Substitution and Exclusivity
This is probably the main point now discussed among freelance contractors, as many incorrectly believe it is the only point needed in a contract to prove self-employment.
This relates to the Court of Appeal case, Express Echo Publications v. Tanton in 1999. Tanton was employed as a self-employed driver and the intention was agreed that it was a contract between contractor and client rather than as an employee and employer.
The agreement was that Tanton would pick up newspapers in the company van and deliver them on a fixed route in Devon. The company also provided a uniform, which Tanton had to wear. His fee was calculated and fixed by the company and was not negotiated. The fee was fixed regardless of how long it took Tanton to deliver the newspapers.
However, there was a clause, which allowed: “In the event that the Contractor is unable or unwilling to perform the Services personally he shall arrange at his own expense entirely for another suitable person to perform the Services.” Another part of the contract stated: “In the event that the Contractor provides a relief driver, the Contractor must satisfy the Company that such a relief driver is trained and is suitable to undertake the Services.”
As it turned out Tanton did use a substitute from time to time. In addition, Tanton became ill for six months and paid the substitute driver from his remuneration from Express and Echo Publications. However, the industrial tribunal decided that Tanton was an employee.
The case was then brought before the Court of Appeal. In this case, the judges referred to the Ready Mixed Concrete South East Limited v. Minister of Pensions and National Insurance (1968) where the judge expressed his view that a contract of service (employment) means the following.
A contract of service exists if these three conditions are fulfilled.
- 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.
- He agrees, expressly or implied that in the performance of that service he will be subject to the other's control in a sufficient degree to make the other master.
- The other provisions of the contract are consistent with its being a contract of service.
Based on these points it was stated that 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.
Looking at Hall v. Lorimer, Lorimer did use a substitute on six occasions when some of his bookings clashed. At these times, he paid for the substitute from his own money and actually made a profit on these payments.
Article supplied by Ray McMahon.