17 January 2017
Can a checklist approach be taken to the indicators of employment status?
No, held the First-Tier Tax Tribunal (FTTT) in Dhillon and Dhillon v HMRC, which reminded us of the need to step back and look at the whole picture.
The Appellant provided haulage services, engaging drivers who were paid a fixed amount per shift, could refuse jobs and were not guaranteed work. There was induction training, but no subsequent supervision and a limited right of substitution. Drivers had to meet certain competency and safety standards, generally provided their own equipment and used the Appellant's lorries.
Having examined the various indicia for employment status, the FTTT found that the drivers were employees during each individual contract. The key factors were the considerable degree of control exercised and the fact that the drivers were not in business on their own account.
Importantly in this case, the FTTT were considering whether the drivers were employees or independent contractors under tax legislation, a dichotomy that does not allow for the third category of 'workers' contained in employment legislation. Furthermore, the FTTT reiterated the need to make "an informed, considered, qualitative appreciation of the whole picture" and avoid a checklist approach. This is, of course, a fact-sensitive decision.
With thanks to Daniel Barnett’s employment law bulletin for providing this update.