Ready-Mixed Concrete Limited v the Minister of Pensions and National Insurance [1968]

Court: Court of Appeal

Facts: A driver contracted with Ready Mixed Concrete Ltd for the delivery of concrete. The contract declared him an “independent contractor” and set out his wages and expenses. The driver was required to purchase his own vehicle, which had to be painted in the company’s colours. He was to drive the vehicle himself, but had to comply with the company’s rules, including guidelines on vehicle repairs and payments.

Issue: Was the driver an “employed person” under a contract of service with the company for the purposes of the National Insurance Act 1965?

Held: The Court held that the label “independent contractor” was not determinative; what mattered were the actual rights and duties under the contract. The Court ruled that employment under a contract of service exists when:

1. A person agrees to perform a service for a company in exchange for remuneration;

2. A person agrees, expressly or impliedly, to subject themselves to the control of the company to a sufficient degree to make the company their “master,” including control over task performance, means, and timing;

3. The other contractual provisions are consistent with ordinary contracts of service.

On the facts, the Court found that the driver had enough freedom in carrying out his contractual obligations. He was free to decide the vehicle, labour, fuel, and other requirements in performing the task, which made him an independent contractor and not an employee. The Court of Appeal overturned the minister’s determination that the driver was an employee under a contract of service, which would have required Ready Mixed Concrete to pay National Insurance contributions.

Key Judicial Statements: Mackenna J outlined that, for a contract of service to exist, three conditions generally need to be satisfied:

1. The servant agrees to provide their own work and skill in return for remuneration;

2. The servant agrees, expressly or impliedly, to be under the control of the employer to a sufficient extent to make them the master;

3. The other provisions of the contract must be consistent with it being a contract of service.

Mackenna J further stated that “control” (condition 2) is not always necessary. The real test is whether the overall distribution of rights and duties suggests a master-servant relationship, taking into account the manner of service and the parties' investment or risk. Here, the Court concluded that no such relationship existed, meaning the driver was not an employee.

💡 Leveluplaw: highlights that the labels used in contracts (such as "independent contractor") are not decisive in determining employment status. What matters is the substance of the contractual rights and duties, particularly the extent of control the company exercises over the worker and the level of autonomy the worker maintains.