Atholl House Productions Limited v The Commissioners for HMRC

“[the] court’s task is to ascertain the objective meaning of the language which the parties have chosen to express their agreement”;

this is not a literalist exercise focused solely on a parsing of the wording of the particular clause. Instead, the court needs to consider the contract as a whole and, depending on the nature, formality and quality of the drafting in the contract, give more or less weight to elements of the wider context in reaching its view as to that objective meaning;

where there are rival meanings, the court can give weight to the implications of the alternative constructions “by reaching a view as to which as to which construction is more consistent with business common sense”;

in striking a balance between the indications given by the language and the implications of the competing constructions, the court must consider the quality of the drafting of the clause; and

the court must be alive to the possibility that:

the grounds of appeal by the Respondents related solely to the manner in which the Upper Tribunal in that case had approached Stage 3; and

the “Respondent’s notice” served by the taxpayer related solely to:

in determining the terms of the hypothetical contract, Sections 49(1)(c) and 49(4) of the ITEPA 2003 refer to the “circumstances” in which the services are provided and stipulate that those “circumstances” “include the terms on which the services are provided, having regard to the terms of the contracts forming part of the arrangements under which the services are provided”;

it follows that the terms of the actual contracts forming part of the arrangements will generally be highly material in determining the terms of the hypothetical contract but will not be determinative of them;

whereas the terms of the actual contracts should be determined by reference to the ordinary canons of contractual interpretation, those ordinary canons will not, of themselves, determine the contents of the hypothetical contract;

in addition, it is not necessary to defer all analysis of the hypothetical contract at Stage 2 until all of the terms of the actual contracts have been comprehensively determined at Stage 1. It might often be appropriate, in the iterative way identified by Lord Hodge JSC in Arnold v. Britten [2015] UKSC (“Arnold”) at paragraph [77], to construe the terms of the actual contracts whilst considering at the same time how the actual contracts would work in determining the content of the hypothetical contract;

when determining the terms of an actual contract, the parties’ subjective beliefs as to the meaning of the contract or ignorance of the contract’s terms will typically be irrelevant. Similarly, unless giving rise to a variation or some form of waiver or estoppel, the manner in which the actual contract is performed is typically irrelevant to its construction. However, those matters should not be regarded as being necessarily irrelevant in determining the terms of the hypothetical contract and are, in the view of the Upper Tribunal, matters that can appropriately be taken into account. This is because they are part of the “circumstances” which are required to be taken into account in determining the terms of the hypothetical contract. The Upper Tribunal observed that:

“The process of synthesising the hypothetical contract out of the actual contracts in fact agreed involves additional considerations, and not merely the usual processes of interpretation.”

As such, the parties’ subjective beliefs and conduct are relevant circumstances which need to be considered in determining the terms of the hypothetical contract at Stage 2, even if they do not affect the identification of the terms of the actual contracts at Stage 1;

it is not correct to construct the hypothetical contract simply by reference to the understanding by one of the parties of the terms of the actual contracts. That would be to place too much weight on matters not necessarily relevant to the construction of the hypothetical contract. Instead, the appropriate way to approach the task of constructing the terms of the hypothetical contract is to conduct a “counterfactual” exercise - in other words, to consider what the terms of the contract would have been if the client had contracted directly with the worker. In doing so, where the intermediary is under the control of the worker, the terms of the actual contract between the intermediary and the client is a safe starting point because that is what the client agreed with the intermediary and what the intermediary (which is controlled by the worker) agreed with the client;

in many cases, the worker and the client will have enjoyed a harmonious working relationship in which the precise terms of the actual contracts do not feature prominently as there will be no need for either party to insist on enforcing the strict terms of the actual contracts between the parties. It is therefore helpful in constructing the terms of the hypothetical contract to consider what might have happened in the event of certain hypothetical potential “flashpoints” - which is to say, postulating circumstances where one of the parties might have wished to stand on its rights as set out in the actual contracts against the wishes of the other party and then to consider what might then have occurred; and

these principles are as applicable in the case of the relevant national insurance legislation as they are in the case of the income tax legislation notwithstanding the fact that Regulation 6 in the 2000 Regulations does not contain an equivalent to Section 49(4) of the ITEPA 2003 - which expressly directs attention to the terms of the actual contracts - because the provisions deal with similar and overlapping subject matter.

there must be mutuality of obligations;

the putative employer must enjoy a degree of control over the putative employee; and

the other terms of the contract must be consistent with its being an employment contract.

determine the terms of the actual contracts between the BBC and the Appellant - Stage 1;

determine the terms of the hypothetical contracts between the BBC and Ms Adams in view of the terms of the actual contracts described in paragraph 32(1) above and the circumstances in which those contracts came to exist - Stage 2; and

apply the three limbs of the test laid down by MacKenna J in RMC - Stage 3A, Stage 3B and Stage 3C.

began by saying that Stage 3A and Stage 3B had been finally determined by the Upper Tribunal but that Stage 3C remained to be determined - see paragraph [163];

then said that Stage 3C had yet to be considered on a correct basis - see paragraph [164];

then said that the Court of Appeal did not feel confident enough about reaching the right conclusion on the facts to re-make the decision - see paragraph [165]; and

finally, said that, as a result, the case needed to be remitted and that it should be remitted on the basis that the decision should be re-made on the basis of our findings of fact in the original decision, as corrected by the Upper Tribunal in Atholl House UT, but that he would, however, give the parties the opportunity to argue that further facts should be found and, if so, to apply to produce new evidence - see paragraph [166].

copies of two written agreements between the BBC and the Appellant – one relating to the period from 16 March 2015 to 31 March 2016 and the other relating to the period from 4 April 2016 to 31 March 2017. Each written agreement related to the presentation of 160 programmes during the period specified by the written agreement and the parties informed us at the original hearing that both written agreements were on the same terms. Accordingly, for the purposes of this decision, we make no distinction between the terms of the two written agreements;

copies of correspondence between the Respondents and Mr Zanettos dated 29 July 2015 and 26 October 2015 in which a number of questions were raised by the Respondents in relation to the relationship of the BBC and Ms Adams and answers were provided by Mr Zanettos (the “Correspondence”); and

two notes - one by the Respondents and the other by the BBC - of a meeting held between the Respondents and three representatives of the BBC, including Mr Paterson, on 27 September 2016.

it specified that the Appellant was to provide the services of Ms Adams as presenter of the Kaye Adams Programme for a minimum commitment of 160 programmes (the “Minimum Commitment”) during the term of the agreement (Part A and clauses 3 and 6.1 of Part B);

it specified that, in return for the Minimum Commitment, subject to the compliance by the Appellant and Ms Adams with its and her obligations pursuant to the agreement, the BBC would pay the Appellant a minimum fee of £155,000 (the “Minimum Fee”) and that, if the BBC required Ms Adams to exceed the Minimum Commitment, then the Appellant would be entitled to invoice and be paid for the additional programmes at the rate of £968.75 per programme (clause 6.1 of Part B);

it required the execution by Ms Adams, as the contributor, of a “Contributor Guarantee” (in the form set out in Schedule 2 to Part B), pursuant to which Ms Adams confirmed that:

(Part A and clause 11.19 of Part B);

it specified that the services of Ms Adams to the BBC were not exclusive (clause 1) but that, during the term of the agreement, “the BBC will have first call on the freelance services of [Ms Adams] (subject only to any prior professional commitments of [Ms Adams] which have been confirmed to the [BBC] in writing prior to the signature hereof)” (clause 8.1 of Part B). It also provided that:

it required the Appellant to provide the freelance services of Ms Adams to the BBC as required in order to present the programme including preparation, appearing in and out of vision, creative input for content production (and revising such content as required at the Appellant’s own cost and in Ms Adams’s own time), travel as deemed necessary by the BBC, promotion of the programme and “such other services as are usually provided by a professional first class presenter” (clause 3.1 of Part B);

it required the Appellant to procure that Ms Adams would be contactable and available to provide her services throughout any “call day”, if required, attend at such times and places as the BBC deemed reasonably necessary, execute and complete the services conscientiously and “fully and willingly comply with such requests as may be made by the BBC in connection with the [services]” (clause 3.2 of Part B);

it contained an assignment by the Appellant to the BBC of all intellectual property rights associated with the services provided by Ms Adams (clause 4 of Part B) and a confirmation that Ms Adams had waived any moral rights to her contributions (clause 5 of Part B);

it specified that all fees were VAT-exclusive and would be paid monthly on completion of the relevant work (clauses 6.2 and 6.3 of Part B);

it specified that, if the Appellant failed for any reason to procure the delivery of the services by Ms Adams, the BBC would be entitled to reduce the Minimum Fee by a proportionate amount (clause 6.5 of Part B);

it specified that the Minimum Fee was inclusive of all expenses unless specific expenses were agreed with the BBC in advance of being incurred to be exceptional, that the Appellant would provide the appropriate clothing for Ms Adams to carry out the services and that the Appellant would be responsible for the care, control, security, insurance and maintenance of any equipment and materials which it or Ms Adams provided to perform the services (clause 7 of Part B);

it specified that:

(clauses 9.1 to 9.3 of Part B);

it specified that Ms Adams would:

(clause 9.4 of Part B);

it contained warranties from the Appellant that (inter alia):

and that the Appellant would indemnify the BBC for any loss which the BBC might suffer as a result of any breach of warranty or any other breach of the terms of the agreement (clauses 11 and 12 of Part B);

it provided for the BBC to have the right to terminate the agreement if the Appellant or Ms Adams committed a material or irremediable breach of the agreement or failed to remedy a remediable breach of the agreement within 14 days of receiving notice of the breach from the BBC and it specified that (inter alia) it would be a material or irremediable breach if Ms Adams “is unable personally to provide the [services] hereunder due to ongoing ill-health, injury, mental or physical disability or other substantive cause or reason” (clause 13.1 of Part B);

it specified that, if the Appellant or Ms Adams failed to provide the services in accordance with the terms of the agreement or acted in breach of clause 8.1 of Part B (as summarised in paragraph 53(4) above), then the BBC would have the discretion to give Ms Adams the option of continuing to provide the services for the balance of the term but that, if Ms Adams refused, then the BBC would not be obliged to provide any future work to her and could exclude her from the premises and, if the BBC chose to make payment to her for a certain part of the term, could prevent her from working for any other party during the payment period without the BBC’s prior written consent (clause 13.2 of Part B);

it specified that the BBC could suspend the agreement:

(clause 13.3 of Part B);

it contained an acknowledgment from both parties to the agreement that “the BBC’s editorial control of its content is final” and a statement that:

