ESM0518 | Guide to determining status: right of control

When reviewing the status of an individual you should always consider the right of the engager to exert control. It is the right of control, not whether the engager chooses to exercise that right, which is important. In many cases, particularly where the work in question involves the use of an individual with specialist skills or knowledge, there may be little evidence of the engager exercising control. The key question is whether there is a sufficient framework which allows the engager to exercise control over the worker? [Montgomery v Johnson Underwood Ltd [2001] EWCA Civ 318 at para 19 and PGMOL [2024] UKSC 29 at para 66].

It is not necessary for an engager to have a contractual right to retain control over, or intervene in, every aspect of the performance of all aspects of an engagement for a sufficient framework of control to be present. An employers right of intervention can be implied rather than an express term in the contract.

Whilst a high level of control is a strong pointer towards employment, it may not be conclusive on its own and should be considered in the light of all the relevant factors and the overall picture. On the other hand, if there is no right of control whatsoever under a particular contract, it cannot be a contract of service for tax and NICs purposes. It should be noted that the right of control may be explicitly set out in the contract or merely implied.

It should also be noted that where a right of control exists, that right may not be exercised directly by the engager. The right may have been delegated to a third party such as a customer’s representative e.g. site foreman, project manager, office manager etc. HMRC had previously relied on the case of Global Plant Ltd v Secretary of State for Social Services [1971] 1 QB 739, as authority that where the engager had delegated control to his/her client/customer then this would not have been regarded as a negation of the engager’s own right of control over the worker.

In the case HMRC v Philip John Wright [2007] EWHC 526 (Ch), paragraph 20, the High Court did not believe the Global Plant case set down any principle in this respect and moreover the Judge believed the law had moved on, and, in referring to the case of Bunce v Postworth Limited [2005] IRLR 557, he did not regard the fact that the workers were told what to do by, for example, a site foreman, amounted to control by the engager.

There is still likely to be evidence of residual control being exercised over the worker by the engager. For example, it is likely that the engager will give instructions to the worker in relation to liaising with and following instructions from the client or main contractor or their representatives in relation to carrying out the work You should establish what the workers are told, and or instructed to do in this respect and by whom. You need to establish what control is retained by the engager and who ultimately has control over the workers. You should, under normal fact-finding/evidence gathering, obtain copies of any relevant documentation to establish if they contain any requirement for the worker(s) to follow instructions or guidance in relation to carrying out the job e.g. method statements, company handbooks/procedures, working practices, contractual documents.