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No Contract Needed for Employment Relationship to Exist for the Purposes of the Temporary Agency Workers Directive

The ECJ has followed the Advocate General's opinion in finding that bank nurses who are members of a German not-for-profit association should be considered "workers" under the Temporary Agency Workers Directive despite not having a contract of employment with the association and not falling under the definition of "worker" under German law. The ECJ held that the legal characterisation under national law of the form and nature of the relationship between the individual and the agency is not decisive. The key will be whether someone is in an "employment relationship", the essential feature of which is that a person performs services for, and under the direction of, another person for a certain period of time in return for remuneration.

The Temporary Agency Workers Directive provides agency workers with, among other things, the right to basic employment conditions that are no less favourable than if they had been recruited direct by the hirer, and equal access to employment, collective facilities and vocational training. The Directive is implemented in Great Britain by the Agency Workers Regulations 2010.

The Directive applies to "workers with a contract of employment or employment relationship with a temporary-work agency who are assigned to user undertakings to work temporarily under their supervision and direction" (Article 1(1)). A worker is defined as "any person who, in the Member State concerned, is protected as a worker under national employment law" (Article 3(1)(a)).

A temporary work agency is "any natural or legal person who, in compliance with national law, concludes contracts of employment or employment relationships with temporary agency workers in order to assign them to user undertakings to work there temporarily under their supervision and direction". The Directive applies to temporary work agencies "engaged in economic activities whether or not they are operating for gain".

In the ECJ's view, while member states are able to determine the scope of "worker" under national law, they cannot unilaterally define that concept for the purposes of the Directive. If they could, it would jeopardise the aim of the Directive which is to establish a protective framework for workers which is non-discriminatory, transparent and proportionate, while respecting the diversity of labour markets and industrial relations throughout the EU.

The decision highlights the importance which the ECJ will attach to the objectives of EU law, particularly in increasingly contentious areas such as employment status and agency work. It effectively extends the reach of the Directive to individuals who might not otherwise be considered employees of an agency. Whether this ultimately matters to the UK depends on what happens next with respect to Brexit and any consequent negotiations. 

This bulletin is for general guidance purposes only and should not be used for any other purpose.

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