“…control cannot be the decisive test when one is dealing with a professional man, or a man of some particular skill and experience. Instances of that have been given in the form of the master of a ship, an engine driver, a professional architect or, as in this case, a consulting engineer. In such cases there can be no question of the employer telling him how to do work; therefore, the absence of control and direction in that sense can be of little, if any, use as a test.” 27. The key question is not whether in practice the company exercises control but whether it has a contractual right of control, as per White v Troutbeck[2013] IRLR 286 at [290]: “…the key question is whether there is, to a sufficient degree, a contractual right of control over the worker. The key question is not whether in practice the worker has day-to-day control of his own work….In my judgment what was required was to analyse the terms of the agreement between the parties to see whether, expressly or by implication, Troutbeck…retained a right of control to a sufficient degree….Moreover, for the reasons I have given, it is not inconsistent with the concept of employment for an absentee owner to want someone to be responsible for maintaining and managing their property. The question is not by whom day-to-day control was exercised but with whom and to what extent the ultimate right to control resided.”
“MacKenna J made plain that provided (i) and (ii) are present (iii) requires that all the terms of the agreement are to be considered before the question as to the existence of a contract of service can be answered. As to (ii) he had well in mind that the early legal concept of control as including control over how the work should be done was relevant but not essential. Society has provided many examples, from masters of vessels and surgeons to research scientists and technology experts, where such direct control is absent. In many cases the employer or controlling management may have no more than a very general idea of how the work is done and no inclination directly to interfere with it. However, some sufficient framework of control must surely exist. A contractual relationship concerning work to be carried out in which the one party has no control over the other could not sensibly be called a contract of employment. MacKenna J cited a passage from the judgment of Dixon J in Humberstone v Northern Timber Mills(1949) 79 CLR 389 from which I take the first few lines only: "The question is not whether in practice the work was in fact done subject to a direction and control exercised by any actual supervision or whether any actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter's order and directions."” 29. In Autoclenz Ltd v Belcher[2011] ICR 1157 Lord Clarke stated at [1163] that if a right of control exists within the contract, the fact that the company does not exercise it does not detract from that fact: “Three further propositions are not I think contentious: (i) As Stephenson LJ put it in Nethermere (St Neots) Ltd v Gardiner[1984] ICR 612 , 623, “There must … be an irreducible minimum of obligation on each side to create a contract of service.” (ii) If a genuine right of substitution exists, this negates an obligation to perform work personally and is inconsistent with employee status: Express & Echo Publications Ltd v Tanton[1999] ICR 693 , 699 g, per Peter Gibson LJ. (iii) If a contractual right, as for example a right to substitute, exists, it does not matter that it is not used. It does not follow from the fact that a term is not enforced that such a term is not part of the agreement: see eg the Tanton case, at p 697 g.” 30. In Various Claimants v Catholic Child Welfare Society [2013] 2 AC at [36] Lord Philips explained: “Today it is not realistic to look for a right to direct how an employee should perform his duties as a necessary element in the relationship between employer and employee. Many employees apply a skill or expertise that is not susceptible to direction by anyone else in the company that employs them. Thus the significance of control today is that the employer can direct what the employee does, not how he does it.” 31. Dragonfly Consulting Ltd v HMRC[2008] EWHC 2113 (Ch) at [41] and [52] explained that the degree of control needs only be sufficient as opposed to tantamount to that over an employee: “Everybody agrees that control is in some sense an essential ingredient of a contract of employment. It is the second of the three conditions to which MacKenna J referred to in Ready Mixed Concrete . By way of amplification, he said at 515F: “Control includes the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when and the place where it shall be done. All these aspects of control must be considered in deciding whether the right exists in a sufficient degree to make one party the master and the other his servant. The right need not be unrestricted…To find where the right resides one must look first to the express terms of the contract, and if they deal fully with the matter one may look no further. If the contract does not expressly provide which party shall have the right, the question must be answered in the ordinary way by implication.” … On the strength of the oral evidence, the Special Commissioner was in my view fully entitled to conclude that Mr Bessell's performance of his duties was subject to a degree of supervision and quality control which went beyond merely directing him when and where to work. In the case of a skilled worker, you do not expect to find control over how the work is done. Conversely, in the case of a self-employed worker in business on his own account you would not normally expect to find regular appraisal and monitoring of the kind attested to by Mr Palmer and Miss Tooze. The weight and significance to be attached to this evidence was a matter for the Special Commissioner, and in my view it was open to him to conclude that the nature and degree of the control by the AA under the hypothetical contract was on balance a pointer towards employment.” 