Ready Mixed Concrete (South East) Ltdv Minister of Pensions and National Insurance
| Jurisdiction | England & Wales |
| Judgment Date | 08 December 1967 |
| Date | 08 December 1967 |
| Court | Queen's Bench Division (Administrative Court) |
Queen's Bench Division.
McKenna J.
Roger Parker QC and Gordon Slynn (instructed by Linklaters & Paines) for Ready Mixed Concrete (South East) Ltd, Mr Latimer and Mr Bezer.
HAP Fisher QC and Adrian Hamilton (instructed by McKenna & Co) for Greenham Ready Mixed Concrete Ltd and Mr King.
Nigel Bridge (instructed by the Solicitor for the Ministry of Social Security) for the Minister.
The following cases were referred to in the judgment:
Amalgamated Engineering Union v Minister of Pensions and National InsuranceUNK [1963] 1 All ER 864
Bank voor Handel en Scheepvaart NV v SlatfordUNKELR [1952] 2 All ER 956; [1953] 1 QB 248
Clarke v Bailieborough Co-operative Agricultural and Dairy Society Ltd (1913) 47 IrLT 113
Doggett v Waterloo Taxi-Cab Co LtdELR [1910] 2 KB 336
Hardaker v Idle District CouncilELR [1896] 1 QB 335
Humberstone v Northern Timber MillsUNK (1949) 79 CLR 389
Montreal Locomotive Works Ltd v Montreal and A-G for CanadaUNK [1947] 1 DLR 161
Moroney v Sheehan (1903) 37 IrLT 166
National Labour Relations Board v Nu-Car Carriers (1951) 189 F 2d 756
O'Donnell v Clare County Council (1913) 47 IrLT 41
Park v Wilsons & Clyde Coal Co LtdENR 1928 SC 121
Queensland Stations Pty v Federal Commr of TaxationUNK (1945) 70 CLR 539
Short v Henderson Ltd (1946) 174 LT 417
US v Silk (1946) 331 US 704
Zuijs v Wirth Brothers Pty LtdUNK (1955) 93 CLR 561
National Insurance contributions - Employment status - Contractual provisions - Financial risk - Control - Intention of parties - Owner-driver - Delivery of concrete by owner-drivers - Contract for carriage of concrete and hire-purchase contract relating to lorry - Whether contract between company and driver one of service - Requirements for contract of service - Provisions inconsistent with contract of service.
This was an appeal against a decision of the Minister of Pensions and National Insurance that a lorry driver was employed under a contract of service rather than as an independent contractor.
The driver entered into a contract, with the company that had previously employed him as a yardman, for the carriage of concrete. The contract contained a declaration that the individual was an independent contractor.
The driver also entered into a hire purchase contract to acquire the lorry, and was solely responsible for maintaining it and for paying all running costs. The lorry was to be used for the purposes of the company's business only and was adapted accordingly.
Apart from during periods of holiday or sickness, the driver was obliged to drive personally for the maximum legal number of hours, but he could also employ competent substitute drivers, which he sometimes did. He wore the uniform of the company and was to carry out all reasonable orders from other employees "as if he were an employee of the company". He was paid at fixed rates per cubic yard per mile covered, but subject to provision for minimal annual earnings.
Held, allowing the appeal:
The rights conferred and the duties imposed by the contract between the driver and the company were not such as to make it one of service; rather, it was a contract of carriage. The ownership of assets, the chance for profit and the risk of loss all lay with the driver. He could decide whether to maintain the vehicle himself or to pay someone else to do it. He had broad freedom to choose who else he wanted to drive the lorry, and he could choose where to buy fuel. Although the company had powers to ensure that he was running his business efficiently and that he paid his bills, those provisions were not inconsistent with the fact that he was running a business of his own. There were clear differences between the driver's status and that of the employed drivers. In summary, he was a "small businessman" and not an employed "servant".
McKenna J:
The first of these three cases is an appeal against a decision of the Minister of Pensions and National Insurance, now the Minister of Social Security, by which she determined that Thomas Henry Latimer was included in the class of employed persons for the purposes of the National Insurance Act 1965, during the week commencing 8 November 1965, and that Ready Mixed Concrete (South East) Ltd were his employers and liable under s. 3(b) of the Act to pay in respect of him a flat rate contribution for that week. The company required the Minister to state a case setting forth her decision and the facts on which it was based, which she has done, and that case comes before me on appeal.
