Courts will only imply a contract on the ground of necessity in certain circumstances. In Smith v Carillion the Court of Appeal held that, even in the case of a blacklisted worker, the question for courts was whether it was necessary to imply a contract between the worker in question and the end user by looking at how the parties conducted themselves.
Basic facts
Mr Smith, an active member of UCATT, worked for 20 years on various building projects initially as an engineer and subsequently as site agent until 2001 when he could no longer find work. In 2009, he discovered that he had been blacklisted because of his union and health and safety activities after a raid on an organisation called the Consulting Association. It had compiled a database of workers in the industry who were perceived to cause problems for employers.
Mr Smith claimed that by providing information about him to the Association, Carillion (previously Mowlem) had subjected him to detrimental treatment by virtue of his trade union and health and safety activities. Although he had been supplied as an agency worker to the company, he argued that the court could imply an employment contract on the basis of “necessity”.
Decisions of lower courts
Although the company conceded that Mowlem had provided information about Mr Smith to the Consulting Association between 1997 and 1999; that it was for the purpose of penalising him for taking part in the activities of an independent trade union and acting as a safety representative; and that the provision of this information caused him a detriment, it ruled that he could not succeed in his claim as there was no contract between him and the company. Nor could it imply such a contract on necessity grounds as the facts did not warrant making that implication. The EAT upheld the tribunal decision.
Court of Appeal decision
Mr Smith argued before the Court of Appeal that there were a number of factors which pointed strongly in favour of his status as an employee, including the fact that he was integrated into the business and that he was interviewed for his post.
However, the Court was not persuaded, holding that the question was whether it was necessary, having regard to the way in which the parties conducted themselves, to imply a contract between worker and end user. In this case the facts did not justify the implication of a contract as it was not unusual for agency workers to be integrated into an end-user’s business and contractors often interviewed relatively senior staff to ensure they were suitable for the post and would fit in.
The reality was that Mr Smith had been supplied as an agency worker under an agency contract and there was no contractual documentation to suggest otherwise. The Court noted that it was not against public policy for contractors to obtain services in this way, even if the purpose was to avoid legal obligations. In any event, it said that courts could not imply a contract just because they disapproved of the employer’s objectives.
It also dismissed an argument based on the Human Rights Act (HRA) because all the relevant acts that Mr Smith complained of, namely the provision of information at various times, all occurred prior to the Human Rights Act coming into force on 2 October 2000. Although section three of the HRA required courts to interpret legislation to give effect to the rights conferred by the Act “so far as it is possible to do so”, it could not be used to construe the legislation retrospectively.