New Judgment: Autoclenz Ltd v Belcher & Ors  UKSC 41
27 Wednesday Jul 2011
On appeal from:  EWCA Civ 1046
Concerns the correct approach to written contracts in the employment context where there is a dispute as to the genuineness of a written term. The question arises in the context of a dispute as to whether individuals are “workers” within the meaning of the National Minimum Wage Regulations 1999 and of the Working Time Regulations 1998. Twenty car valeters signed contracts describing themselves as self-employed subcontractors. They paid their own tax and had to purchase their own insurance, uniforms and materials (the latter two of which they could do from Autoclenz). Their contracts stated they were under no obligation to attend work, although the employment tribunal found as a fact – in practice – they were expected to attend work and provide services personally. The tribunal also found that they went into the contracts with their eyes open about being self-employed.
Held: the tribunal had been entitled to disregard the terms included in the written agreement between the parties on the basis that the documents did not reflect what was actually agreed between the parties. In the employment context the courts must be alive to the possibility that written documentation may not accurately reflect the reality of the relationship between the parties. Employers may include terms aimed at avoiding a particular statutory result, even where such terms do not reflect the real relationship. Where one party to an employment contract seeks to challenge the genuineness of the terms there is no need to show an intention to mislead anyone; it is enough that the written term does not represent the intentions or expectations of the parties. The question in every case is what was the true agreement between the parties.