THE INDUSTRIAL TRIBUNALS

CASE REFS:	2472/02
2529/04

APPLICANT:		Marie-Louise McGurk

RESPONDENTS:		1.	Department of Social Development
				2.	Worknet

DECISION
By a majority the tribunal found that the applicant was employed by the first respondent under an implied contract of service, and thus entitled to all the first respondent’s terms and conditions of employment.

Appearances:
The applicant was represented by Mr Brian McKee, Barrister-at-Law, instructed by Donard King & Company, Solicitors.
The respondents were represented by Mr Martin Wolfe, Barrister-at-Law, instructed by The Departmental Solicitor’s Office.

The majority of the tribunal found the following facts:-

1.	The applicant was supplied as an agency worker by Worknet, the second respondent, to the Department of Social Development, the end user. 

2.	The applicant was initially placed with the first respondent in 1990 and continued with the first respondent until her contract of employment was terminated by the second respondent in or around June 2004.  During the period of her employment, the applicant initially considered herself to be a contract worker, however in or around 1995 she applied in open competition for the post of data manager.  She was appointed to this post in 1996 and took up her duties in the post from December 1996.  From 1995 for a period of six months the applicant acted-up to her next grade which was Executive Officer II.  

3.	In or around 9 April 1998 the applicant was required to attend the offices of Worknet to discuss her new statement of terms and conditions.  The applicant checked the new contract and handed the corrected contract to the Chief Executive of Worknet.  The applicant tried to have certain changes made to the contract but both the first and second respondents refused to accept these, telling her that if she did not sign the contract as offered her employment was in jeopardy.  The applicant continued in this post from 1998 to 2001.  

4.	The next significant event occurred while the applicant was on maternity leave from approximately 29 May 2001 to 28 September 2001.  During this time the applicant realised that she was not being paid the same level of wage on maternity leave as an employee of the Department of Social Development would receive.

5.	The applicant was unable to return to work immediately after maternity leave due to a period of subsequent sick leave.  Upon her return in January 2002 there ensued a series of discussions with various colleagues and superiors as to why she had not received the same terms and conditions on maternity leave as an employee of the Department would receive.  Ultimately, Liam Parker, the Chief Executive of Worknet, informed her that she was ‘on secondment’ to the first respondent and its predecessors.  He claimed that because the applicant had joined the Worknet pension scheme with Friends Provident many years ago she was still a Worknet employee.  Liam Parker also informed the applicant that if other Worknet employees knew that she received full maternity pay then this would set a precedent and they would want to receive it too.  It is interesting to note that the first respondent was fully prepared to reimburse the second respondent if Worknet had paid the applicant her full salary.  Worknet refused to do so.

6.	The applicant applied for part-time work and eventually received it.  

7.	In January 2003 the applicant was given an identity card by the first respondent which showed and stated that she was an employee of the Department of Social Development.  

8.	Since February 2002 the applicant had been acting-up as an Executive Officer I.  In or around 9 September 2003 a post of Executive Officer II was advertised in the Belfast Telegraph.  The applicant applied but was informed by letter dated 12 November 2003 from John Culbert of the Recruitment Service that she was not eligible to apply because she was already employed by the Northern Ireland Civil Service.

9.	The legal question which was before the tribunal was, was the applicant an employee of the Department of Social Development, or an employee of Worknet, or an employee of neither or an employee of both?

10.	There was no written contract between the first and second respondents governing the terms upon which the applicant was supplied by the second respondent to the first respondent.  There was no written contract between the applicant and the first respondent.  The only written contracts involved in this triangular relationship were between the applicant and Worknet.

11.	In reaching its decision the tribunal had regard to the case of Dacas  v  The Brook Street Bureau (UK) Limited [2004] EWCA CIV 217 and in particular to certain dicta set out therein.  In this case Lord Justice Mummery said:-

“The formal written contracts between the applicant and the agency and between the agency and the end user relating to the work to be done by her for the end user did not, as a matter of law, necessarily preclude the implication of a contract of service between the applicant and the end user.  There is no insuperable objection in law to a combination of transactions in a triangular arrangement, embracing an expressed contract for services between the applicant and the agency, an expressed contract between the agency and the end user and an implied contract of service between the applicant and the end user, with the agency acting in certain agreed respects as an agent for the applicant and as an agent for the end user under the terms of the expressed written agreements.”

	and

“In the present case, the Council in fact exercised the relevant control over the applicant and over her work.  As for mutuality of obligation, the applicant while at the workplace was under an obligation to do what she was told and to attend punctually at the stated times.  The Council was under an obligation to pay for the work the applicant did for it and she received payment in respect of such work from the agency.  The Council was the ultimate paymaster.  The arrangements were set up and operated on the basis that the Council was paying the agency, but what was the Council paying for, if not for the work done by the applicant under its direction and for its benefit?”

Applying those dicta to the facts in the current case the tribunal found that while the applicant had an expressed contract of employment with the agency (Worknet), the applicant had an implied contract of service with the end user (the Department of Social Development).  In reaching this decision the tribunal relied on the following facts:-

1.	The applicant worked for the Department of Social Development and no one else since her initial placement in 1990.

		2.	The applicant was chosen to act-up into an acknowledged Civil Service post.

3.	The applicant applied for her post in 1995 (the eventual appointment was in July 1996 after a direct recruitment exercise) as part of a competitive process which invited candidates from within the Civil Service and from outside.

