A “worker” under the WTR cannot have an unfettered right of substitution

Mr MacGettigan’s contract with Archer-Hoblin stated that he was a “self-employed sub-contractor”. The contract contained an unfettered  substitution clause which provided him with the right to send someone with similar experience and qualifications to do his work and while he would be paid for that work he must then arrange to pay the substitute himself.

Mr MacGettigan gave evidence that that although the contract referred to a substitute he knew how the industry worked and it was not the norm to send someone else to do the work. He said that if that were to happen it would be likely that the contract would come to an end. Indeed, he had personally worked for a period of over 5 months on a daily basis prior to his claim.

The employment judge concluded that the substitution clause was not a sham and that Mr MacGettigan was a “worker” for the purposes of the Working Time Regulations 1998 (“WTR”), and so his claim for holiday pay succeeded. The EAT, however, upheld the employer’s appeal. The definition of “worker” under WTR is not limited to an individual who works under a contract of employment: it includes those contracted to provide services personally. The EAT confirmed that a limited power of substitution is not inconsistent with a requirement to provide personal service. However, the judge had made two fundamental errors:

(1)The substitution clause was not restricted in any way: as a matter of law, such an unfettered right is inconsistent with an obligation to perform work personally and cannot possibly come within the meaning of a ‘worker’ as set out in Regulation 2(1) of the WTR.

(2)How the parties behaved in practice was not considered at all, so no evidential basis existed for concluding that the arrangement was not a sham.