An employed person means for the purposes of the Act one employed under a contract of service, and the question raised by the appeal is whether Latimer was employed under such a contract. The Minister has found that he was; the company say that he was not.
The company are one of the Ready Mixed Group and are engaged in the business of making and selling concrete. On 15 May 1965, Latimer and the company entered into a written contract which was in force at the material time. The circumstances preceding the making of that contract were described in the case.
Latimer began to work for the company in 1958 as a yardman batcher. In that capacity he served them first at Northfleet and later at Crayford, two of the eight plants which they operated. At the time when he entered their service they delivered the concrete to their customers through an independent company of haulage contractors. In 1959, being dissatisfied with the operations of these contractors, they determined their contract with them, and introduced a scheme of delivery by owner-drivers. It is stated in the case that the provisions of the company's contract with the owner-drivers, when the scheme was introduced, were similar to those of the contract in force at the material time, to which I shall come presently, though not identical with them. The case also states that it is, and always has been, the policy of the group "that the business of making and selling concrete should be carried on as far as possible separately from the business of delivering the concrete to the customers", and that the owner-driver scheme was introduced to further that policy, in the belief that it would stimulate "speedy and efficient cartage, the maintenance of trucks in good condition, and the careful driving thereof, and would benefit the owner-driver by giving him an incentive to work for a higher return without abusing the vehicle in the way which often happens if an employee is given a bonus scheme related to the use of his employer's vehicle."
This was in 1959. In 1963 Latimer ceased to be employed as a batcher and agreed to work for the company as an owner-driver. He entered into a contract for the carriage of concrete, presumably in the form used at the inception of the scheme, and also into a hire-purchase contract relating to a Leyland lorry. The first-mentioned contract continued for two years, during which time Latimer became the owner of the lorry. At the end of the two years the contract was determined, and the Leyland lorry was sold. On 15 May 1965, he entered into a new contract with the company, and, a month later, into a hire-purchase contract relating to another vehicle, a new Leyland, EUW 152C. The hire-purchase company are Ready Mixed Finance Ltd. They are, as their name indicates, one of the group.
There are other facts which I must mention, but before doing so it is convenient that I should summarise the provisions of the new contract between the company and Latimer. The commencement date was 1 June 1965, and the termination date 30 April 1970. The company are to procure that the hire-purchase company will offer to sell the Leyland to Latimer on credit terms, painted in colours and with distinguishing signs selected by the company, and adapted to carry the company's concrete-mixing unit, fleet number 52140, which the company will fix to the Leyland, and he is to buy the Leyland from the hire-purchase company. The contract refers to the Leyland as "the vehicle", and to the Leyland with the mixing unit attached as "the truck", and I shall use these descriptions. If required to do so he must at his expense instal radio equipment on the vehicle. He is to procure an "A" contract licence under the Road Traffic Act 1960 covering the use of the truck.
Clause 5 is in these terms:
The owner-driver shall at all times of the day or night during the term of this agreement (excepting only in accordance with the terms hereof) make available the truck to the company for the purpose of collecting carrying and delivering the materials used for or in connection with the business of the company (not being a business of carrying or arranging for the carriage of goods) whenever and wherever so required by the company whether such requirement is notified to the owner-driver or to his servants or agents and shall duly and promptly collect carry and deliver such quantity or quantities of the materials as and when required in the manner at the time and to the destination directed by the company, and it is further provided that the truck shall be used exclusively for the purposes set out in this agreement and for no other purpose. In furtherance of the terms of this clause the owner-driver shall if so required by the company at his own expense ensure that the company is able to contact him by telephone at his usual residence or residences.
The company can call on him to make the truck available for delivering the materials of any other group company, subject to his obtaining a "B" licence, which he must in that case try to get. He must comply with the conditions of his licences and obey any other rules or regulations, parliamentary, local or parochial. Under clause 10 he may, with the company's consent and subject to clause 12, appoint a competent driver to operate the truck in his place. He must pay this driver National Joint Council wages or better, and, if the company are...
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