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Sec'y of State BIS v Studders & ors - Employment status of agency workers [2011] EAT

The contract between an employment agency and the workers whom it sends on assignments is a contract of employment only if it clearly indicates that there is mutuality of obligation between the parties and the agency exerts control over the worker.

In August 2009, Messrs Studders, Baldwin and Ballantyne were assigned by Unity Personnel Ltd, an employment agency, to work at Mathers Foundry. Mr Studders and his colleagues had difficulty obtaining payment from Unity and then on 8th October 2009 were advised that Unity was subject to insolvency proceedings.

Mr Studders' had a letter from Unity thanking him for his efforts "while in our employment" and a subsequent letter from the insolvency practitioner alluded to the fact that Unity had terminated his "contract of employment". Under the Employment Rights Act 1996 s.182, the Secretary of State for Business, Innovation and Skills is liable to pay any debts owed by insolvent employers to their former employees. 

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