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

Unite joint general secretary, Tony Woodley, 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 now the Court of Appeal has too.”

The Court of Appeal upheld Unite’s argument that valeters working for Autoclenz (which had a contract to clean cars for British Car Auctions), were employees and not self employed contractors. Consequently, those valeters 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.

Autoclenz tried to take away the rights of the Unite members by including clauses in their contracts that were designed to suggest that the Unite members were self-employed contractors and not employees. The clauses 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 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. However they had been told that no further work would be provided if they did not sign the contracts.

The Court of Appeal held that the offending clauses should be disregarded as they did not represent the “true agreement” or the “real bargain” between the valeters and Autoclenz. The clauses were, in effect, a ‘sham’. Assessing the true agreement, the valeters were clearly under the direction and control of Autoclenz and were, as such, employees.

Deborah Franks of Thompsons solicitors, who acted for the Unite members, commented: “In the past employment tribunals have paid too much attention to the written contract in deciding whether or not someone is an employee, although what goes in the written contract is completely controlled by the employer and often does not reflect the reality of the employment relationship. Following this judgment it will be much easier for employment tribunals to look at the reality of the employment relationship and to decide that workers are employees, with all the protections that gives them, even if the employer has labelled them ‘self-employed contractors’.”