Sub-contracting vs substitution

[speling bee]

Do you (or YourCo) have an NDA with the Client? Does it let you (or YourCo) pass enough information to the 3rd party to do the piece of work? That might get the Client's attention (but it's entirely fixable, if the Client wants to play).

No NDA and the client wouldn't care about that aspect.

[malvolio]

Some sub-contracting is substitution and some isn't.

No it's not. The substitute has fuill resposnibiity for delivering the original contract. A sub-contracotr is doing his work under your direction.

I don't think the line management is a correct comparison. The line manager does not pay you out of his own pocket to do his work. He has an employment duty to ensure that the work is done within the management structure. This highlights the differences, not the similarities.

Nit picking. Swap "line manager" for "Philip Green". However, I was illustrating a point, not trying settling case law.

However, whether this is a pointer to IR35 is a different question. Has it been tested at law?

Yes. Several times; for example, look up Lime-IT's judgement. But the bottom line is employees can't substitute themselves.

[speling bee]

No it's not. The substitute has fuill resposnibiity for delivering the original contract. A sub-contracotr is doing his work under your direction.


Nit picking. Swap "line manager" for "Philip Green". However, I was illustrating a point, not trying settling case law.


Yes. Several times; for example, look up Lime-IT's judgement. But the bottom line is employees can't substitute themselves.

Nit picking about the difference between sub-contracting and substitution but happy to be corrected.

I am surprised you are raising the line management question. One is an exercise of employee management and the other a business to business arrangement. That bit is clear to me. What is not clear hence this thread is whether that business to business relationship has an impact on the contractor's employment status with the end client.

Thanks for the point towards Lime. Will have a look.

[malvolio]

Nit picking about the difference between sub-contracting and substitution but happy to be corrected.

I am surprised you are raising the line management question. One is an exercise of employee management and the other a business to business arrangement. That bit is clear to me. What is not clear hence this thread is whether that business to business relationship has an impact on the contractor's employment status with the end client.

Thanks for the point towards Lime. Will have a look.

Contractors don't ever have "employment relationships". It's not about employment, it's about tax.

[speling bee]

Contractors don't ever have "employment relationships". It's not about employment, it's about tax.

You know what I mean.

[Contreras]

No it's not. The substitute has fuill resposnibiity for delivering the original contract. A sub-contracotr is doing his work under your direction.

Sorry but no matter how many times I read it I am unable to make sense of that statement.

If I send in a substitute then he/she shall work with my direction and supervision, and MyCo carries full responsibility for contract delivery.

How is this different to delivering elements of the contract using a sub-contractor?

[speling bee]

Sorry but no matter how many times I read it I am unable to make sense of that statement.

If I send in a substitute then he/she shall work with my direction and supervision, and MyCo carries full responsibility for contract delivery.

How is this different to delivering elements of the contract using a sub-contractor?

I didn't like to say. Of course the substitute is only delivering part of the contact in that it is time limited. But this is only semantics. I'm talking about a sub-contractor while we wouldn't recognise as a substitute.

Reading an analysis of the Lime IT case was interesting. What I am wondering is if she had sub-contracted some work out (and other wasn't a sham) but not in a way that would be recognised as a substitute, where would this have come in the judgment? Irrelevant? Pointer to outside IR35? Definitive to outside IR35?

[malvolio]

Sorry but no matter how many times I read it I am unable to make sense of that statement.

If I send in a substitute then he/she shall work with my direction and supervision, and MyCo carries full responsibility for contract delivery.

How is this different to delivering elements of the contract using a sub-contractor?

FFS, this is basics of fereelancing #101.

A subsitute is nominated by you to take over your contract and do your job while you are somewhere else. They do it their way, you are not involved in the least other than collecting the money and paying them.

A sub-contractor is engaged for a given task within your contract of services and is esentially doing what you tell them to do.

Put it this way - you buy a kitchen from B&Q and B&Q nominate a fitter to turn up to install it, that's a sub-contractor. If Homebase turn up, that's a substitution.

[speling bee]

FFS, this is basics of fereelancing #101.

A subsitute is nominated by you to take over your contract and do your job while you are somewhere else. They do it their way, you are not involved in the least other than collecting the money and paying them.

A sub-contractor is engaged for a given task within your contract of services and is esentially doing what you tell them to do.

Put it this way - you buy a kitchen from B&Q and B&Q nominate a fitter to turn up to install it, that's a sub-contractor. If Homebase turn up, that's a substitution.

So if Homebase turned up for the first day, would you say that B&Q had sub-contracted the work to Homebase?

[Contreras]

FFS, this is basics of fereelancing #101.

A subsitute is nominated by you to take over your contract and do your job while you are somewhere else. They do it their way, you are not involved in the least other than collecting the money and paying them.

A sub-contractor is engaged for a given task within your contract of services and is esentially doing what you tell them to do.

Mal, it was a genuine (and polite) question, as was the OP, so there's no need to be arsey.

RoS clause from MyCo's contract:

The Consultancy is responsible for maintaining reasonable continuity in personnel providing Services on its behalf, but reserves the right in its sole discretion to make changes from time to time; no additional charge will be made for any handover period, and the Consultancy remains responsible for defining the scope of (and, if any supervision and direction is required, for providing such supervision and direction of) any Services to be performed by a substitute, and in any event for all Services performed on its behalf. Where the Consultancy’s charges are on a time and materials basis, or where any individual who will provide Services is named in a Schedule (or the Client has a reasonable expectation that the Services will primarily be provided by a specific individual), it is the Consultancy’s responsibility to ensure that the relevant skills and experience of any replacement personnel remain commensurate with the fee rates charged.

So you see I am a little confused when you say:

The substitute has fuill resposnibiity for delivering the original contract

and:

you are not involved in the least other than collecting the money and paying them.

The B&Q analogy is too subtle for me, sorry.