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The legal impact on employers where there is a sham element in contracts with their workers.

Middlemiss, Sam


Sam Middlemiss


The recent development of legal rules that can invalidate sham clauses or bogus contracts in employment have proven beneficial to workers, in particular those workers that want to be treated as employees. This paper aims to investigate this issue. This article considers relevant legal decisions from all areas of employment law that have a bearing on this topic. As will be seen when a court or tribunal has a reasonable suspicion that the clause (or the contract itself) is a sham that is designed, for example, to exclude employee status (to those persons working under a contract with an employer) they may decide to ignore it and treat the contract as a contract of service. The affected worker will then have entitlement to the full range of employment rights available to an employee. As a consequence of recent legal decisions particularly, those over the last three years an employer that introduces a clause into his contracts (or enters in contractual relations with his workers) needs to ensure that the clause or contract is genuine and operates in practice as it states that it intends to. If a clause or contract is not genuine and does not operate in practice as it states that it intends to, as the title of this article suggests, there might be serious legal implications for an employer. The clause (usually a substitution clause) or the type of contract entered into must not simply be a device to circumvent the correct application of the law in other words perpetrate a sham. The legal impact of clauses or type of contract entered into is analysed fully for the first time in this paper.


MIDDLEMISS, S. 2012. The legal impact on employers where there is a sham element in contracts with their workers. International journal of law and management [online], 54(3), pages 209-221. Available from:

Journal Article Type Article
Acceptance Date May 11, 2012
Online Publication Date May 11, 2012
Publication Date Jun 30, 2012
Deposit Date May 16, 2012
Publicly Available Date May 16, 2012
Journal International Journal of Law and Management
Print ISSN 1754-243X
Electronic ISSN 1754-2448
Publisher Emerald
Peer Reviewed Peer Reviewed
Volume 54
Issue 3
Pages 209-221
Keywords Legal; Approach; To; Invalidate; Sham; Contracts
Public URL


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