The "Conduct Reg's" are virtually unenforceable against your intermediary

[SueEllen]

Dear Malvolio,

Maybe we are talking at cross purposes here. From what I understand of your situation, you are not under the pre dominant control of your hirer.

If that is the case, then you can not rely on the "Conduct Regs" as applicable legislation for protection. So it matters not if you opt in and by opting out you are making a specific declaration that you are not predominantly controlled.

That is all I am saying, and if that is so it would support your outside of IR35 argument. But you can't have you cake and eat it too.

You keep banging on about the Conduct Regulations but as your case wasn't trialled in a higher court then it sets absolutely NO legal precedent.

There are plenty of other cases people can quote or easily find both criminal and civil which were purposely dragged to a higher court i.e. Supreme Court, European Court of Human Rights to ensure that the case set a legal precedent and clarified the law.

[Rory Dwyer]

You keep banging on about the Conduct Regulations but as your case wasn't trialled in a higher court then it sets absolutely NO legal precedent.

There are plenty of other cases people can quote or easily find both criminal and civil which were purposely dragged to a higher court i.e. Supreme Court, European Court of Human Rights to ensure that the case set a legal precedent and clarified the law.

Dear Sue Ellen,

Court Of Appeal, Administrative Court

Accenture Services v HMRC & ors

[SueEllen]

Dear Sue Ellen,

Court Of Appeal, Administrative Court

Accenture Services v HMRC & ors

I'm talking about your particular case not Accenture.

[Rory Dwyer]

I'm talking about your particular case not Accenture.

Dear Sue Ellen,

That is the case that set the precedent in relation to the level of control necessary for the Employment Agencies Act (EAA) 1973 to apply as a definition of an Employment Business i.e. Pre Dominant Control. The Conduct Of Employment Agencies and Employment Businesses Regulations 2003 the "Conduct Regs" is only applicable if the intermediary passes the definition of the EAA.

The judge in the BIS v CNL had no option but to abide by the decision in Accenture Services v HMRC & ors or be subject to appeal, as will any other lower court in the future or any case lost in the last six years that is in conflict with this decision.

If you then choose to look at the HMRC ESM0516 it clearly states;

"
ESM0516 - Guide to determining status: control - overview

In the 1950s the courts took the view that the distinction between employment and self-employment turned on who controlled the worker when carrying out his or her duties. If the engager had the right of control then there was employment. Since then there has been a lot of case law where control has been a feature, notably Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2QB497, which have reaffirmed that the presence of control is an essential and necessary consideration in determining whether a contract of employment exists. Although the right of control is a significant factor and one which must be present in establishing whether someone is self-employed or employed, that right is not conclusive on its own. It has to be considered in the light of all the other factors relevant to employment status (see ESM0515).

What we are concerned with is the right to control what the worker has to do, where it has to be done, when it has to be done and how it has to be done. It is the right to exert control that is significant; not whether that right is exercised (see ESM0518). In practice, the employer may rarely (or never) exercise this right; particularly where the worker is a skilled individual used to working on his or her own initiative (see ESM0527). It can be difficult to demonstrate both that a right exists and that there is actual control. The engager may not be able to exercise control over all aspects of the work. If so, this does not necessarily mean that there cannot be employment although the greater the level of control there is, the stronger the pointer towards employment. You must also bear in mind that the right of control is only one factor to take into account and must be considered in context. The right of an engager to exert control over a worker is a strong pointer towards employment.

When investigating the status of a worker you need to establish whether the engager has the right to control the worker. The fact that the right exists carries a lot of weight even where little control is exercised. For example, a manager may not closely supervise the work of an experienced or skilled worker, although the right exists.

Control is a necessary condition of a contract of employment so to satisfy the test laid down by MacKenna J in the Ready Mixed Concrete case - see ESM7030 - there must be evidence to show a “sufficient degree of control” over the worker exists.

The Court of Appeal case Autoclenz Ltd and Belcher & Ors [2009] EWCA Civ 1046 provides very useful guidance as to what the Courts should accept as to the level of control necessary to satisfy the test laid down in Ready Mixed Concrete - see ESM7310.

