ESM0550 - Guide to determining status: personal factors (Lorimer case)

It is clear from the decision in Hall v Lorimer (see ESM7160) that, in reaching a balanced judgment on status, it is not appropriate to look solely at the terms and conditions of the individual engagements. The employment status may be affected by the way in which the worker generally carries on his occupation. In particular

• the length of each engagement and the number of other persons for whom similar work is performed should be considered, and
• engagements need to be looked at in the context of the worker’s business activities as a whole, including matters such as the worker’s exposure to bad debts and the amount spent on organising, obtaining, or carrying out the work.

In these circumstances many of the other factors that are normally associated with a contract for services may be absent (for example financial risk, provision of equipment, stock, employment of helpers, etc.). Nevertheless, when looked at in the round, the personal factors which are present may be sufficient to make the contract a contract for services.

However, this is subject to an important qualification. The intention of the engager and worker can be of fundamental importance in some instances. Where an engager wishes to take on an employee he has that right and if a contract, freely signed by both parties, whose terms and conditions are consistent with employment specifically states that the engagement amounts to a contract of service (employment) then that will conclude the matter. The personal factors present will not override the contract.