Background

Paul Sheehan (“PS”) was an employee of employment agency Kelly Services Ltd (the “Agency”).  He was assigned from 24 July 2017 to 5 July 2019 (the “Assignment Period”) to work on the site of its client, Boston Scientific.  Following the Assignment Period, PS was employed directly by Boston Scientific from 6 July 2019 until his dismissal with effect on 9 January 2020 (the “Probation Period”).

Unfair Dismissal Claim

In challenging his dismissal under the Unfair Dismissals Acts 1977-2015 (the “UD Acts”), PS needed to demonstrate that he had at least 12 months’ service required to bring a claim.  PS therefore argued that the Assignment Period should be included in the calculation of his continuous service with Boston Scientific.  

Section 13 of the Unfair Dismissals (Amendment) Act 1993

In support of the argument that the Assignment Period and the Probation Period should be considered together as continuous service with Boston Scientific, PS sought to rely on section 13 of the Unfair Dismissals (Amendment) Act 1993 (the “Amendment Act”) which provides as follows: 13.

—Where, … an individual agrees with another person, who is carrying on the business of an employment agency within the meaning of the Employment Agency Act, 1971 , and is acting in the course of that business, to do or perform personally any work or service for a third person (whether or not the third person is a party to the contract and whether or not the third person pays the wages or salary of the individual in respect of the work or service), then, for the purposes of the [UD Acts], as respects a dismissal occurring… —

(a) the individual shall be deemed to be an employee employed by the third person under a contract of employment, 

(b) … , and 

(c) any redress under the [UD Acts] for unfair dismissal of the individual under the contract shall be awarded against the third person. (emphasis added)

Workplace Relations Commission Decision

The Adjudication Officer agreed with PS’s argument in relation to the preliminary issue of continuity of service.  Having considered the substantive complaint relating to his dismissal, the Adjudication Officer ordered the re-engagement of PS by Boston Scientific under the UD Acts. Boston Scientific appealed the decision to the Labour Court.

Labour Court Decision

Following one of its previous decisions, the Court held that the purpose and effect of section 13 of the Amendment Act was to create certainty in relation to liability and employment status for the UD Acts in respect of a dismissal while a person is employed by an employment agency and assigned to a third person. It stated that section 13 does not however, have “general application for the purposes of computing service following the termination of the contract with the employment agency and in respect of a dismissal occurring during the currency of a subsequent contract of employment with another employer and under another contract of employment.”

The Court also had regard to the First Schedule of the Minimum Notice and Terms of Employment Act 1973 which provides:

1. The service of an employee in his employment shall be deemed to be continuous unless that service is terminated by —

(a) the dismissal of the employee by his employer, or

(b) the employee voluntarily leaving his employment.

                               ……….

(1)(6). The continuous service of an employee in his employment shall not be broken by the dismissal of the employee by his employer followed by the immediate re-employment of the employee.

In upholding Boston Scientific’s appeal, the Labour Court found that section 13 of the Amendment Act “does not operate to create continuity of service for the purposes of the UD Acts for an employee of an employment agency” who is then employed by the employer he had previously been assigned to as an agency worker.

Comment

The decision is a welcome restatement of the purpose and limits of the application of section 13 of the Amendment Act.  While the law was on the side of the employer in this case, organisations should maintain a clear distinction between an agency worker assignment and any subsequent direct employment of the worker concerned.  This should include clear oral and written communications with the worker in order to reduce the risk of costly and unnecessary litigation.