“The BBC will not be obliged to call on the [services] of [Ms Adams] or to use any of the [contributions], and will not be liable to the [Appellant] or to [Ms Adams] for any loss or damage or any failure to obtain publicity or any opportunity to enhance the reputation of [Ms Adams], as a result provided that the BBC will still be obliged to pay the [Minimum Fee] (subject to any other provisions in the [agreement] to the contrary)”,

(clause 14 of Part B);

it provided expressly that the failure of either party to the agreement to exercise or enforce any right conferred on it by the agreement “will not be deemed to be a waiver of any such right or operate so as to bar the exercise or enforcement of such right at any time thereafter” and that no omission or delay on the part of any party to the agreement in exercising any right or discretion under the agreement would “operate as a waiver by it of any such right or stop the exercise or enforcement of any such right at any time thereafter” (clauses 16.1 and 16.2 of Part B);

it precluded the Appellant from assigning or sub-contracting its rights under the agreement but stated that the Appellant “will be entitled to nominate and provide an alternative Contributor in exceptional circumstances where [Ms Adams] is not available for reasons beyond [her] reasonable control (not including suspension hereunder) subject to reasonable prior notice being given to the [BBC] and such alternative provider being deemed suitable and being approved by the [BBC] for this purpose. The terms of this [agreement] will remain in effect in relation to the substitute for the approved duration of their services” (clause 16.7 of Part B); and

it specified that no amendment to the terms of the agreement “will be valid or binding unless made by prior written [contract] between the parties and signed by them or their authorised representatives” (clause 16.7 of Part B) and that the agreement would “prevail at all times over all other terms and conditions which may purport to apply in connection with the [services], unless amended by the prior written agreement of the parties…” (clause 16.10 of Part B).

we concluded that it was not necessary to summarise the contents of either the Correspondence or the notes of the meeting held between the Respondents and the BBC on 27 September 2016 because the ground covered by the Correspondence and those notes was largely repeated in the witness evidence; and

we said that, where a specific extract from that material was pertinent to the evidence given by a witness, we would refer to it in our summary of the relevant witness’s evidence.

Ms Adams has been a freelance journalist for more than 20 years. Over that period, she has provided her services to a wide variety of media organisations, including the BBC, and she has never over that period received, from any of the organisations to whom she has provided her services, any employment-related benefits such as holiday and sick pay, maternity leave or a pension entitlement;

she was first approached by Mr Jeff Zycinski, the head of radio at BBC Scotland, in 2010 to host a morning radio phone-in and she has worked for BBC Scotland since that date although the number of weekly programmes and the duration of those programmes have fluctuated over that period and she has provided her services under a series of agreements, each of which has a term of around one year;

if she was unable to fulfil the Minimum Commitment because of her own unavailability, then the Minimum Fee would be reduced by a pro rata amount. She had not really contemplated what the position would be if her failure to fulfil the Minimum Commitment was attributable to a failure by the BBC to call on her services despite the fact that she was available. (In that regard, her answer to question 43 in the Correspondence suggested that she would have expected a similar reduction to the Minimum Fee in that instance whereas both the Respondents’ and the BBC’s notes of the meeting of 27 September 2016 between the Respondents and the BBC recorded a response to the contrary from Ms Alison Denvir of the BBC’s legal and business team, at least in relation to an earlier agreement than the ones which are at issue in the appeal;)

for each programme, she would receive a briefing note by email on the evening before the programme and would spend between 20 minutes and 2 hours during the evening working on the content and writing the script. She would then send that to the producer later in the evening so that the producer was able to put it onto the BBC’s system. This was essential to the whole team’s having access to the script whilst she was on air. In the morning, the rest of the team would be in before her arrival at around 7.15 to 7.30 and would have worked on the material during that time. There would then be a team discussion before the final content of the programme was agreed, shortly before 9.00;

whilst on air, she would have ultimate control over which callers to take, what questions to ask and what direction the show should follow although other members of the team would make suggestions in that regard;

at the end of each programme, she would spend a short time with the team debriefing on how the programme had gone and then having preliminary discussions with the team for the following day’s programme in relation to the content of that programme, before leaving the BBC at around 12.30;

as a result of her parents’ ill-health and her responsibilities to her children over the tax years in question, she had not managed to fulfil the Minimum Commitment under at least one of the two written agreements and had not been paid a proportionate part of the Minimum Fee under that agreement as a result;

neither of the written agreements had been reviewed by her agent because she saw no need to pay an agency commission in respect of them, given that her earlier agreements with the BBC had been negotiated by her agent;

during the term of one of those earlier agreements (in 2011), she had put out a tweet from her own personal twitter account in relation to the then London Mayor, Boris Johnson. The BBC considered that the tweet was in breach of the Standards and she was suspended for three weeks as a result. The BBC did not pay her for the programmes which she had missed during the period of her suspension;

she was very conscious of the need to maintain a high personal profile in order to maximise her income. Accordingly, she had spent a lot of time developing her own brand through her work for other media outlets, her hosting of events and awards and her social media output. She currently had around 133,000 followers. Her work on Loose Women was particularly significant in that regard because it meant that her face was recognised more widely. Accordingly, she had tended to cut back on her work for the BBC whenever she had been given an opportunity to expand her work on Loose Women. Whenever she was introduced on stage at her other engagements, she was more likely to be referred to as “Loose Women’s Kaye Adams” than as “the BBC’s Kaye Adams”;

the significance to her of her own brand development could be seen when she was criticised by certain women’s organisations for her handling of a debate on the case of Ched Evans, a footballer who had been accused of rape and was ultimately acquitted. Although the BBC did not consider that her handling of the debate amounted to a breach of the Appellant’s agreement with them, she felt that the criticism was unfair and would have a detrimental impact on her reputation if left unchallenged. Accordingly, she had, of her own initiative and at her own expense, sought to challenge the criticism by submitting a complaint to the Press Commission;

the BBC never sought to place any restrictions on her work for others and it was at all times understood by the BBC that she would continue to carry on with her other engagements without seeking the BBC’s permission. In fact, the BBC would often go out of its way to help her to fulfil her other engagements by allowing her to present her programme from an alternative location. This suited the BBC as well because the higher her national profile, the better it was for the BBC too. Having said that, in the course of her regular and ongoing discussions with other members of the team, she would often tell them what she was planning to do - not by way of seeking permission for her other work but merely to solicit their thoughts on her other engagements and to bounce ideas back and forth. She would not have felt constrained from accepting another engagement merely because she had not mentioned it to the BBC team in one of those discussions;

she did not have access to the BBC operating system when she was working from home and would therefore use her own mobile phone, computer and personal email address to communicate with the BBC during those times. In addition, on those occasions when the programme was broadcast from outside the studio and the technology provided at the relevant location was insufficient, she would use her own equipment - an iPad and a mobile phone - to present the programme;

she had been given a copy of the Guidelines when she first started to work for the BBC but she couldn’t say that she had ever read them or referred to them on any occasion. On reading them recently as a result of the present dispute, they appeared to encapsulate what she would have regarded as good practice which she would have chosen to follow in any event. She could not recall the BBC’s personnel’s ever raising with her in relation to one of her programmes the BBC’s duties under the Guidelines although, had they done so, she would have taken the matter seriously as it was not in her interests to breach the Guidelines, both in terms of her ongoing relationship with the BBC and in relation to her other engagements and her profile and brand in general;

she observed that, had she wanted to breach the Guidelines whilst on air, the BBC would have been unable to stop her as she had control of the microphone but she conceded that the BBC would then have been able to discipline her, either by suspending her (as it had done in relation to the Boris Johnson tweet) or by terminating the written agreement;

apart from the Boris Johnson-related suspension, the BBC had never sought to control the content of her social media output or her articles for newspapers. In addition, she had been an ambassador for breast cancer and children’s charities and the BBC had never sought to intervene in that;

her work for the BBC during the two tax years in question had been no different in terms of content or approach from her work for the BBC in the earlier tax years the appeal in relation to which the Respondents had now agreed not to oppose. In fact, she had at one stage in the earlier tax years been presenting her programme on the BBC for five days each week and not four. The only difference was that, in the two tax years which remained the subject of the appeal, she had done a greater percentage of her overall work for the BBC than for others. The reason for this was that, because of her father’s illness, she was keen to spend as much of her working time as possible in the Glasgow area and to reduce her travelling so that she could spend time with him in her afternoons;

she would frequently record promotions for the programme - these would generally be recorded just after she arrived at the studio in the morning and would appear on BBC Scotland TV. This was in her interests, as well as the BBC’s, and so there was no need for the BBC to compel her to do it;

she had not read the written agreements as she knew what she had agreed in her discussions with Mr Zycinski and she had worked for the BBC for a number of years already;

she accepted that the only one of the services outlined in clause 3.1 of the written agreements which could realistically be performed by a substitute might be the preparation for a programme (see clause 3.1.1). This was consistent with her response to question 54 in the Correspondence - which asked whether Ms Adams was entitled to send a replacement to carry out her work under the written agreement - to which Ms Adams had replied “Of course not”; and

notwithstanding the terms of each written agreement, she had not been asked by the BBC to complete any editorial training or to undergo a medical.

