MOO Contract Clause
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For the avoidance of doubt, there is no obligation upon the Company to
provide nor upon the Sub-Contractor to provide Services pursuant for any
normal numbers of hours in any week other than those for which the
Sub-Contractor and the Sub-Contractor's Worker(s) shall be deemed to be
required to perform the Services for such period as shall be necessary to
fulfil its obligation to the Company and/or the Client hereunder. No rights
shall accrue to the Sub-Contractor and no obligations shall be imposed upon
the Company in respect of any period during which the Sub-Contractor is not
engaged by the Company or in respect of which the Sub-Contractor declines to
accept, from the Company, a Contract For Services in respect thereof.
IR35 seeks to apply the ordinary employment (contract of service) tests to
contractors. With later embellishments, these go back to the Ready Mix case.
It is a tripartite test. To paraphrase ruthlessly:
? ("MOO/IMOMO") There must be (continuing) obligations on the part of the
servant to provide service, and (continuing) obligations on the part of the
master to provide work to and renumerate the servant for that service;
? ("Substitution") The service provided must be personal, which means for
example the servant may not "delegate" the service to any other person;
? ("IBOYOYA") overall, other factors must be consistent with a contract of
service
It is also a joint test: all conditions must hold. In practical terms,
defeat of one means defeat of all.
The IBOYOA brigade, including ourselves, have been in full cry for some
time, for want of any other way to oppose IR35.
Cooke J. in Market Investigations Ltd. v. Minister of Social Security [1969] 2 Q.B. 173, 184-185:
"the fundamental test to be applied is this: 'Is the person who has
engaged himself to perform these services performing them as a
person in business on his own account?' If the answer to that
question is 'yes,' then the contract is a contract for services. If
the answer is 'no,' then the contract is a contract of service."
The above seems quite clear.
No doubt this case is central to any specialist contract reviewer thoughts.