|
The following are the reasons why the Special Commissioner gave his verdict against Bill Hood.
1. Substitution
In this case, whatever the contractual relationship, the reality, as I am satisfied, is that ABB required Mr Hood’s services.
It was not contracting, indirectly, with the taxpayer for the supply of a person competent in Pro-Engineer; it required Mr Hood.
It would not have accepted a substitute, if Mr Hood had sent one, without interview and certainly not on the basis that Mr Hood or his substitute might attend as the taxpayer elected from day to day.
Mr Hunter’s evidence, which I accept, can lead to no other conclusion than that the arrangement was personal to Mr Hood.
I do not go so far as to say that the right to substitute was a sham – Mr Hunter agreed that, if Mr Hood had become unavailable and suggested someone to continue in his place, that suggestion would be given some weight – but Mr Hood and the taxpayer could not dictate, at will, who would perform the work: it had to be Mr Hood.
In my view, the “right” of substitution was largely illusory.
2. Working hours and practices
While I accept that Mr Hood retained some control over the hours he worked, I am satisfied from the evidence that the degree of control he could exercise in practice cannot be materially distinguished from that which one would expect in any fairly senior employee.
It was apparent to me that he was, as a rule, expected to work the “core” hours from 8 am to 5pm.
Mr Hunter, in particular, made it clear that Mr Hood was expected to work full time for ABB; while the two small contracts he undertook at weekends or in the evening were acceptable, it would not have been acceptable to ABB if he had decided to work on, say, only three days of the week while undertaking other work on the remaining days.
I accept that Mr Hood was left largely to his own devices in the manner in which he carried out his work, but that too seems to me to be no more or less than one would expect of any skilled and trusted employee.
Mr Hood was taken on by ABB precisely because he knew how to do the work, without the need for instruction or supervision.
This is not a factor inconsistent with a contract of service
3. Control
The evidence showed clearly that Mr Hood was expected to undertake the work allocated to him by ABB and to do so in accordance with its directions and at times of its choosing.
Although in theory he could decide whether or not he would work on any particular project, the reality was that he either accepted the work which was allocated to him, or his engagement was terminated.
In that, too, he was in materially the same position as an employee.
As I have indicated, I regard the fact that Mr Hood attended safety meetings and office meetings as neutral - it is not, in my view, in any way remarkable that a temporary member of staff, working (as Mr Hood did) in a team should attend such meetings – but, overall, it seems to me that there is no difference of substance between the measure of control exercised over his work by ABB and that it would have exercised over an employee of his status.
4. Mutuality of Obligation
The requirement of mutuality may be satisfied by the obligation, on the one hand, to work and, on the other, to remunerate.
Special Commissioner’s Conclusion
In my judgment, whether one asks if the taxpayer, in the context of this engagement, was pursuing a business on its own account, or considers the distinction between a contract of service and a contract for services – tests which in any event overlap to a great extent – the answer is the same: had there been a direct contract between ABB and Mr Hood it would have been a contract of service.
I am left in no doubt that ABB was in close control of the work, that it was Mr Hood personally who was required to undertake it and it is quite unrealistic to suggest that, in the relevant period and on the assumption that there was a direct relationship between ABB and Mr Hood, he or the taxpayer was in the course of carrying on a business on his or its own account.
The conclusion must be that the notional contract between ABB and Mr Hood was one of service.
I can find no factor in the case which is inconsistent with that conclusion.
|