he confirmed that he was the editor in charge of the Kaye Adams Programme in the period from April 2015 until December 2016 and his description of the manner in which each day’s programme was put together was consistent with the description of that process by Ms Adams;

he reiterated the collaborative approach which was adopted by the whole team associated with the programme and said that, given that that was the case, there was no need for the editorial team ever to insist on editorial control over the programme’s content. Instead, the team, together with Ms Adams, would discuss the content of each programme and decide together on the format. Ms Adams, as an experienced journalist, was at the forefront of such discussions. Reference was made to the BBC’s note of the meeting of 27 September 2016 in which Mr Paterson had likened Ms Adams to the conductor of “her Orchestra”. That note also recorded Mr Paterson as having said at the meeting that Ms Adams was “very much a broadcaster in her own right, given that she works for others, she isn’t “BBC’s Kaye Adams”, she is a journalist who happens to work for us”;

however, when pushed to explain what would happen in the hypothetical situation where no consensus on the way forward could be reached in a particular case, he accepted that the BBC had ultimate responsibility for the content of the programme (and hence ultimate control over the editorial process);

he explained that the way in which an agreement between the BBC and a presenter like Ms Adams would arise is that there would be initial conversations between the editor of the programme - in this case, Mr Zycinski - and the presenter - in this case, Ms Adams - in which the number and content of the programmes would be agreed. In those discussions, the amount payable under the agreement would also be tentatively discussed in the light of the available budget. The agreement would then be handed over to the BBC’s legal and business affairs team to be finalised;

he confirmed that Ms Adams did not ask anyone at the BBC for permission to take on any of her other engagements but that the nature of some of those engagements would be known by him as a result of his regular conversations with Ms Adams. By way of elaborating on this, Mr Paterson said that he wouldn’t necessarily be aware about the awards ceremonies and corporate events which Ms Adams presented because information on those would not always emerge during the relevant discussions but that information about Ms Adams’s newspaper columns and TV work would generally become known to him as a result of those discussions.  However, those were relaxed exchanges in which Ms Adams happened to let him know what she was doing for organisations other than the BBC - they were not requests for permission to do the relevant work.  In addition, he would have been aware if Ms Adams had been required to apply to someone else in the organisation for permission to do other work;

he also confirmed that Ms Adams did carry out promotional activities for the programme but pointed out that it was in her interests to do so. It was not a case of her being instructed by anyone in the BBC to do so;

he confirmed that, if the BBC did not schedule programmes to the extent of the Minimum Commitment for its own reasons - as opposed to Ms Adams’s other commitments - then Ms Adams would still be entitled to receive the Minimum Fee. (As noted in paragraph 56(3) above, this was consistent with the answer given by Ms Denvir to the same question at the meeting of 27 September 2016 between the Respondents and the BBC;)

he explained that the Guidelines did not prescribe what to do in specified individual scenarios.  Instead, they set out general principles and areas which required care.  Accordingly, the Guidelines left both the relevant editorial team and the relevant presenter with considerable discretion as to how the Guidelines should be applied in any particular scenario.  The same was true of the Ofcom code;

he confirmed that, while she was presenting the programme, Ms Adams would wear BBC headphones and while she was in the studio, Ms Adams would have a BBC computer available to her and would also have access to the BBC’s messenger service so that she could communicate with the team during the show.  However, Ms Adams also had access to her own laptop and iPad which she would use both inside and outside the studio; and

he explained that there were differences in the way in which the BBC dealt with Ms Adams from the way in which it dealt with its employees.  For example, if the BBC wanted to change an employee’s job, it would have to go through a formal and clearly laid-down process whereas any change to the relationship with Ms Adams could be achieved through informal discussions with her.  Similarly, there was a process within the BBC under which employees could apply for other jobs internally once their fixed term contracts came to an end and he was not sure that that process would extend to Ms Adams. In addition, an employee was required to undertake compulsory training and was entitled to holiday and sick pay and maternity leave, which was not the case with Ms Adams.

his job was to ensure that the Guidelines were observed by the programme where applicable and that the editorial remit for the programme set by Mr Zycinski - a focus on topical issues (such as the Scottish referendum) and issues pertaining to family life - was met;

Ms Adams did not have the ability to send a replacement to do the programme instead of her.  If Ms Adams was unable to do a particular programme, then the choice of a replacement presenter would be made by the BBC and that replacement presenter would be paid separately and outside the terms of the written agreement between the BBC and the Appellant; and

Ms Adams did not have an annual review, unlike BBC employees who had regular formal appraisals.

Ms Adams testified that, in 2014, immediately prior to the tax years in question, she had fallen out of favour with ITV and her role on Loose Women had therefore been reduced. There was subsequently a change of editor and she began to be offered more work on Loose Women;

in its responses to questions which were raised with it during the course of the meeting on 27 September 2016, the BBC indicated that:

Ms Adams estimated that, during the two tax years in question, on average, approximately 40% to 50% of her working time was spent on her engagement with the BBC;

Ms Adams estimated that, during the two tax years in question, on average, approximately 50% to 70% of her gross income derived from her engagement by the BBC;

the amount of gross income received by the Appellant from the BBC in the tax years ending 5 April 2014 to 5 April 2017, both inclusive, was as follows:

the turnover of the Appellant in the financial years ending 30 June 2013 to 30 June 2016, both inclusive, was as follows:

Ms Adams testified that the BBC had never required her to do any work for the BBC other than the programmes for which she had contracted; and

Ms Adams testified that, despite the rights of first call which it held, the BBC had always gone out of its way to accommodate her other commitments and had allowed her occasionally to prioritise those other commitments over her commitments to the BBC.

the Radio Industry Guidelines published by the Respondents in 2008 (the “Radio Guidelines”);

a report by the National Audit Office into the BBC’s engagement with personal service companies (the “NAO Report”) dated 15 November 2018;

a witness statement from Mr Zycinski dated 14 June 2022; and

a witness statement from Ms Denvir dated 16 June 2022.

the contract accurately reflected the true terms and conditions and it was not simply a case of wording the contract to satisfy the above conditions; and

in practice, the actual services required of the presenter did not extend over and beyond what he or she was contractually required to do.

the hiring of “freelancers” - who were defined in the NAO Report as individuals who were not members of the BBC’s staff but might be either self-employed for tax purposes or employed for those purposes - was common practice within the media industry and gave broadcasters the flexibility to make changes quickly that reflected programming and audience needs;

prior to 2013, the BBC based its decisions as to whether a person providing services to it was employed or self-employed on its understanding of the Respondents’ guidance “and, for on-air presenters, of industry practice”. The guidance on which it relied was the Respondents’ general guidance on employment status “and media-specific guidance covering most on-air and off-air roles”;

whilst the latter set out certain specified roles which the Respondents considered to be self-employed for tax purposes, “there was a lack of clear media-specific [Respondents’] guidance for on-air television, and for radio presenters on long-term engagements”. However, the BBC considered these roles “to be self-employed for tax purposes in line with its understanding of case law and industry practice at the time”;

in the early 2000s, when the BBC was certain that presenters were self-employed, it had no preference as to whether it engaged presenters directly as sole traders or through personal service companies but, once some uncertainties about that arose following investigations conducted by the Respondents in 2004 and then 2007, it introduced policies requiring presenters engaged in longer-term or higher value roles - which is to say longer than 6 months or more than £10,000 per annum - to contract through personal service companies unless they produced a written determination from the Respondents stipulating that they were self-employed for tax purposes or met some other specific criteria, because that reduced the risk to the BBC of a finding that the presenters had employment status; and

from November 2013, the BBC began to use a new test - developed with Deloitte in liaison with the Respondents - for assessing the employment status of its television and radio news presenters while continuing to use the Radio Guidelines for non-news radio presenters. It also adopted the policy of offering those television and radio news presenters whom it considered, following the application of the above test, to be employed the option of one of two on-air talent employment contracts.

he was head of radio at BBC Scotland at the time of Ms Adams’s engagement and, in that capacity, was responsible for the strategy of the station and had direct control over non-news and non-sport programmes. Talent recruitment and management was an important part of his role but he was not particularly familiar with the contractual issues involved because, once he had reached agreement orally with an individual, he would hand things on to the contracts department to deal with the relevant paperwork;

the move towards having more presenters on a self-employed basis started with the introduction of a regime in 1993 to enable producers to select their own talent and resources. This encouraged producers to look outside the BBC for talent and, by 2005, when he had become head of radio at BBC Scotland, the culture shift was already well-ingrained;

whilst he did not have the necessary expertise to distinguish between individuals who were self-employed for tax purposes and individuals who were employees for those purposes, he did maintain a distinction in his own mind between people whom he called “freelancers” - individuals who worked for other organisations as well as the BBC - and people whom he called “staff” - individuals who worked exclusively for the BBC. Whilst he accepted that the BBC had part-time employees on the staff, he wouldn’t describe such people as “freelancers” because they tended not to do work for other organisations in addition to the BBC but were instead part-time because of their other commitments, such as family or caring responsibilities;

in keeping with the practice at commercial radio stations, the BBC tended to enter into employment contracts with its news presenters and to enter into contracts for services with its non-news presenters. The presenters who had employment contracts had the usual employee rights, which meant that they were more difficult to remove than self-employed presenters in a case of poor performance. Even in the case of a longer-term contract such as the contracts in the present case, the key point was that the contract was for a fixed term and therefore it was easier for the BBC to make a change in the event that a programme wasn’t as successful as had been hoped. There was no need to find alternative work for the relevant individual to do as it was in the case of staff. A staff member had to be paid indefinitely even if there was no work to do;

however, he accepted that the statement made above needed to be qualified by what was outlined in the NAO Report. In that regard:

allowing self-employed presenters to maintain other interests benefited the BBC because it lessened the blow when changes to the schedule had to be made. For that reason, it was always more desirable to engage non-news presenters on a self-employed basis;

those other interests were also beneficial to the BBC as it enabled the relevant presenter to increase his or her profile and that was helpful in expanding the BBC’s audience. In the present case, ensuring that the programme on which Ms Adams was engaged carried her name was designed to associate Ms Adams with the BBC in the minds of the listeners;

in the case of a new programme, the aim would be to try to ensure that the relevant presenter was available frequently in the initial months in order to establish a regular pattern. After that initial period, it was easier to be more flexible about the presenter’s absences;

after he took over as head of radio at BBC Scotland, he was keen to increase the audience by opening up the schedule to new ideas and formats and conducting audience research and what became clear was that very few of the existing presenters were known to non-listeners. As part of the audience research, people were asked for the names of well-known personalities whom they would like to hear on BBC Scotland and Ms Adams was one of the names put forward. Ms Adams was an attractive proposition because, in addition to addressing the gender imbalance of presenters on the station, she had a high profile with listeners in Scotland through her work on Scottish Women for STV and Loose Women for ITV;

a staff presenter was required to work normal eight-hour day shifts and this time constraint would have precluded the presenter from doing other work outside the BBC. He accepted that the amount of work required by Ms Adams under the relevant contracts was material. Taking into account the programme itself, the preparation for the programme and the debriefing following the programme, it might well involve around six hours on each day that the programme went out. In this case, the programme went out on four days a week, Monday to Thursday, so that the overall time commitment was substantial. However, he did not think that this would prevent Ms Adams from taking on another substantial presenting role over the same period. Presenters realised that they had a short shelf-life and tried to fit in as much work as they could;

his budget constraints meant that, in any event, he would not have been able to offer Ms Adams a contract with a larger Minimum Commitment. As for the Minimum Commitment that was agreed, he did not expect that Ms Adams would be available for as many as 160 programmes per annum but he was not too concerned about that as, if she did not get to that level, he would have been able to save some money. The main point was to ensure that she would be available as much as possible for the first three months in order to make the audience aware that this was her new format. After that, gaps in her availability would not be too troublesome;

