Employment Status: Substitution Clauses

[Thanks to Lydia Carter, pupil barrister at Littleton Chambers, for preparing this case summary]

The EAT (Slade J) has handed down its decision in Archer-Hoblin v MacGettigan, which is authority for two propositions.

1. the construction of substitution clauses must be carried out applying ordinary principles of construction. If the clause is clear and unambiguous, its meaning and effect are to be determined in accordance with its terms [34]. The term in question, unless held to be a sham, provided an unfettered right of substitution which was inconsistent with an obligation to perform personally any work or services within the meaning of WTR Reg 2(1) [43]. The tribunal judge had erred in considering what happened in practice when construing the meaning of the clause.
   
   
2. what happened in practice would, however, be relevant in determining whether or not the clause was a sham. In determining whether a substitution clause was a sham the intention and practice of the parties should have been considered [45].

The case has been remitted to a fresh tribunal to determine whether the substitution clause was a sham and, in light of the conclusion on that point, to make a finding on whether the Claimant was a worker within the WTR.