Massey v Crown Life Insurance Company: CA 4 Nov 1977

Massey worked as Crown Life’s manager under 2 contracts, one a contract of employment, the other a contract of general agency. Tax and other contributions were deducted from wages paid under the former, while commission was paid under the agency contract. Under the agency contract Massey could work for other insurance brokers. Later, with Crown Life’s agreement, Massey registered himself as Massey and Associates and, trading under such name, entered into a new contract as a self-employed person with Crown Life in 1973. Massey’s duties under the new contract remained the same, although tax and other contributions were no longer deducted from monies paid to him. The company said that he was an independent contractor, not an employee. He had in law been an employee, but at his own request had been treated as self employed. He failed at the tribunal.
Held: Massey’s appealwas dismissed. The deed prepared by the plaintiff and accepted by the company was entered into freely and was clear. He was not an employee and had no right not to be dismissed unfairly.
Lawton LJ said: ‘In the administration of justice the union of fairness, commonsense and the law is a highly desirable objective. If the law allows a man to claim that he is a self-employed person in order to obtain tax advantages for himself and then allows him to deny that he is a self-employed person so that he can claim compensation, then in my judgment the union between fairness, commonsense and the law is strained almost to breaking point. The applicant is asking this court to adjudge that he is entitled to make claims with two different voices.’
Lord Denning MR said: ‘The law, as I see it, is this: If the true relationship of the parties is that of master and servant under a contract of service, the parties cannot alter the truth of that relationship by putting a different label upon it. If they should put a different label upon it and use it as a dishonest device to deceive the Revenue, I should have thought it was illegal and could not be enforced by either party and they could not get any advantage out of it – at any rate not in any case where they had to rely upon it as the basis of a claim. See Alexander v. Rayson (1936) 1 King’s Bench 169. An arrangement between two parties to put forward a dishonest description of their relationship so as to deceive the Revenue would clearly be illegal and unenforceable.
On the other hand, if their relationship is ambiguous and is capable of being one or the other, then the parties can remove that ambiguity, by the very agreement itself which they make with one another. The agreement itself then becomes the best material from which to gather the true legal relationship between them.’

Lord Denning MR, Lawton LJ, Eveleigh LJ
[1977] EWCA Civ 12, [1978] 1 WLR 676, [1978] ICR 590
Trade Union and Labour Relations Act 1974 30(1)
England and Wales
CitedStevenson v MacDonald 1952
Denning J described the difference between a contract of service and a contract for services: ‘It is often easy to recognise a contract of service when you see it, but difficult to say wherein the difference lies. A ship’s master, a chauffeur, and a . .
CitedReady 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 . .
CitedAlexander v Rayson CA 1936
The action was for arrears of rent. The evidence at trial was that the plaintiff granted a lease to the defendant at a rent of andpound;1200 and contracted that certain services in connection with the flat would be performed. The plaintiff sent the . .
CitedDavid v New England College of Arundel 1977
. .
CitedConstruction Industry Training Board v Labour Force QBD 1970
In this industrial training levy case there was an appeal on a point of law against the imposition of the levy on a company, Labour Force Limited, which was engaged in the supply of labour to contractors in the construction industry, but not as an . .
CitedMaurice Graham Ltd v Brunswick 1974
It is impossible to draw up a complete list of criteria to be considered when deciding whether a contract is one of employment or one for services . .
CitedGlobal Plant Ltd v Secretary of State for Social Services 1972
Lord Widgery said: ‘One must not overlook that the intention of the parties was that the relationship should be that of an independent contractor, and although the parties cannot by intention make a transaction into something which it is not, yet it . .
CitedInland Revenue Commissioners v Duke of Westminster HL 7-May-1935
The Duke’s gardener was paid weekly, but to reduce tax, his solicitors drew up a deed in which it was said that the earnings were not really wages, but were an annual payment payable by weekly instalments.
Held: To find out what the true . .
CitedFerguson v John Dawson and Partners (Contractors) Ltd CA 22-Jul-1976
The plaintiff had fallen from a roof whilst working for the defendants, and had claimed damages for breach of statutory duty. The parties disputed whether the plaintiff was an employee or a self-employed independent contractor.
Held: The real . .

Cited by:
CitedAnsell Computer Services Ltd v HM Inspector of Taxes SCIT 29-Jul-2004
SCIT National insurance – earnings of workers supplied by service companies etc. – provision of services through intermediary – worker establishing information technology company – company contracting with agency . .
CitedLambden v Henley Rugby Football Club and Another EAT 29-May-2009
The Claimant was a part time Rugby Coach. The Employment Tribunal found that he had freely elected to be paid as an independent contractor though a limited . .
CitedYoung and Woods Ltd v West CA 11-Feb-1980
The applicant had complained of unfair dismissal.The employment contract had been dressed as a self employed service provider’s contract to privide him with tax, and was unlawfully so. The employer appealed, saying that as an unlawful contract, the . .

Lists of cited by and citing cases may be incomplete.

Contract, Employment

Leading Case

Updated: 01 November 2021; Ref: scu.250992