Autoclenz Ltd v Belcher
Encyclopedia
Autoclenz Ltd v Belcher [2011] UKSC 41 is a significant UK labour law case decided by the Supreme Court of the United Kingdom
, concerning the scope of statutory protection of rights for working individuals. It confirmed the view, also taken by the Court of Appeal, that the relative bargaining power of the parties may be relevant material in deciding what are the detailed terms of a contract under which an individual works, and in particular whether that contract amounts to a contract of service.
, Derbyshire
. Autoclenz Ltd had contracted with British Car Auctions Ltd (BCA) to provide valeting services. The valeters engaged by Autoclenz claimed holiday pay and pay at the rate of the national minimum wage. They had each signed contracts describing them as self-employed. Paul Huntington worked full time from 1991 until the hearing before the Employment Tribunal (and thereafter) except for a few weeks working for a competitor in 2002 and 2003. In 2007 Autoclenz Ltd invited the valeters to sign new contracts, purportedly clarifying that they were sub-contractors and not employees, that they must provide their own cleaning materials, that there was no obligation to provide services to Autoclenz and nor did Autoclenz have any obligation to offer work to the valeters. Furthermore, there was a term that a valeter could provide a suitably qualified substitute. Autoclenz made a 5% charge for materials, and a charge for insurance. The individuals wore the BCA logo on uniforms for security reasons. Autoclenz contended that the individuals were not 'workers' for the purposes of the statutory definitions of that term in the Working Time Regulations 1999 and the National Minimum Wage Act 1998.
Aikens LJ concurred in the result, but said that he would put the point in his own words.
Sedley LJ concurred with Aikens LJ. He said,
. The judgment of Rimer LJ, in Consistent Group Ltd v Kalwak, suggesting that contractual documents contained the expression of the true intentions of the parties unless there was a sham, intended to deceive third parties, was expressly doubted. Accordingly under the valeters were employees and 'workers' as defined and were entitled both to remuneration at the rate of the national minimum wage and to paid leave.
Supreme Court of the United Kingdom
The Supreme Court of the United Kingdom is the supreme court in all matters under English law, Northern Ireland law and Scottish civil law. It is the court of last resort and highest appellate court in the United Kingdom; however the High Court of Justiciary remains the supreme court for criminal...
, concerning the scope of statutory protection of rights for working individuals. It confirmed the view, also taken by the Court of Appeal, that the relative bargaining power of the parties may be relevant material in deciding what are the detailed terms of a contract under which an individual works, and in particular whether that contract amounts to a contract of service.
Facts
20 car valeters, including Mr Paul Huntington and Mr Belcher, worked for Autoclenz Ltd in MeashamMeasham
Measham is a village in Leicestershire, near the Staffordshire and Derbyshire border, located just off the A42 just south of Ashby-de-la-Zouch, and within the National Forest...
, Derbyshire
Derbyshire
Derbyshire is a county in the East Midlands of England. A substantial portion of the Peak District National Park lies within Derbyshire. The northern part of Derbyshire overlaps with the Pennines, a famous chain of hills and mountains. The county contains within its boundary of approx...
. Autoclenz Ltd had contracted with British Car Auctions Ltd (BCA) to provide valeting services. The valeters engaged by Autoclenz claimed holiday pay and pay at the rate of the national minimum wage. They had each signed contracts describing them as self-employed. Paul Huntington worked full time from 1991 until the hearing before the Employment Tribunal (and thereafter) except for a few weeks working for a competitor in 2002 and 2003. In 2007 Autoclenz Ltd invited the valeters to sign new contracts, purportedly clarifying that they were sub-contractors and not employees, that they must provide their own cleaning materials, that there was no obligation to provide services to Autoclenz and nor did Autoclenz have any obligation to offer work to the valeters. Furthermore, there was a term that a valeter could provide a suitably qualified substitute. Autoclenz made a 5% charge for materials, and a charge for insurance. The individuals wore the BCA logo on uniforms for security reasons. Autoclenz contended that the individuals were not 'workers' for the purposes of the statutory definitions of that term in the Working Time Regulations 1999 and the National Minimum Wage Act 1998.
Judgment
At the Employment Tribunal, Employment Judge Foxwell held that the claimants were employees, and that even if they were not they were workers. Judge Peter Clark in the Employment Appeal Tribunal held that the claimants were not employees but that they were workers, following the decision of the Court of Appeal in Consistent Group Ltd v Kalwak. The company appealed against the finding that the individuals were workers, and and the individuals then cross-appealed against the finding that they were not employees.Court of Appeal
Smith LJ held that the car valeters were employees, despite the contract describing them as self-employed. Employers, and their advisers, cannot draft their way out of employment status if that does not accord with the reality of the relationship.Aikens LJ concurred in the result, but said that he would put the point in his own words.
Sedley LJ concurred with Aikens LJ. He said,
Supreme Court
Lord Hope, Lord Walker, Lord Collins, Lord Clarke and Lord Wilson, on appeal, unanimously held that the car valeters were engaged under contracts of employment and this was not affected by the clauses which stated that they were self-employed, had no obligation to work, no right to receive work, and could substitute another worker. Lord Clarke, giving the judgment of the court, emphasised that a contract of employment was a specific kind of contract, not to be treated the same as commercial contracts, because there may be an element of inequality of bargaining powerInequality of bargaining power
Inequality of bargaining power is a concept used in social sciences and humanities, particularly law and economics to denote the situation where freedom of contract ceases to be real and markets fail....
. The judgment of Rimer LJ, in Consistent Group Ltd v Kalwak, suggesting that contractual documents contained the expression of the true intentions of the parties unless there was a sham, intended to deceive third parties, was expressly doubted. Accordingly under the valeters were employees and 'workers' as defined and were entitled both to remuneration at the rate of the national minimum wage and to paid leave.
See also
- Contract of employment in English law
- UK labour law
- EU labour law
- US labor law
- German labour lawGerman labour lawGerman labour law refers to the regulation of the employment relationship and industrial partnership in Germany.-Contract of employment:*Burgerliches Gesetzbuch §§ 611–630...
- R v Foster [1952] HCA 10; (1952) 85 C.L.R. 138
- Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84