he had no reason to doubt Ms Adams’s evidence at the original hearing to the effect that she had spent 40% to 50% of her working time over the two tax years in question in working for the BBC;

the written agreement which commenced in March 2015 interrupted the term of another agreement which had commenced in September 2014 and involved a number of changes. Under the earlier agreement, the programme ran for just one hour, the name of the programme was “Morning Call”, the minimum commitment was 46 programmes, the minimum contract fee was £27,600 and the fee per programme for each additional programme was around £600. In contrast, under the written agreement commencing in March 2015 which replaced it, the programme ran for three hours, the name of the programme was the “Kaye Adams Programme”, the Minimum Commitment was 160 programmes, the Minimum Fee was £155,000 and the fee per programme for each additional programme was £968.75. The format of the programme changed from a phone-in - where Ms Adams could essentially just respond to callers - to something which required much more preparation time and challenges - for example, in dealing with guests. The purpose underlying the change in format was to take advantage of the post-independence referendum up-tick in interest in more serious matters such as politics, health, education and current affairs. The programme retained its name even on the days when Ms Adams did not present it;

even at his very first meeting with Ms Adams many years previously, he was aware that her availability would be an issue for the BBC as she had many other irons in the fire. At the time of the contract in March 2015, he was aware that Ms Adams was back in favour with ITV and of her commitment to Loose Women which he understood would be a greater priority for Ms Adams because of its higher profile. Although Loose Women was the only commitment of which he was definitely aware in March 2015, he was also aware at that point that, in addition to that commitment, Ms Adams had opportunities to write newspaper columns and was talking about writing a book. However, he viewed the other commitments in positive terms because it was important that Ms Adams should maintain a profile outside BBC Scotland if BBC Scotland was to attract new listeners. Her profile with the wider audience was a key reason for recruiting her and it was not simply her skills as a journalist and presenter. Therefore, he knew that he would have to be flexible in allowing Ms Adams time away to take advantage of other media opportunities;

he did not have any knowledge about the precise terms of Ms Adams’s other engagements or even whether that work was carried out as an employee or as an independent contractor. Such terms tended to be commercially sensitive. All he knew was that she had a portfolio of work other than her work for the BBC and he assumed that she carried out that work as an independent contractor;

although he could not recall the precise timing, he was aware at or around the time of the March 2015 contract that Ms Adams was looking to spend more time in Glasgow because of her parents’ ill-health and that this might affect her availability to do other work;

by the time of both the March 2015 contract and the March 2016 contract, Ms Adams had been presenting on BBC Scotland for some time and was well known for BBC radio presenting. There was a picture of her in the foyer of BBC Scotland alongside other well-known BBC presenters;

he would not have wanted Ms Adams to become a member of staff for the reasons outlined above in relation to flexibility on both sides. Had she become a staff presenter, she would have been unable to carry on the other work which gave her the profile that he wanted to attract the wider audience to BBC Scotland;

he did not regard Ms Adams as being part of the BBC except during the periods when she was on-air. He considered that, in the minds of the public, she was much more associated with Loose Women than with the BBC. Whilst he wanted her to be associated with the BBC in the minds of the public, the internal perception of her within the BBC was that she was an external presenter;

in addition, had the intention been to make her a member of staff, human resources procedures within the BBC would have required the presenter role to have been advertised both internally and externally. He doubted that Ms Adams would have been prepared to go through the interview process and there was always the chance that the interview panel might have preferred another candidate;

from the very beginning, he was keen to give Ms Adams as much creative control and input as possible. Programmes were shaped around her ideas and the relationship was co-operative and not confrontational. If there was ever an issue to resolve, he or Mr Paterson would meet Ms Adams for coffee and resolve the issue; and

Ms Adams’s work schedule with Radio Scotland evolved over time as a result of the needs of the schedule and Ms Adams’s availability.

at the time when the written agreements were executed, she was a senior legal and business affairs manager at the BBC and part of her responsibilities included processing the contracts between the BBC and its contributors (including presenters);

in the course of those responsibilities, she had been involved in the process leading up to the execution of the written agreements. Her role was twofold. First, she provided background advice to Mr Zycinski when he did his headline negotiations with Ms Adams as to the main contract terms - for example, the nature of the programme, the length of the programme, the Minimum Commitment and the Minimum Fee - and then, once they had shaken hands on the deal, she had been responsible for documenting it;

contracts for contributors were in a standard form and the detailed terms and conditions were generally not reviewed. There were different contract types and it was largely a case of selecting the correct type for execution. Even when, in a particular case, changes needed to be made to the standard form for that type, it was generally not a matter of making the change using bespoke new drafting. Instead, a term from another contract type would be inserted into the contract;

there was not generally any negotiation on the general terms of the contract. Any negotiations tended to focus on the primary commercial terms such as the ones mentioned in paragraph 67(2) above;

at the time when the written agreements were executed, custom and practice across the industry, and the widely-held view within the BBC, which she shared, was that radio presenters other than those responsible for delivering the news were self-employed. The BBC, in common with the rest of the industry at the relevant time, followed the Radio Guidelines. This indicated that presenters were self-employed as long as certain conditions were met, including where the relevant presenter was engaged on a non-exclusive basis, was paid a fee per programme (rather than a salary) and was engaged for a specific programme (with no requirement to move from task to task);

notwithstanding the BBC’s view set out above, the fact that the Radio Guidelines left some room for interpretation meant that the BBC policy was to arrange for presenters with longer-term or higher-value engagements to contract through an intermediate personal service company. A few exceptions were made to that policy but that was the policy. The contractual terms for those presenters who were engaged through personal service companies were essentially the same as the contractual terms for those presenters who were engaged directly, with the obvious differences that, in the latter case, there was no intermediate service company and, hence, no need for a letter of guarantee from the relevant presenter;

the reason for the policy described in paragraph 67(6) above was to ensure that the risk of the relevant presenter’s being treated as an employee for tax purposes would fall on the presenter’s personal service company and not on the BBC. She was not senior enough at the time to be involved in the internal processes which led to that decision, and she did not know why the uncertainty arose, but she surmised that, despite the terms of the Radio Guidelines, the terms of those contracts were perceived to involve a greater commitment on the part of the relevant presenter to the BBC and therefore to give rise to a risk that the relevant presenter might fall to be treated for tax purposes as an employee and the BBC, as a publicly-funded organisation, would not have been prepared to take that risk;

she accepted that, by requiring the relevant presenter to contract through a personal service company, the BBC did not need to decide for itself whether, for tax purposes, the relevant presenter was employed or self-employed. Nevertheless, she confirmed that, in her view at the time, the engagement of Ms Adams satisfied most or all of the conditions for self-employment which were set out in the Radio Guidelines and therefore she believed that it was appropriate for Ms Adams to be treated as self-employed;

whilst she did not have the necessary expertise to distinguish between individuals who were self-employed for tax purposes and individuals who were employees for those purposes, she did maintain a distinction in her own mind between people whom she called “freelancers” and people whom she called “staff”. She agreed with the distinction drawn by Mr Zycinski between “freelancers” - individuals who worked for organisations other than the BBC in addition to their work for the BBC - and “staff” who, whether they were full-time or part-time, worked exclusively for the BBC. “Freelancers” were treated very differently from “staff”. They would not be moved from task to task but would instead be engaged for a specific purpose and they would not have fixed hours but would have more flexible working arrangements;

she added that, so far as presenters were concerned, she saw “freelancers” as being people who were considered by the BBC to be self-employed in accordance with the Radio Guidelines. She accepted that, within the BBC as a whole, there might well be “freelancers” who were employees and not self-employed, such as camera operators and other people who operated behind the scenes;

a distinguishing feature of staff members was that they tended to have fixed and predictable working hours and it would be rare for those to change. In addition:

she distinguished between freelancers and part-time staff. An individual tended to be a part-time member of staff when he or she had external commitments such as childcare or was winding down his or her career. It tended not to be because he or she had employments elsewhere. However, the BBC had a lot of part-time staff members and she could not rule out the possibility that a part-time staff member might have other employments or might have slightly more flexible working hours;

she accepted that, at the time when the written agreements were executed, there were categories of contract in addition to contracts for freelancers and contracts for staff. Around 2013, OATS contracts, and the related “On-Air Talent - Benefits” contracts (“OATB contracts” and, together with OATS contracts, “OAT contracts”) had been devised for news and current affairs presenters. That was because the BBC wished to impose significantly greater restrictions on the external activities of news reporters and journalists. The main difference between OATS contracts and OATB contracts lay in the level of benefits which they offered to the relevant individual. OATS contracts provided for only statutory employment benefits, were terminable on minimum statutory notice and were not subject to collective bargaining with the unions. She could not recall whether OATB contracts were also terminable on minimum statutory notice. Both categories of OAT contract:

there was not a significant difference between the benefits available under an OATB contract and the benefits available to staff and many of the individuals who had originally had OATB contracts subsequently became members of staff. However, OATS contracts carried significantly lower benefits than OATB contracts and staff contracts;

the restrictions on work for other organisations which were placed on individuals who were staff were greater than the restrictions on such work placed on individuals who were on OAT contracts;

she did not consider individuals who were on OAT contracts to be “staff” but she accepted that she also did not think of those individuals as “freelancers”;

at the time when the BBC introduced OAT contracts, there had been a general review of all of the BBC’s presenters who might be considered to be news or current affairs presenters. Of particular interest in the course of that review were journalists like Ms Adams, whose programme followed the news programme in the morning. She recalled discussing Ms Adams’s status with Mr Zycinski in the course of that review and that they had agreed that:

at the time of the relevant contracts between the BBC and the Appellant, the BBC were aware of Ms Adams’s other engagements on Loose Women with ITV, as a paper reviewer for Sky TV and for various charities and she understood that Mr Paterson had confirmed in writing to Ms Adams that those engagements were not in conflict with her engagement by the BBC and would require no further discussion. In addition, without knowing the specific details, she was also vaguely aware at that time that Ms Adams worked as a journalist for various newspapers and was looking for other work. The market for engaging presenters for key slots was competitive and the BBC had to be flexible in accommodating the other engagements of the relevant presenter - for example, by amending its production schedule. The BBC considered Ms Adams’s other engagements to be beneficial to the BBC because they enhanced her brand and would attract an audience and so it encouraged Ms Adams to accept those other engagements. There would have been an ongoing conversation between Ms Adams and Mr Paterson and/or Mr Zycinski during the terms of Ms Adams’s engagement as to the other work which Ms Adams was doing;

