In their successful case against Autoclenz, car valets won convinced the Supreme Court they were not self-employed and helped set a new precedent that working practices could trump contract terms, reports Nick Huber.
The recent Supreme Court judgment in Autoclenz Ltd v Belcher and Others (UKSC 41) backed a group of self-employed car valets who worked for Autoclenz and argued that clauses in their contracts did not reflect their actual working arrangements. In spite of clauses on mutuality and substitution, the court ruled that they were obliged to provide the services personally. The legal dispute started in 2007.
The Supreme Court decision establishes a precedent that the conduct of the contractual parties could “trump” the written terms, according to IR35 specialist Matt Boddington of Accountax.
In its ruling the Court said decided that the contracts did not reflect the true agreement between the parties and that in reality “four essential contractual terms were agreed: (1) that the valeters would perform the services defined in the contract for Autoclenz within a reasonable time and in a good and workmanlike manner; (2) that the valeters would be paid for that work; (3) that the valeters were obliged to carry out the work offered to them and Autoclenz undertook to offer work; and (4) that the valeters must personally do the work and could not provide a substitute to do so.”
Tax experts said that that the ruling it had important lessons for tax advisers and contractors.