Mr Buckborough and Mr Sewell were bricklayers who approached builder Redrow for work. They were taken on and each signed a document called ‘Sub Contract for a Labour Only Bricklayer Conditions and Acceptance of Offer’. This document stated that the bricklayer was self-employed.
It also said that the bricklayer was not required to accept any work offered by Redrow, but that if they did so, they were bound by the terms of the document. Further, it provided that the bricklayer was responsible for ensuring there was sufficient labour to maintain Redrow’s rate of progress on the site. In this regard, the document stated that the bricklayer was not required to perform the work personally and that the obligations could be performed by alternative labour.
Buckborough and Sewell later brought a complaint under the Working Time Regulations 1998 (WTR). The employment tribunal had to determine whether Buckborough and Sewell were workers for the purposes of the WTR. The key issue was whether they had entered into a contract whereby they had undertaken to do or perform personally any work or services for Redrow.
The tribunal held that Buckborough and Sewell had entered into a contract to perform work personally for Redrow. Therefore they were workers for the purposes of the WTR. The tribunal said that, at the time the contract was signed, it was never expected by any party that Buckborough or Sewell would seek to provide a substitute or refuse the work offered. It said that the provisions as to the right to maintain a substitute and to provide other labour if necessary were a sham, inserted into the document to give the appearance that Redrow had not contracted with Buckborough and Sewell as workers. This did not seriously reflect the intentions between the parties. Alternatively, the tribunal said that the contract document contained an obligation of personal service, which was sufficient to bring Buckborough and Sewell within the statutory definition of ‘worker’.
The Employment Appeal Tribunal (EAT) upheld the decision of the tribunal. It said that, in its opinion, earlier cases had demonstrated that there are two different contexts in which the word ‘sham’ may legitimately be used in respect of a contract or contractual provision.
One context is when the parties have a common intention and the documents they have created in some material respect appear to give rise to legal obligations that both parties intend not to exist, to deceive third parties or the court.
The other is where in reality neither party – although not intending to deceive a third party or the court – intends the contract or the relevant provision of it to be effective or to constitute an effective obligation between them. The latter applied here. The EAT also agreed with the tribunal that the contract document required Buckborough and Sewell to provide personal work or services. They were expressly obliged to provide such labour as was necessary to carry out the work, and if they did not themselves carry out the work, they were bound to provide alternative labour.
This case serves as a useful warning to employers that they will not be able to avoid their obligations under the WTR simply by crafting express contractual terms designed to bring the individual outside the statutory definition of ‘worker’. It is clear that a court will look beyond the express contractual terms and review all the circumstances to determine the parties’ intentions when they entered into the contract.