Does control influence whether an engagement is one of for service or of service ?

[Rory Dwyer]

We've seen more than a few examples over the years through these forums where two different courts dealing with the same person will decide for IR35 purposes that the contractor is a "disguised employee" but also "not an employee" for terms of employee protections. If you get caught into the trap of thinking the courts or tax man will be consistent between even closely related subjects then you're quite sadly deluded.

There's no cause or justification for absolute statements on this subject until a court case is held in a CIVIL court and appealed to a precedent making authority level deciding the question on whether the Conduct Regs have even the slightest bearing on control from the purposes of identifying disguised employment from an IR35 perspective. Criminal court decisions are about as worthless as a forum opinion when it comes to setting legal precedent.

watch this space! I will be seeking judgement on exactly this point

[Ticktock]

I think the real question is, "Does anyone trust an agency to advise you on your legal position and act in your best interests when it may conflict with their own?".

[Rory Dwyer]

I think the real question is, "Does anyone trust an agency to advise you on your legal position and act in your best interests when it may conflict with their own?".

I am not advising you what you do. I am bringing to your attention the precedent set by the Accenture Services vs HMRC in relation to the "Conduct Reg's". It is your choice what you do with the information.

[Rory Dwyer]

HMRC have recently given guidance on the cases that they rely on from the courts to determine SDC:

Ready Mixed Concrete V Minister of Pensions and NI is the leading authority on employment status "...he agrees expressly or impliedly [sic] that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master"

Autoclenz Ltd V Belcher and Others: "They are subject to the direction and control of the respondent's employees on site. The claimants have no say in the terms upon which they perform work, the contracts which are placed before them are devised entirely by the respondent and the services they provide are subject to a detailed specification"

Talentcore v HMRC (although the predominant issue in the case was ROS): The FTT found that whilst there was little of no supervision, direction and control being exercised, IF a manager ....were present they would have had the right to supervise, direct and control the employees in a similar way as they would regular retail staff.

Serpol v HMRC - the tribunal found that a RIGHT of control existed over those persons supplied - clause 3 of the agency contract gave the client the right to ensure that 'the job was completed in accordance with his wishes and in the time stated by him if specified.

To my mind the most relevant of these is Ready Mixed Concrete - although the case took place in 1968 (I think) it is regularly cited as the authority.

Thank you Lisa, very informative. I might even forgive you for the sued/screwed comment !

[Rory Dwyer]

Thanks to Lisa's input and my own investigations, it would appear on the precedent setting cases, the following;

1) Where there is sufficient "Control" to create one master and the other servant then the contract is one of employment. RMC v MOP ESM7030

2) The issue of IR35 et al, is where there is insufficient control for one to be master and the other servant there can be other factors other than predominant control which could still determine a contract of service, i.e. MOO, ROS etc.

But these are only relevant if the master/servant relationship does not exist.

I can find no reference to any case law where predominant control existed between two parties contractually where it was not one of service.

The problem here for contractors, is that in the main, they are sole director of their respective, Personal Services Companies (PSC) and as such there are only three parties involved, the hirer and the individual supplied by the work seeker and the intermediary in a tripartite arrangement.

Unlike Accenture Services v HMRC where there were four parties Accenture Services Ltd a wholly owned subsidiary of Accenture UK, Barclays (the hirer) and the employees, an individual providing their services to a hirer via their work seeker (PSC) and an intermediary to the hirer there is no way for a contractor to separate themselves from a contract of service where they have become the servant.

Which has to be the case if the Employment Agencies Act 1973 is to apply.

I am happy to be challenged on case law where predominant control has existed between two parties only and it is not a contract of service, but I haven't been able to find any.

[malvolio]

Thanks to Lisa's input and my own investigations, it would appear on the precedent setting cases, the following;

1) Where there is sufficient "Control" to create one master and the other servant then the contract is one of employment. RMC v MOP ESM7030

2) The issue of IR35 et al, is where there is insufficient control for one to be master and the other servant there can be other factors other than predominant control which could still determine a contract of service, i.e. MOO, ROS etc.

But these are only relevant if the master/servant relationship does not exist.

I can find no reference to any case law where predominant control existed between two parties contractually where it was not one of service.

The problem here for contractors, is that in the main, they are sole director of their respective, Personal Services Companies (PSC) and as such there are only three parties involved, the hirer and the individual supplied by the work seeker and the intermediary in a tripartite arrangement.

Unlike Accenture Services v HMRC where there were four parties Accenture Services Ltd a wholly owned subsidiary of Accenture UK, Barclays (the hirer) and the employees, an individual providing their services to a hirer via their work seeker (PSC) and an intermediary to the hirer there is no way for a contractor to separate themselves from a contract of service where they have become the servant.

Which has to be the case if the Employment Agencies Act 1973 is to apply.

I am happy to be challenged on case law where predominant control has existed between two parties only and it is not a contract of service, but I haven't been able to find any.

I get this terrible feeling of déja vu...

[Wanderer]

Agent's summary of all threads: Opt out.

Yep, I always find it amusing how agents are so anxious for us to opt out in order to protect our IR35 status, yet no one else thinks that the Agency Conduct regulations are anything other than a minor IR35 pointer.

[Rory Dwyer]

Yep, I always find it amusing how agents are so anxious for us to opt out in order to protect our IR35 status, yet no one else thinks that the Agency Conduct regulations are anything other than a minor IR35 pointer.

I am not anxious for any one to opt out. You can choose to do what you want to do, but I am going to test this point in a court of law.

Virtually, all of the contractors we operate with, opt out of their own volition. Those that don't, I would wager aren't operating outside or IR35.

I can't see any logical argument to question my proposition.

[Old Greg]

I am not anxious for any one to opt out. You can choose to do what you want to do, but I am going to test this point in a court of law.

What point are you going to test in a court of law?

[Rory Dwyer]

What point are you going to test in a court of law?

What the level of control in the "Conduct Regs" if applicable will have on the position of IR35, if any.