The Employment Appeal Tribunal (EAT) has held in the case of Moran and Others v Ideal Cleaning Services Limited (1) and Celanese Acetate Limited (2) that the Agency Workers Regulations 2010 ("AWR") do not apply to agency workers placed indefinitely with an end user.
In this case, the Appellants were employed by Ideal and placed with Celanese. All had worked for Celanese for between 6 and 25 years before being made redundant in June 2012. They sought to argue that AWR applied to them and as such, entitled them as agency workers to the same basic working and employment conditions as if they had been recruited directly by Celanese, including redundancy pay.
The Tribunal dismissed their claims and this decision was upheld by the EAT. The EAT confirmed that AWR applies to workers supplied by a temporary work agency (Ideal) to work for on a temporary basis for an end user (Celanese). For the purpose of AWR, 'temporary' means not permanent - a permanent contract is one that is indefinite and a temporary contract is terminable upon a condition being satisfied, such as the expiry of a fixed period or the completion of a specific project. Here, the Appellant's worked on an indefinite, and therefore permanent, contract and as such were outside of the scope of AWR.
Judge Singh considered that the interpretation argued for by the Appellants would fail to give proper effect to the Directive and the Regulations. It was not appropriate to ignore the wording of the Directive and the legal significance of any amendment of the word 'temporarily'. Judge Singh further commented that in so far as that may be thought to leave a lacuna in the scope of protection, it may be that is a lacuna that was deliberately left by the European Union.
As it stands, this decision is likely to have significant implications for the many thousands of agency workers who are engaged on indefinite contracts with end users. We may also see a number of employment businesses seeking to re-structure their contractual arrangements so that staff are employed on open-ended / indefinite and non project related contracts, as these are now likely to fall outside of the scope of the AWR. In so doing, employment businesses and end users may be able to avoid the potential costs associated with longer assignments where the right to equal treatment after a 12 week qualifying period would otherwise apply.
It is worth noting, however, that it is unlikely that this is the last we will hear of this case as there is a strong possibility the decision will be appealed.