Reply to: IR says you are, Employment court says you arent...

[Mailman]

You, as I recall, wanted compensation for losing a contract to a more cost-effective replacement (and ignore all the nonsense, that was at the heart of your case). That alone means you and I have a completely different approach to business. Which is why I see no point in debating the issue myself, although others will no doubt wish to contribute.

I remember this and unlike yourself am aware of the implications such cases have for the greater masses of contractors out there...the main one being clients ability to get rid of you because they found a monkey in India to do the same job for 1/100000000004984825235 the cost of you.

Mailman

[Sionner]

ET case

"You, as I recall, wanted compensation for losing a contract to a more cost-effective replacement (and ignore all the nonsense, that was at the heart of your case)" - sorry, but you're mixing me up with someone else.

In essence HP and Certes had conspired to misrepresent the contractual terms. Despite a substitution clause being present in the contract, they declared that they would not accept a substitute. Those terms apparently protected HP and Certes from employment liabilities, but condemned me to being "caught" under IR35.

Clearly, the whole issue of IR35 was a hotly debated subject amongst contractors at the time, as it still is. After failing to convince HP and Certes that they should not issue contracts where they refused to honour certain provisions of that contract, I reluctantly signed and accepted an extension. 4 days later, the contract was cancelled and I was told that HP did not like my conversations with other contractors regarding IR35.

Clearly I was incensed. Both HP and Certes maintained that IR35 had no effect on them. So I reasoned (correctly as subsequent events showed) that having my employment status decided in the ET would help to defend me from a challenge under IR35 from the IR. I was declared "not an employee of HP nor Certes. (both were joint respondents).

Additionally, at the EAT, the judge declared that despite the statements regarding substitution by HP and Certes, I had a contractual right of substitution and this over-rode the actual nature of the arrangement. He also declared that the myco/agent/client was a legitimate and legal structure and in no way was it a "sham". He also declared that I was a legal and bona fide employee of myco.

I felt that this verdict would also help other contractors in the same position, although few agree that it has. So I still claim that my motives were not entirely selfish, although the general consensus of opinion is that it has done little to help contractors in their fight against IR35.

[malvolio]

2) IR35/Employment rights become an avbsolute ireelevance since it will be "PAYE temp" or nothing

Agreed. But at least we'd be on a level playing field then. The major gripe with IR35 is that it is so bloody arbitrary and ill-defined!

[ASB]

If the EAT and the HMRC used he same rules and definitions, you'd be right. But they don't, ....

Quite, but trying to get people to understand that - as a generality - is about as easy as pushing water up hill.

Mind you the Muscat v Cable and Wireless case will be interesting when it finally gets to it's conclusion.

Here he has been found to be an actual employee of C+W despite the existance of the intermediaries. IR35 becomes completely irrelevant in this case (real live actual employee).

[rose tinted glasses]In some ways it would be good to see this judgement being upheld all the way to the HOL because it will ensure that across the board much more sensible contracts are created all the way through the chain[/rtg]

In practice of course what is more likely to happen is:-

1) The law is changed to tighten the definitions involved
2) IR35/Employment rights become an avbsolute ireelevance since it will be "PAYE temp" or nothing.

[malvolio]

Maybe. They'll have a less informed one, I suspect. Anyway, I'm not in the PCG, although I know some who are, and I read the press occasionally, so it's not that difficult to figure out where you're coming from (hint: 3GLs, HP, failed EAT case...?)

If the EAT and the HMRC used he same rules and definitions, you'd be right. But they don't, rightly or wrongly - I suspect the latter, actually - because one is concerned with employment rights protection and one is concerned with revenue collection. QED.

You, as I recall, wanted compensation for losing a contract to a more cost-effective replacement (and ignore all the nonsense, that was at the heart of your case). That alone means you and I have a completely different approach to business. Which is why I see no point in debating the issue myself, although others will no doubt wish to contribute.

[Sionner]

Revelation

"Oh bugger - just figured out who this is...

Sorry, you're still wrong. But I'm not going to argue about it." - perhaps a wider audience unrelated and unfettered by the PCG might have a different viewpoint!

