ESM8570 - Considering the evidence: effective substitution clauses

An effective substitution clause will be a pointer to self-employment. The weight of it as a pointer will vary in accordance with the wording. In some cases it may be so unqualified as to actually determine that there is no requirement to give personal service at all. At the other end of the spectrum, the evidence may suggest that the clause is almost ineffective. For example, if the duration of a contract were very short-term, why would it be necessary to include a substitution clause? Between the two extremes, there will be cases where, for example, the client must give approval. The degree to which the clause points to self-employment will depend on the facts in each particular case and the extent to which substitution took place.

In the case of Synaptek Ltd v Young - see ESM7260 - where the substitution provision was qualified, Mr Justice Hart indicated at paragraph 28 of his judgment that

“The Commissioners were entitled in my judgment to regard it as simply one fact among others, and, in assessing the weight to be given to it, to take into account the extent to which the provision was utilised in practice.”

Further general guidance on the right of substitution can be found at ESM0530 onwards.