Gavin Howe
The control test is one of several tests used to determine whether a worker is an employee or an independent contractor in the UK. The test examines the degree of control that an employer has over a worker, including when, where, and how the worker performs their work. It is a subjective test, and even with all the facts, it may be difficult to determine whether an individual is an employee or not. The control test is an important indicator of the relationship between the parties, and it is one of the key tests, along with personal service and mutuality of obligation, used to determine employment status.
| Characteristics | Values |
|---|---|
| Purpose | To determine whether a worker is an employee or an independent contractor |
| Determining factors | Control over when, where, and how the work is done |
| The right to exert control, regardless of whether that right is exercised | |
| The worker's compliance with instructions about when, where, and how to work | |
| The worker's ability to work without receiving instructions due to proficiency | |
| The employer's power to decide the thing to be done, the way it is done, the means to be employed, the time, and the place | |
| The worker's ability to appoint a substitute | |
| The worker's ability to set their own fees, work elsewhere, determine their work, and provide their own equipment | |
| The worker's economic dependence on the employer | |
| The worker's compliance with internal procedures | |
| The worker's treatment as an integrated part of the business in day-to-day operations | |
| The existence of a contract of service | |
| The mutuality of obligations between the parties | |
| Consistency of the contractual provisions with a contract of service |
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What You'll Learn
The right to control
The control test is often referred to in case law as a "master-servant" relationship, with the employer having the power to decide the tasks to be performed, the methods employed, the time and place of work, and the means to carry it out. This was articulated in the 19th-century case of Yewens v Noake, where Bramwell LJ stated, "A Servant is a person subject to the command of his master as to the manner in which he shall do his work."
The control test is not just about instructions or direction but also includes the broader aspects of managing staff, enforcing internal procedures, and treating them as integrated into the business's day-to-day operations. An employer's right to intervene and control can be implied rather than explicitly stated in the contract.
The control test is particularly relevant in situations where there is no written agreement or contract, and it helps determine the true nature of the relationship between the parties. It is a crucial indicator of employment status, and the more control that exists, the more likely it is that an employer-employee relationship exists.
While the control test is a significant factor, it is not the sole determinant of employment status. Other factors, such as personal service, mutuality of obligations, and economic dependence also come into play when determining whether an individual is an employee, worker, or self-employed contractor. Each case must be assessed on its own facts, considering all relevant factors.
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When, where, how
The control test is one of the tests used to determine whether a worker is an employee or self-employed in the UK. It is a common-law test that examines the degree of control an employer has over a worker.
When
The control test considers whether the employer has the right to control when the work must be done. This means that the employer can dictate the times and dates when the worker must perform their work.
Where
The test also considers whether the employer can control where the work must be done. This includes the physical location, such as an office or specific work site, as well as the broader context, such as requiring the worker to work remotely or travel to different places.
How
The "how" aspect of the control test involves assessing whether the employer has the right to control how the work must be done, including the methods, processes, and procedures to be followed. This covers the level of supervision, direction, and management the employer exerts over the worker in performing their duties.
The control test is subjective and can be challenging to apply. It is important to note that the actual exercise of control is not the sole determining factor. Instead, the focus is on the right to exert control, even if it is rarely or never exercised in practice, particularly with skilled workers who work independently.
While the control test is a crucial indicator, it is typically used alongside other tests, such as the integration test and the multiple test, to determine employment status comprehensively.
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Actual instruction
The control test is one of the three common-law tests used to determine whether a worker is an employee or an independent contractor. The other two tests are the integration test and the multiple test. The control test is considered the most crucial and determinative indicator of the presence or absence of an employer-employee relationship.
The control test involves examining whether the employer has the right to control what the worker does, where, when, and how they do it. It is important to note that the actual exercise of control is not the determining factor, but rather the right to exert control. This means that even if the employer rarely or never exercises this right, the control factor is still present if the employer has the authority to do so.
