When is an agency worker an employee?

Esso engaged a number of workers through an employment agency. The workers were paid by the agency, although the rates were set by Esso. They worked alongside Esso employees, were subject to the same lines of authority and under Esso's day-to-day control, sought authority for holidays from Esso, were subject to the same working policies, and received bonuses from Esso. By contrast, there was no grievance procedure or formal disciplinary procedure, and they were not members of the Esso pension scheme.

The employment tribunal decided that they were 'employees' of Esso, within the meaning of the Employment Relations Act 1996 (and, although not stated in the decision, could presumably therefore claim unfair dismissal against Esso). The EAT overturned this, confirming that the absence of a contract between Esso and the workers meant that they were not capable of being 'employees', since there was no contract in existence which could be said to amount to a contract of employment.

This case is a further example of the lack of employment protection given to agency workers (albeit it should be extended if and when the EC Agency Workers Directive is implemented).
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