Adecco – English Court of Appeal finds that a placement service providing non-employee temps to clients was not paying the temps’ compensation on the clients’ behalf

An employment bureau (Adecco) introduced temporary staff ("temps"), who were not Adecco employees, to clients looking for a temporary worker to undertake an assignment, and if the temps accepted an assignment, Adecco paid them for the work they did for the clients – and collected those amounts plus a mark-up from the clients.

Newey LJ essentially found that Adecco was not paying the temps as agent for the clients, so that the full consideration received by it from the clients was subject to VAT rather than just the “commission” earned by it.

It was helpful to Adecco’s case that it could not direct the temps as to how to carry out their assignments, had no effective control over when the assignments ended and did not conduct any appraisals of the temps. However Newey LJ noted that there was no contract between the temps and the clients, the contracts referred to their services being provided "through Adecco," and Adecco charged a single sum for each hour worked rather than breaking out the commission portion.

Neal Armstrong. Summary of Adecco UK Ltd & Ors v Revenue & Customs [2018] EWCA Civ 1794 under s. 123(1) – consideration.