32. Market Investigations v Minister of Social Security[1969] 2QB 173 in which Cooke J suggested that the test to be applied was whether the worker was an employee “as a matter of economic reality” set out the following factors as potentially relevant in making that assessment: · provision of own equipment; · whether he hires his own helpers; · what degree of financial risk he takes; · what degree of responsibility for investment and management he has; and · whether and how far he has an opportunity of profiting from sound management in the performance of his task. 33. In Novasoft Ltd v Revenue & Customs[2010] UKFTT 150 (TC) the FTT summarised the position as follows at [22]: “Mr Hall in his skeleton argument proposed the following list of factors for consideration, and we agree these are the relevant factors: (1) Extent and degree of control exercised by the client over the worker. (2) The worker’s right to engage helpers or substitutes. (3) Mutuality of obligations between the worker and the client. (4) Financial risk of the worker. (5) Provision of equipment. (6) Basis of payment of the worker. (7) Personal factors (8) The existence of employee rights. (9) Termination of the contract. (10) Whether the worker was part and parcel of the client’s organisation. (11) Exclusive services. (12) Mutual intention. We bear in mind the admonishment of Mummery J not to treat this as a checklist to run through mechanically. Instead they are the factors that go towards painting the picture whose overall effect must be evaluated.” 34. More recently, in Christa Ackroyd Media Ltd v Revenue and Customs[2018] UKFTT 69 (TC) the FTT concluded at [171]: “ We do not consider that the fact the fees were payable on a monthly basis akin to the way an employee might be paid is significant. Nor is the absence of any provision for holiday, sick pay or pension entitlement. The Contract was between CAM Ltd and the BBC and both parties accept that the Contract was not an employment contract. It would not be expected to contain such provisions. Mr Tolley suggested that as a “worker”
“Either party shall be entitled to terminate the engagement at any time after2 September 2014 on 6 (six) months’ written notice without specifying any reason therefor. In the event of termination under this provision [ITV] will pay to [the Appellant] a portion of the Fee commensurate to the amount of Services provided up to the date of termination and this shall constitute the full extent of our liability to you and [Ms Kelly] as a result of such termination. Notwithstanding the foregoing in the event that termination occurs pursuant to this Clause 12.2 prior to3 March 2015 then the balance of the Minimum Fee not already paid prior to termination shall be payable.” 47. Clause 1.1 of the Agreement provided that the services would be provided to ITV by Ms Kelly on “an exclusive and first call basis for the period commencing on3 September 2012 and continuing thereafter unless otherwise terminated.” 48. Clause 1.2 of the Agreement provided that the services would be provided for 42 weeks each year excluding bank holidays. It also provided that Ms Kelly was entitled to be absent for the remaining 10 weeks in each calendar year at times “to be agreed in good faith at least one month in advance.” 49. Clause 1.3 provided that for each episode where Ms Kelly’s attendance was required she was “required to provide on-screen services between 7.00am and 9.30am as lead presenter for an hour and a half and sole presenter for an hour.”
“the services…as a first class presenter in full and willing co-operation with reasonable requests made to [Ms Kelly] from time to time by the executive producer of the Programme”
“[Ms Kelly] shall not provide either directly or indirectly [her] services as a presenter or contributor of any television or audio-visual programme for production, broadcast and/or transmission in the UK that is available to viewers between the hours of 6am and 6pm during the term without [ITV’s] prior approval (approval with regards to programmes on Saturday on Sunday (sic) shall not be unreasonably withheld).” 53. Clause 7.2 provided that neither the Appellant nor Ms Kelly will engage in conduct which may bring ITV, the programme or the broadcaster into disrepute. Clause 7.7 provided that Ms Kelly would comply with the rules and regulations of the place of work and television guidelines laid down by OFCOM. The clause also stated that clothing and accessories worn by Ms Kelly would not have visible branded logos and Ms Kelly could be asked to remove or change and items as directed by ITV. 54. Under Clause 12.1.7 ITV was able to terminate the Agreement with immediate effect if Ms Kelly in providing the services gave “public expression to any matter of public, political, social or other controversy.” 55. The Agreement also stated (Clause 7) that the Appellant would procure that Ms Kelly would do certain things related to personal health including undergoing a full medical examination and not engaging in any hazardous pursuits without permission. 56. The Amended Agreement drew a distinction between two periods;3 September 2012 to10 April 2014 related to Ms Kelly’s services provided in relation to “Daybreak” and “Lorraine”, and the second period from11 April 2014 to15 July 2017 related to Ms Kelly’s services in respect of “Lorraine”
“you and [Ms Kelly] have not participated in or otherwise contributed to, and shall not participate in or otherwise contribute to, any press, radio or television or other media advertisement, commercial or other endorsement, which might be broadcast any time during the Term (“Commercial Activity”) without our prior written consent in each case in accordance with the procedure set out in Schedule 3 hereto such consent not to be unreasonably withheld. For the avoidance of doubt, we shall be entitled to withhold our approval if in our reasonable opinion acting in good faith any of your new Commercial Activities would bear unfavourably upon us, the Programme, our editorial independence or reputation or conflict with activities of the Programme. The activities described in Schedule 2 hereto have been approved by us but are still subject to the other Terms of this Agreement.”