The level of control necessary to satisfy the test was guided by the Court of Appeal case Autoclenz Ltd and Belcher & Ors [2009] EWCA Civ 1046. This case established that the more control that exists, the more likely it is that an employer-employee relationship is established.
In practice, actual instruction or direction of the worker is a strong indicator of an employer-employee relationship. A worker who is required to comply with instructions about when, where, and how to work is typically considered an employee. However, it is important to note that some employees may work without receiving explicit instructions due to their proficiency and ability to work independently.
The control test also considers whether the employer determines the work to be done, directs how the work should be carried out, actively manages staff, requires staff to follow internal procedures, and treats staff as an integrated part of the business in day-to-day operations.
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Self-employment
The control test is one of several common law tests used to determine whether a worker is an employee or self-employed. The test examines whether the employer has the right to control when, where, and how the worker performs their work. This includes control over the means and methods of the work. It is important to note that the control test is now subsumed as part of the multiple test, which allows courts greater flexibility in considering all relevant factors.
It is possible for someone to be both employed and self-employed at the same time, such as working for an employer during the day and running a business in the evenings. In such cases, it is important to understand the different rights and responsibilities associated with each status.
Self-employed individuals have limited employment rights and are generally not covered by employment law as they are considered their own boss. They do not have the same rights as employees, such as sick pay, but they do have protection for their health and safety while working on a client's premises.
When determining employment status, it is important to consider multiple factors, including the degree of control, economic dependence, and the nature of the working relationship. Misclassification of employment status can result in unpaid taxes and penalties for both individuals and employers.
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Mutuality of obligations
Mutuality of obligation is a key factor in determining employment status under UK law. It refers to the expectation that an employer will provide work and that the worker will accept and perform it. This is a contractual duty on both parties, and it determines whether there is a contract in existence at all. The mutual obligations to work and be paid will continue to exist until the contract comes to an end.
The mutuality of obligation is an important concept in employment protection law, where certain entitlements only accrue after an individual has acquired a period of continuous employment. It is also a factor in determining whether an individual is a worker or self-employed, and therefore whether they are entitled to employment rights such as holiday pay, sick leave, and protection against unfair dismissal. For example, an employer cannot dismiss an employee without meeting certain conditions, such as legitimate reasons and issuing written warnings.
The IR35 rules, introduced by HMRC in 2000, are based on the principle that two individuals working similarly for a business should pay similar income tax and National Insurance. Mutuality of obligation is one of the tests used to determine whether a worker falls within the scope of IR35.
The Supreme Court in PGMOL found that mutuality of obligation could exist even if there was no overarching contract to offer or do work. This was referred to as the 'wage-work bargain', where an individual provides their personal service in return for payment.
The control test is one of the common-law tests used to determine whether a worker is an employee. It involves examining whether the employer has the right to control when, where, and how the worker performs their work. This does not mean that the control is actually exercised, only that the employer has the right to do so. The control test is often regarded as the most crucial indicator of the presence or absence of an employer-employee relationship.
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Frequently asked questions
The control test is one of the tests used to determine whether a worker is an employee or an independent contractor. The test examines whether the employer has the right to control when, where, and how the worker performs their work.
Independent contractors typically have the ability to appoint a substitute, set their own fees, work for multiple clients, determine their own work, and provide their own equipment.
The key tests are personal service, control, and mutuality of obligation. Personal service refers to the requirement for employees to perform the work themselves without sending a substitute. Control refers to the employer's right to determine when, where, and how the work is done. Mutuality of obligation means that the employer is obliged to provide work, and the employee is obliged to do it.
Incorrectly identifying an employee's status can result in claims for back pay, holiday pay, sick pay, and increased employment costs. It can also impact the rights and protections afforded to the worker, such as sick pay, pension enrolment, minimum wage, and holiday entitlements.
In 2016, the UK government commissioned a review of modern employment practices, which resulted in the Good Work Plan published in December 2018. The government committed to improving clarity on employment status and aligning definitions with modern working practices. However, in their 2022 response, they stated that labour market conditions had changed, and a legislative response was no longer considered appropriate.
