A Purposive Approach to Employment Protection or a Missed Opportunity?

AuthorJulie McClelland
Date01 May 2012
Publication Date01 May 2012
A Purposive Approach to Employment Protection or
a Missed Opportunity?
Julie McClelland*
This note discusses how far the Supreme Court judgment in Autoclenz Ltd vBelcher and others
provides grounds for a purposive interpretation of the contract of employment for employment
protection purposes, or whether its scope is limited to the specific issue of considering the validity
of boilerplate contractual terms.The author reflects on the approach taken by the Supreme Court
and how far issues of inequality and substantive fairness within employment relationships have
been addressed.The note concludes that whilst the judgment has extended the context of facts to
be considered to include a consideration of relative bargaining power,this in itself does not extend
to a consideration of substantive fairness nor does it clarify the standards that should apply to a fair
employment relationship.
The traditional dogma of classical contract theory is that parties are free to make
their own bargains. If a contract is concluded then it is assumed that each party
is content.There is no room for consideration of the fairness of the exchange.1
The relative bargaining strength of the contractors, issues of substantive fairness,
are not questions for enquiry. ‘The Courts’ function is to ensure procedural fair
play: the Cour t is the umpire to be appealed to when a foul is alleged, but the
Court has no substantive function beyond this’.2The basic premise of classical
theory,that the contract must be fair because the contracting parties have freely
given their consent to the terms and conditions contained within it, has persisted
in the Courts’ and tribunals’ consideration of employment status.
That was the position until the UK Supreme Court on 27 July 2011 handed
down its judgment in Autoclenz Limited vBelcher and others3(Autoclenz) that the
relative bargaining strength of the contractors is a relevant factor in determining
the parties’ legal obligations. In reaching this decision the Court resolved out-
standing issues that had emerged in two other cases, Kalwak vConsistent Group
Ltd4(Kalwak) and Protectacoat Firthglow Ltd vSzilagyi5(Szilagyi).
The ruling means that where one party challenges the genuineness of
the written terms, the tribunal will be required to have regard to extrinsic
evidence to determine what was actually agreed between the parties.This is an
objective test and one which must not put undue emphasis on the parties’
*University of Huddersfield.I am grateful to Pascale Lorber, Universityof Leicester, and the anonymous
reviewer for their comments on an earlier draft of this note.Responsibility for all errors and omissions
is mine.
1 P. S.Atiyah, ‘Contract and Fair Exchange’(1985) 35 University of Toronto Law Journal 1, 1.
2 P. S. Atiyah, The Rise and Fall of Freedom of Contract (Oxford:Clarendon, 1979) 404.
4 [2008] IRLR 505 (CA); [2007] UKEAT/0535/06/DM.
5 [2009] IRLR 365 (CA); [2007] UKEAT/0435/07/DA.
Julie McClelland
© 2012 TheAuthors. The Modern Law Review © 2012The Modern Law Review Limited. 427
(2012) 75(3) MLR 387–436

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