“I am saying that the non-news presenters on entertainment type shows, including magazine shows (but not news) are entertainers and qualify for relief under s352…The Richard and Judy case dealt with the grey area of magazine shows with a news content and found it in scope and set out that news was outside. Who is an entertainer is very broad and covers almost all of your in front of camera talent.” 89. Mr Grant exhibited a letter from Mr Frampton dated12 March 2018 in which HMRC’s policy appeared to change significantly. The revised guidance now aligns with HMRC’s stance in this case however Mr Grant understands that Ms Kelly would still fall within the definition of an entertainer for the purposes of agents fees being an allowable deduction. The letter referred to the definition of a theatrical artist in Madeley and Finnigan stating: “HMRC’s policy view is that this definition does not apply to TV or radio shows presenters in general. Whilst a presenter may have a unique style, and offer analysis and personal opinion, they cannot in general be described as entertainers or theatrical artists whilst performing that specific role…Where an individual performs both types of role, for example as well as reading the news they might additionally appear in an entertainment situation, it may still be possible to claim tax reliefs on the deductions relating to the entertainment fee, subject to the facts of the engagement and the rules in tax law.” 90. Mr Grant accepted that Mr Frampton’s views are not determinative nor binding on the Tribunal and clarified that it was no more than his opinion that HMRC’s policy appeared to have changed to align with the facts of this case. 91. Professor Shalit OBE is the Chairman of the ROAR Group Talent Management Agency which specialises in representing entertainers. Mr Shalit takes the view that the “Lorraine” show is clearly entertainment covering items such as Hollywood, cooking and fashion. He noted that when an important news story breaks “Lorraine” is taken off air. Professor Shalit explained that he has worked with employees of broadcasters who present news and current affairs programmes. Presenters of news and current affairs have much more restrictive contracts than Ms Kelly as governed by OFCOM, for example they cannot market or be associated with products and services in the way that Ms Kelly has been able to have her own clothing range with JD Williams. As Ms Kelly is regarded as an entertainment presenter she is not governed by these restrictions. Professor Shalit explained that unlike most employees in the UK presenters such as Ms Kelly rarely have long term job security. 92. Professor Shalit explained in oral evidence that for most presenters at ITV contracts are usually standard contracts because it is significantly onerous to write different contracts. Professor Shalit explained that the contract is fairly irrelevant in reality as both parties know what is expected of the relationship. He stated that the phraseology in the contract is standard but does not really apply to Ms Kelly as she will undertake dangerous pursuits such as parachute jumps and zip wires irrespective of the clause in the contract restricting such activities. Professor Shalit confirmed that the extent of Ms Kelly’s control was significant; she could say what she wanted on air and has vetoed potential guests in the past; this is the reason Ms Kelly is hired and liked and the reason it is the “Lorraine” show and not the “ITV show”. 93. Professor Shalit explained that the parties to the contract with Roar Global are Professor Shalit and Ms Kelly which therefore also encompass her companies. Their agreement is based on a relationship of trust and therefore a lengthy contract is not required. Ms Kelly’s accountant instructs Roar Global how to invoice. Professor Shalit explained that in his view the Appellant and Ms Kelly are the same person. 94. Professor Shalit explained that in his view the contract which required the services of a “first class presenter” meant that Ms Kelly was given a task of presenting in general terms and, if available, was expected to do it to a high standard. Professor Shalit clarified that the clauses relating to transport, clothing, expenses and exclusivity were all standard terms in the industry which he did not challenge as the reality was that if Ms Kelly wanted to do other work she would, even if it conflicted with the timing of the programmes, and ITV would be informed out of politeness but not to seek consent. Professor Shalit confirmed that ITV were so eager to hire Ms Kelly for “Daybreak” that they had travelled to Dundee to persuade her and that she had chosen her co-presenter. 95. Having recited the evidence we will now set out the parties’ submissions as to how that evidence should be applied to the factors to be considered in deciding whether the hypothetical contract would have been a contract for services or a contract of services. HMRC’s submissions 96. On behalf of HMRC Miss Roxburgh made the following submissions. 