Whether an owner-driver of a vehicle used exclusively for the delivery of a company’s ready mixed concrete was engaged under a contract of service or a contract for services.
Ready Mixed Concrete (South East) Ltd (“RMC”) was in
the business of making and selling ready mixed concrete. The
company had engaged an independent haulage contractor to deliver
the concrete to customers but that contract was terminated and RMC
decided to introduce a scheme whereby concrete was delivered by
owner- drivers working under written contracts. The owner-drivers
entered into a hire purchase agreement with Readymix Finance Ltd to
purchase a lorry but the mixing equipment on the lorry was the
company’s property. In 1965 the company asked the Minister of
Social Security for a determination of the employment status of one
of the owner-drivers, Mr Latimer.
Mr Latimer’s written contractual terms included the following
Other facts found were
The Minister decided that Mr Latimer was employed under a contract of service but, on appeal to the High Court, MacKenna J held that he was running a business of his own. In summing up MacKenna J said that Mr Latimer was a “small business man” and not a servant. He concluded that the contract was not one of service but of carriage.
In his judgment, MacKenna J considered what is meant by a contract of service. He said
“A contract of service exists if these three conditions are fulfilled.
(i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service.
As to (i). There must be a wage or other remuneration. Otherwise there will be no consideration, and without consideration no contract of any kind. The servant must be obliged to provide his own work and skill. Freedom to do a job by one’s own hands or by another’s is inconsistent with a contract of service, though a limited or occasional power of delegation may not be….”
This established that in order for there to be a contract of service there must be