By virtue of regulation 2(1) of the Working Time Regulations 1998 (“the Regulations”) the expression “worker” is defined to mean
“an individual who has entered into or works under (or where the employment has ceased, worked under) –
A contract of employment; or
Any other contract whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;”
As a result of the definition, it is clear that the expression “worker” is not limited to “employees” (those who work under a contract of employment) but also includes those who fall into the scope of paragraph (b) of the definition.
Many of the rights granted by the Regulations (including the right to claim holiday pay) are granted to workers and not merely employees; therefore it is possible for someone to claim entitlement to these rights even if they are not an employee.
Excluding the rights
Over the years since the Regulations were implemented, employers have adopted a number of methods to try and avoid the consequences of contractors who have been engaged on a self-employed basis arguing that they are workers within the meaning of the Regulations. They do so by requiring the contractors to sign up to carefully worded contracts.
Recent case law, however, has undermined the approach of dealing with these things simply by means of the careful drafting of the contractual arrangement that the self-employed contractor is required to sign.
The reasons for this are summarised in the case of Autoclenz Limited v Belcher and Others [2011] ICR 1157 in which it was stated
“that the circumstances in which contracts relating to work or services are concluded are often very different from those in which commercial contracts between parties of equal bargaining power are agreed
… frequently, organisations which are offering work or requiring services to be provided by individuals are in a position to dictate the written terms which the other party has to accept. In practice, in this area of the law, it may be more common for a court of tribunal to have to investigate allegations that the written contract does not represent the actual terms agreed and the court or tribunal must be realistic and worldly wise when it does so…”
In the more recent case of Boss Projects LLP v Mr G Bragg UKEAT/0330/13/SM the Employment Appeal Tribunal was asked to consider an appeal arising from a contract pursuant to which the claimant had been engaged as a self-employed contractor.
In the employment tribunal itself, the tribunal had found that “as far could be achieved by express contractual terms, this document meant that the Claimant was neither an employee nor a worker… it was, in other words a watertight contract”.
However, the employment tribunal had gone on to decide that the reality of the situation was different. In particular, it concluded that the claimant did not bring any equipment with him or take any business risk; all equipment and training was provided for him and all he did was to provide his own labour and skill. On the facts the tribunal was confident that the situation fell well outside anything that could be regarded as the carrying on of a business undertaking and was certainly not a profession (as described in the definition of the term “worker” above). The tribunal therefore concluded that the claimant was a worker and was entitled to the holiday pay that he had claimed and that decision was upheld by the EAT.
Summary
This is another example of a claim in which, having considered the facts of the case, a tribunal has concluded that the arrangements between the parties did not accord with the written terms of the contract they had signed and have therefore gone behind what might have seemed to be a completely watertight contract in all other respects.