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 court asked what was the test of whether a worker was self-employed or an employee. It looked to whether the employer exercised ‘control’ over the worker.
MacKenna J said: ‘A contract of service exists if these three conditions are fulfilled. (i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service.’
As to (i): ‘There must be a wage or other remuneration. Otherwise there will be no consideration, and without consideration no contract of any kind. The servant must be obliged to provide his own work and skill. Freedom to do a job either by one’s own hands or by another’s is inconsistent with a contract of service, though a limited or occasional power of delegation may not be . . As to (ii). Control includes the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when and the place where it shall be done. All these aspects of control must be considered in deciding whether the right exists in a sufficient degree to make one party the master and the other his servant. The right need not be unrestricted.’ and
”To find where the right resides one must look first to the express terms of the contract, and if they deal fully with the matter one may look no further. If the contract does not expressly provide which party shall have the right, the question must be answered in the ordinary way by implication.
The third and negative condition is for my purpose the important one, and I shall try with the help of five examples to explain what I mean by provisions inconsistent with the nature of a contract of service.
(i) A contract obliges one party to build for the other, providing at his own expense the necessary plant and materials. This is not a contract of service, even though the builder may be obliged to use his own labour only and to accept a high degree of control: it is a building contract. It is not a contract to serve another for a wage, but a contract to produce a thing (or a result) for a price.
(ii) A contract obliges one party to carry another’s goods, providing at his own expense everything needed for performance. This is not a contract of service, even though the carrier may be obliged to drive the vehicle himself and to accept the other’s control over his performance: it is a contract of carriage.
(iii) A contract obliges a labourer to work for a builder, providing some simple tools, and to accept the builder’s control. Notwithstanding the obligation to provide the tools, the contract is one of service. That obligation is not inconsistent with the nature of a contract of service. It is not a sufficiently important matter to affect the substance of the contract.
(iv) A contract obliges one party to work for the other, accepting his control, and to provide his own transport. This is still a contract of service. The obligation to provide his own transport does not affect the substance. Transport in this example is incidental to the main purpose of the contract. Transport in the second example was the essential part of the performance.
(v) The same instrument provides that one party shall work for the other subject to the other’s control, and also that he shall sell him his land. The first part of the instrument is no less a contract of service because the second part imposes obligations of a different kind: Amalgamated Engineering Union v Minister of Pensions and National Insurance [1963] 1 WLR 441, 451, 452.
I can put the point which I am making in other words. An obligation to do work subject to the other party’s control is a necessary, though not always a sufficient, condition of a contract of service. If the provisions of the contract as a whole are inconsistent with its being a contract of service, it will be some other kind of contract, and the person doing the work will not be a servant. The judge’s task is to classify the contract (a task like that of distinguishing a contract of sale from one of work and labour). He may, in performing it, take into account other matters besides control.’
MacKenna J
[1968] 2 QB 497, [1968] 1 All ER 433, [1968] 2 WLR 775, [1967] EWHC QB 3
Bailii
National Insurance Act 1965
England and Wales
Citing:
Cited – Chadwick v Pioneer Private Telephone Co Ltd 1941
Stable J said: ‘A contract of service implies an obligation to serve, and it comprises some degree of control by the master.’ . .
Cited – Zuijs v Wirth Brothers Proprietary Ltd 1955
The court considered the extent of authority to be established to show the relationship of employer and employee: ‘What matters is lawful authority to command so far as there is scope for it. And there must always be some room for it, if only in . .
Cited – Hardaker v Idle District Council CA 1896
A reservation of a right to direct or superintend the performance of the task cannot transform into a contract of service what in essence is an independent contract.
A statutory duty to maintain the highway could not be delegated to . .
Cited – Humberstone v Northern Timber Mills 16-Nov-1949
High Court of Australia – The Court was asked whether a contract was one of employment. For a number of years the owner had taken his truck at about the same time each day to the respondents’ factory where he had been given goods to deliver to their . .
Cited – City of Montreal v Montreal Locomotive Works Limited and Another PC 24-Oct-1946
(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 . .
Cited – Bank Voor Handel En Scheepvaart NV v Slatford 1951
A Dutch bank deposited a quantity of gold in London before the start of the 1939-1945 war. In May 1940 the Netherlands were invaded and they became an enemy territory for the purposes of the 1939 Act. The Royal Netherlands Government, with the . .
Cited by:
Cited – Hewlett Packard Ltd v M O’Murphy EAT 26-Sep-2001
The applicant, a computer programmer, worked through his own limited company. That company contracted with an agency to provide his services, and the agency contracted with appellant to supply on those services. The contracts did contain some . .
