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

[Rory Dwyer]

I can only write from my personal experience of dealing with your staff at OracleContractors and trying to not opt out.

You might want to make sure that everyone is aware of this policy when they discuss with contractors whether they should opt out or not.

If you wish to have a contract that declares that the engagement with the hirer is one of predominant control, we would not enter into that contract. Plain and simple.

Then it is your choice whether to accept the contract or find another one where you can safely be working under the predominant control of the hirer.

[Rory Dwyer]

Moot

apologies moot not mute, I thought Jimmy Saville had passed away, did you pick up his hooter as well !! Just so that you know, that is an attempt at a joke.

[Rory Dwyer]

From what you have written, it would seem that the Judge in the case was deliberating whether or not CNL was an employment business. The Accenture case you referred to was a VAT case but it was necessary to determine whether or not Accenture was an employment business when the provided staff to Barclays as defined under the Employment Agencies Act 1973 - " ‘Employment Business’ means the business ..of supplying persons in the employment of the person carrying on the business, to act for, and under the control of, other persons in any capacity.”

Questions arose as to what degree of control would be required to satisfy the definition in section 13(3).

It was argued (and the judge agreed – para 40)
- ‘control’ related to day to day control over the staff in respect of ‘the activity contemplated by the supply agreement’, or ‘the matter in hand’
- ‘control’ must mean less than the full form of control required to establish an employment relationship

It was held:

- ‘the word ‘control’ … is not expressly qualified and there is no reason to give it anything other than its natural meaning … and requires an overall evaluative judgment to be made whether the predominant power of control of what the employee does has been transferred … to ‘other persons’’ (para 41)
- ‘the control’ suggests that merely ‘any significant level of control’ would not be sufficient (para 43)
- ‘where control is divided between different persons, the natural meaning of ‘the control’ is the predominant practical control over what the person does’ (para 43)

So, essentially, what this would seem to mean is that it's not a question of whether or not a contractor outside IR35 would not have any rights under the Conduct Regs but rather whether or not an agency that has no control over that contractor would be considered an Employment Business according the the Employment Agencies Act and therefore the Conduct Regs.

this is not correct as the statute clearly states under the "control" of other parties. So it could be the employment business, it could be the hirer, and in the case of Accenture Services it could have been Barclays.

It was found that the employees were under the predominant control of the work seeker. What I am saying is that in the instance of an individual supplied by the work seeker and the work seeker themselves, they are under their own control in our engagement.

In an engagement similar to ours, then if predominant control passes then the contract becomes a contract of service due to the necessary level of control to be predominant (creating a master/servant) relationship when there are only three parties and one of which is the intermediary whom declares he does not control the work seeker or individual supplied by the work seeker.

[tractor]

..

If you wish to have a contract that declares that the engagement with the hirer is one of predominant control, we would not enter into that contract. Plain and simple.

Then it is your choice whether to accept the contract or find another one where you can safely be working under the predominant control of the hirer.

Or where you can safely expect to be paid for the work completed?

[Rory Dwyer]

Exactly, now cutting through all the misinformation in this and other threads, it seems to me that the contractor tried to rely upon the Conduct Regs for protection even though they could never have done so. This forced the agent to deny they were an employment business in respect of this individual contract. This is plainly wrong because you cannot be in or out from an agent's perspective. The agent was always going to be pushing at an open door and the contractor (and the stupid BIS) was wrong to ever think that they could rely upon the protection of legislation when they had already agreed that it did not apply.

So the whole issue has no bearing on either the Conduct Regs or indeed, IR35. The court in this instance simply rubber stamped the agreement that was already in force.

The fact that the agent did all that legal research on case law etc and had never heard of RMC is quite telling

You are incorrect, we did not deny anything, CNL stated that they are an employment business who is this engagement did not supply an individual who was under the predominant or significant control of the hirer.

The BIS proceeded with the case because CNL could not prove that the opt out notification had been provided to the hirer, because it suited the contractor, the sales manager who could have proved the position and the hirer to allegedly take that stance.

At no point did I say that did not research RMC, I was well aware of RMC. It actually supports my argument, which is where there is a master/servant relationship then the contract has to be one of service.

I will always respect your right to your opinion even if I disagree with it, which I do insofar as it relates to the Conduct Regs and IR35

[Rory Dwyer]

Or where you can safely expect to be paid for the work completed?

Even if the "Conduct Regs" had have applied to this engagement, which it didn't, if you breach your contract and it wasn't under the intermediaries control it would have been grounds to withhold payment for breach of contract, even if the judge had found that predominant control existed, which he didn't

[LisaContractorUmbrella]

this is not correct as the statute clearly states under the "control" of other parties. So it could be the employment business, it could be the hirer, and in the case of Accenture Services it could have been Barclays.

It was found that the employees were under the predominant control of the work seeker. What I am saying is that in the instance of an individual supplied by the work seeker and the work seeker themselves, they are under their own control in our engagement.

In an engagement similar to ours, then if predominant control passes then the contract becomes a contract of service due to the necessary level of control to be predominant when there are only three parties and one of which is the intermediary whom declares he does not control the work seeker or individual supplied by the work seeker.

OK

[northernladuk]

OK

Now get us a cuppa...

[LisaContractorUmbrella]

Now get us a cuppa...

[Rory Dwyer]

ESM0516

"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"

Accenture Services v HMRC

Justice Sales

"The natural meaning of "the control" is the predominant control over what the transferred employee DOES"

"In my view, the words, "the control", in sec 13(3) cannot be reconciled with the idea that any significant level of control is sufficient. The use of the definite article implies that it is some FULL measure of control which is required before the test is satisfied."

District Judge Workmen

"It is submitted that on the evidence before me that the work seeker and it’s director the contractor were not at any time under the control of other persons"

"The contractor told me that he was a freelance IT Consultant and the director of the work seeker. He stated that he had an autonomous role with the hirer , the sole restraints being “what does the company want to achieve and whom it would like to do so”. He was not an employee and had never been employed by the hirer. He received his remuneration through his company and was not taxed as an employee. He had been advised by accountants and regarded himself as a self employed contractor. He told me that no one other than himself, controls the work seeker."

"The consultancy agreement specifies that the work seeker has reasonable autonomy in the method of performance of services and that services will be supplied as an independent contractor."

"The contractor agreed on behalf of the company and himself to opt out of the Conduct Regulations 2003. He was fully aware of the term and I am satisfied that he later notified the hirer of the existence of the opt out."

"The hirer representative told me of the arrangements between the work seeker and the hirer. He was not involved in the original agreement. The contractors role and therefore the work seekers role was an expert and he acknowledged he did not control the work seeker."

"I am satisfied that the role of the contractor and the work seeker was that of a self employed freelance contractor.

"I have been helpfully referred to the case Accenture v HMRC 2003. I have reached the conclusion that there is not significant power of control vested in the hirer."

"In the absence of the work seeker or the contractor coming under the control of other persons I am satisfied that consultancy agreement does not fall within the realm of the Employment Agencies Act 1973 and that the company has not committed the offences alleged."

"It follows that the charges against the director are also dismissed. Had the agreement fallen within the Act I would have dismissed the charges against him on the grounds that there was no evidence before me to satisfy me so that I am sure that he consented to , connived at or neglected to prevent those offences."