97. In determining the terms of the hypothetical contract, the Tribunal must have particular regard to the terms of the actual arrangements in place. The Agreement provides that Albatel will procure that Ms Kelly act in defined ways. In consequence there must necessarily have been a contractual relationship between the Appellant and Ms Kelly entitling the Appellant to control the services of Ms Kelly; that was necessary in order for the Appellant to be able to comply with the terms of the Agreement. HMRC invite the Tribunal to conclude that a contract of employment was necessarily to be implied between the Appellant and Ms Kelly. 98. Ms Roxburgh did not submit that the witnesses were not trying to assist the Tribunal but she submitted that Ms Kelly and, to a lesser extent Ms Walton gave the impression of trying to avoid giving evidence detrimental to the Appellant’s case. By way of example Ms Roxburgh highlighted the notes of meeting which Ms Walton had signed but the content of which she sought to dilute in evidence. Ms Roxburgh noted that Ms Walton was reluctant to agree that she had ultimate control over Ms Kelly although she appeared to concede in cross-examination that she could have said no to Ms Kelly. Ms Roxburgh submitted that Professor Shalit had agreed that ITV retained control over Ms Kelly in relation to obligations under OFCOM. He also agreed that although Ms Kelly may have chosen Aled Jones as a co-presenter, ultimately ITV “paid the cheque” and therefore retained control. 99. HMRC submit that mutuality of obligation existed in this case. The Agreement provides for services for up to 42 weeks allowing for holidays as employees would be entitled to. It is therefore not inconsistent with a contract of employment. Furthermore Ms Kelly is obliged to perform if called on by ITV to do so and regardless of whether they do so, they are obliged to pay the Appellant. Although ITV has broad powers to terminate the contract for reasons outside Ms Kelly’s control, ITV is still required to make payment of the minimum sum under the contract if it does so. Each of these factors demonstrates mutuality of obligation. 100. HMRC submit that Ms Kelly falls into the category of persons who can have both an employment and separate self-employed income. HMRC do not question Ms Kelly’s talents as a presenter but highlight that it is perfectly feasible for a skilled person (such as a surgeon or professional footballer) to be an employee. HMRC drew a parallel with the facts of this case and the recent Decision of Christa Ackroyd in which the Tribunal accepted the Appellant’s factual case, for instance that Ms Ackroyd was expected to drive ratings, was involved in the look, feel and approach of the programme, was a very successful television journalist and presenter, was more than just a newsreader and had a high degree of autonomy. Nevertheless the Tribunal found that the BBC retained the contractual right of control, consistent with employment at [168]: Mr Summers rightly submitted that the contract had no express term dealing with control. Control of Ms Ackroyd's work pursuant to the hypothetical contract must lie somewhere, either with Ms Ackroyd or with the BBC. We are not satisfied that it lay with Ms Ackroyd. We consider that the BBC did have ultimate control in how, where and when Ms Ackroyd carried out her work. We accept a submission by Mr Tolley that this was an implied term of the hypothetical contract in order to give that contract business efficacy. In the context of Ms Ackroyd's role it was necessary for the BBC to at least have the power to direct Ms Ackroyd's work, otherwise Look North as a programme ran the risk of not complying with the Editorial Guidelines. For example, if Ms Ackroyd consistently failed to comply with the Editorial Guidelines, it is inconceivable that the parties intended that the BBC should be obliged to continue to pay Ms Ackroyd for her work even if as a result she was not called on to present Look North. 101. HMRC do not dispute that when presenting, Ms Kelly has to use her individual judgement, for example as to what to say when conducting live interviews. Given the practical realities of a live broadcast environment there is no sensible means by which ITV could determine the words that Ms Kelly would say before she said them. However, as the examples of the surgeon and footballer demonstrate, a practical inability to control the decisions of a person at the moment of delivery of the skilled work is not inconsistent with employment; the limits of ITV’s practical control in respect of Ms Kelly at the point of delivery are the same as they would be in relation to an employed presenter. 102. HMRC submit that what matters is where the right of control lies, which would undoubtedly be with ITV under the hypothetical contract. The agreement contains express clauses requiring a first class presenter for the two programmes, granting editorial control to ITV and requiring the Appellant to procure that Ms Kelly would cooperate with instructions from ITV which includes matters ancillary to the shows. Such clauses are consistent with ITV’s need to control its output in order to comply with OFCOM’s guidelines. 103. HMRC contend that Ms Kelly is incorrect as a matter of contract when she stated “for the hour that I am contracted to do I am in total control” and “I have control over the content of my show and who I interview.”
