Legal case study: Whistleblowing and agency workers

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Irrespective of no direct contractual relationship with an agency worker, a firm can be liable under whistleblowing legislation

The Employment Appeal Tribunal (EAT) has held that an agency worker was entitled to whistleblowing protection against action to her detriment by a client or end user because she was a 'worker' under the extended definition in section 43K of the Employment Rights Act 1996.

The extended definition of 'worker' applies only to the whistleblowing provisions of the ERA 1996. Section 43K(2) of the ERA 1996 provides that a party can be an 'employer' of a worker if they 'substantially determine or determined the terms on which he is or was engaged…'

Ms McTigue was employed by agency TMS, and was deployed to work as a nurse for the University Hospitals Bristol NHS Foundation Trust in a sexual assault referral centre. She had a written employment contract with TMS on its standard terms. She also had a contract directly with the Trust that required her to co-operate with it in relation to health and safety, clinical governance, and working time, and which designated the NHS supervisor she would report to.

McTigue was removed from the assignment in December 2013. She subsequently pursued claims against both TMS and the NHS, alleging she had been removed and subjected to other detriments for making protected disclosures. The employment tribunal ruled that it did not have jurisdiction to hear McTigue's claim as she was not a 'worker' under the statutory definition. McTigue appealed to the EAT.

The EAT allowed the appeal and decided that the employment tribunal had erred in concluding that the Trust could not have substantially determined the terms on which McTigue worked for TMS. The tribunal's logic for this was that TMS had determined McTigue's terms of employment. The EAT made it clear that the test was not whether the client (NHS) had determined her terms of employment, but whether the client could have determined those terms.

The EAT stated that the whistleblowing legislation allowed for a conclusion where both the employer and the client/end user can be found to have the right to substantially determine the terms of a worker's employment, even if that right is not exercised. The case was remitted to a fresh employment tribunal for reconsideration.

Comment

This case is a useful reminder for users of agency workers that, irrespective of the lack of a direct contractual relationship with the agency worker, they can be directly liable to agency workers under our whistleblowing legislation, even if they have not been involved with the setting of their terms of employment. If the circumstances support the proposition that an end user could influence the terms on which an agency worker is employed the end user is susceptible to a potential claim.

As potential compensation for whistleblowing claims is uncapped the liability risks for these claims can be significant. It is therefore prudent for users of agency workers to take appropriate steps to limit these risks. For example, end users should consider including terms in their contractual arrangements with suppliers of agency workers, making it clear that it is for the supplier to set the terms of employment for those workers and, if possible, providing for indemnities from suppliers in relation to such claims.

More generally, it is prudent for users of agency workers to ensure that their internal policies and procedures take account of their potential liability to agency workers in setting out how potential whistleblowing disclosures are managed and responded to.

Alex Trotter is an associate at law firm Dentons

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