4.	The applicant worked exclusively under the direction of the Department of Social Development.

5.	The applicant’s day-to-day duties were controlled by the Department of Social Development.

6.	The applicant was for all intents and purposes integrated into Department of Social Development.

7.	The applicant, as Premises Officer, was responsible for the Health & Safety of the respondent’s employees.

8.	The applicant was assessed for years in the same way, using the same forms and process as other Civil Servants (an attempt was made to change this only after the applicant had informed the Department of Social Development of her belief that she was their employee).

9.	The applicant was paid by the Department of Social Development indirectly through Worknet (the applicant’s rate of pay was the same as the Civil Service rate).

10.	The applicant’s hours of work were the same as the Civil Servants working with her.

11.	The management attendance procedures applicable to the applicant were those of the Department of Social Development.

12.	The applicant was provided with training courses by the Department of Social Development throughout her employment as data manager (the numerous courses attended are set out on the first page on each of the annual report appraisals).

13.	The applicant’s holidays and leave were the same as the Civil Servants working with her.

		14.	The applicant was issued with an employee’s security pass.

		15.	Worknet had no input into the content of the applicant’s work.

16.	The ultimate control of her terms and conditions lay with the Department of Social Development.  This last matter is exemplified by the disagreement about terms in April 1998 between the applicant, Liam Parker and Michael Farnham.  The applicant objected to the terms offered, Liam Parker (Chief Executive of Worknet) appeared to agree with her and yet was overruled by, and had to comply with Michael Farnham’s directions.

12.	For all of the above reasons, the majority of the  tribunal held that the applicant had a contract with the first respondent satisfying the requirements of ‘an irreducible minimum of mutual obligation necessary for a contract of service’, ie an obligation to provide work and to perform it coupled with the presence of control.  For all of these reasons, the majority of the tribunal found that the applicant was an employee under an implied contract of service of the first respondent and was as such entitled to the benefit of the terms and conditions of employment of the first respondent in every respect.

13.	The minority of the tribunal disagreed in certain respects, finding that there was nothing in the evidence or the documentation before it which required the first respondent to regard itself as being under any duty to provide work for the applicant.  Fundamentally, this obligation lay with Worknet, the second respondent.  In the Dacas case it was the Council who took the initiative in bringing to an end the work done by the applicant, using the ‘but for’ test but for the actions of the Council the applicant in that case would have been entitled to continue to work there as previously.  In this case, the position was reversed and it was in fact the actions of the agency which terminated the applicant’s employment.  But for the fact of Worknet no longer existing, the applicant would still have been employed with the first respondent.  Furthermore, the minority was influenced by the decision taken by Worknet over the maternity pay.  The first respondent was completely prepared to pay maternity pay to the applicant at the Civil Service rate.  It was in fact the second respondent, Worknet, which prevented that happening.  Additionally, the minority considered that there were significant other factors which could not be ignored and these were as follows:-

1.	The applicant signed a statement of main terms and conditions declaring her employer was Worknet in 1998 and between 1990 and 1994.

2.	Each of the statements declared that the terms and conditions applying to the relationship were Worknet’s.

3.	Worknet paid the applicant and accounted for her to the authorities in respect of statutory deductions.  Although the minority did not accept that the applicant was entitled to be paid by Worknet regardless of whether Worknet was paid by the Department as it was a term of her contract of employment that her employment with the Department would last as long as the Department paid for it.

4.	Worknet’s terms applied during maternity leave in respect of maternity pay and were not subject to challenge until the applicant presented her application to the tribunal.

5.	Worknet provided its employees with a pension scheme through Friends Provident of which the applicant was a member.

6.	Worknet was asked by the Department to approve the applicant’s temporary promotion in or about February 2002.

7.	Worknet was consulted by the applicant when she was seeking approval for part-time working in March 2002.

8.	Worknet was consulted and asked whether it had any objections before approval was granted for the applicant to go part-time in November 2002.

9.	Worknet was responsible for deciding that the applicant’s post was redundant, for dismissing her and paying to her a redundancy payment.

10.	The minority also took account of the basic contractual argument that there was no intention on the part of the Department to enter into a contract with the applicant.  An intention to enter into legal relations is a fundamental of any contract of employment.

11.	The Department had no obligation to pay the applicant.  The Department’s obligation was to pay Worknet a sum which included a fee in respect of its costs for providing the service.

12.	Particular procedures apply for recruitment of employees into the Northern Ireland Civil Service.  Those procedures did not apply with regard to the applicant’s appointment to the post of data manager.

13.	The applicant’s trade union representative was referred to Worknet if he wanted to raise issues of a specific nature regarding her employment.

14.	Her performance appraisal reports  did not go to the end user.

15.	Only one promotion assessment was carried out and this was done at the applicant’s request with the manager, Mr Murray, acknowledging that she was not a Civil Service employee.

16.	Finally, for all of the above reasons, the minority of the tribunal considered that the applicant was at all material times an employee of Worknet governed by its terms and conditions, in the areas in which it was not prepared to offer Civil Service terms and conditions.

14.	In reaching the majority decision, the majority have had regard to all the factors set out in the minority decision and indeed vice versa.  The area of dissent was purely connected with the respective weights attached to each set of factors.

15.	The parties agreed in presenting their case to the tribunal that they wished only at this stage to receive a declaration on the issue of by whom the applicant was employed.  

16.	This decision is presented in extended form, as due to the nature and complexity of the issues before it, the tribunal did not consider that a summary decision would be adequate to explain its reasons to the parties.

Chairman:

Date and place of hearing:		20 – 22 September 2004, Belfast

Date decision recorded in register and issued to parties: