What exactly is an employment agency? And does the statutory definition embrace businesses which merely introduce work-seekers to those who use their services? The High Court authoritatively answered both those important questions in a test case concerning the provision of private home tuition.
The case concerned nine companies which engaged similar business models. They introduced private tutors to hirers, usually parents, who directly engaged the tutors under contracts for services. The companies received an introduction fee and also provided various collateral services such as collecting payments from hirers and passing them on to tutors.
The Department for Business, Energy and Industrial Strategy took the view that the companies were employment agencies within the meaning of the Employment Agencies Act 1973 and were thus subject to extensive regulatory requirements designed to protect work-seekers, those who hire them and end users of their services. The companies were adamant that they were not employment agencies and sought a judicial declaration to that effect.
Ruling on the matter, the Court noted that the case hinged on whether tutors who are introduced to clients by an introducing company, but thereafter provide their services under contracts for services with their hirers, fall within the definition of ’employment’ found in Section 13 of the Act.
On an obvious and literal reading of Section 13, the Court found that it was intended to apply to all arrangements through which a business supplies people personally to perform work for a third party – whether or not that is regarded as employment, in the non-statutory sense of the word, professional engagement or self-employment under a contract for services.
The word ’employee’ in Section 13 had a specific and broad meaning and embraced a wide and inclusive range of ways in which people work. That interpretation accorded with the purpose of the Act to provide broad protections, not only to those seeking work via employment agencies, but also to those seeking to obtain the benefit of their work and vulnerable people who may be the subject of such work.
In rejecting the companies’ application, the Court found that, where a business holds itself out as a middleman between a person who needs services and a person offering to supply them, the protective terms of the Act and regulations made under it will usually apply.
The Court made a declaration that the definition of ’employment’ in Section 13 includes in its application persons, including companies, who provide services on a self-employed basis as independent contractors. That definition encompassed private tutors introduced by the companies.
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