When employers hire work-seekers to perform certain work or provide services recommended by the employment agencies, there is no contractual relationship. However, there will be a contract between the employment agency and work-seeker and a contract between the employers and employment agency.
This creates a fiduciary relationship between them. The employment agency generally obtains certain benefits from either the employer or employee or from both. Once the employee is hired by or engaged in work according to such contracts, then the implied authority exists to perform certain tasks necessary to complete the work expressly authorized to such person. Implied authority played an important role in the trending business activities like a publicity manager who will perform all the necessary activities important for advertising and publicity of the products or services.
This is because not all the work can be included in the contract or can be spelled out. Some activities may arise from the circumstances. The agency relationship is created between them by the express authority through an agreement between the employer and agency and the employee and the agency. Although a written contract is not necessary in all cases, sometimes such a relationship can be created through oral words.
Rights and Duties
There are different employee rights and duties under the agency relationship. Agency workers may differ in some rights and duties from the regular employees. Still, they are entitled to normal statutory work rights as the other employees. Therefore, the agency worker is advised to ensure that all rights are being covered under the contract. Similarly, they are also expected to perform the statutory duties as the other employees.
The contracts also create the fiduciary duties on the work-seeker to be loyal, trustworthy, law-abiding, safeguard any confidential information, perform their responsibilities with proper skills, care, and caution, etc. However, this fiduciary relationship did not exist between the agency and the job seeker, and the agency is only liable to fulfill the general contractual duties. The employer must also perform general statutory obligations toward such employees, like workersâ€™ compensation in an accident.
Also, the agency may be liable for the employee’s actions if it knows the person being hired is incompetent or dangerous or where such an employee committed an act of tort within the scope of business. The agency will be directly liable in the former case while vicariously liable in the latter.
The dismissal of employees hired or engaged in work through an agency is generally governed by common law doctrine, i.e., the employment at will. It means that any employee without any official binding service contract securing the job would be regarded as the employee “at will” and can be fired or discharged from the service at any point in time. However, the court stated an exception to the employee “at would” principle in the form of the tort of wrongful discharge. Wrongful discharge means termination of the employment for any reason which is not sufficient or wrong in the eyes of the law.
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