Highest court boosts 'self-employed' workers’ rights in landmark ruling27 July 2011
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 has today confirmed, in a landmark judgment, that valeters working for Autoclenz were employees and not self employed contractual workers.
In a significant day for workers’ rights, Britain’s highest court has upheld a Court of Appeal (CA) ruling, and a previous one by an employment tribunal, that clauses in the contracts of 20 Unite members working for Autoclenz (which had a contract to clean cars for British Car Auctions) which were designed to suggest that they were self-employed and not employees, should be disregarded.
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 Autoclenz put in to the contracts included a supposed right for the valeters to send a substitute to carry out their work and a clause suggesting that Autoclenz did not have to provide work to the valeters and that the valeters did not have to do any work that was offered.
In reality the valeters could not send a substitute and did have to do work that was offered to them. And they had been told that no further work would be provided if they did not sign the contracts.
The Supreme Court’s decision means that the valeters will now enjoy the whole range of employment rights including:
- the right not to be unfairly dismissed;
- holiday pay;
- national minimum wage;
- maternity pay; and
- redundancy pay.
They would have had none of those rights had they been held to be self-employed contractors as Autoclenz had claimed.
Unite general secretary Len McCluskey, said: “This is a significant day for workers’ rights. For far too long too many employers have tried to take away our members’ employment rights by claiming they are 'self employed' when quite clearly they are not. We have always been able to see through these sham arrangements and are pleased that first the Court of Appeal and now the Supreme Court have too.”
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”.