in fact, on at least one occasion, the BBC had arranged for Ms Adams to record her programme elsewhere in the UK to accommodate her other engagements. In addition, the BBC would occasionally flex the topic to be covered on the Kaye Adams Programme so as not to create an overlap with Ms Adams’s other work. For example, if, on a particular weekend, Ms Adams had covered a particular topic in the course of her other work, then the BBC might well avoid that topic in considering the subject matter of the Kaye Adams Programme the following week. It was always a case of balancing the desire to have Ms Adams on air as much as possible and facilitating the other commitments which would be beneficial to the BBC;

there was a photograph of Ms Adams, along with other high-profile presenters and actors who worked on BBC Scotland, in the foyer of the BBC Scotland building, with the aim of showcasing the wealth of programming which BBC Scotland was making;

she accepted that she had no knowledge of the terms of Ms Adams’s other engagements but she assumed from her knowledge of the way that the media industry operated in general that those other engagements were on a self-employed basis; and

she confirmed that:

the terms of the relevant written agreement, as summarised in paragraph 53 above, were known or reasonably available to each of Ms Adams, Mr Zycinski and Ms Denvir, who were the individuals representing the parties to the relevant written agreement (together referred to in the rest of this decision as the “relevant individuals”);

the terms of the relevant Radio Guidelines, as summarised in paragraphs 62 to 64 above, were known or reasonably available to each of the relevant individuals;

it was known or reasonably available to each of the relevant individuals that:

the amount of income received by the Appellant from the BBC in each tax year ending prior to the date when the relevant written agreement was executed was known or reasonably available to each of the relevant individuals;

the turnover of the Appellant in each of its financial years for which accounts had been produced and lodged at Companies House prior to the time when the relevant written agreement was executed was known or reasonably available to each of the relevant individuals;

the fact that, in the two years preceding the execution of the first written agreement, the percentage of Ms Adams’s overall working time which was devoted to the BBC was lower than it was expected to be under the relevant written agreement was known or reasonably available to each of the relevant individuals;

the fact that custom and practice within the industry as a whole was for presenters of programmes such as Ms Adams, who satisfied most or all of the conditions for self-employment which were set out in the Radio Guidelines, to be regarded as self-employed was known or reasonably available to each of the relevant individuals;

each of the relevant individuals believed that:

As regards this point, we find that, although the fact that Ms Adams was engaged through the Appellant meant that any risk that she might fall to be treated as an employee of the BBC did not fall on the BBC, neither Mr Zycinski nor Ms Denvir was relying on that fact. They genuinely believed that Ms Adams satisfied most or all of the conditions for self-employment which were set out in the Radio Guidelines and was not an employee of the BBC; and

it was known or reasonably available to each of the relevant individuals that Ms Adams’s work for the BBC pursuant to the relevant written agreement was going to involve a considerable commitment in terms of time and take up a considerable part of Ms Adams’s overall working time over the period in which the relevant written agreement was on foot.

There are two aspects to this question - the level of commitment in terms of time which Ms Adams’s engagement was expected to involve as at the date when the relevant written agreement was executed and the percentage of Ms Adams’s overall working time which that commitment was expected to take up as at that date.

As regards the first of those, the precise extent of Ms Adams’s commitment resulting from the Kaye Adams Programme would certainly have been known or reasonably available to the relevant individuals by the time that the second written agreement was executed but, even at the time when the first written agreement was executed, all three of the relevant individuals would have known that, on each day on which she presented a programme, a significant part of Ms Adams’s working day was going to be taken up with the programme. Exactly how many hours in the working day would have been expected to be involved in the making of each show is slightly unclear and no doubt it varied according to the content of a particular show and how much preparation time and debriefing time were required. However, it seems to us that an estimate of six to seven hours in the working day for each show - which is the one suggested by the Respondents based on the evidence summarised above - is entirely realistic.

As regards the second of the two questions - the percentage of Ms Adams’s overall working time which her engagement by the BBC was expected to take up - there was considerable dispute at the remitted hearing as to what would have been known or reasonably available to the relevant individuals in relation to that subject at the time when each written agreement was executed.

Mr Gordon pointed out that Ms Adams’s uncontested evidence at the original hearing was that:

Mr Tolley KC said that, given the significant time commitment required for the making of each show described above and the fact that it was known that Ms Adams wanted to spend time looking after her parents, Ms Adams’s estimate described in paragraph 75(9)(b) above looked like an under-estimate. However, he did not seek to recall Ms Adams to cross-examine her on that evidence.

Given that this exercise is one which must necessarily be conducted by reference to what was known or reasonably available to each of the relevant individuals at the time when each written agreement was executed, we do not see that there is much to be gained from debating the accuracy of Ms Adams’s percentages with the benefit of hindsight. However, in the light of the fact that:

we are inclined to accept that, despite the expected impact on Ms Adams’s overall working time of her caring responsibilities, it would have been known or reasonably available to each of the relevant individuals at the time when each written agreement was executed that, over the course of the relevant written agreement, roughly half of Ms Adams’s working time was going to be spent on her engagement for the BBC.

Ms Adams had, over her professional career, tended to carry on her profession as an independent contractor rather than as an employee; and

Ms Adams’s activities as an independent contractor included activities which were similar to those which she was to perform for the BBC pursuant to the relevant written agreement.

staff contracts - these were for individuals who were regarded as being BBC staff. They carried the highest level of benefits but imposed the greatest level of restrictions on work for organisations other than the BBC;

OATB contracts - these were for news and current affairs presenters. In comparison to staff contracts, they imposed a lower level of restrictions on work for organisations other than the BBC but carried a slightly lower level of benefits;

OATS contracts - these were also for news and current affairs presenters. They imposed the same level of restrictions on work for organisations other than the BBC as OATB contracts but carried a lower level of benefits than those contracts;

freelance contracts without an intermediary - these were for individuals who were perceived by the BBC to be self-employed freelancers and whose terms of engagement fell beneath thresholds referred to in paragraph 75(3)(a) above; and

freelance contracts with an intermediary - these were for individuals who were perceived by the BBC to be self-employed freelancers but whose terms of engagement fell at or above the thresholds referred to in paragraph 75(3)(a) above and were therefore considered by the BBC to be at risk of being treated as employees,

the parties stipulated expressly in the written agreements that the written agreements were a complete record of the terms of their agreement; and

the evidence did not suggest that any modification was required to be made to those terms by reference to the principles set out in Autoclenz.

one party’s subjective views as to the terms of the actual contracts; and

the conduct of the parties in the performance of the actual contracts,

the evidence did not support the conclusion that the BBC would have declined altogether from exercising its rights under the actual contracts to restrict Ms Adams’s other engagements or that, had the BBC done so, Ms Adams would have resisted and forced the BBC to litigate and that therefore those rights should form part of the hypothetical contracts - see Atholl House UT at paragraphs [57] to [62] and [70(1)];

the evidence supported the conclusion that the BBC’s rights of “first call” over Ms Adams’s services under the hypothetical contracts were slightly more restricted than as set out in the actual contracts. It said that, under the hypothetical contracts:

In short, the Upper Tribunal held that the hypothetical contracts would have allowed Ms Adams some latitude to fulfil other engagements but that that latitude would not have been unlimited and the BBC would have taken action under the hypothetical contracts to exercise its rights of “first call” in certain circumstances - see Atholl House UT at paragraphs [63] to [67] and [70(2)]; and

the evidence supported the conclusion that the BBC would have enforced its rights to require Ms Adams to attend at such times and places as it deemed reasonably necessary, with the question of what attendance was “reasonable” to be determined so as to give Ms Adams a reasonable opportunity to undertake other appropriate non-BBC engagements - see Atholl House UT at paragraphs [68] and [70(4)].

each of the hypothetical contracts would have provided for Ms Adams to present a minimum of 160 shows over a period of one year - see Atholl House UT at paragraphs [69(1)] and [70(3)];

the hypothetical contracts would have required Ms Adams to adhere to the BBC’s editorial policies from time to time and to Ofcom guidelines - see Atholl House UT at paragraphs [69(2)] and [70(5)];

the hypothetical contracts would have contained the terms described in paragraph [102] of our original decision (to the extent not inconsistent with the conclusions set out in paragraphs 87(1) to 87(3) above). Those were that:

- see Atholl House UT at paragraph [70].

the right of substitution was “quite realistic: it operated in limited “exceptional circumstances” and could only be invoked on prior notice to the BBC and in circumstances where the BBC was happy with the substitute being proposed”; and

Ms Adams’s testimony to the effect that she was not entitled to send a substitute simply demonstrated that she did not know all of the terms of the actual contracts (see Atholl House UT at paragraph [49(4)]).

the Upper Tribunal held that the right of substitution was included in the terms of the actual contracts; and

the Upper Tribunal considered the right to be realistic,

the focus of the hearing before it was Stage 3C, which was the basis for the Respondents’ appeal; and

whilst it did address the Stage 1 question of whether Autoclenz played any role in the construction of the actual contracts - because that was the basis for the “Respondent’s notice” - having upheld the Upper Tribunal’s conclusion to the effect that Autoclenz had no relevance to that stage, it did not comment on how the Upper Tribunal had reached its conclusions in relation to Stage 2 on the basis of its conclusions in relation to Stage 1.

we do have freedom to reach different conclusions in relation to each of Stage 1 and Stage 2 but only insofar as those conclusions are relevant to Stage 3C, which is the only stage that we are required to address in these proceedings; and

we do not have the freedom to reach different conclusions in relation to each of Stage 1 and Stage 2 insofar as those conclusions are relevant to either of Stage 3A or Stage 3B

the Court of Appeal decision to the effect that Autoclenz cannot apply; and

the principles set out by the Supreme Court in Wood at paragraphs [10] and [11],

Stage 3A - mutuality of obligations;

Stage 3B - control; and

Stage 3C - the other terms of the hypothetical contracts and the circumstances in which the hypothetical contracts arose.

there are two aspects to Stage 3A. The first relates to the nature of the putative employer’s obligations - the putative employer limb of Stage 3A - and the second relates to the nature of the putative employee’s obligations - the putative employee limb of Stage 3A;

as regards the putative employer limb of Stage 3A, the case law establishes that, in order for this limb to be satisfied, the putative employer must either be obliged under the hypothetical contract to provide work to the putative employee or obliged under the hypothetical contract to pay a retainer to the putative employee - see Clark v. Oxfordshire Health Authority [1998] IRLR 125 (“Clark”) at paragraph [41], Usetech Limited v. Young [2004] TC 811 at paragraph [64] and Atholl House CA at paragraph [73]. In this regard, it is important to note the distinction between:

In the former case, the obligation on the part of the putative employer to pay the retainer is sufficient to satisfy the putative employer limb of Stage 3A - see Turner v. Sawdon & Co [1901] 2 KB 653 (CA) - whereas, in the latter case, the absence of the obligation to provide work prevents that from being the case - see Devonauld v. Rosser & Sons [1906] 2 KB 729 and Professional Game Match Officials Limited v. The Commissioners for Her Majesty’s Revenue and Customs [2021] STC 1956 (“PGMOL”). Sir David Richards highlighted this distinction in Atholl House CA at paragraphs [73] and [74];

as regards the putative employee limb of Stage 3A, MacKenna J in RMC said that, in order to satisfy this limb, the putative employee “must be obliged to provide his own work and skill. Freedom to do a job by one’s own hands or by another’s is inconsistent with a contract of service, though a limited or occasional power of delegation may be”.