“One might possibly draw a line and say what amount of duration makes the employment incidental to the exercise of the profession, but I do not think that that matters. It seems to me quite clear that one can have both an employment and a profession at the same time. Quite clearly one can have it in different categories. A man might have the steadiest employment in the world by day, and he might do something else entirely different in the evening and make some more money by way of a professional vocation. I cannot doubt that that would be so, but even if it were in the same line, I do not see why he should not have both. I do not see why a man who is a musician, for instance, and holds an office could not do that and hold an employment in respect of some permanent engagement which he has and at the same time pursue his profession at large. I do not think there is any difficulty about doing both things at once.” 135. Mr Gordon submitted that ITV has no right to tell Ms Kelly or Albatel what to do which distinguishes the present case from Christa Ackroyd in which the BBC could direct Ms Ackroyd to present any programme of their choice whereas the Appellant’s contract is no more than a contract for specific services, akin to that provided by any self-employed individual. Mr Gordon highlighted the distinction with the case of Christa Ackroyd in which the BBC had a general right to call on Ms Ackroyd’s services and could call on her to present Look North, read the weather, to work in Leeds or wherever the task she was required for was. 136. Mr Gordon relied on the examples provided by Ms Kelly in evidence as to how she chooses whether to take on additional work, such as “Daybreak” which helped ITV on a temporary basis. The requirements and/or restrictions imposed on Ms Kelly such as those in relation to assisting with marketing, are no more than would be expected from a person providing services as a performer. 137. Mr Gordon submitted that the control element must be effective; the star may use their own skill for instance in an interview, but there must be an entitlement by ITV to choose the subject matter, the running time or the person interviewed. Mr Gordon submitted that the role of OFCOM as a regulator is irrelevant to control in the context of this case as it applies as a professional body to everyone in the industry. 138. HMRC confuse ITV’s responsibility as a broadcaster with the test of control. ITV undoubtedly had duties to OFCOM. Similarly they paid for the services of Ms Kelly, as one would pay for the services of any freelancer or self-employed individual. However, ultimately control was in the hands of Ms Kelly as sole presenter who decided how long an interview would last. 139. Mr Gordon noted HMRC’s notes of meeting with ITV which stated: “LK [i.e. Mrs Smith] has final say on length of interview…LK can decide if the interview is going well or badly…LK can say that an item can be extended.” 140. This was emphasised by the former editor Ms Walton who confirmed that Ms Kelly chooses to dispense with others’ scripts and even the guests reflect Ms Kelly’s choice. 141. Mr Gordon submitted that the provision by ITV of studio equipment and some clothing is a red herring; the Appellant was providing the services of Ms Kelly, it did not purport to be the producer of the “Lorraine” show. Furthermore part of the Appellant’s remuneration package was the contribution towards Ms Kelly’s wardrobe. That ITV paid for part of it does not mean that ITV controlled what was worn. 142. “Lorraine” is essentially Ms Kelly’s show, a reflection of her personal brand. HMRC’s notes of meeting in 2015 confirm the control Ms Kelly has: “LK essentially drives and controls her services and essentially she drives the programme. It is up to her how she presents and the subject matter…LK is not bound by ITV’s Code of Conduct which is for employees…They [ITV] couldn’t do anything LK didn’t believe in…LK drives the ratings. LK is operating in an Oprah type way. If there was no LK there would be no show.” 143. Ms Kelly chooses when to take time off and chose to pre-record the Friday show to allow her to spend more time at home in Scotland. On paper and in reality it is Ms Kelly who is in control, not ITV. 144. In taking a holistic view as required by the third limb of the Ready Mixed Concrete test, Mr Gordon submitted that the overall arrangement is not consistent with that of employment. Mr Gordon relies on the following in support of the submission: (a) The Appellant provides Ms Kelly’s services to a range of different clients with ITV work comprising just 33% and 37% of the company’s total turnover, increasing to 65% and 69% in the short period in which “Daybreak” was also presented; (b) Ms Kelly is not tied to ITV in the same way that an employee might be. She has worked and continues to work for other broadcasters; (c) Ms Kelly is not an intrinsic part of the ITV organisation and can provide services to rival broadcasters and other media outlets; (d) Other services provided by Ms Kelly include film and radio work. Ms Kelly also writes regularly for newspapers and magazines. 