[malvolio]

Oh bugger - just figured out who this is...

Sorry, you're still wrong. But I'm not going to argue about it.

[Sionner]

ET action

"But if you were someone who worked in the IT department supporting their network, could you take the same risk? Yes.

I think that you easly fit into the second category, and thus your experienece is of no use to someone in the first"

- there was no risk in my case. My contract had already been terminated and my agency had declined to represent me further. By getting the ET to determine my employment status, before the IR challenged me under IR35, I reasoned that the IR would have had great difficulty is pressing such a challenge. I believe subsequent events supported that belief.

If you wish to peruse the details, search the SHOUT99 web for "Hewlett Packard". That should pick up the details.

[Mailman]

Well thaks for that, but it wasn't really necessary.

I'm just trying to make the destinction between someone who works exclusively in one sector and someone who has generic transferable skills.

What you mean like a plumber who will only ever work in the plumbing arena?

Lets say, (for the sake of arguement) that the aeronautic industry has a habit of shunning people who have brought ET claims against a previous employer0.

How exactly are prospective clients going to know who has been through the ET eh? You think they scour the papers for peoples names and then match those against prospective contractors?

Now, if you are a designer of airframes would you consider taking your employer to an ET on some speculative action? I don't think so.

Some wont but some will be sufficiently motivated to do so.

Mailman

[tim123]

Well thaks for that, but it wasn't really necessary.

I'm just trying to make the destinction between someone who works exclusively in one sector and someone who has generic transferable skills.

Lets say, (for the sake of arguement) that the aeronautic industry has a habit of shunning people who have brought ET claims against a previous employer.

Now, if you are a designer of airframes would you consider taking your employer to an ET on some speculative action? I don't think so.

But if you were someone who worked in the IT department supporting their network, could you take the same risk? Yes.

I think that you easly fit into the second category, and thus your experienece is of no use to someone in the first.

tim

[Sionner]

Skill set and industries

Just to clarify matters, I have worked in IT in various industries for 39 years. I am an experienced IBM Assembler and PL/1 programmer, and also have programmed extensively in Cobol on several hardware platforms, but currently on HP3000.

I have used a host of 4gl tools as well as several different DBM systems. I have worked in the steel industry, the automotive industry and consumer electronics industry. However, all my experience relates to traditional commercial data processing systems. I have been involved in sales order processing, ledger systems, payroll systems, process control systems, warehousing systems and what I regard as my forte, manufacturing systems. I've been working as a freelance IT consultant exclusively on HP3000 architectures for the past 9 years, having been made redundant from my last post, which was effectively data processing manager.

My hobbies are classic cars and motorcycles, and anything with wheels and cogs, e.g. steam locomotives and aeroplanes. I enjoy all types of music that generally people would call pleasant, i.e. pop (particularly 1960's of course!) and classical, although I'm not too interested in jazz. Like many other contractors, I am fundamentally opposed to IR35, and in general I oppose any regulations which seek to restrict or control the lives of the ordinary citizen. Hope that gives you some background about me.

[tim123]

Legacy 3gl support.

Well without being entirely clear what you mean by this,

it is a (horizontal) skill set,

not a (vertical) industry sector, such as avionics, automotive, chemical ....?

tim

[Sionner]

Sector

Legacy 3gl support.

[tim123]

"If you do this in some sectors, win or lose, you will never work in that industry again" - I'm still working in the same sector.

which is?

[Sionner]

Employment status

"If you do this in some sectors, win or lose, you will never work in that industry again" - I'm still working in the same sector. If your skills are in demand, then it shouldn't be a problem. However, I agree that there is the potential for a problem.

In my case, paying IR35 would have made it economically unviable to continue contracting, so I had nothing to lose (and I had already had my contract terminated). What I believe we should have is the ability to have our employment status decided by the ET, without the client having to defend a case. Clearly impossible with the current structure.

But if the IR are being allowed to contact the clients and ask for details of an engagement, without any implications for them, then the ET should be allowed the same facilities. i.e. the contractor asks for the ET to decide their employment status and the ET approaches the client for information regarding the engagement.