264 Chapter 9Nuisance, trespass, defamation and vicarious liability
Sometimes one employer lends an employee to another employer. In Mersey Docks &
Harbour Board vCoggins and Griffiths (Liverpool) Ltd (1947)the House of Lords held
that when this happens it is strongly presumed that the employer who lent the employee
out retains liability. However, if it can be proved that the borrowing employer had sufficient
control of the employee, then it is possible to displace this presumption.CommentThe logical consequence of this case would seem to be that if the claimant had
injured somebody whilst working for the local firm, she, and she alone, would have been
liable. As she would have been highly unlikely to have thought of herself as self-employed,
she would also have been highly unlikely to have carried insurance against such a risk.Dacas vBrook Street Bureau (UK) Ltd (2004)Mrs Dacas was registered with the defendants’ employment agency and they sent her to
Wandsworth Council, where she worked for six years. Wandsworth Council exercised day-
to-day control over the claimant but the defendants also exercised considerable control
in that they paid her wages, could discipline her and could terminate her contract. How-
ever, the claimant’s contract with the defendants stated that she was not employed by
them.
HeldThe claimant was employed by the defendants. They had considerable control of her,
there was mutuality of obligation as required by Carmichael vNational Powerand it was
obviously not correct to regard her as in business on her own account. The fact that her
contract said that she was not an employee could not be the determining factor in deciding
whether in fact she was.
Comment(1) This decision of the Employment Appeal Tribunal in Dacas vBrook Street
Bureauis somewhat at odds with the Court of Appeal decision inJohnson Underwood Ltd
vMontgomery. In that case the Court of Appeal thought that perhaps the claimant was
neither an employee nor an independent contractor but had a special type of contract
somewhere between the two.
(2) InCable and Wireless plc vMuscat (2006)the Court of Appeal approved the decision
inDacas. In the typical triangular arrangement, such as the one in Dacas, there was not
necessarily an implied contract between the end-user and the worker but there could be if
this is what all of the circumstances indicated. The Carmichael vNational Powertest could
be satisfied where the end-user was indirectly paying the worker’s wages.
(3) Both Dacasand Muscatwere reviewed by the Court of Appeal in James vLondon
Borough of Greenwich Council (2008). The court stressed that Dacaswas not an authority
that long-term agency workers were always employees of the end-user. This was merely a
possibility, which depended upon whether, on the facts of the case, a contract could be
implied. Muscatcorrectly stated that in order to imply a contract of employment this must
be necessaryto give effect to the business reality of the relationship between the worker
and the end-user. The point was also made that, in some very extreme cases, a sham
arrangement could be exposed as a contract of employment.