ESM0536 - Guide to determining status: the weight to be given to a genuine right of substitution

A genuine right of substitution is a pointer to self-employment.

The weight to be given to such a provision will however depend on the particular facts of each case. For example, in the case of Mrs MacFarlane & Mrs Skivington v Glasgow City Council (EAT/1277/99) - see ESM7220, the Employment Tribunal found as fact that:

"If for any reason, one of the applicants was unable to take a class, she would contact a replacement from the register of coaches maintained by the respondents, and arrange for her class to be covered by a member on the register."

The Employment Appeals Tribunal distinguished this case from the Tanton case (see ESM7210) for four cumulative reasons:

• Mrs M and Mrs S could not choose not to attend or not to work in person
• they could not provide anyone but only someone from the Council register
• the Council sometimes organised the replacement
• the Council did not pay Mrs M/Mrs S but instead paid the substitute direct.

They later added:

"We cannot regard a provision of the kind found by the Tribunal in our case to have such force that it had to be seen to overwhelm the factors pointing the other way; it was not such that had inescapably to lead to a conclusion that the Appellants were not employees."

In effect the Employment Appeals Tribunal found that personal service was required and that although a genuine right of substitution existed that right did not clearly outweigh other factors pointing towards a contract of service.

In the case of Synaptek Ltd v Young [2003] EWHC 645 (Ch) - see ESM7260 - which was concerned with the IR35 legislation, Mr Justice Hart said in considering whether the substitution clause in that case was a pointer to employment or self- employment:

"The Commissioners were entitled in my judgment to regard it as simply one fact among others and, in assessing the weight to be given to it, to take into account the extent to which the provision was utilised in practice."