IR35 Judgement

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his analysis is of a recent case heard by IR35 judge, Justice Burton. The judgment has many points of relevance to IT contractors. The article was compiled for us by Paul Chapman, who has been a developer for 16 years and a contractor since 1995. he has followed IR35 very closely.

Sub Postmasters EAT judgement on Employment Status covers many of the usual suspects.

1) COMMISSIONERS OF INLAND REVENUE APPELLANTS (2) MR K J HAYWARD (3) MRS J TOOBY (4) MRS J WOLSTENHOLME v POST OFFICE LTD

Although I have no legal training as part of a due diligence exercise under IR35 I have become familiar with the case law governing employment status. Many of the cases I have come across are available to members of the Professional Contractors Group (PCG) in the Groups forums.

One of the sources of case law I have used is the Employment Appeal Tribunal website; Employment Appeals
. It was here I came across the case of 1) COMMISSIONERS OF INLAND REVENUE APPELLANTS (2) MR K J HAYWARD (3) MRS J TOOBY (4) MRS J WOLSTENHOLME v POST OFFICE LTD RESPONDENT.

Now the President of the Tribunal was Justice Burton, who many contractors will remember from the JR into IR35.

The case revolves around a number of ways an Employee can be defined, and considered if each of the Appellants were employed or not. Now on the face of it you might not think the employment status of Sub Postmasters is of much interest, but this case highlights a number of the common employment status pointers and may for some give guidance to the contractor;

1. Intent: – Now on the face of it you might think intent is fairly self-evident in the relationship the contractor has with his client. For simplicity I will not try and enter into the ‘˜Who is the client‘ question but this case did consider the intent of the parties.

In Paragraph 13, the judgement quotes from Section 1: Sub postmaster‘s Contract and Status

The contract is a contract for services and consequently the Sub-postmaster is an agent and not an employee of [the] Post Office

It is always worth stating the intent. Not only is this one of the various pointers to status available it is unlikely to cost either you, the contractor or your client, since they never actually offered you employment did they?

Later in Paragraph 17 the judgement speaks again of Intent

‘¦that the intention of the parties was not to enter into a contract of employment and the Tribunal is satisfied that that was the case. What he argues, however, is that the label attached to the arrangement between them is not conclusive, which of course is right as a matter of law

Now intent is not conclusive, it helps but if all other pointers point to the arrangement being one of employment stating intent is not going to help matters. In many of the discussions I‘ve had both online and offline the importance of intent has always been a matter for debate but this judgement has not finished with this aspect of employment status

In paragraph 20 the judgement states

Of course, as she also had to accept, and as was also set out by the Employment Tribunal in Tooby, it is clear from Massey that the label is nonetheless of significance

2. Substitution – Enough of intent, it may be of significance but it is not conclusive. One thing that is considered significant is Substitution. Personal service is a requirement of empl

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