In a highly significant test case, the Court of Appeal decided that two part-time staff who worked for the company were entitled to a contract of employment.
The decision against National Power, whose chief executive, Keith Henry, is among those utility directors denounced as "fat cats", means that thousands of casual employees working in a range of industries are now eligible for holiday and sick pay and statutory maternity leave. They will also have the right to claim unfair dismissal if they are sacked without reason.
Mr Henry's company had won the case at an industrial tribunal and an employment appeals tribunal and registered its intention to seek leave to appeal to the House of Lords. The company's latest annual report shows that Mr Henry was paid pounds 628,000 a year.
The two staff concerned - Heather Carmichael, 35 and Janet Leese, 36 - worked as guides at Blyth power station in Northumberland. After being refused contracts of employment and with the backing of the GMB general union, they took their case to an industrial tribunal and then an appeals tribunal, both of which decided that they did not work for the company directly.
Yesterday, however, the Court of Appeal overruled those findings and ordered a fresh industrial tribunal hearing to set down their terms of employment so that the workers can be covered by the Employment Protection Act.
Andy Freer, of the GMB's legal department, said the judges had found that it was not a "commercial reality" for the company to claim the women were not employed because it had advertised the job, given interviews and training and then offered them the work.
Mr Freer said it would be relatively simple for any casual worker who had a written job offer to establish the same rights as directly employed staff, although it would be more difficult with an oral agreement.
The two women showed parties round power stations and were paid for the number of hours they worked. Although they had never been offered a contract of employment, they paid tax and national insurance and were provided with a uniform and the use of company vehicles.
Lord Justice Ward said the company's offer of work and the women's acceptance amounted to a "contractual relationship". Lord Justice Chadwick said the use of words "on a casual basis" in the company's letters did not negate the women's rights. Lord Justice Kennedy, dissenting from the decision, agreed with National Power that no contract had been made.
John Edmonds, general secretary of the GMB, said that he was perplexed by Mr Henry's keenness to deprive the two women of a contract of employment. "This is the man who was paid pounds 120,000 'disturbance' allowance for moving 30 miles to be nearer National Power's headquarters. All these two women want are basic rights. We've had three hearings on this issue and now he wants to go to the House of Lords over it. What is he on?" he said.
A spokesman for National Power said the company was surprised by yesterday's judgment and believed it had a "robust" case.
Ms Leese, of Blyth, said she was thrilled with the decision by the Court of Appeal, "not just for us, but for other people, the majority of them women, who find themselves in a similar position to us".Reuse content