker as a result of the nature of his assignment to the end user.

The case of Matei involved the dismissal of the claimant (‘M’) who had been working for the respondent (‘B’) for 21 months in his role as a security guard. M was contracted on a ‘zero-hours’ contract and often assigned to different end-user clients by B to carry out his role. The majority of M’s employment was spent contracted out to Mitie Security Limited (‘Mitie’). M’s role with Mitie was ad-hoc and his underlying remit was to provide cover for Mitie as and when required. Mitie supervised M and provided him with instruction.

Upon his dismissal, M made a claim to the tribunal, claiming that he was an agency worker as defined by the Agency Workers Regulations 2010 (‘AWR’). M asserted that he should have been subject to the same working conditions as Mitie’s permanent staff. The tribunal decided in M’s favour, they held that M’s assignment to Mitie was temporary and they also relied upon the nature of M’s relationship with Mitie (including the fact that M was subject to Mitie’s supervision and direction) to hold that he was an agency worker for the purposes of AWR.

Upon appeal to the EAT, B argued that M’s zero-hour contract was not a bar to him being a permanent employee and as such he could not be an agency worker. The EAT upheld the tribunal’s decision, rejecting B’s arguments. However, the EAT agreed with B that a zero-hour contract was not a bar to permanent employment however on the facts of the case they stated that M’s relationship with Mitie was that of agency worker, they focused on the temporary, ad-hoc nature of M’s assignment to assert that M was not a permanent employee and that he was an agency worker for AWR purposes.

What does this mean for you?

If you operate a similar model to B then the judgment in Matei could have serious implications for you. The decision leaves some businesses (e.g. security companies, cleaning companies) open to potential tribunal litigation. It is important, on the back of Matei, for businesses concerned with the supply and engagement of contractors, to revisit contracts with workers before supplying/engaging them to ensure that the contractual terms between the business, the worker and the end user are clear and to establish whether the worker could be deemed to be an agency worker. If any workers can be deemed agency workers then they should receive parity with permanent staff after 12 weeks’ service so as to avoid any potential complaints.

This case raises further doubts in regards to the utilisation of ‘zero-hours’ contracts. ‘Zero-hours’ contracts are increasingly becoming a paradox – whilst they are flexible and can benefit both businesses and workers, they are facing increased scrutiny and litigation, and whilst they enable businesses to ‘pick and choose’ when to provide employees with work, companies using them face the constant threat of litigation and/or tribunal claims. It is important to be careful and clear when utilising ‘zero-hours’ contracts to avoid any potential legal issues.

This bulletin is for general guidance purposes only and should not be used for any other purpose.