145. There is financial risk borne by the Appellant and Ms Kelly. If the ratings fall, the programme is unsuccessful or there is simply a change of mind, ITV can terminate the contract. There is no ongoing obligation to pay for Ms Kelly’s services. Ms Kelly is not subject to fixed hours as would typify any employment contract. 146. Mr Gordon submitted that the final limb of Ready Mixed Concrete is a “reality check”; a checklist cannot be followed and the reality of the situation must be looked at. There is a clear lack of indicators to support a contract of services. 147. Mr Gordon submitted that a narrow approach should not be taken; although this appeal relates to two successive contracts in respect of “Lorraine” and “Daybreak”, the Tribunal must look at the full picture which involves pre-2012 and post 2016. “Lorraine” and “Daybreak” were just two engagements in a series of engagements over Ms Kelly’s professional career; longevity does not automatically point towards employment and this appeal only reflects 3 ½ years of an ever-evolving career. He submitted that the evidence was clear; Ms Kelly was in total control (there being no suggestion of any real difference between the programmes). Ms Walton’s evidence was crucial in confirming this; she held a role that would ordinarily have meant control rested with her but Ms Walton was clear that this was not the case in ITV and her own relationship with Ms Kelly. This evidence was also supported by Professor Shalit. Deductible expenses 148. The application of the definition of “entertainer” is the only issue in dispute between the parties. Mr Gordon noted that the predecessor legislation was considered by Special Commissioner Howard Nolan in Madeley & Finnigan in which the Decision related to work undertaken in a very similar programme to that presented by Ms Kelly. The Special Commissioner was satisfied that the couple’s work on “This Morning” amounted to a theatrical performance. The expression “theatrical artist” was interpreted as: “a performer or entertainer, performing with a theatrical bent, or in the manner of acting or theatre, but not necessarily in the theatre.” 149. That conclusion has been fully endorsed by HMRC in its guidance. The only distinction in the present case is that Ms Kelly is a sole presenter. However, her performance is undoubtedly theatrical and Ms Kelly’s sketches are all clear examples of being an entertainer over and above the more regular “informal chatting…constantly trying to entertain, and making [her] personality and performance the core of the programme.”
“It is clear from the cases that although there is a range of factors or indicia which might usefully be taken into account in ascertaining whether a contract is one of employment or one for the provision of services by an independent contractor, there is no simple formula or process which can be applied to determine, in any particular case, which factors are relevant or the weight or significance which is to be attributed to any factors which are considered to be relevant… The essential factors – the “irreducible minimum” – which must be present if an employment contract is to exist were set out in the Ready Mixed Concrete case by MacKenna J in terms which have since been recognised as the helpful starting point for the analysis of the true nature of contracts in this difficult area… The first of these conditions has evolved into two distinct factors: first, that there should be what has commonly been called “mutuality of obligation”; and second, that a defining feature of an employment contract is that the employee, and he alone, is the person whose services are to be provided. The question of “mutuality of obligation” has led to discussion as to whether all that is required on the part of the employing party is that it should simply pay the remuneration contracted for, or whether a defining characteristic of an employment contract is that the employer is required to provide a flow of work and to continue to pay the contracted remuneration even if at times there is no work. The Special Commissioner in the Dragonfly Consultancy case provides a helpful review of the cases which deal with the employer’s obligation (see paragraphs 50 to 59), and reaches this conclusion: for a contract to exist there must, of course, be mutual obligations, but that obvious requirement is met if the “employee” is obliged to provide his labour and the “employer” is obliged to make payment for it; and that “an obligation on the employer to provide work or in the absence of available work, to pay, is not a precondition for the contract being one of employment, but its presence in some form…is a touchstone or a feature one would expect to find in an employment contract and where absence would call into question the existence of such a relationship.” 152. In reaching our conclusion we have had regard to the nature of the hypothetical contract and the principles to be applied from the authorities cited. We have considered the cumulative features and considered all of the relevant circumstances as per Park J in Usetech Ltd v Young (Inspector of Taxes)[2004] All ER (D) 106 (Oct) at [53]: “As it seems to me the present state of the law is that whether a relationship is an employment or not requires an evaluation of all of the circumstances.” 