Factual and Procedural Background
The appeal concerns employment status and rights claims brought by the Plaintiff, a contracted pilot flying for an international airline operated by the Second Appellant ("Company B"). The Plaintiff was engaged as a contracted pilot through the First Appellant ("Company A"), which supplied pilots under an agreement with Company B. The Plaintiff's services were nominally provided via a service company, but it was accepted that this interposition was legally ineffective, making Company A and the Plaintiff the true parties to their relationship.
Following an incident in January 2020, Company A terminated its contract with the Plaintiff. The Plaintiff, supported by a trade union, brought two claims in the Employment Tribunal ("ET") against Company A and Company B: (A) an annual leave claim against Company A under the Civil Aviation (Working Time) Regulations 2004 ("CAWTR") and the underlying EU Directive; and (B) an equal terms claim against both Company A and Company B under the Agency Workers Regulations 2010 ("AWR") and the related EU Directive on Temporary Agency Work ("AWD").
A preliminary hearing in 2022 found in the Plaintiff's favour on employment status issues relevant to both claims. Both Appellants appealed to the Employment Appeal Tribunal ("EAT"), which dismissed their appeals in November 2023. The present appeal challenges the EAT’s decision with permission granted by the Court of Appeal.
The underlying contractual arrangements involve a 2011 agreement between Company B and Company A, designed to provide Company B with flexible access to a pool of pilots without creating employment relationships between Company B and those pilots. The Plaintiff's engagement was governed by a Services Agreement between himself, Company A, and the service company, setting a fixed five-year term with specific obligations and payment terms. In practice, the Plaintiff was integrated into Company B's workforce, subject to its rostering, supervision, and disciplinary processes, though paid by Company A.
Legal Issues Presented
- Whether the Plaintiff qualifies as a "crew member employed by" Company A for the purposes of the CAWTR and thus entitled to annual leave payments from Company A.
- Whether the Plaintiff qualifies as an "agency worker" under the AWR, specifically whether he was supplied by Company A to work "temporarily" for Company B.
Arguments of the Parties
Appellants' Arguments
- Company A contended that it was not the Plaintiff's employer for the purposes of the CAWTR; the true employer was Company B or no one, given the agency arrangement.
- Company B argued that the Plaintiff was supplied on a permanent basis, not temporarily, and thus did not qualify as an agency worker under the AWR.
- Both Appellants relied on the practical integration of the Plaintiff into Company B’s operations, asserting that control and direction by Company B implied employment by it or negated the temporary nature of the supply.
- Appellants challenged the ET’s reliance on the written contracts, submitting that the factual working relationship should determine employment status and the temporariness of the supply.
- Company A invoked regulation 36 of the Working Time Regulations 1998 to argue that agency workers without a worker’s contract with either agency or principal are not workers under the CAWTR.
- Company B argued that "temporarily" in the AWR means "short term," and a five-year fixed term is not temporary in that sense.
- Company B further submitted that the ET failed to focus on the purpose and nature of the supply, which in practice was permanent.
Respondent's Arguments
- The Plaintiff argued that Company A was his employer under the CAWTR, based on the express written Services Agreement and consistent domestic and EU case law recognising tripartite agency relationships where the agency is the employer despite the principal’s control.
- He submitted that the contractual terms and the legal principles established in authorities such as James v London Borough of Greenwich and CJEU decisions support this conclusion.
- Regarding the AWR claim, the Plaintiff contended that "temporary" means limited in duration, not necessarily short term, and that a fixed five-year contract qualifies as temporary within the meaning of the Directive and Regulations.
- The Plaintiff relied on EAT authorities including Moran, Brooknight, and Angard to support the interpretation that the nature and purpose of the supply, as evidenced by the contract, establish temporariness.
