A Court of Appeal ruling will make it much harder for contractors to claim employment rights when they are working for agencies.

Temporary agency worker Merana James lost her appeal against Greenwich Council, where she had worked part time under a temporary agency contract for five years.

James took the local authority to an Employment Appeals Tribunal, claiming there existed an implied employee contract with the council. But the tribunal ruled that James was not an employee of Greenwich Council and not entitled to the same employment rights as local authority employees. The Court of Appeal upheld the ruling.

Sara McCracken, director of legal services, Adecco UK & Ireland, said: "For recruiters like Adecco who genuinely employ their workers on contracts of service, it is hoped that this decision will help reduce the number of claims by workers who seek to secure better employment terms and conditions or establish rights against the client.

"While recruiters and clients should take heart from the Court of Appeal decision, recruiters do need to ensure that their contractual terms are clear as to the nature of their relationship with their workers, but also that they reflect the practical reality of the relationship between all parties. The risk of the implication of a contract between the worker and the client will increase if the nature of the relationship between the recruiter and the worker is unclear."

Charlotte Hamer, professional support lawyer at Bond Pearce, told Recruiter: "What this case reinforces is that simply length of time is not of itself enough to make it necessary to imply a contract of employment with the end user."