In a recent case, Autoclenz Ltd v Belcher,the Court of Appeal has held that a group of car valets employed under terms and conditions that described them as self-employed were really employees for the purposes of the protection given to employees under legislation. The 20 valets had been recruited via advertisements seeking self-employed people and engaged under agreements that described them as 'subcontractors'. The contracts contained “substitution” clauses allowing the valets would to supply suitably qualified substitutes to carry out valeting on their behalf. The contracts stated that the valet were under no obligation to provide their services on any particular occasion, and offered no guarantee of work. All these provisions were designed by the employer to get round the legislation so the employers may have been dumb-founded when the valets lodged Tribunal claims seeking a declaration that they were, amongst other things, employees as well as claiming unpaid wages and holiday pay. The employment tribunal found that the substitution and obligation clauses in the written contracts did not reflect the reality of the relationship. It decided that the valets were fully integrated into A Ltd's business and subject to its control. Consequently, they were employees. The Appeal Tribunal did not agree; but onward went the case to the Court of Appeal who concluded that the law on sham terms had been recently set out in Firthglow Ltd (t/a Protectacoat) v Szilagyi and followed that case. A tribunal must consider whether or not the words of the written contract represent the true intentions or expectations of the parties, not only at the outset of the contract but at any later stage if evidence shows that the parties have expressly or impliedly varied the agreement between them. In this case, the facts supported the tribunal's original conclusion, in particular, that no one seriously expected the valets to provide a substitute and that the valets were expected to turn up every day and do the work provided. So, the Court of Appeal concluded that there was the necessary mutuality of obligation to conclude that the claimants were workers and, furthermore, the necessary control to establish that they were employees. Although employers have for years tried to find ways round the employment legislation by using devices such as those described in this case and with varying degress of success it will now be much more difficult to exclude employees from protection. If the written contracts are unreal, i.e. do not reflect the reality of the deal then they may well not do what the employer expects of them.