Where the engager has no right of control whatsoever over the worker, there will not be a contract of service. In general, the more control that exists the more likely it is that the relationship between the engager and the worker is that of employment.

"

By declaring yourself opted in to the "Conduct Regs" i.e. you the individual supplied by the work seeker or as a consequence the work seeker itself is stating in unequivocal terms that the hirer has pre dominant control over you and as a consequence your company.

Not a good way to start your business entity test.

[malvolio]

Odd. don't recall the BETs making any reference to the regs, not that they have any relevance to anything anyway, least of all IR35. Plus, as I've said before, and as you as someone else who has a deep understanding of the underlying legalities surely know, you can't opt in, you can only opt out.

Like I said, getting bored now. Either start talking sense or go away.

[Rory Dwyer]

Odd. don't recall the BETs making any reference to the regs, not that they have any relevance to anything anyway, least of all IR35. Plus, as I've said before, and as you as someone else who has a deep understanding of the underlying legalities surely know, you can't opt in, you can only opt out.

Like I said, getting bored now. Either start talking sense or go away.

Dear Malvolio,

The business entity test clearly make reference to direction and control, as to determine how much exists to create a master / servant relationship.

By signing a declaration that the "Conduct Regs" apply, you as a contractor are accepting that predominant control has passed from yourself as the individual supplied by the work seeker and as a consequence the work seeker itself to the hirer.

Pre dominant control is a higher degree of control than is necessary for IR35.

If you fail to see the relevance of that, I hope the other readers of the forum don't make the same mistake.

Your contract with your intermediary, can make the declaration that the Conduct Regs apply or that they don't apply or stay silent on the matter.

As in the case of Accenture Services vs HMRC & ors, in the case of BIS v CNL the contractor had opted out and the hirer was aware of this but all that matters not a jot if predominant control can not be proven, beyond a reasonable doubt in a criminal proceeding and on the balance of probabilities in a civil one.

A defective declaration opting out may be considered by default that the engagement is covered by the Conduct Regs,

But all of this is immaterial if you as the individual supplied by your PSC and the hirer are not prepared to argue that predominant control has passed from one party to the other.

If the contractor is operating outside IR35 and the client us not treating the PSC as a controlled associated company then the court will be presented with contradictory evidence as to the true nature of the engagement.

[malvolio]

I repeat, which of the BETs do you think involves an assessment of Direction and Control? Business premises, PII, Efficiency, Assistance, Advertising, Previous PAYE, Business Plan, Repair at Own Expense, Client Risk, Billing, RoS or actual Substitution? And I'm not interested in the associated dialogue and examples describing the tests' operation, that is merely HMRC's attempt at FUD and has even less legal force than the BETs themselves.

The main criticism of the BET's - among many others - is that they explicitly do not mention Control.

[Rory Dwyer]

I repeat, which of the BETs do you think involves an assessment of Direction and Control? Business premises, PII, Efficiency, Assistance, Advertising, Previous PAYE, Business Plan, Repair at Own Expense, Client Risk, Billing, RoS or actual Substitution? And I'm not interested in the associated dialogue and examples describing the tests' operation, that is merely HMRC's attempt at FUD and has even less legal force than the BETs themselves.

The main criticism of the BET's - among many others - is that they explicitly do not mention Control.

Dear Malvolio,

It seems we have exhausted all of the questions with regards to the purpose of this thread which just to repeat was;

As a sole director of a PSC unless you as the individual supplied by the PSC and the hirer are prepared to argue that predominant control had passed from one party to the other, you will not be able to rely on the Conduct Regs as applicable legislation to the engagement. Regardless of declaration of opt out, opt in or remaining silent.

The second issue that seems to be outstanding is whether the level of control would influence a judge as to whether the engagement was one of service as opposed to for service.

I will open up a separate thread on that topic for discussion.

[v8gaz]

I will open up a separate thread on that topic for discussion.

Oh please, dear God, no.

[Rory Dwyer]

Oh please, dear God, no.

The thread is entitled "does control influence whether an engagement is one of for service or for service"

If no one is interested then all I suggest is that you don't ask any questions or make statements that may contradict case law or statute.