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Question: I have been contracting for a company for over 4 years now, through an agent. I work through my own limited company. My company's contract is with my agent and the agent is contracted to the company where I carry out the work. I have been led to believe that I may have similar rights to that of a full employee of the company, i.e. redundancy pay. Is this true? Answer: In English Law a contract does not have to be in writing and need not even be by word of mouth but can be implied from conduct. Where the written contractual arrangements are between the individual contractor and his company, between his company and the agent, and between the agent and the client, but with no written contract directly between the individual contractor and the client, the courts have traditionally taken the view that the fact that the individual is working for the client can be wholly explained by the chain of written contracts so that there is no need to imply a direct contract between the individual and the client. More recently the courts have shown more flexibility on this question and in the 2004 case of Dacas v Brook Street Bureau, the Court of Appeal held that the existence of the indirect written contracts did not preclude the possibility of a direct implied contract between the individual and the client. In practice such a direct contract of employment is most likely to be held to exist where the relationship between the parties is fairly long term (i.e. over a year) and where the client exercises control over the individual in the same way as it would over other workers who are undoubtedly employees. The existence of an implied contract of employment entitles the individual to the ordinary employment rights such as protection from unfair dismissal (or from being unfairly selected for redundancy) and the right to a redundancy payment if the individual is made redundant. Advice should, of course, be sought on the tax implications of successfully claiming to be an employee. Answer kindly provided by John Antell John Antell is a barrister who specialises in contractual disputes (particularly those involving IT and engineering) and in employment law in its widest sense (i.e. including the duties of agencies and clients towards contractors and other workers who are not employees, and the taxation of all types of worker). Prior to coming to the Bar he worked in the IT industry for 19 years including 9 years as a contractor. He is the author of Employment Status (published by Butterworths) John Antell Copyright John Antell 2006 Disclaimer: The information and commentary on the law in this article are provided free of charge for information purposes only. Every reasonable effort is made to make the information and commentary accurate and up to date at the time when the article was written, but no responsibility for its accuracy, or for any consequences of relying on it, is assumed by the author or publisher. The specific details in the question and answer are intended to illustrate legal principles and do not, and are not intended to, amount to legal advice to any reader on a specific case or matter with which the reader may be concerned. You are strongly advised to obtain specific, personal advice from John Antell or another qualified lawyer about your case or matter and not to rely on the information or commentary in this article. Jan 31, 2006 Email this article Printer friendly page Previous Page
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