Agency workers

Labour Court - January 2004

Was a part-time worker an employee of the employment agency who paid her, or the organisation she carried out work for?

The Protection of Employees (Part-Time Work) Act, 2001 defines “employer” as “the person with whom the employee has entered into or for whom the employee works under a contract of employment”. This is further qualified that where a person “is liable to pay the wages of the individual concerned in respect of the work or service concerned” they shall be deemed to be the employer.

Rooney was a nurse. She worked part-time in Diageo’s Occupational Health Department located at the Guinness Brewery from 1991. When applying for the role, Rooney made her application to the sister in charge of the centre and subsequently agreed her terms, including pay, with the sister. Once she was employed, Rooney was informed an employment agency, the Irish Recruitment Consultants, would pay her wages and issued her tax form. No further communication from, or to, the agency occurred.

Diageo reduced Rooney’s working hours and informed her of this. Rooney brought a claim that Diageo was in breach of the Protection of Employees (Part-time Work) Act, 2001 by selecting her for a reduction to working hours because she was part-time.

Diageo resisted the claim, alleging Rooney was not their employee but was an employee of the employment agency. They claimed the payment of wages by the agency meant the agency fell within the definition of ‘employer’ under the Act.

When deciding whether there was an implied contract of service between Diageo and Rooney, the Court commented that the determination is whether the person is engaged as an employee or is self-employed on a contract for service. In most cases, this can be judged by looking at whether the person is in business on their own account or if they are an integral part of the business of the other party. The enterprise test could not be applied to this case because it was not contended Rooney was self-employed.

The Court went on to apply tests from Ready-Mixed Concrete. They commented:

• in relation to the first limb, there was an offer of employment made by the sister to Rooney which was accepted and there was mutuality of obligation as Diageo provided work and Rooney performed the work. Although wages were paid by the agency, they were acting on behalf of Diageo by paying these out of funds provided by Diageo
• turning to the second limb, there was an element of control as Rooney was directed by the director of medical services at all times. Diageo determined Rooney’s hours of work, they would contact her when she was required for work and she worked exclusively at the Health Centre. Therefore, the contract between Diageo and Rooney entitled them to exercise control over the performance of her work
• looking at the third limb of whether the contract was consistent of it being one of service, the Court found that although the agency paid Rooney’s wages, they were acting on behalf of Diageo and Rooney worked exclusively for Diageo.

The Court decided there was a contract of service, ie a contract of employment, between Rooney and Diageo.

This case highlights that Courts will imply an employment relationship between agency workers and end-users where the relationship meets the tests set out in Ready Mixed Concrete. A contract of service will exist if:

• the individual agrees to perform a service for an organisation in exchange for remuneration
• the individual agrees, expressly or impliedly, to be subject to the control of the organisation
• the provisions of the contract are consistent with it being a contract of service.

Labour Court – April 2014

Was there a failure to provide the agency worker with equal treatment in relation to rates of pay?

The Protection of Employees (Temporary Agency Work) Act, 2012 came into effect in May, 2012, with the pay provisions having retrospective effect. Section 6 of the Act states, subject to collective agreements, agency workers are entitled to the same basic working and employment conditions as if they were employed by the hirer under a contract of employment to do work that is the same, or similar to, the work they carry out during their assignment.

Costello was employed by an employment agency as a forklift driver. He was paid a basic rate of €13.50 per hour.

Costello was assigned to a third party hirer, Logistics Company Shannon Transport Logistics, who provide services to Diageo Guinness Ireland. The hirer’s employees were paid €18.50 per hour for carrying out the same work.

Costello made a claim that he was being paid less basic pay than what he would have been paid if he was employed directly by the hirer to perform the same work, relying on s6(1) of the Act.

The employment agency argued that the hirer had produced a written statement which set out they would pay direct employees €13.50 per hour if they were taken on to do the same work carried out by agency workers.

The Court did not accept the agency’s defence.

They determined it was more probable Costello would have been paid €18.50 per hour if he had been employed directly by the hirer; the same rate of pay as the forklift drivers who were directly employed. As such, this was the rate of pay to which he was entitled to under s6(1) of the Act.

The Court ordered Costello’s pay should be adjusted to €18.50 per hour, with retrospective effect from 5 December 2011.

The obligation to provide equal treatment for agency workers is on both the employment agency and the hirer. The hirer is required to provide the agency with information on terms and conditions of employment, including rates of pay, to ensure the worker is provided with equal treatment.

