In a previous parallel universe I was a contractor and it was a grey area
then - looking in from outside now it appears even murkier. I agree Jim's
premise, but as you say the garage that services the truck is not an
employee so there is a line of demarcation somewhere. The notion that this
line between subcontractor and contractor (in respect to liability) might be
defined by contract as per your last paragraph looks beguilingly
straightforward but I suppose someone will say it does not comply with
statute.
Mention of partnerships is interesting-I bet there are lots of contractors
out there looking at partnerships to mitigate costs of insurance-
-----Original Message-----
From: David Cheshire [mailto:davidjcheshire@xxxxxx.ca]
Sent: Saturday, December 27, 2003 6:06 PM
To: UK Tree Care
Subject: Re: Time to think - INSURANCE
Dear Jim,
In a previous parallel universe I used to be a taxation specialist, and the
question of employment/self-employment was a perennial conundrum in certain
quarters.
There is a fair body of case law on the subject, from which it is clear that
there is most unlikely ever to be a single feature that makes a working
relationship between two people either self-employed:self-employed, or
employer:employee. A person who contributes to the profitability of your
work, or assists you in deriving income from your business, is one of those
single features.
The current belief is that a subcontractor engaged by contractor
automatically becomes an employee. Anyone who wants to challenge that would
certainly be able to convince the judge that is too inclusive to say that
"Anything or anybody that assists you to that effect (how one derives
income) is a "tool" of your work" - for example it makes the consultant an
employee of the arborist who asks him for a professional opinion, or the
motor mechanic an employee of the arborist whose vehicles he services. Both
the consultant and the motor mechanic help the arborist to organise his
business, and to derive income from it.
So why should the fellow arborist, working beside another at his request,
with perhaps as much experience and ability, or more or less, automatically
become an employee just because he is an arborist? The working relationship
used to be examined on the basis of master and servant, but nowadays the
whole working arrangement is usually looked at - but there are still grey
areas, and arguments can be made for self-employed or employee status for
many aspects of the working arrangement.
My humble opinion is, therefore, that there is no mandatory requirement for
Employer's Liability insurance in respect of any subcontracted arborist,
because the subcontractor does not indisputably become an employee - unless
the contractor wants him to be, and the subcontractor agrees to it.
If I were still in the tax game, I would be advising arborists to consider
partnership arrangements with their regular, even though intermittent,
subcontractors. There would have to be a written agreement about the
insurance liabilities. As ever, because it is a question of money, much
would depend upon the financial burdens that might be avoided.
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