However, subsequent case law has more fully explored the question of when the putative employee’s right to substitute the services of another person for the putative employee’s own services can be seen as preventing this limb of Stage 3A from being satisfied.

In Pimlico Plumbers Limited v. Smith [2018] ICR 1511 (“Pimlico Plumbers”), the Supreme Court addressed the question of whether, assuming that the putative employee (a plumber) had a contractual right as against the putative employer to arrange for a particular job to be done by another plumber who also did work for the putative employer, that contractual right was incompatible with an obligation of personal performance on the part of the putative employee and hence negated the existence of a contract of service between the putative employer and the putative employee. The Supreme Court concluded that the appropriate way to approach this issue was to consider whether the “dominant feature” of the contract in question remained one of personal performance on the part of the putative employee.

In Pimlico Plumbers itself, the Supreme Court focused on two particular aspects of the facts in that case, namely:

and concluded that the “dominant feature” of the contract in that case was one of personal performance. The contract was to be contrasted with “a situation in which the other party is uninterested in the identity of the substitute, provided only that the work gets done” (see Pimlico Plumbers at paragraph [34]).

The “dominant feature” test set out in Pimlico Plumbers was applied by the Upper Tribunal in Northern Light Solutions Limited v. The Commissioners for Her Majesty’s Revenue and Customs [2021] UKUT 134 (TCC), a case relating to the IR35 legislation. In that case, it had been held at first instance that the hypothetical contract included a right on the part of the putative employee to offer a substitute which the putative employer could refuse as long as it acted reasonably in so doing. The Upper Tribunal held that, assuming that the First-tier Tribunal had been right to conclude that the hypothetical contract included a term to that effect, it was unlikely, in practice, that the putative employee would be able to offer a substitute who met the requirements for the right experience and qualifications whom the putative employer, acting reasonably, would accept. That was because it was clear from the facts in that case that the putative employer particularly valued the putative employee for his specialist expertise and familiarity with the way in which the putative employer operated. That was sufficient to show that the “dominant feature” of the hypothetical contract was personal performance by the putative employee.

The “dominant feature” test set out in Pimlico Plumbers was also considered by the Court of Appeal in Stuart Delivery Limited v. Warren Augustine [2021] EWCA Civ 1514 (“Stuart”). In that case, the putative employee (a courier) did not have a right of substitution as such. The courier could give up slots that he or she had previously accepted provided that another courier who worked for the same putative employer was able and willing to take the slot. In the Court of Appeal in Pimlico Plumbers, Sir Terence Etherton MR had set out what he saw as five basic principles which could be derived from the prior case law as to when a right of substitution would or would not negate the obligation of personal performance and the lower courts in Stuart had considered whether the facts in Stuart fell within the fifth of those principles.

However, the Court of Appeal in Stuart rejected that approach. It held that it was unhelpful to try to impose rigid rules based on the facts of prior cases as to when a right of substitution would or would not negate the existence of an obligation of personal performance. Instead, each case needed to be considered on the basis of its own facts and in the light of the injunction by the Supreme Court in Pimlico Plumbers to consider whether the “dominant feature” of the contract in question was one of personal performance (see Stuart at paragraphs [47] to [58]). In so doing, it was necessary to consider “whether the nature and degree of any fetter on the right or ability to appoint a substitute ...was inconsistent with any obligation of personal performance” (see Stuart at paragraph [55]). It concluded that, on the facts in that case, the limited right or ability of the courier to give up a slot was not sufficient to remove from the courier the personal obligation to perform his work personally for the putative employer and the facts were analogous to those in Pimlico Plumbers.

did not form part of the actual contract to which that written agreement gave rise; and

therefore also did not form part of the relevant hypothetical contract.

under the terms of the hypothetical contracts, the right of Ms Adams to provide a substitute to provide the services was heavily circumscribed. It was a right to provide an alternative only “in exceptional circumstances” where Ms Adams was not available for reasons beyond her control (other than because she was suspended) and it was subject to her giving the BBC reasonable prior notice and to the specified alternative’s being deemed suitable and approved by the BBC. The very limited nature of the right to propose a substitute serves to emphasise the importance of the obligation to provide the services personally. The First-tier Tribunal made a similar observation in Paya Limited and others v. The Commissioners for Her Majesty’s Revenue and Customs [2019] UKFTT 583 (TC) at paragraph [616] and in Alan Parry Productions Limited v. The Commissioners for Her Majesty’s Revenue and Customs [2022] UKFTT 194 (TC) (Parry”) at paragraph [115(1)];

in addition, the hypothetical contracts provided that it would be a material or irremediable breach and justify termination of the hypothetical contracts if Ms Adams were to be “unable personally to provide the [services] hereunder due to ongoing ill-health, injury, mental or physical disability or other substantive cause or reason” (see clause 13.1 of Part B of each written agreement). This again served to show how important Ms Adams’s personal service was to the BBC;

the evidence of both Mr Zycinski and Ms Denvir was that the BBC entered into the written agreements with the Appellant with the aim of using Ms Adams’s brand to grow the BBC Scotland audience. The essence of each written agreement was that it was Ms Adams who was presenting the programme. That was why, at the start of the earlier of the two written agreements, in March 2015:

Each of these features demonstrated how it was Ms Adams’s reputation in the market which the BBC was hoping to utilise in entering into the written agreements and that the provision of the services by her was an essential feature of the contracts;

neither Mr Hollywood nor Ms Adams considered that Ms Adams had the right to provide a substitute. Whilst their beliefs do not mean that the right of substitution should be regarded as not being a term of the hypothetical contracts - see paragraph 93 above and Atholl House UT at paragraph [55] - they do speak to the intentions and understanding of the parties and are therefore relevant to the question of whether Ms Adams’s personal service was the dominant feature of the hypothetical contracts; and

in practice, no substitute was ever suggested or provided by Ms Adams. Instead, if Ms Adams was unable to present a programme, then the BBC found a replacement, that replacement was paid separately, outside the terms of the contract between the BBC and the Appellant, and the programme presented by the replacement did not count toward the Minimum Commitment. Whilst we agree that the failure to exercise a right of substitution does not mean that that right does not exist - see Lord Clarke in Autoclenz at paragraph [19] - a failure to exercise a right of substitution is, we consider, a relevant factor in considering whether the right of substitution is the “dominant feature” of the relevant contract. So we think that the fact that, on the days when Ms Adams was unable to present the programme, the BBC sourced a replacement separately and outside the terms of the actual contracts with the Appellant is a relevant factor to consider in assessing whether the “dominant feature” of the hypothetical contracts was one of personal service by Ms Adams.

shortly stated, this test refers to the ability of the putative employer to have the power of deciding the thing to be done, the way in which it should be done, the means to be employed in doing it and the time when, and the place where, it should be done, or, as it has often been put, the “what, how, when and where”;

the case law reveals the following:

under the hypothetical contracts, the BBC controlled the “what” in that, although it did not have a general right of redeployment over Ms Adams, it was entitled to determine the form and content of the programme presented by Ms Adams. Although in practice it gave Ms Adams a high degree of autonomy in that regard, it had the right under the hypothetical contracts to insist on that form and content;

the BBC also controlled the “where” and the “when” under the hypothetical contracts. It had a qualified right of first call and it had the right to schedule the programmes which Ms Adams was to present when it chose. Although it was obliged to behave reasonably in accommodating Ms Adams’s other engagements, it could ultimately withhold its consent to those other engagements and require Ms Adams to present the programme at the time and place it desired; and

although the BBC had relatively modest control over the “how”, that is of little moment in a case such as this given the case law described in paragraph 130(2)(e) above. Ms Adams provided services of a highly-skilled and specialist nature and therefore it is not surprising that, in carrying out her work, she was not under the close supervision of the BBC. Ms Adams was required to adhere to the Guidelines and Standards and to Ofcom’s guidelines. Although there was little that the BBC could do in real time if Ms Adams breached those requirements, it did retain the right to impose sanctions for any breach retrospectively. In addition, the case law shows that such real time control is not necessary for this part of the control test to be passed. In the words of Buckley J in Montgomery at paragraph [19], the BBC had the ultimate authority or “framework of control” even though the level of knowledge and skill required to carry out the work meant that control exercised by actual supervision was impossible. The position on the “how” in this case is similar to that in Parry at paragraph [119(3)].

there has historically been some debate as to whether, once each of Stage 3A and Stage 3B has been satisfied, there has to be a clear inconsistency in the other terms of the contract to displace the conclusion of employment or whether Stage 3C should be approached on the basis that the other terms of the contract need to be consistent with employment in order to reach the conclusion of employment. However, in Atholl House CA at paragraph [75], Sir David Richards said as follows:

“Whether the third condition is one of consistency or inconsistency with a conclusion of employment strikes me as a largely arid debate. The court or tribunal will in any event have to analyse the terms of the contract and reach a conclusion whether they are consistent or inconsistent with a relationship of employment. Given that mutuality of obligation and control are necessary elements of employment, there will inevitably have to be factors pointing in the opposite direction, but it is, in my view, no more than that.”

