Construction Workers Win Holiday Pay Victory

The Union of Construction, Allied Trades and Technicians (UCATT) has welcomed the Court of Appeal's refusal to allow property developer Redrow leave to appeal against the October 2008 decision of the Employment Appeal Tribunal (EAT) in Redrow Homes (Yorkshire) Ltd. v Buckborough and another.

The case involved two bricklayers who were taken on at Redrow's site at Malton, East Yorkshire. The question at issue was whether the men were workers for the purposes of Regulation 2(1) of the Working Time Regulations 1998 (WTR) or whether, as Redrow contended, they were self-employed contractors. The men claimed that they were workers and were each seeking £2,293 in holiday pay.

In 2004, Redrow Homes lost a similar case in the Court of Appeal. In that instance, the tradesmen had signed a 'one size fits all' contract, designed to cover a wide range of situations, described by the Court as a 'menu' of conditions, requiring the Employment Tribunal (ET) to determine which clauses the parties intended to select as being applicable to their contracts. The Court held that the ET had been entitled to find that it was the common intention of the parties that the men would undertake to do the work personally, which led to the conclusion that the men were employees, not self-employed.

In the light of this decision, Redrow sought to avoid the problem in future by redrafting the standard terms and conditions on which they offered work, introducing the following words:

'For the avoidance of doubt the obligation to perform the work is not personal to the Contractor and their obligations may be performed by other labour. Further the Contractor is required to provide other labour if it is necessary to carry out the works or to maintain the rate of progress stipulated by the Company'.

In the 2008 case, the tradesmen had signed contracts intended only for self-employed bricklayers or a gang of bricklayers. The ET found, however, that it was never expected by either side, seriously or otherwise, that the bricklayers would seek to provide a substitute or refuse the work offered. In its view, the provisions introduced in the revised wording were a 'sham' and did not seriously reflect the relationship between the parties.

Redrow appealed and lost. In passing its judgment, the EAT described two differing contexts in which the word 'sham' may legitimately be used with regard to a contract. Firstly, there are the circumstances described in Snook v London and West Riding Investment Ltd, where the parties have a common intention and the documents created give rise to legal rights and obligations which neither party truly intends, in order to deceive third parties or the court. However, a contract or contractual provision may also be a sham where, in reality, neither party intends it to be effective or to constitute an effective obligation between them. The ET had made a factual determination of the parties' intentions and its finding that the obligation provision in the contract was a sham did not contain any error of law.

In addition, the obligations provisions imposed on the bricklayers a duty either to provide the required labour themselves or to find someone else to do it. The men were therefore under a contract personally to execute the work and it therefore fell within Regulation 2(1) of the WTR.

The UCATT has hailed the decision as 'a massive victory' which should 'pave the way for thousands of other construction workers to claim the holiday pay they are entitled to receive'.

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