Reply to: Turning a negative into a positive - MOO

[northernladuk]

I have a somewhat similar situation where the working arrangement my client enforces towards contractors has elements of MOO. Basically, if a contractor is to arrive late or leave early (outside of the client core hours) they are expected to invoice for hours worked or a half day. I've recorded these instances via emails exchanged. Also, contractors are not expected to 'request' day-offs via the official leave system (just notify the client), no wfh, no involvement in 'secret' company meetings or decisions.

If you read the thread you'd know this isn't MoO

[ladymuck]

I have a somewhat similar situation where the working arrangement my client enforces towards contractors has elements of MOO. Basically, if a contractor is to arrive late or leave early (outside of the client core hours) they are expected to invoice for hours worked or a half day. I've recorded these instances via emails exchanged. Also, contractors are not expected to 'request' day-offs via the official leave system (just notify the client), no wfh, no involvement in 'secret' company meetings or decisions.

That's not MOO

[thesquaremile]

I have a somewhat similar situation where the working arrangement my client enforces towards contractors has elements of MOO. Basically, if a contractor is to arrive late or leave early (outside of the client core hours) they are expected to invoice for hours worked or a half day. I've recorded these instances via emails exchanged. Also, contractors are not expected to 'request' day-offs via the official leave system (just notify the client), no wfh, no involvement in 'secret' company meetings or decisions.

[northernladuk]

Interesting write up on a recent case with MoO as a main factor. The blurb talks about the work he was engaged to do but lack of MoO exists because he was only doing the work brought in, not extra work as I mentioned earlier.

Chris Leslie of Tax Networks, who represented Mr Alcock, put this into context: “He agreed the work to be done, and only that work to be done. Then he got to work, and worked very hard indeed to meet the outcome goals. And then he billed only for the work done. His contract specifically states that he can only charge for work actually completed. And to top it off, in one instance they did cut the project short at a moment’s notice, and he was not paid.”

Contractor defeats taxman in GBP240k IR35 case - Contractor Weekly

[WordIsBond]

Yeah I can see it from both side the more I think about it.

It certainly shows financial risk and on this occasion I was treated different than the perms and it has an element of MOO.

So overall I think its been a worth while fall out to have.

On the argument - I won - still here today

So this is a double-win for you.

[dx4100]

Yeah I can see it from both side the more I think about it.

It certainly shows financial risk and on this occasion I was treated different than the perms and it has an element of MOO.

So overall I think its been a worth while fall out to have.

On the argument - I won - still here today

[WordIsBond]

Not sure we disagree, actually, but it is all too common to focus on the absence of Mutuality when in fact the case law is about an irreducible minimum. Mutuality always exists...

Exactly. The question is always whether there is sufficient mutuality to constitute employment. If it drops below an irreducible minimum for employment, then there's no employment.

If you get sent home for a day, unpaid, because there is no work, or because you had an argument with a client perm and they are trying to figure out what to do about it, that's certainly an argument that you have less MOO than a permanent employee. Is it an argument that there's less MOO than a temporary employee? That's harder to say. This can happen to employees on zero hours contracts. Even so, it's certainly worth keeping in your IR35 dossier. In

If you don't have any guarantee of continuing work after your current contract ends, that is less MOO than a perm employee, but probably not less than a temporary employee. Still worth keeping evidence.

If you just get terminated without notice, that's less MOO, generally, than employees get, and in at least one case was a strong point against IR35.

When case law talks about an 'irreducible minimum', it's talking about the irreducible minimum necessary to constitute a contract of service (as opposed to a contract for services). Is there enough MOO to say this is a contract of service, a master-servant relationship? If not, it's not employment, and IR35 fails.

Anything that shows you have less MOO than a perm is helpful. But IR35 is not about proving you are essentially a permie. It is about them claiming you are essentially an employee, perm or temp. So the really helpful thing, for IR35, is if you are treated as having less mutuality of obligation than even a temporary employee would have.

[dx4100]

He's probably right and the OPs got himself some good evidence. My point was to raise a comment about the misconception that MoO is about being able to take the day of in contracts and its rather mor complicated than that.

I haven't taken a day "off".

There is no work to do due to a mistake by the perms.

I can't work, been asked to cease work until its sorted and I won't be charging...