It follows that, when it comes to Stage 3C, there is no presumption either in favour of the conclusion of employment or against the conclusion of employment;

nevertheless, the absence of any presumption either way does not mean that the court must address Stage 3C in a vacuum. The express or implied terms of the relevant contract are central to the enquiry and necessarily the starting point in that enquiry but the factors to which the court or tribunal is to have regard “are not confined only to the terms of the [relevant] contract and the effects of those terms” (see Atholl House CA at paragraph [61]). What is needed is a consideration of “the relationship between the parties recorded in the agreement in the setting of the surrounding circumstances” - see Troutbeck at paragraph [41] and also Atholl House CA at paragraphs [122] and [130];

in that regard:

turning then to the factors that have been addressed specifically in the case law, those are as follows:

the principles which are required to be adopted at Stage 3C;

the factors which the case law shows to be potentially relevant at that stage; and

the weight to be attached to those factors,

first, it meant that the Upper Tribunal wrongly focused on the activities of Ms Adams instead of the capacity in which, and the conditions under which, those activities were performed. The Court of Appeal said that it is a relevant fact, if known or reasonably available to the client, that the worker performs similar services as an independent contractor but it goes no further than that - see Atholl House CA at paragraph [128];

secondly, insofar as this approach was concerned with the terms and circumstances under which Ms Adams performed her services, it involved taking into account the terms and circumstances of Ms Adams’s other engagements, which were not in issue in the relevant proceedings, which might well have been varied themselves and which could not be assumed to be those carried on as an independent contractor, if analysed. “They cannot be held up as a gold standard against which the contracts with the BBC were to be judged. Even if the FTT had received evidence of these other engagements and the circumstances in which they were made, the approach of the UT is misguided” - see Atholl House CA at paragraph [129];

thirdly, apart from taking into account the amount of time that Ms Adams’s contractual commitment took up, the Upper Tribunal had not considered the terms of the hypothetical contracts, including those which pointed in the direction of employment, and those were “central to the enquiry”. The Upper Tribunal had “largely failed to take account of the many features of the contractual terms and their effects, some of which may be seen as pointing to an employment relationship while others may be seen as consistent with Ms Adams being an independent contractor” - see Atholl House CA at paragraphs [130] and [164];

fourthly, the Upper Tribunal had said that Ms Adams’s time commitment for the BBC over the years in question needed to be judged by reference to an appropriately broad sample of her professional career rather than simply by reference to a snapshot in the two tax years in dispute. Whilst it was correct to take into account the fact that Ms Adams had been performing as an independent contractor for the period before the tax years in dispute, if known or reasonably available to the BBC at the time when the contractual arrangements took effect:

see Atholl House CA at paragraph [131]; and

fifthly, in looking at the period before the tax years in dispute, the Upper Tribunal had wrongly assumed that the Respondents’ concession as regards the Appellant’s appeal in relation to the two tax years preceding the tax years which remained in dispute meant that the Respondents had accepted that Ms Adams was acting as an independent contractor in those earlier tax years whereas the Respondents had in fact made that concession simply for pragmatic reasons - see Atholl House CA at paragraphs [132] to [136].

it is apparent from the criticism made of the decision in Atholl House UT by the Court of Appeal that it is important for us to afford a degree of pre-eminence in the process to the terms of the hypothetical contracts, over and above other factors. Whilst it is not the case that only those terms need to be considered, they remain “central to the enquiry”. In this regard, account must be taken of both terms which point in favour of employment and terms which point in favour of self-employment. There should not be an imbalance in favour of one category of terms over the other - see Atholl House CA at paragraph [130];

however, the circumstances in which the relevant hypothetical contracts would have arisen must also be taken into account in addition to the terms. We deduce from the fact that the Court of Appeal considered that it was unable to re-make the decision and remitted the case on the basis that additional evidence as to those circumstances could be provided that the circumstances in which the hypothetical contracts would have arisen are of some importance to the outcome and that it is not simply a question of looking at the terms of the hypothetical contracts;

in weighing up the relevant factors:

- see Atholl House CA at paragraphs [66], [113], [170] and [171];

in a case where the evidence shows that the worker tends generally to be engaged on a self-employed basis, it is wrong to approach the question by asking whether the particular engagement which is being considered is an exception to that general trend. Instead, the starting point should be the terms of the hypothetical contract relating to the particular engagement in question and the knowledge that the worker’s other engagements are generally on a self-employed basis should be no more than one of the factors which is to be weighed in the balance - see Atholl House CA at paragraphs [126] to [137];

similarly, the mere fact that Stage 3A and Stage 3B have been satisfied at the point when Stage 3C is being addressed does not mean that there should be a presumption of employment at the point when the various factors are being considered. The position should be approached without any presumption either way - see Atholl HouseCA at paragraph [75]; and

our task is to determine whether, taking into account the terms and effects of the hypothetical contracts and the circumstances in which those contracts would have arisen insofar as they would have been known or were reasonably available to both parties, there would have existed an employment relationship between the BBC and Ms Adams under the hypothetical contracts.

the proportion of Ms Adams’s working time which the parties must necessarily have known at the point when the written agreements were executed that Ms Adams was going to have to spend on her engagement for the BBC pursuant to those contracts; and

the fact that, at the time when the written agreements were executed, Ms Adams had already been engaged by the BBC for some five years and that therefore there must have been an expectation that, after each written agreement expired, a further agreement was going to be offered.

time commitment - the time commitment required by each hypothetical contract was substantial. We have found as facts that, at the time when each written agreement was executed - and therefore at the time when each hypothetical contract would have arisen - it was known or reasonably available to each of the relevant individuals that Ms Adams’s work for the BBC pursuant to the relevant written agreement:

In this case, the Upper Tribunal considered that the level of time commitment involved was a significant factor although not determinative - see Atholl House UT at paragraphs [81], [114] and [115] - and the Court of Appeal did not include this in its list of errors of law which had been made by the Upper Tribunal. On the contrary, it implied that the Upper Tribunal had been right to take that approach - see Atholl House CA at paragraphs [128] to [136] and particularly paragraph [130];

extent of mutuality of obligations - the fact that the BBC was required by each hypothetical contract to pay the Minimum Fee in return for the Minimum Commitment and the fact that the dominant feature of each hypothetical contract was personal service by Ms Adams together mean that the extent of the mutuality of obligations was considerable. The only mitigating factor in this context is that there was a right of substitution which Ms Adams could have invoked in very limited circumstances but, in overall terms, we think that the extent of the mutuality of obligations in this case points in the direction of employment;

extent of control - similarly, the rights of control which were exercisable by the BBC under each hypothetical contract were significant.

We should start by reiterating that, in relation to this question, it is the extent of the rights of control, as opposed to the manner in which the rights of control were or were not exercised in practice, which counts. It is therefore of no moment in this context that, in practice, the BBC chose for the most part not to exercise its rights of control under each hypothetical contract.

Turning then to those rights of control, the BBC’s rights to control the “what”, the “when” and the “where” of Ms Adams’s engagement were considerable.

The BBC had significant control in determining the “what” in that it had the right to decide on the form and content of the programme. In Atholl House UT,the Upper Tribunal accepted Mr Gordon’s submissions that:

but went on to say that, on the facts of this case, it did not accept Mr Gordon’s argument that the BBC’s rights of control over the “what” were narrow. On the contrary, it concluded that, despite the absence of a general right of redeployment, the BBC’s right to control the “what” went much further than mere “editorial control”. It was instead “significant and related to the very tasks that Ms Adams could be required to perform”– see Atholl House UT at paragraphs [93] to [97] and [102] to [105].

As for the rights to control the “when” and the “where”, those rights were slightly more limited under each hypothetical contract than they were under the related actual contract - the Upper Tribunal held that the BBC had to have a good reason for insisting on exercising its right of “first call” to Ms Adams’s services and had to engage in reasonable discussions with Ms Adams to accommodate her other reasonable commitments in exercising that right so that its rights to control the “when” and “where” were subject to some limitations - see Atholl House UT at paragraph [70(2)] - but they were nevertheless still wide-ranging. In Atholl House UT, the Upper Tribunal expressly stated that the BBC’s rights of control over the “when” and the “where” were “significant”.

The BBC’s right under each hypothetical contract to control the “how” was more limited than its rights to control the “what”, “when” and “where” but we have already explained in paragraph 130(2)(e) above why the right to control the “how” is of limited significance in the case of a highly-skilled worker such as Ms Adams.

As such, in overall terms, we think that the rights of control in this case were considerable and point in favour of employment. This not a case where, to follow the language of Sir David Richards in Atholl House CA at paragraph [76], “the decision on whether the right of control is sufficient may be borderline”;

control over other engagements - the BBC’s rights under each hypothetical contract to limit Ms Adams’s other engagements during the term of the relevant hypothetical contract were far-reaching. Pursuant to the terms of each hypothetical contract:

As we have already observed, except to the extent that these rights to control Ms Adams’s other engagements related to the BBC’s right of “first call” (and therefore related to the “when” and the “where”), they did not involve any ability to control the manner in which Ms Adams performed her engagement for the BBC and, as such:

We discuss the latter in paragraph 159(1) below. It suffices to say at this stage that, given the terms of that discussion, this particular aspect of the terms of each hypothetical contract as a feature pointing in favour of employment is effectively negated; and

editorial training and medicals - each hypothetical contract required Ms Adams to attend editorial training and to undergo a full medical, in each case should the BBC require it. Since we have found as a fact that, at the time when each written agreement was executed, each of the relevant individuals knew that, in practice, the BBC did not exercise these rights, this particular aspect of the terms of each hypothetical contract as a feature pointing in favour of employment is effectively negated. We discuss this in paragraph 159(2) below.

absence of customary employment rights - each hypothetical contract did not entitle or oblige Ms Adams to receive a review or to be subject to the formal procedures applicable to BBC employees when a change was made to the nature of their work obligations and each hypothetical contract did not entitle Ms Adams to apply as an insider for internal vacancies. In addition, although limited weight can be attached to this for the reason set out in paragraph 135(4)(k), neither hypothetical contract made provision for Ms Adams to receive holiday or sick pay, maternity leave or a pension entitlement;

clothing - each hypothetical contract required Ms Adams to be responsible for providing her own clothing; and

contractual statement - each hypothetical contract stated that the parties did not intend the relationship between the BBC and Ms Adams to be one of employment (see paragraph 97 above). This is clear evidence of an intention on the part of the parties to the effect that they intended the relationship to be one of self-employment. We recognise that the decision in Dragonfly suggests that such statements should be given minimal, if any, weight and may be useful only in a borderline case but, in our view, this is precisely such a case, as the terms of this analysis demonstrate.

intellectual property rights - we do not think that the fact that all of the intellectual property rights associated with the programme were assigned to the BBC or that Ms Adams waived her moral rights in relation to the programme content sheds any meaningful light on the question which we are addressing. We regard this as a neutral factor in determining this question. As the programme was being broadcast on the BBC, it was inevitable that the BBC would wish to own the intellectual property rights associated with the programme and not to be exposed to any claim by Ms Adams in relation to its use of the material and that would have been the case regardless of whether Ms Adams’s engagement was as an employee or as an independent contractor; and

changes in the length and name of the programme - similarly, we think that the fact that each hypothetical contract specified that the programme presented by Ms Adams would be three hours in length and would bear her name - neither of which was the case under the agreement which was on foot when the first of the written agreements was executed - is neutral in its impact. It might be said that those changes tend to indicate that Ms Adams was being presented as one of the BBC’s “own” and therefore support a conclusion of employment. On the other hand, the changes are entirely consistent with the evidence of Mr Zycinski and Ms Denvir to the effect that, in engaging Ms Adams, the BBC was seeking to access her “brand” as an independent journalist of some standing with a reputation founded on her other engagements and, in particular, her role on Loose Women and this would tend to support a conclusion of self-employment.

absence of control over other engagements - as we have indicated in paragraph 153(4) above, although the terms of each hypothetical contract gave the BBC the right to require Ms Adams to obtain its written consent before taking on other engagements, we have found as a fact that, at the time when each written agreement was executed, the fact that, in practice, the BBC did not exercise those rights was known or reasonably available to each of the relevant individuals. In fact, not only did Ms Adams not have to seek the BBC’s written consent to her other engagements but those other engagements were positively encouraged by the BBC because of the favourable impact which the BBC perceived that they would have on its audiences. Each of Mr Zycinski and Ms Denvir was acutely aware that Ms Adams had her own brand which they were seeking to harness by engaging Ms Adams and took steps to facilitate Ms Adams’s performance of her other engagements.

