Free Law Dissertations - 2.the Organisation Test This Test Was Devised By Lord Denning In Stevenson,
2.The organisation test
This test was devised by Lord Denning in Stevenson, Jordan & Harrison Ltd v MacDonald and Evans, where he stated:
Under a contract of service a man employed as part of the business and his work is done as an integral part of the business but under a contract for services his work, although done for the business, is not integrated into it but only accessory to it.
Unfortunately, there was no assistance provided for the interpretation of integration or organisation, and, beyond this case, the test was barely used.
3.The Multiple test
This test was first established in the case of Ready Mixed Contcrete (South East) Ltd v MPNI. The test is based upon the realisation that no one deciding factor can distinguish between contract of service and contracts for services rendered, since the employment relationship is far more complex and there are a number of issues that require to be taken into consideration. In Ready Mixed Concrete, the distinction was crucial from a tax point of view since, if the appellants were to be deemed as employers, they themselves would be liable to pay the National Insurance contributions of the employee lorry drivers. McKenna J began by setting aside the facts of the case that fell into either the employment or self-employment categories. For the former, this consisted of the fact that the Lorry was painted in the colours of the company and was for the exclusive use of the company. The team of drivers also had specific orders to obey and they were provided with a minimum income guarantee of £1500 per annum. For the latter, the lorry was purchased by the drivers via a company loan, which was subsequently serviced by the drivers. The drivers could also delegate their driving duties but the company did reserve the right to insist on a particular driver. Finally, the drivers were guaranteed a minimum payment and extra was determined on the basis of the amount of concrete that they borrowed.
McKenna J then assessed these facts against three conditions that he deemed to be required in order for the contract to be that of a contract of employment. Firstly, skills must be provided in exchange for a wage, secondly, there should be an element of control exercised on the part of the employer and thirdly, the provisions of the contract ought to be consistent with a contract of service.
McKenna J held, on the basis of there being freedom to delegate, that the contract was one of self employment. This is easily a flawed answer from the point of view that many supervisory or department Head employees are given powers of delegation however the important issue here is that the fundamentals of the test were accepted.
CIs the multiple test satisfactory?
1.Handling the multiple facts!
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