(Canada) the Board was asked whether a corporation was the occupant of an armaments factory so as to be liable to pay an occupation tax, and whether it was carrying on a business in the factory so as to be liable to pay a business tax. The answer to both questions depended on whether the corporation was acting as the government’s agent in the manufacture of the armaments or as an independent contractor. All the funds necessary for the enterprise were provided by the government, which bore all the financial risks. The corporation was subject to the government’s control in making the armaments and received a fee for each unit of production.
Held: The corporation was not liable to pay the taxes.
Lord Wright said: ‘In earlier cases a single test, such as the presence or absence of control, was often relied on to determine whether the case was one of master and servant, mostly in order to decide issues of tortious liability on the part of the master or superior. In the more complex conditions of modern industry, more complicated tests have to be applied. It has been suggested that a fourfold test would in some cases be more appropriate, a complex involving (1) control; (2) ownership of the tools; (3) chance of profit; (4) risk of loss. Control in itself is not always conclusive. Thus the master of a chartered vessel is generally the employee of the shipowner though the charterer can direct the employment of the vessel. Again the law often limits the employer’s right to interfere with the employee’s conduct, as also do trade union regulations. In many cases the question can only be settled by examining the whole of the various elements which constitute the relationship between the parties. In this way it is in some cases possible to decide the issue by raising as the crucial question whose business is it, or in other words by asking whether the party is carrying on the business, in the sense of carrying it on for himself or on his own behalf and not merely for a superior.’
Judges:
Lord Wright
Citations:
[1946] UKPC 44, [1947] 1 DLR 161, [1946] 3 WWR 748
Links:
Cited by:
Cited – Ready Mixed Concrete Southeast Ltd v Minister of Pensions and National Insurance QBD 8-Dec-1967
Contracts of service or for services
In three cases appeals were heard against a finding as to whether a worker was entitled to have his employer pay National Insurance contributions on his behalf which would apply if he were an employee. He worked as an ‘owner-driver’
Held: The . .
Lists of cited by and citing cases may be incomplete.
Commonwealth
Updated: 26 September 2022; Ref: scu.447967