ESM0529 - Guide to determining status: control exercisable by various means

The amount of control an engager may wish to exercise over the performance of a task can be set out in detail in a contract. Alternatively the contract may contain the broad outline and also a clause, or clauses, allowing the engager to give directions as the work is performed. But even if the right of control is not clearly stated, it may be possible to imply such a right into the contract (for example, the worker may be part of a team or gang which is under the control of a manager).

In the case of Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2QB, Mr Justice MacKenna said at p.516 in relation to the right of control:

“To find where the right resides one must look first to the express terms of the contract, and if they deal fully with the matter one may look no further. If the contract does not expressly provide which party shall have the right, the question must be answered in the ordinary way by implication.”

In the later case of Narich Pty Ltd v The Commissioner of Pay-roll Tax [1984] ICR286, counsel for Narich argued that the greater the detail in which the way the person engaged to do his work is prescribed by the contract, the less scope there is for direction and control during and in the course of performance of the work. The Privy Council rejected this argument saying:

“In their Lordships’ view this argument has a paradoxical quality about it. It matters not by what means the engagor is contractually entitled to direct and control the manner in which the engagee does his work. What matters is that, by one means or another, the engagor is, as a matter of law arising from the terms of the contract concerned, entitled to do so.”