In a landmark judgment last week, the Supreme Court confirmed that valeters working for Autoclenz were employees and not self-employed contractual workers.

Britain’s highest court upheld an earlier Court of Appeal (CA) ruling that clauses in the contracts of 20 Unite members which were designed to suggest that they were self-employed and not employees, should be disregarded (see weekly LELR 144).

As a result it will be much more difficult for employers to take away employees’ employment rights by labelling them “self employed”.

The Supreme Court judges held unanimously that the CA was entitled to decide that the claimants were employees because they were working under contracts of employment within the meaning of the National Minimum Wage and Working Time Regulations.

They said that the CA’s findings were “findings of fact which Autoclenz cannot sensibly challenge in this Court”.

The clauses included a supposed right for the valeters to send a substitute to carry out their work and another suggesting that there was no obligation on them to accept work or on the company to offer it.

In reality the valeters could not send a substitute and did have to do work that was offered to them. One of them (with 17 years of experience) was unaware that he even had the right to bring in a substitute. They also had to notify the company in advance if they were unavailable for work.

The Supreme Court’s decision means that the valeters will now enjoy the whole range of employment rights previously denied to them, including:

  • the right not to be unfairly dismissed
  • holiday pay
  • national minimum wage
  • maternity pay
  • redundancy pay.

Deborah Franks of Thompsons solicitors, who acted for the Unite members, commented:

“The Supreme Court, following the decision in the Court of Appeal, has clarified the position of those on purported self-employed contracts, who have been denied the protection of statutory rights.

“This is a sea change which will assist all claimant employment lawyers in attempting to assert these rights. This judgment will enable employment Tribunals to assess the reality of the employment relationship and provides a clear framework in which to decide whether an individual is an employee.

“Furthermore, it will prevent unscrupulous Respondent lawyers inserting substitution clauses into contracts with a view to avoiding their legal obligations under domestic and EC law”.