Held, appeal allowed. (1) The power given to the respondent in clause 2.5 was effective and of value to the respondent without the term implied by the judge, which ran contrary to the purpose of implying a term in a contract to protect against a potential abuse of power. Nor was it necessary to imply such a term to give clause 2.5 business efficacy or on the basis that it went without saying. While the fact that a written substitution clause was never exercised or used did not automatically mean it was not genuine, such a fact was at least highly relevant to whether it reflected the true agreement. Any extra-contractual practice of occasional substitution, operating independently of clause 2.5, was of little consequence in answering the question of whether clause 2.5 itself was a genuine clause which gave the claimant an unfettered right to use substitutes. The failure to follow the process required by clause 2.5 on any single occasion was, at the very least, a highly relevant factor to which the employment judge should have had regard in deciding whether the facts viewed realistically meant clause 2.5 gave the claimant a right never to do any work (paras 58, 69, 71).

(2) The business undertaking exclusion in the definition of “worker” in section 230(3) of the Employment Rights Act 1996 and regulation 2 of the Working Time Regulations 1998 was not co-extensive with those who were self-employed or carrying on business on their own account. It was not appropriate to give any weight to the parties’ characterisation of the relationship on the basis that the claimant was self-employed or to the fact that he was, qua self-employed person, responsible for his own taxes, when those factors or labels were perfectly consistent with his having worker status. Clause 11 itself did not purport to exclude worker status, and nor did it state or suggest that the respondent was a client or customer of the claimant’s business undertaking. The most obvious purpose of the clause was to distinguish associates from those investment managers who were direct employees, and the reference to “independent contractor” had to be read in that context. The characterisation of the relationship as not being one of employer and employee, and the accompanying obligation on the part of the claimant to pay his own taxes, were not matters which should have been given any weight. Either the facts viewed realistically showed that the claimant was a worker within the terms of the statutory definition or they did not, and the label in clause 11 was neutral on that question and had no weight. The judge accordingly misdirected herself on that issue (paras 95, 96, 98, 101, 105, 106).

(3) The judge erred in finding that the respondent was a client of the claimant’s business undertaking because his business was not restricted to working for the respondent and had other clients. In trading in his personal investments, the claimant was not conducting or carrying on part of his business at all. He was not acting for anyone else, nor providing a service to any client or customer. He was doing exactly what was done by directly-employed investment managers conducting trades for their personal benefit. It followed that the personal trading of the claimant, on his own behalf, did not support a conclusion that the respondent was a client or customer of a larger business undertaking carried on by the claimant. Accordingly, the case would be remitted to the employment judge. The sole issue for that hearing would be the “client or customer” element of the statutory definition in section 230 of the Employment Rights Act 1996 and regulation 2 of the Working Time Regulations 1998 (paras 115, 117, 118, 128).