Does right of substitution have to be in the contract?

[electronicfur]

Does the right of substitution have to be in the contract, if the contract clearly states that the company is providing the services and nowhere in the contract is a mention of specific employees who provide services?

[Wanderer]

Does the right of substitution have to be in the contract, if the contract clearly states that the company is providing the services and nowhere in the contract is a mention of specific employees who provide services?

Sounds like you have no specific worker named in the contract which implies that your company can send anyone you want.

I would get this written as an explicit clause if I were you. Get one of the recommended professional reviewers to have a look at the contract if you are in doubt.

Also, read and understand the IR35 Tests.

[northernladuk]

Nope there does not need to be a RoS in the contract... or MoO for that matter.

[Qdos Contractor]

Does the right of substitution have to be in the contract, if the contract clearly states that the company is providing the services and nowhere in the contract is a mention of specific employees who provide services?

It really depends on the wording. Obviously some genuine business to business contracts are silent on substitution and it's not necessarily an issue, but you would need to ensure there was literally no mention of the individual, i.e. in the schedule specific to the agreement.

For a contractor where IR35 is potentially an issue having a clear substitution clause is always going to be preferable, even if the rest of the contract does not infer personal service. It's one of the first things HMRC would look for and having no such clause leaves the issue open to interpretation.

[electronicfur]

Thanks for the answers.

Because some of my previous contracts haven't been as clear-cut business to business contracts and have stated a specific worker, I've always been used to insisting on substitution clauses.

But in this case its a genuine business to business contract I'm being asked to sign, which is why there is no no specific worker named in the contract.

So it seems odd to ask for a right of substitution, as it doesnt seem to make much sense in terms of this contract.

Cheers,
EF

[northernladuk]

Just because a specific worker is not named does not give you right to put anyone in as and when you choose it. There could be an implied RoS due to the lack of an individual name but you can bet your bottom dollar the client won't agree when you try test it. Contracts are not meant to be that ambiguous that you think you can do something and shovel it past the client due to wording.

Not having a named worker is one thing, swapping people in and out as you see fit is a totally different one.

[centurian]

Thanks to a very recent judgement, it is now confirmed that you do not need to have RoS explicitly stated in your contract. In fact you don't even have to be aware that you have the ability to send a substitute.

Creasey case confirms the value of an unfettered right to substitute :: Contractor UK

However, this case was lost by HMRC on the basis that ClientCo had accepted substitutes in the past. So if you don't have it in your contract, you will have to show compelling evidence that you would have been able to exercise RoS regardless of the lack of any clause.

[blacjac]

Thanks to a very recent judgement, it is now confirmed that you do not need to have RoS explicitly stated in your contract. In fact you don't even have to be aware that you have the ability to send a substitute.

Creasey case confirms the value of an unfettered right to substitute :: Contractor UK

However, this case was lost by HMRC on the basis that ClientCo had accepted substitutes in the past. So if you don't have it in your contract, you will have to show compelling evidence that you would have been able to exercise RoS regardless of the lack of any clause.

HMRC had nothing to do with it, the case was lost by the contractor who was trying to claim employment rights.

[northernladuk]

HMRC had nothing to do with it, the case was lost by the contractor who was trying to claim employment rights.

Indeed but either way I will certainly not be resting on my laurals because there is a case involving a van driver.

[JamJarST]

Does the right of substitution have to be in the contract, if the contract clearly states that the company is providing the services and nowhere in the contract is a mention of specific employees who provide services?

The last contract I had reviewed by QDOS had an implied right of substitution, but QDOS recommended amending it to be being an explicit term.