An interesting case has been reported in the EAT regarding contracts of employment and the intention to create legal relations.

The case of Steelcraft v Ellis has looked at enforceability of a clause in the contract stating that the contract was not intended to create legally binding relations.

In effect the clause was attempting to avoid giving the worker employment status. As is usual the facts of the case are fascinating in that this was a prisoner who was working for a local employer on a rehabilitation programme for seven months prior to his release from prison.

After his release he continued working for the employer and was eventually dismissed for some misdemeanour or another. The question arose as to whether or not he had a year’s service and the employer pointed towards a clause stating that the contract was a Rehabilitation Contract and was not intended to create legal relations.

Therefore, the time spent working for the employer whilst he was in prison did not count towards his one year period of continuous service.

The EAT has ruled that any clause purporting to exclude the Employment Rights Act is invalid as a matter of policy and will not be effective or is invalid if its purpose is to avoid legal obligations.

The question arises as to whether or not this chips away at the party’s intention as being one determinative factor and whether or not somebody can be classed as an employee.