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Focus on clarity
Key points
- Personal service is always present in an employment relationship – an occasional power of delegation is still consistent with employment.
- A genuine right of substitution is an easy way to demonstrate that an employment relationship does not exist.
- It is important to understand the distinction between subcontracting and substitution.
- If personal service is to be denied then only allowing subcontracting or having overly fettered substitution clauses will not achieve that aim.
The three key factors of personal service control and mutuality of obligations are still critical to evaluating the hypothetical contract which would exist between the parties if the intermediary (the contractor’s limited company) were removed. In the context of the test of personal service it is important to understand the core differences between subcontracting and substitution.
Precedent
Despite recent tribunal decisions in favour of contractors on the basis that they could demonstrate clear in-business factors...
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