153. We bear in mind that the test is not a “mechanical exercise of running through items on a checklist” but rather the full picture “from the accumulation of detail” must be considered followed by standing back to make an “informed, considered, qualitative appreciation of the whole” (per Nolan LJ in Hall v Lorimer ). We have therefore approached this case by making a value judgment on the circumstances as a whole rather than focussing on isolated features. 154. Both parties agreed that the burden of proof rests with the Appellant. The standard of proof is the balance of probabilities. 155. Our view was that all of the witnesses gave honest and cogent evidence. We did not accept the criticisms of Ms Kelly and (to a lesser degree) Ms Walton’s evidence as seeking to avoid giving answers detrimental to the Appellant’s case. Ms Kelly is clearly an intelligent lady who understood the nature of the case and we found it understandable that she sought to understand the questions being asked of her. However, we did not find that this detracted from the reliability of the evidence she gave. In relation to the evidence given by Ms Walton we accepted her evidence that the purpose of her meeting with HMRC in 2015 was not clearly explained to her and that although she had signed the notes of the meeting, she had not been responsible for the amendments made. We also accepted Ms Walton’s evidence that the meeting notes were broadly true but did not reflect the entire picture and we were satisfied that Ms Walton’s oral evidence was accurate to the best of her recollection. 156. We should note that there was some criticism levelled against the Appellant in relation to DVD clips produced and, in particular the limited evidence relating to “Daybreak”
“I would accept that it is an over-simplification to say that the obligation of the putative employer to remunerate the worker for services actually performed in itself always provides the kind of mutuality which is a touchstone of an employment relationship. Mutuality of some kind exists in every situation where someone provides a personal service for payment, but that cannot by itself automatically mean that the relationship is a contract of employment: it could perfectly well be a contract for free lance services.” 161. Mr Gordon conceded, and we agree, that Ms Kelly was obliged to personally perform the services; the Appellant had no other employees it could send in her place and the Agreement specifically named Ms Kelly as the person engaged to perform the services. 162. Although not main thrust of the Appellant’s case, Mr Gordon did not concede the issue of mutuality of obligation, noting that X paying Y for a specific task is insufficient; an employer calls on the services of an employee however in this case ITV is entitled to call on Ms Kelly but it is not obliged to do so nor is there an obligation to continue to call on the services of Ms Kelly. 163. As recognised in Dragonfly Consultancy an obligation to provide work or pay in the absence of it is not a precondition for a contract of services although it may point towards it. In this case ITV was obliged to pay Ms Kelly for the services performed and there was an expectation that there would be up to 42 weeks of work per year. However, ITV was not obliged to call on Ms Kelly and the show could have been dropped, for instance as we were told by the witnesses if ratings fell. 164. In our view there was mutuality of obligation, but such that what there was amounted only to the “irreducible minimum” and we did not find it determinative of the issue. Control 165. The Appellant’s case relied, in the main, on the absence of control as a significant indicator pointing away from a contract of services. As MacKenna J explained: “Control includes the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when and the place where it shall be done. All these aspects of control must be considered in deciding whether the right exists in a sufficient degree to make one party the master and the other his servant. The right need not be unrestricted.” 166. The authorities recognise that absence of control in the case of a skilled worker is not an automatic indicator away from employment ( see Morren v Swinton and Pendlebury Borough Council[1965] 1 WLR 576 ). 167. The issue is whether a contractual right of control existed to a sufficient degree, irrespective of whether that right was exercised ( Autoclenz v Belcher[2011] UKSC 41 at [19]). 168. In this case Ms Kelly was engaged for her specific skill. We accepted the evidence of Ms Walton and Professor Shalit that in relation to “Lorraine” and, to a lesser extent, “Daybreak”, it was Ms Kelly’s “brand” that was specifically engaged. We accepted the parallel drawn with “Oprah” and it was clear from the evidence that Ms Kelly had minimal or no supervision. 