Ready Mixed Concrete v Minister of Pensions

Legal Case Summary

Ready Mixed Concrete Ltd v Minister of Pensions [1968] 2 QB 497

Summary: Definition of an employee under a ‘contract of service’.

Facts

A driver contracted with a mixed concrete company for the delivery of concrete.  The contract declared him an “independent contractor” and set out wages and expenses. The driver was to purchase his own vehicle, yet with a requirement that the vehicle be painted in company colours. He was to drive the vehicle himself but under compliance with certain company’s rules including, for example, the manner of vehicle repairs and payments.

Issues

The question arose as to whether the driver was an “employed person” under a contract of service with the company for the purposes of the National Insurance Act 1965.

Decision/Outcome

Firstly, the Court held that whether a contract creates a ‘master and servant’ relationship between an employer and employee is determined on the basis of contractual rights and duties, and that the nomenclature used in the contract is irrelevant. Thus, the fact that the contract termed the driver to be an “independent contractor” is not material. Secondly, the Court held that employment under a contract of service exists when:

1. a person agrees to a perform a service for a company in exchange for remuneration; and
2. a person agrees, expressly or impliedly, to subject himself to the control of the company to a sufficient degree to render the company his “master,” including control over the task’s performance, means, time; and
3. the contractual provisions are consistent with ordinary contracts of service.

On the facts, the Court held that the driver had sufficient freedom in the performance of his contractual obligations as he was free to decide the vehicle, his own labour, fuel, and other requirements in the performance of the task. In lieu of these freedoms, he was an independent contractor and not an employee of the company.