Since, except to the extent that it relates to the right of “first call” and therefore feeds into the “where” or the “when”, the ability or inability of Ms Adams to work for others does not go to the question of the BBC’s control over any aspect of the provision of her services to the BBC, we are not constrained, in considering this factor, by the terms of each hypothetical contract pursuant to the decision in RWG at paragraph [134] but are instead permitted to take into account both the terms of the relevant hypothetical contract and the manner in which the relevant hypothetical contract was expected at its inception to operate in practice. Thus, the fact that, at the time when each hypothetical contract would have arisen, Ms Adams would, in practice, be free to seek alternative engagements during the term of the relevant hypothetical contract without obtaining the prior written consent of the BBC (and would in fact be encouraged to do so) was known or reasonably available to each of the relevant individuals is a factor which points toward self-employment;

absence of compelling editorial training and medicals - as we have indicated in paragraph 153(5) above, although the terms of each hypothetical contract required Ms Adams to attend editorial training and to undergo a full medical, in each case should the BBC require it, we have found as a fact that, at the time when each written agreement was executed, the fact that, in practice, the BBC did not exercise those rights was known or reasonably available to each of the relevant individuals. Thus, this is also a factor which points toward self-employment;

time commitment in previous tax years - it is important that any consideration of Ms Adams’s commitment to the BBC under the hypothetical contracts is viewed against the background of her commitment to the BBC in the period which preceded the execution of each written agreement. The extent to which a worker is dependent upon, or independent of, a particular paymaster for the financial exploitation of his or her talents is a relevant factor. Thus, Ms Adams’s ability to exploit her talents in the wider market and economic independence from the BBC in that earlier period is an indication of self-employment. Although Ms Adams was highly dependent on the BBC in the tax years to which each written agreement relates, we have found as facts that:

That information would have indicated to the relevant individuals that, at least in the two years prior to the execution of the first written agreement, Ms Adams would have had considerably more time for other engagements outside the BBC than was expected to be the case under each written agreement and that is indicative of a relationship between the parties of client and independent contractor. It is of course possible for a relationship of self-employment to become a relationship of employment but that would generally require some sort of change in the terms on which the worker is engaged and not merely a reduction in the time in which the independent contractor is able to pursue his or her other engagements;

custom and practice - we have found as a fact that, at the time when each written agreement was executed:

We consider each of these to be factors which point toward self-employment. Having said that:

course of business dealings - a similar point to the one made in paragraph 159(4)(b) above arises in relation to our finding of fact that, at the time when each written agreement was executed, each of the relevant individuals believed that:

There are two points which we would make in relation to this factor.

The first is that, even if we were to have found as facts that the statements in paragraphs 159(5)(a) and 159(5)(b) above were true, that would not, in and of itself, be determinative of self-employment status. The Court of Appeal made it clear in Atholl House CA at paragraph [128] that the fact that the worker is generally in business on his or her own account and that the activities performed under the hypothetical contract in question are similar to the activities performed under the worker’s self-employed engagements are merely relevant facts and go no further than that.

The second is that, in any event, as we have already said in setting out our findings of fact - see paragraph 76 above - we have had insufficient evidence in this case to conclude that the matters set out in paragraphs 159(5)(a) and 159(5)(b) above were facts in and of themselves. The mere fact that the relevant individuals believed them to be true does not mean that their beliefs were well-founded. However, whilst we have had insufficient evidence to establish the truth of those propositions as facts, we have had a lot of evidence to support the conclusion that the relevant individuals believed the propositions to be true and, for similar reasons to those which we have just noted in paragraph 159(4)(B) above, it seems to us that, in the context of identifying objectively whether the parties intended their agreement to give rise to a relationship of employment, the subjective beliefs of the parties as to the situation in which they were entering into the contract at the time when the contract was executed are relevant circumstances.

Thus, the fact that, at the time when each written agreement was executed, each of the relevant individuals believed that Ms Adams was generally acting on a self-employed basis when she entered into her various engagements, and that her activities under those engagements were similar to those which she was to perform for the BBC pursuant to the relevant written agreement is a relevant factor to be taken into account in suggesting that none of them intended Ms Adams to be an employee of the BBC by virtue of her engagement with the BBC; and

equipment - we have found as a fact that, at the time when each written agreement was executed, the fact that:

was known or reasonably available to each of the relevant individuals. We think that these features are indicative of self-employment - essentially for the reasons set out in paragraph [125(a)] of our original decision.

the “part and parcel” test - we do not consider the “part and parcel” test to be of much assistance in the present case because it seems to us to point in both directions.

For instance, we think that Ms Adams was “part and parcel” of the BBC in the first of the two ways in which that phrase was considered in Lee Ting Sang. In other words, the work that she carried out under her engagement - that of presenting 160 three-hour programmes over the course of a year - was clearly integral to the activities of the BBC and not merely accessory to it. Her programme took up three hours of air-time for 160 days in the course of the year.

On the other hand, Ms Adams was not “part and parcel” of the BBC in the second of the two ways in which that phrase was considered in Lee Ting Sang. In other words, at the time when each written agreement was executed, the fact that the BBC did not consider Ms Adams to be “part and parcel” of the BBC in an organisational sense was known or reasonably available to each of the relevant individuals. The latter approach could be seen in, for example:

Moreover, although we recognise that the relevance of, and weight to be attached to, a particular factor in any case is highly dependent on the facts in that case and that we are therefore free to depart from the approach which was adopted by another tribunal in relation to this factor on the facts of another case, we consider it to be significant that, in Kickabout CA, the Court of Appeal did not disapprove of the Upper Tribunal’s refusal to place significant weight on this aspect in considering the circumstances of that case. We think that it might fairly be said, as Mr Tolley KC in fact did say at the remitted hearing, that the situation of Ms Adams in the present case is not very different from that of the Talksport presenter who was the appellant in that case.

For the above reasons, we are not inclined to place much weight on the “part and parcel” test in reaching our conclusion in this case;

the photograph of Ms Adams - for similar reasons, we do not think that the fact that, at the time when each written agreement was executed, it was known or reasonably available to each of the relevant individuals that there was a photograph of Ms Adams, along with other high-profile presenters and actors who worked for BBC Scotland, in the foyer of the BBC Scotland building sheds any light on this question. That could either be taken to evidence the fact that Ms Adams was being presented to the world at large as an integral part of the BBC - and therefore amount to an indication of employment - or to evidence the fact that the BBC was trying to benefit from Ms Adams’s brand as an independent journalist and presenter - and therefore amount to an indication of self-employment; and

financial risk - we do not think that financial risk is a factor which carries any weight in the present case, in the light of the decisions in Global Plant and Lee Ting Sang. The financial risk which distinguishes a worker who is in self-employment from an employee is the ability to make a profit or loss from the engagements into which the relevant worker enters - for example, by way of sub-contracting. The mere fact that Ms Adams stood to make a smaller profit if she were to be unable to obtain sufficient engagements or if one of her clients defaulted did not put her in any different a position from that of a casual employee. We would add that, in saying that the risk of client default carries no weight in this context, we are not relying on the fact that a credit exposure to the BBC is insignificant in comparison to a credit risk on a client in the private sector. Instead, we are saying that, as is the case with the risk of not being able to find further work, the risk of non-payment by the client, no matter how creditworthy the client may be, is not what this test is ultimately about.

the degree of commitment which each hypothetical contract was likely to entail;

the length of the relationship between the BBC and Ms Adams; and

the extent of the mutuality of obligations and the rights of control to which the hypothetical contracts gave rise.

by reference to the amounts which the BBC had paid to the Appellant historically and the Appellant’s filed accounts; and

anecdotally, from the fact that they knew the extent of Ms Adams’s responsibilities to the BBC and were kept informed by Ms Adams of her other engagements as part of the ongoing management of the relationship.

the provisions of the relevant hypothetical contract which do not relate to mutuality of obligations or control; and

the overall circumstances in which the relevant hypothetical contract arose.

although we have had insufficient evidence as to the precise terms on which Ms Adams’s other engagements occurred to be able to reach a conclusion as to whether those other engagements were pursuant to contracts of service or contracts for services, at the time when each written agreement was executed, the fact that those other engagements occurred in an industry where established custom and practice, as reflected in the terms of the Radio Guidelines, was to treat presenters like Ms Adams as self-employed independent contractors was known or reasonably available to each of the relevant individuals;

at the time when each written agreement was executed, the fact that Ms Adams had her own “brand” as a presenter from which the BBC wished to benefit by engaging her services was known or reasonably available to each of the relevant individuals. This was not a case where the BBC wished to curtail the other engagements of Ms Adams over the period that she was engaged by the BBC, as it did in the case of its staff or its news or current affairs presenters who were on OAT contracts. On the contrary, the BBC positively sought to facilitate those other engagements in order to make the most of Ms Adams’s profile and to increase its audience;

at the time when each written agreement was executed, the fact that the BBC did not treat Ms Adams as an employee in any way was known or reasonably available to each of the relevant individuals. For example, it was known or reasonably available to each of the relevant individuals that Ms Adams:

finally, there was an unequivocal statement in each written agreement to the effect that the parties did not intend to create a relationship of employment.