»Ê¹ÚÌåÓýapp

Facts

Gordon is an IT contractor who works through his own service company.

Job description/control

Client is a large retail concern. »Ê¹ÚÌåÓýapp contract was obtained through an agency. »Ê¹ÚÌåÓýapp terms and conditions of the engagement are set out in the contracts between the client and the agency and the agency and Gordon’s company.

Gordon works as part of a support team for the client’s payroll system. »Ê¹ÚÌåÓýapp team leader (another IT contractor) tells Gordon what work he is to carry out at any particular time (e.g. help-desk work, specific maintenance tasks, etc).

»Ê¹ÚÌåÓýapp client has the right to tell Gordon ‘howâ€� the work should be carried out - although in practice such control is not normally necessary.

Gordon must work a regular forty-hour week on the client’s premises.

Payment basis/risk

Gordon’s company is paid an hourly rate for Gordon’s services. Any extra hours worked (by mutual agreement) are paid at 1.5 times the normal hourly rate. »Ê¹ÚÌåÓýapp client makes payment monthly following submission of an invoice by the agency. Gordon’s service company invoices the agency.

Holiday pay/sick pay

No sick pay or holiday pay paid under the terms of the inter-company contract.

Length of contract and personal factors

• »Ê¹ÚÌåÓýapp contract is for six months.
• Gordon uses a computer, telephone, fax, etc at home to seek and negotiate contracts for his company.
• Gordon has worked through his company for two other clients in the last two and a half years - one for three months and one for two years. Prior to that he was a direct employee of another engager.

Other factors

• »Ê¹ÚÌåÓýapp company is contracted to supply Gordon to do the work personally.
• All equipment and materials are supplied by the client.
• Neither side can terminate the contract early.
• »Ê¹ÚÌåÓýappre is no restriction imposed by the contract that prevents either Gordon or his company providing services to others during the engagement.
• Both parties never intended Gordon to be an employee of the client.

Comments

»Ê¹ÚÌåÓýapp fact that the engagement has been obtained through an agency has no bearing on whether Gordon would have been an employee or not.

»Ê¹ÚÌåÓýapp extensive right of control that exists here is a very strong pointer to employment. »Ê¹ÚÌåÓýapp more important features are the client’s ability to shift Gordon from task to task and to specify how the work should be done - but in addition the client can control where and when the work is carried out.

»Ê¹ÚÌåÓýapp company is paid an hourly rate for Gordon’s services and the only financial risk comes from invoicing. »Ê¹ÚÌåÓýappre is no opportunity to profit from sound management of the work covered by the contract. Overall this points to employment.

»Ê¹ÚÌåÓýapp engagement runs for six months and holiday pay/sick pay might be expected had there been a direct engagement. But both parties see the actual company/client contract as a contract for services and this is probably why no such payments are made. A minor pointer to self-employment.

Gordon’s company has a limited ‘business organisation� consisting of an office and associated equipment at his home. This is a pointer to self-employment - but not an overly important one in the context of a six-month contract of this sort.

Both the requirement to provide services personally and the fact that the client provides equipment and materials point to employment.

»Ê¹ÚÌåÓýapp fact that neither side can terminate the contract early is a neutral factor (no right to terminate is common in engagements of this length - whether employment or self-employment).

»Ê¹ÚÌåÓýapp fact that there is no restriction on Gordon or his company providing his services to others during the engagement is a mild pointer towards self-employment.

»Ê¹ÚÌåÓýapp mutual intention for self-employment will only be relevant if the other factors are neutral.

Overall picture

»Ê¹ÚÌåÓýapp engagement is fairly long-term and there is an extensive right of control over Gordon. He must carry out the services personally. »Ê¹ÚÌåÓýapp client provides equipment and accommodation and there is no significant financial risk to the company.

»Ê¹ÚÌåÓýapp only pointers to self-employment are the minimal financial risk (from invoicing), the ability to work for others (again, a minor point) and the existence of a business organisation/work for other clients.

Standing back from the detail therefore the engagement is one which would have been an employment had it been direct between Gordon and the client. »Ê¹ÚÌåÓýapp common intention for self-employment does not alter that. Whilst it would have proved decisive in a ‘borderlineâ€� situation a review of other factors points strongly to employment here. »Ê¹ÚÌåÓýapp new rules would apply to the engagement.