- He submitted that the factual integration into Company B’s workforce and the practical operation of the contract do not alter the legal characterisation of the employment or agency relationship.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| James v London Borough of Greenwich [2008] EWCA Civ 35 |
Tripartite agency relationships: employment relationship lies with the agency, not the principal, despite control and integration. |
The Court applied the principle that the contractual relationship governs employment status; no implied contract with the principal was found. |
| Allonby v Accrington & Rossendale College (C-256/01) |
Recognition of agency worker status and the employment relationship with the agency despite direction by the principal. |
The Court acknowledged the agency as the employer, supporting tripartite arrangements. |
| Betriebsrat der Ruhrlandklinik GmbH v Ruhrlandklinik GmbH (C-216/15) |
Temporary agency work involves an employment relationship with the agency, with supervision by the user undertaking. |
Confirmed that employment relationship is with the agency, not the principal, even where supervision is by the principal. |
| LM v Omnitel Comunicaciones SL (C-441/23) |
Temporary agency workers have dual relationships: contractual with agency, supervision by user undertaking. |
Clarified the nature of agency worker relationships under the AWD; supported Plaintiff’s position. |
| Uber BV v Aslam [2021] UKSC 5 |
Employment relationship requires control and subordination; focus on practical working relationship. |
The Court noted these features but the present case was distinguished as involving tripartite agency relationships. |
| London Underground Ltd v Amissah [2019] EWCA Civ 125 |
Liability under AWR may rest with agency, hirer, or both. |
Supported the joint claim against both Company A and Company B for equal treatment. |
| Moran v Ideal Cleaning Services Ltd [2013] UKEAT 0274/13/1312 |
“Temporary” in AWR means limited in duration, not necessarily short term. |
The Court followed this interpretation, applying it to the fixed-term contract in this case. |
| Brooknight Guarding Ltd v Matei [2018] UKEAT 0309/17/2604 |
Determination of temporary supply requires factual analysis of the nature and purpose of the work supplied. |
The Court agreed that contract terms provide evidence but are not necessarily determinative. |
| Angard Staffing Solutions Ltd v Kocur [2020] ICR 1541 |
Agency worker status depends on the basis of supply to the hirer; contract terms relevant but not always conclusive. |
Applied to confirm that a fixed-term contract with the agency supports temporary supply status. |
| JH v KG (C-681/18) |
Temporary agency work is by definition finite and not permanent; successive assignments may be abusive but do not negate temporariness. |
Supported the interpretation that a fixed-term contract is temporary despite length or renewals. |
| NP v Daimler AG (C-232/20) |
Member States may set limits on duration of temporary assignments; "temporary" means limited in time in everyday language. |
Clarified that duration is relevant to abuse but does not change the legal meaning of temporary. |
| LD v ALB FILS Kliniken GmbH (C-427/21) |
AWD covers temporary employment relationships, not permanent; measures must prevent temporary work becoming permanent. |
Confirmed that temporary agency work is distinct from permanent employment relationships. |
| Gilham v Ministry of Justice [2019] UKSC 44 |
Interpretation of worker status in line with EU law; contractual form not always decisive. |
Referenced regarding the interpretation of worker status under the CAWTR. |
Court's Reasoning and Analysis
The Court analysed the employment status of the Plaintiff under the CAWTR by applying established principles relating to tripartite agency relationships. It held that the contractual relationship between the Plaintiff and Company A was decisive, and that no employment relationship with Company B should be implied despite the latter’s control and supervision of the Plaintiff’s work. The Court rejected arguments that the practical integration into Company B’s workforce or the absence of a contract with Company B altered this conclusion. It distinguished the present case from general worker status inquiries such as in Uber BV v Aslam, noting that the issue here was the identity of the employer, not the existence of an employment relationship per se.
Regarding the equal terms claim under the AWR, the Court examined the meaning of "temporary" supply. It endorsed the interpretation that "temporary" means limited in duration rather than necessarily short term, consistent with the underlying EU Directive and case law. The Court found that the Plaintiff’s fixed five-year contract constituted a temporary supply. It rejected submissions that the practical rostering of the Plaintiff on a full basis indicated permanence, holding that the nature and purpose of the supply should be assessed primarily at its inception and by reference to contractual terms, unless evidence showed otherwise.
The Court also addressed the argument that the supply’s nature should be determined by the contract between Company A and Company B rather than between Company A and the Plaintiff. It concluded that the terms of the contract between the Plaintiff and Company A were sufficient and appropriate evidence of the nature of the supply, especially as the Company A-Company B agreement did not explicitly address supply terms.
The Court considered but did not find persuasive the argument based on regulation 36 of the Working Time Regulations 1998, noting that it addressed exceptional cases and that its absence in the CAWTR did not affect the present case where a contract existed between the Plaintiff and Company A.
Holding and Implications
The Court DISMISSED both appeals by Company A and Company B.
It held that the Plaintiff is a "crew member employed by" Company A for the purposes of the CAWTR, entitling him to bring a claim against Company A for annual leave payments. It further held that the Plaintiff qualifies as an "agency worker" under the AWR, as he was supplied by Company A to work temporarily for Company B within the meaning of the Regulations.
The decision confirms the legal recognition of tripartite agency relationships where the agency remains the employer despite the principal’s operational control, and clarifies that a fixed-term contract of several years can constitute a temporary supply under the AWR. The ruling directly affects the Plaintiff and the Appellants and is of wider relevance to the contracted pilot workforce of Company B, with numerous claims stayed pending this outcome. No new precedent altering existing principles was established; rather, the Court reaffirmed and applied established domestic and EU law.