The tribunal gave weight to two factors which make up the irreducible minimum required to show a contract of employment, namely mutuality of obligation and control.
In this case, involving Gary Hughes and his company, Marlen Ltd, the tribunal found that while there was some evidence of control, it fell short of which was required to prove the case. The found the issue of mutuality clearer. Judge Lady Mitting said: "It is our conclusion that there is no mutuality of obligation and the degree of control which would have been needed to establish a contract of employment just did not exist."
The tribunal found that Mr Hughes determined how he carried out the services in a way similar to senior employees of his client, JCB. However, it was his flexibility in terms of hours, holiday and absences which marked him differently to permanent staff. It was therefore concluded that the degree of control was not sufficient to constitute a contract of employment.
HMRC made a case that mutuality of obligation existed within each of the series of contracts. This was rejected by the tribunal citing examples of Mr Hughes being sent home without pay when circumstances prevented him working and early termination of contracts during the engagements. The tribunal therefore found that no mutuality of obligation existed.
Freelancer group, the PCG said: "In summarising all the factors, the Tribunal did not find one single aspect which was consistent only with a contract of employment.
"With such a string of defeats one asks whether HMRC will change their approach to IR35 cases, since it is becoming increasing apparent that the cases they are choosing to pursue are clearly not within the ambit of IR35."
Further details will be available when the full judgement is published.
If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'.
Susie Hughes © Shout99 2011