Subsequent cases, such as Paul Doyle Hire Services Ltd v Furlong and Paul Doyle Hire Services Ltd v Stafford, have applied a six month limit to the amount of arrears owed to the agency worker.

High Court – March 2015

Can an agency worker claim they are not being provided with equal treatment in relation to one direct employee of the hirer?

The Protection of Employees (Temporary Agency Work) Act 2012 came into effect in May 2012, with the pay provisions having retrospective effect. Section 6 of the Act states, subject to collective agreements, agency workers are entitled to the same basic working and employment conditions as if they were employed by the hirer under a contract of employment to do work that is the same, or similar to, the work they carry out during their assignment.

Basic working and employment conditions is defined in section 2 as “"terms and conditions of employment required to be included in a contract of employment by virtue of any enactment or collective agreement, or any arrangement that applies generally in respect of employees, or any class of employees, of a hirer and that relate to:

• pay
• working time
• rest periods
• rest breaks during the day
• night work
• overtime
• annual leave or
• public holidays

Mulholland worked as a truck driver for an employment agency. He began working for Greenstar, the hirer, in 2009 and was paid €11.50 an hour.

Mulholland brought a claim under the 2012 Act alleging direct employees of the hirer were paid €12.50 an hour, while those with long service would receive up to €20 per hour. It was also alleged direct employees had more favourable overtime arrangements and were paid a daily meal allowance.

The Rights Commissioner did not uphold the claimant at first instance.

On appeal, the Court upheld the decision of the Rights Commissioner. They found Mulholland had failed to show the working and employment conditions fell within section 2 of the Act ie he had not shown they were established by virtue of any enactment, collective agreement, or an arrangement that applied generally in respect of employees at the time of his claim.

When considering the appeal, the High Court reiterated the purpose of the Act is to ensure agency workers are entitled to the same basic working and employment conditions as if they were directly employed by the hirer to carry out the same or similar work.

Therefore, an agency worker who wishes to rely on the Act must be able to establish there is a contractual term, collective agreement, or other generally applicable entitlement or agreement in place for the direct employees of the hirer, that they are not entitled to because they are an agency worker.

As the agency worker was only able to identify one direct employee who received a different rate of pay, he had failed to establish there was a generally applicable arrangement in place. As such, the appeal was dismissed.

This case confirms agency workers are not entitled to claim they have not been provided equal treatment where they are only able to establish one direct employee of the hirer is provided with different terms and conditions.

Instead, the agency worker first needs to point towards a contractual term, collective agreement, or generally applicable entitlement or agreement which applies to the direct employees of the hirer who are carrying out same or similar work to themselves.

Only once this is established will the agency worker be able to claim they are being treated differently in relation to their basic working and employment conditions.

Labour Court

Should compensation for a failure to provide equal treatment be limited to six months?

Furlong and Stafford were employed as agency workers from June 2012 until April 2014. They worked as truck helpers and truck drivers at Greenstar, the hirer. The agency workers were paid an hourly rate of €9 for the helper role and €12.50 for the driver role. There was a collective agreement in place between Greenstar and SIPTU which provided direct employees with €9.15 per hour for the helper role and €12.50 per hour for the driver role.

The agency workers made a claim under s6(1) of the Protection of Employees (Temporary Agency Work) Act 2012 for a failure to provide equal treatment. They claimed they should receive the difference between the pay they received and the pay direct employees were paid under the collective agreement for the whole length of their assignment.

The agency argued that the agency workers could only receive the difference for the six month period ending on the date they made their claim, as set out in the Second Schedule of the Act. There was no reasonable cause to increase the six month period.

They also contended that a higher rate for subsistence and travel time provided to agency workers in comparison to direct employees should be offset against any entitlement.

The Court considered the applicable tests for extending time limits to bring a claim and they found the delay could not be explained or justified. Therefore, the period for the claim was the six month period ending on the day which the claim was brought.

When considering the offset argument made by the agency, the Court explained the statutory definition of pay in section 2 of the Act applies. As this definition does not include payments for subsistence or travel time, these payments could not be taken in to account when determining if equal treatment had been provided under section 6. They could also not be used to offset any amounts due to the agency workers.

The Court ordered the agency workers should receive the difference between the pay they received and the pay of comparable employees for the six month period ending on the date the claim was brought.

This case outlines the application of the six month period complainants have to bring a complaint that their rights under the Act have been contravened.

In cases where the six month period is not extended, where there is no explanation of justification to extend, the period the Court will consider is the six month period immediately prior to the claim being lodged. Any period before that will be deemed out of time even if they were not granted equal treatment during this time.