Cited – Brook Street Bureau (UK) Ltd v Dacas CA 5-Mar-2004
The applicant cleaner sought compensation for unfair dismissal. The issue was whether she was an employee of the respondents, of their client where she did her work, or was not an employee at all. She worked for an agency, who sent her out to . .
Cited – Clark v Oxfordshire Health Authority CA 18-Dec-1997
A nurse was employed under a contract, under which there was no mutuality of obligation; she could refuse work and employer need offer none. This meant that there was no employment capable of allowing an unfair dismissal issue to arise.
Sir . .
Cited – Nethermere (St Neots) Ltd v Taverna and Gardiner CA 1984
The court considered what elements must be present to create a contract of employment.
Held: Stephenson LJ said: ‘There must . . be an irreducible minimum of obligation on each side to create a contract of service.’
Kerr LJ said: ‘The . .
Cited – Motorola Ltd v Gary Davidson, Melville Craig Group Ltd EAT 18-May-2000
EAT Contract of Employment – Definition of Employee . .
Cited – Dacas v Brook Street Bureau (UK) Ltd, Wandsworth London Borough Council EAT 12-Nov-2002
EAT Contract of Employment – Definition of Employee . .
Cited – Cable and Wireless Plc v Muscat CA 9-Mar-2006
The worker was employed via an employment agency. The contract the company had was with the agency, and the agency had the contract with the worker. The worker claimed an implied contract of employment with the end-user.
Held: The end-user . .
Cited – Yuen v The Royal Hong Kong Golf Club PC 28-Jul-1997
(Hong Kong) The applicant was dismissed as a golf caddie after nine years. The Club denied that he had ever been an employee. He was issued by the club with a number, a uniform and a locker. Caddying work was allocated to available caddies in strict . .
Cited – 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 . .
Cited – Upvc Designs Ltd (T/A Croston Conservatories v Latimer and Another EAT 16-Oct-2007
EAT Jurisdictional Points – Worker, employee or neither
Contract of Employment – Whether established
On the question whether the Appellant was employed under a contract of employment, the reasons of . .
Cited – Lambden v Henley Rugby Football Club and Another EAT 29-May-2009
lambden_henlryrfcEAT2009
EAT CONTRACT OF EMPLOYMENT: Whether established
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 . .
Cited – Launahurst Ltd v Larner EAT 18-Aug-2009
EAT JURISDICTIONAL POINTS: Worker, employee or neither
For 13 years the Claimant worked installing double glazing for the Respondent. In 2004 he signed a ‘contract supply agreement’ though matters continued . .
Cited – Autoclenz Ltd v Belcher and Others CA 13-Oct-2009
Car Valeters contracts misdescribed their Duties
The claimants worked cleaning cars for the appellants. They said that as workers they were entitled to holiday pay. The appellant said they were self-employed.
Held: The contract purported to give rights which were not genuine, and the . .
Applied – Knight v BCCP Ltd EAT 16-Mar-2011
knight_bccpEAT11
EAT JURISDICTIONAL POINTS – Worker, employee or neither
The Claimant was a licensed private hire driver, who was engaged by the Respondent between 1 September 2008 and 14 October 2008. He was told that he . .
Cited – Autoclenz Ltd v Belcher and Others SC 27-Jul-2011
Car Cleaning nil-hours Contractors were Workers
The company contracted with the claimants to work cleaning cars. The company appealed against a finding that contrary to the explicit provisions of the contracts, they were workers within the Regulations and entitled to holiday pay and associated . .
Cited – Clyde and Co Llp and Another v Bates van Winkelhof CA 26-Sep-2012
The claimant was a solicitor partner with the appellant limited liability partnership at their offices in Tanzania. She disclosed what she believed to be money laundering by a local partner. She was dismissed. She had just disclosed her pregnancy . .
Applied – White and Another v Troutbeck Sa EAT 23-Jan-2013
EAT Contract of Employment : Whether Established – The Claimants were engaged by the Respondent as caretaker/manager of a house and small farm estate, responsible for undertaking duties which included what might . .
Cited – Sharpe v The Bishop of Worcester CA 30-Apr-2015
Reverend Sharpe applied for the post of Rector of Teme Valley South. The right to present (or nominate) a member of the clergy to this living was vested in Mr and Mrs Miles but a person could not be nominated without the Bishop’s approval, which was . .
Cited – Pimlico Plumbers Ltd and Another v Smith SC 13-Jun-2018
The parties disputed whether Mr Smith had been an employee of or worker with the company so as to bring associated rights into play. The contract required the worker to provide an alternate worker to cover if necessary.
Held: The company’s . .
Lists of cited by and citing cases may be incomplete.
Employment
Leading Case
Updated: 09 November 2021; Ref: scu.181286