Blog: Any ghost employees out there?

Joanne Sefton, Specialist Employment Lawyer at Menzies Law

Yep, it’s that time of year when thoughts momentarily turn to all things witchy, spooky and pumpkin-related in a last-gasp attempt to stave off the impending tinsel tsunami for a few more precious days. Or does it just feel that way with a five-year-old at home?

Anyway, keeping it seasonal, the recent EAT case of Sandle v Adecco caught my eye, and provided a new spin on the old (roasted) chestnut of ‘ghost’ employees. That is, those tricky individuals who manage to drift off over the horizon without the employment relationship ever really being brought neatly to an end.

As you may know, Ms Sandle was a lawyer who gained a post at BASF plc, the chemicals giant, via Adecco employment agency. She worked in the role for a couple of years and hoped to secure permanent employment. However, a recruitment freeze, combined with performance concerns, led to her assignment being terminated on one month’s notice.

Other than a voicemail message from the local manager, there was no communication between Adecco and Ms Sandle after the assignment ended. Adecco generated a P45, but this was not actually sent to her. Ms Sandle subsequently brought unfair dismissal claims against both BASF and Adecco.

The claim against BASF failed on the basis that she was never its employee. It’s worth remembering that there was a period in the mid-2000s when it seemed that end-users might well be at risk of being found to have agency workers who had become employees (and gained employment rights against them). These developments were over-ridden by legislation and, rather than being employed by no one, agency workers will generally now be expressly employed by the agency.

Her claim against Adecco also failed, although not due to employment status. The ET decided (and the EAT agreed) that Adecco had not communicated any dismissal to Ms Sandle (and nor had she resigned). In those circumstances, there could be no dismissal, and so her employment relationship had continued, albeit in a state of “limbo”. If she had been dismissed, or had resigned and claimed constructive unfair dismissal, then the view of the ET seems to have been that she would likely have had a successful claim (albeit with some big question makes over the level of compensation).

Although not quoted in the Sandle case, as it engaged different legal tests, the decision is in some ways reminiscent of the famous 2013 case of Geys v Société General in which the defendant bank thought they had dismissed the Claimant, but hadn’t in fact managed to do so. That decision raised important questions which remain largely unanswered, including around whether employment could be terminated for the purpose of bringing an unfair dismissal claim, but not for contractual purposes.

Although the headline message from Sandle might be that end-user organisations don’t have too much to worry about, the agency situation is not the only one that can give rise to ‘ghosts’. Another classic is employees on long term sickness absences, and then there are more unusual situations, perhaps involving employees who move abroad.

In order to avoid being ‘tricked’ by any nasty surprises at Halloween or any other time, do have a think about:

  • Making sure that any termination is promptly confirmed in writing. Even where the employee resigns, an acknowledgment letter should set out the effect of the resignation in terms of termination date, notice pay, etc.
  • Where achieving termination on a particular date is critical, either for contractual benefits (particularly bonuses), or for making sure the employee doesn’t accrue qualifying service for an unfair dismissal claim, do get advice on the timings and on exact wording of your correspondence.
  • Keep an eye on the status of any employees who are not active in employment, review their situations as appropriate, and make sure information is not lost in and handovers or business transfers.

 

Joanne Sefton, Specialist Employment Lawyer at Menzies Law