Agency workers are unlikely to be deemed employees of the end user following the decision of a recent Employment Appeals Tribunal (EAT).

A Scottish EAT ruled that a worker supplied by engineering recruiters NES was not employed by Woodgroup Engineering (WGE), despite having worked at the company for five years.

The EAT held that as the working arrangements between the workers and NES were expressly set out in a written contract, the worker did not have an implied employment contract with WGE.

Tessa Fry, an employment lawyer, at GSC Solicitors, said that the ruling went against the previous trend for long-term agency workers to be deemed to be employees of the end user. “Unless there is a change in the law, it seems that long-term agency workers will not be considered employees of either the agency or the end user,” Fry told Recruiter.

Fry said that one consequence was that long-term agency workers would not be entitled to a number of employment rights and benefits, including the right to pursue unfair dismissal claims, maternity rights, a pension and the right to request flexible working. However, “as workers rather than employees”, they would still be able to bring discrimination claims against the end user and the agency, she said.

Gavin Maitland, director of NES’s northern region said the result of the tribunal “made pleasant reading.” The case also highlighted the importance of getting contracts right, he said, stressing that the NES’s agency worker’s contract was “a contract of service rather than a contract of employment”. Maitland said with the proviso that contracts explicitly set out workers’ status, the ruling was potentially good news for recruiters as it made it more attractive for employers to use agencies rather than employ the workers themselves