The perms are going to be paid still, even the ones who aren't fixing the issue but also blocked...

I believe this does show a lack of MOO.

[malvolio]

Not sure we disagree, actually, but it is all too common to focus on the absence of Mutuality when in fact the case law is about an irreducible minimum. Mutuality always exists, else we wouldn't get paid for work done, but it must not extend beyond that obligation. You can take a day or two off by withdrawal of your services and not expect payment for them, and the client can send you home without pay if there is no work to be done. As soon as you want money for not working (as in a notice period for example - there are others) or your client can assign work to you if you are idle, then you have exceded the minimum.

All discussed and described in the original RMC judgement incidentally, where Mutuality was the major factor in determing the drivers were not employees, despite all their tools of the trade bar their lorry chassis (and even they were in RMC colours) were supplied by RMC and there would be real issues of they didn't deliver their loads to the right location.

[dx4100]

IR35 - Impotent HMRC Arguments - Contractor Weekly

Mutuality of obligation (MOO)

Once again, HMRC trotted out their simple definition of MOO, in that for each period of engagement there would have been an offer of work, an agreement to do that work and an agreement to pay for it.

During the engagement period there were at least a couple of occasions when the computer servers broke down and the contractors were sent home, without pay, whereas employees remained in place and were remunerated. This demonstrated that JCB did not consider itself under any obligation to provide work or pay even after an offer had been made and accepted.

Marlen terminated the contract early when a better offer came up further enhancing the belief of both parties that the contract could be terminated at any time without any consequence.

The Tribunal came to only one conclusion: that the relationship between the parties was not one in which MOO was present.

I think this does support my stance here and malvolio point

[northernladuk]

And reading the thread again I wish I hadn't opened this tin of worms in the way I did. There must have been a simpler way to point out that being sent home for half a day isn't slam dunk MoO.

[northernladuk]

Interesting how even Malvolio and Northernladuk still after all these years disagree what is MoO and what isn't

I dont think we disagree as such. He's pointed a case out that doesn't meet the thinking of articles about MoO so we are just discussing it.

The fact it's such a grey area after all this time odd but good for us. It means it's easier to argue either way and win. If HMRC had nailed it watertight there'd be no confusion and more difficult for us if that makes sense.

He's probably right and the OPs got himself some good evidence. My point was to raise a comment about the misconception that MoO is about being able to take the day of in contracts and its rather mor complicated than that.

[PTP]

Interesting how even Malvolio and Northernladuk still after all these years disagree what is MoO and what isn't

[northernladuk]

I think you mean a case with JCB where the contractor left to go to Rolls Royce.

You are correct so could use thst as case law but IMO, and it would be interesting to hear from the pros, that was a weak test. The notes I saw from that are pretty wooly and they also threw in the fact he could terminate early as evidence of MoO which it isn't either so an odd conclusion. Good one for the contractor but odd.

Inside the contract there can be a level MoO and it gets into bi and unilateral agreements which is was beyond my simple brain.

If we took the JCB example then just the fact a contractor says he's unavailable for a week while he's on holiday you could argue he has a slam dunk absence of MoO.,one of the three pillars ticked therefor no one will ever lose an IR35 case. We know that's simply not true.

[malvolio]

You'd be wrong then. This situation has absolutely nothing to do with MoO.

MoO (or the absence of) is about the obligation to provide further work after the initial agreed piece of work is complete. It has nothing to do with the actual contract you are in.

While you are in a contract there are actually obligations in effect. These are for you to do the work given and for them to pay you for it. Being asked not to come in is covered by the fact you are paid per day worked. If you don't work you don't get paid as per the T&M nature of the contract. You taking holidays is exactly the same as the client asking you not to come in.

It is great defense being asked not to work yes. It shows financial risk and a different way of working to a permies but it doesn't demonstrate MoO.

The best way to use MoO as a defence is for your client to cancel the Contract when there is no more work to do. You can prove there was no obligation to provide work once the agreed piece has finished.

There was a key IR35 case between Rolls Royce and one of its contractors, who was sent home without pay when the systems failed. that, according to the court, demonstrated that the test of an irreducible level of Mutuality had been clearly demonstrated.

So yes, MoO is important, and the OP has demonstrated the level of it in their case.