Autoclenz Ltd v Belcher & ors 2009 ETCA Civ 1046
The Court of Appeal held that where documents contained express contractual terms that were inconsistent with employee or worker status these could be correctly disregarded by the employment tribunal.
The case concerned car valeters and the EAT held that the individuals were not employees, [Issue 38]. The Court of Appeal reinstated the Tribunal’s decision finding. Where there is a dispute as to the genuineness of a written term in a contract the court must look at the legal obligations of the parties and the contractual documents. However, if the evidence is such that the contract departed from what was expected of them, then the written terms can be ignored and the court can look at what was expected and what happened in practice. Lady Justice Smith stated that individuals should not be stopped from contending that they are employees simply because they had been content to accept the tax benefits of self-employed status for many years.
It was not necessary to show a common intention of the parties to mislead the other. The decision confirms the guidance on sham contracts provided in the case of Protectacoat Firthglow Ltd v Szilagyi.
Autoclenz’s appeal was dismissed and the Claimant’s cross-appeal was allowed. The valeters were employees.
Key point: Substitution uses in self employed contracts will rarely be sufficient evidence of employee/worker status. Tribunals will have to examine the true intentions and expectations of the parties throughout the duration of the arrangement.