ESM0531 - Guide to determining status: the requirement for personal service

An employment exists where there is a contract of service. Past case law shows that, for there to be a contract of service, the worker must be required to carry out, at least some of, the work personally. For example, in a 1967 High Court decision - Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance (see ESM7030), MacKenna J said

’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.’

The first sentence of the above passage (that is, without the qualification in the second sentence) has been quoted with approval in later decisions in the Court of Appeal.

If an individual undertakes to perform a task and is free to hire someone else to do it for him or her, or to get someone else to provide substantial help, it is most unlikely that that individual will be an employee. As Lord Fraser said in the Privy Council Appeal of Australian Mutual Provident Society v Chaplin and Another (1978) 18 Australian Law Reports 385

’…..power of unlimited delegation is almost conclusive against the contract being a contract of service.’

In the 2004 case of Usetech Ltd v Young [2004] EWHC 2248 (Ch) (see ESM7270), Park J. reviewed most of the recent case law on the subject of personal service and substitution and summarised the position as follows:

‘As it seems to me the present state of the law is that whether a relationship is an employment or not requires an evaluation of all the circumstances. In the words of Hart J in Synaptek Ltd v Young, the context is one ‘where the answer to be given depends on the relative weight to be given to a number of potentially conflicting indicia’. The presence of a substitution clause is an indicium which points to self-employment, and if the clause is as far-reaching as the one in Tanton it may be determinative by itself.’

The range of possible substitution provisions is extensive and later sections cover the subject in more detail.

However, there are two provisos

• the obligation or right to provide a substitute must be genuine
• the worker must engage and pay the substitute. Where a worker merely recommends another worker whom the engager takes on this is not what is meant by the original worker providing a substitute. It is no different from, say, an employed barman being unable to cover a shift suggesting someone else who may be able to cover.