Substitution clauses in agreements with contractors have again been looked at by the EAT, this time in the case of Premier Groundworks v Josza.

In circumstances where the contract was not a sham, the inclusion of a clause in Mr Josza's contract allowing him to delegate performance of services to "other persons" meant that he was an independent contractor and not a worker. This was the case even though he had never actually sent a substitute. It should be noted that the only qualifications to Mr Josza's right to delegate were that he must notify the client in advance and that the substitute must be at least as capable and qualified as he was. Such a clause would not have the same effect if the right to send a substitute depended upon some other event, such as the provider being "unable" to perform the services. Contrast, however, the recent case of Redrow Homes (Yorkshire) Limited v Buckborough and Sewell in which the EAT held that, where the parties never intended a substitution clause to be used in practice, it did not stop the individual being a worker.

Impact on employers

Although there is a lack of precise guidance on when a substitution clause will cause an individual contractor to be deemed a worker for the purposes of the Working Time Regulations and other rights afforded to workers, the position following recent cases can be summarised as follows:

  • a substitution clause included in good faith will not cause the individual to be deemed a worker;
  • a clause included for the sake of form only, where there was no intention to actually permit substitution, was a sham and did not prevent the contractor from being a worker;
  • a limited right to substitute only in situations of illness or absence did not prevent the individual from being a worker.