Dismissal of Agency Worker – Who is the Employer?

by Barry Walsh, Partner and Head of the Employment Team at Fieldfisher.

The employment relationship between an employment agency, the agency worker and the “end user” or “hirer” is an interesting one, which can at times bring about complex considerations of the law.

This Workplace Relations Commission (WRC) case (ADJ-00032076) demonstrates the importance of understanding which party is responsible for the potential unfairness of any dismissal of an agency worker – the employment agency or the hirer?

Facts

Here, the agency worker (the “Complainant“) was dismissed by the hirer / end user (the “Respondent“) for alleged breaches of company policy.

The Complainant brought an Unfair Dismissal claim to the WRC against the Respondent and submitted that the Respondent, as end user / hirer, and not the employment agency was his employer for the purposes of the Unfair Dismissal Acts.

WRC decision – Unfair Dismissal Claim

The WRC Adjudication Officer (“AO“) was satisfied that a written contract was in place between the Complainant and the employment agency, who could be considered to be the Complainant’s employer in “general terms“. However, the AO referred to Section 13 of the Unfair Dismissals (Amendment) Act 1993 which states that an agency worker shall be deemed to be an employee of the third person under a contract of employment, i.e. the end user / hirer, not the employment agency.

Consequently, the AO found that the Complainant was employed by (and, in the circumstances, unfairly dismissed by) the Respondent in accordance with the Unfair Dismissals Acts.

In relation to the Complainant’s efforts to mitigate his losses, the AO found that the Complainant had not made sufficient efforts in this respect. As a consequence, the AO awarded the Complainant just 4 weeks remuneration (€2,494.44) which he found was just and equitable in all the circumstances.

Notice Pay Claim

The Complainant had also brought a claim for notice pay as he was dismissed for gross misconduct and did not receive his notice.

Interestingly, the AO found that, unlike the Unfair Dismissals Act, under the Minimum Notice & Terms of Employment Act, the Respondent was not the Complainant’s employer. As a result, the AO held that the Complainant’s claim for notice pay was not well-founded.

Conclusion

This is a somewhat unusual provision which may come as a surprise to many employers. Organisations who regularly use agency workers or even those who enter into once-off arrangements with employment agencies are urged to be aware of their obligations and the associated risks when it comes to terminating an agency worker’s contract of employment. Such organisations are also advised to consider incorporating relevant indemnities into their commercial agreements with employment agencies for further protections in this regard.

The AO’s approach to the Complainant’s failure to mitigate his loss is interesting and should also be noted

About the author
Barry Walsh is Partner and Head of the Employment Team at Fieldfisher. Barry advises a wide range of Irish and multinational corporate, public and institutional clients on all aspects of Irish employment law from recruitment to retirement including contentious, advisory and transactional work. Barry is experienced in acting for clients with respect to contractual and termination issues with senior executives. In addition to advising on employment law, he has also advises on industrial relations issues arising from mergers and acquisitions, outsourcing and redundancy situations. He has significant litigation experience and has directly represented clients before the European Court of Justice, the Irish civil courts and all specialist Irish employment tribunals.