Redrow Homes (Yorkshire) Ltd v Wright

An individual falls within the extended definition of a worker in regulation 2(1)(b) of the Working Time Regulations 1998 only if the contract requires personal performance. Actual personal performance, an expectation of such performance, or economic dependence does not itself establish that obligation.

The contractual terms must be construed objectively in their factual context. Where standard conditions apply only insofar as they are applicable to the particular subcontract, the court must determine which conditions reasonable parties with the relevant background knowledge intended to include. A condition contemplating the employment of others may therefore be inapplicable to a labour-only subcontract. The remaining terms and payment arrangements may establish a positive obligation of personal service.

Bricklayers engaged on residential building sites sought compensation for untaken leave under regulation 14 of the Working Time Regulations 1998. Employment Tribunals at Leeds and Flint unanimously held that the applicants were workers because their contracts required personal service. The Employment Appeal Tribunal dismissed the employers’ conjoined appeals.

The employers appealed to the Court of Appeal. Their standard conditions included a labour clause contemplating operatives, sufficient labour and a foreman or chargehand. The conditions were, however, binding only insofar as applicable to the particular subcontract. The central issue was whether the contracts themselves obliged each applicant to perform the bricklaying personally.

1. The appeals were dismissed unanimously. The applicants worked under contracts requiring personal performance and were therefore workers within regulation 2(1)(b) of the Working Time Regulations 1998.

2. Per Pill LJ, with whom Latham LJ and Holman J agreed, the statutory inquiry concerned the parties’ contractual rights and obligations. General policy considerations about economic dependence, subordination or an intermediate category between employment and self-employment could not replace the requirement to establish a contractual obligation of personal service. Nor did the fact that the applicants subsequently performed all the work personally necessarily prove such an obligation.

3. The contracts were to be construed objectively in the circumstances in which they were made. The printed conditions were designed for contractors ranging from substantial businesses to small gangs of bricklayers. Condition 1 made each condition binding only insofar as it was applicable to the particular subcontract. The factual matrix therefore determined which conditions formed part of each contract.

4. Condition 6 contemplated operatives employed by the contractor, sufficient additional labour, and a foreman or chargehand. Its terms were inconsistent with personal performance. Nevertheless, the tribunals and Employment Appeal Tribunal were entitled to conclude that it was inapplicable to these labour-only arrangements. Relevant matters included the limited scale of the work, the industry context, the inappropriateness of requirements designed for larger contractors, and direct weekly payments to each individual bricklayer.

5. Excluding condition 6 did not alone establish personal service. The contracts still had positively to impose that obligation. Read objectively against the factual matrix, the individual contracting arrangements and payment scheme justified the finding that each applicant was personally bound to perform his share of the work.

6. Holman J added that parts of the tribunals’ reasoning were weak or relied on irrelevant subsequent performance and expectation rather than contractual intention. Their ultimate findings of common contractual intention were nevertheless findings which accorded with the realities and common sense of the arrangements and should not be disturbed.

1. Court of Appeal (Civil Division): The employers’ conjoined appeals were dismissed. The findings that the applicants were workers within the Working Time Regulations 1998 were upheld.

2. Employment Appeal Tribunal: His Honour Judge Peter Clark presiding, the tribunal dismissed the employers’ appeals in decisions sent to the parties on 30 May 2003.

3. Employment Tribunals: The Leeds tribunal decided on 26 February 2002 that Mr Wright was a worker and adjourned assessment of compensation. The Flint tribunal decided on 24 September 2002 that Mr Roberts and seven other applicants were workers and awarded each £658.