EU Court Rules that Employment Relationship Can Exist Without a Contract - What Does This Mean for UK Law?
The European Court of Justice has held that members of a not-for-profit association are 'workers' under the Temporary Agency Workers Directive despite not meeting the definition of worker under national law and there being no existence of a contract.
Background
In the UK, 'worker' is defined as someone who has entered into a contract of employment or any other contract to perform work personally (excluding genuine customer/client type relationships). From this you can see that a contract of some sort must exist for the definition to be met.
Under the Directive an individual can be a worker if they are in an 'employment relationship' with a temporary-work agency. Under this definition there is no requirement for a contract to exist.
The Facts of the Case
The German Red Cross Association of Nurses (the Association) supplies nurses to a clinic in Germany. There is no contract of employment between the Association and the nurses it supplies and the nurses are described as members of the Association. As a result the members do not fall under the definition of 'worker' in German national law. The Association does, however, pay its members a monthly salary in addition to expenses and sick and holiday pay.
A dispute arose as to whether the nurses are agency workers covered by the Directive.
The ECJ's Decision
The ECJ has decided that the members of the Association fall within the definition of 'workers' under the Directive because the nature of their relationship with the Association amounts to that of an employment relationship, notwithstanding the fact that they do not meet the definition of worker under German national law.
What does this mean for employers in the UK?
The definition of 'worker' in the UK requires there to be a contract of employment or another contract personally to do work and this definition has been used when implementing EU legislation.
Therefore the decision in this case that the EU definition should apply in members states, meaning that only an employment relationship is required for an individual to be considered a worker, may have far-reaching implications in relation to who is entitled to protection under various European based laws applicable in the UK, for example protections for fixed term and part time workers.
What sort of impact this decision has in the UK may well depend on what type of Brexit we end up with. Many have identified the Agency Workers Regulations 2010 as being ripe for repeal if the UK has the flexibility to do this on leaving the EU.