169. We accepted Ms Kelly’s evidence that she decided on the running order of the programme, the items to feature and the angle to take in interviews. In looking at the overall picture we were wholly satisfied from the evidence that contrary to being part of a jigsaw, Ms Kelly was the jigsaw. The fact that the programmes were aired from a studio in our view is no more than a practical requirement and it was clear to us that if Ms Kelly had decided to present the show from a different location then this would happen. We accepted the evidence of Ms Kelly and Ms Walton that when ITV wanted to move the programme to Scotland or Manchester this was vetoed by Ms Kelly. We accepted that it was the decision of Ms Kelly to stay on site after the show and lead meetings about the following day’s show; in our view this was a reflection of the control Ms Kelly had in determining what would or would not feature. 170. We were satisfied that Ms Kelly’s preparation or attendance at interviews were not matters in respect of which ITV had control but rather examples demonstrating why Ms Kelly was engaged; rather than relying on researchers Ms Kelly chooses to carry out her own preparation which is why the programme has, as described by Ms Walton, Ms Kelly’s “DNA”. 171. On the basis of the evidence we heard from Ms Kelly, Professor Shalit and Ms Walton we had no doubt that Ms Kelly was not hired to be part of a team but rather to lead a team. Specifically in relation to “Lorraine” we can put it no better than the witnesses when they told us “it was her name on the door”
“70. It is not necessary or appropriate in this decision to try to indicate whether various other presenters, game show hosts, and people such as newsreaders would in my opinion rank as 'theatrical artists'. In the course of the hearing however, a number of remarks and arguments were made and advanced in relation to such other categories. In the interests thus of testing the conclusion that I have reached, and of applying a type of 'sanity check', I think that it will be worth referring to my broad assumption as to the status of certain other performers. Naturally no-one in the hearing gave much attention to the status of the particular people who were referred to and I have given relatively little thought to the full circumstances of the people who I will now mention. In the unlikely event that any of them are also posed with the difficult question of whether they can claim deductions for agents' fees under s 201A, their circumstances would have to be considered in more detail. I am only referring to them now in order to try to illustrate a certain consistency in my approach. 71. I would certainly accept that newsreaders and the weathermen on television are not 'theatrical artists'. Few will forget Angela Rippon's 'high kick', and I accept that the weathermen usually perform an amusing Christmas carol shortly before Christmas. I also accept that with the cult of the celebrity, more attention is given to the appearance and personality of newsreaders than in the past, but I still consider that their role is passive. People switch on the 'news' to find out what has happened, and the presenter will ideally be pleasant but unobtrusive. I would not describe newsreaders as performers or entertainers, and certainly not as theatrical artists. 72. I reach the same conclusion about presenters of current affairs programmes. Some have their unique style and some or most can be very impressive, but they are again neither entertainers nor theatrical artists. 73. Game show hosts can probably cross the line and be described as 'theatrical performers'. I would unquestionably apply that description to Bruce Forsyth and to Ant and Dec. My observation as regards Bruce Forsyth is not so much because I assume that he has a background in dance and stage or music-hall. It is simply that his ability to break into dance, and his whole presentation is 'theatrical', and he is clearly an artist. 74. Quiz show hosts are more difficult. Whilst the following observations have nothing to do with their appeal, and one's admiration for them, I suspect that many would agree that Jeremy Paxman was not a theatrical artist, when presenting 'University Challenge'. He might well be classed as an entertainer, and a performer but I very much doubt as a theatrical artist. Exactly the same would apply to John Humphrys, the presenter of Mastermind. Christ Tarrant on 'Who wants to be a Millionaire?' is border-line. But Anne Robinson on 'Weakest Link' is indeed probably theatrical. 75. The common thread then to Bruce Forsyth, Ant and Dec and Anne Robinson is that they are all putting on one or another form of act. Everything is a performance. And to my mind Richard and Judy share that attribute. Their act was and is to perform the role of the informal chatting husband and wife team, constantly trying to entertain, and making their personality and performance the core of the programme that they presented. And that makes them 'theatrical artists'.” 188. The first area of dispute between the parties was as to the nature of the programmes. We did not find OFCOM’s classification of “Daybreak” as current affairs determinative of the issue. We accepted the oral evidence of the witnesses, in particular Ms Kelly, as to the similar nature of “Daybreak” and “Lorraine”