After a lengthy appeals process, the Court of Appeal made its judgment on the Autoclenz Ltd vs Belcher & Ors case and thankfully, it would seem that justice has prevailed.
The Court has decided in favour of Belcher & Ors, meaning that Autoclenz Ltd now has to provide backdated employment rights including, holiday pay and any redundancy/unfair dismissal compensation.
The case hinged on the ‘Right of Substitution’ within the contract which is one of the main legal tests the courts use to determine whether an individual is considered to be a true independent contractor or a disguised employee.
The Court of Appeal stated, in this case, that the ‘Right of Substitution’ within the contract, was a “sham” because ultimately it did not reflect the true intentions of both parties involved, largely due to the fact that Belcher & Ors had never been shown the contract.
Martin Hesketh, managing director of Brookson commented: “This case has highlights the importance for all parties concerned to ensure that they have seen the contract of services and agree that it reflects the true working practices of everyone involved. The Court stated that; only one party need to claim that a clause in the contract does not reflect their intentions in order for the clause to be considered a sham.”
“Our advice for contractors and end clients alike, is to have up to date contracts in place and agreed by all parties, especially if changes to a contract need to be made mid-way through an assignment. This is specifically important if work is gained through an agency, as the contract between the contractor and the agency may not always mirror the contract between the agency and the end client.”
Brookson offers the following best practice advice to contractors to consider when taking on a new assignment
The end client must agree that:
- The contractor is not subject to their control
- The contractor is not integrated into its business
- The contractor is under no obligation to accept work from them
- The contractor has the right to provide a substitute as required
Martin continued: “As always, if contractors are unsure of their IR35 status within new or existing assignments, our advice is to seek specialist advice to ensure that they are operating within the law.”