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HMRC internal manual

Employment Status Manual

Case Law: St John’s College School, Cambridge v Secretary of State for Social Security

Judgment 12 June 2000 (unreported)

Point at issueWhether visiting instrumental teachers (“VITs”) were engaged under contracts of service or contracts for services.

FactsMr B and Miss H were engaged as visiting instrumental teachers (“VITs”) by St John’s College School (“St John’s”). St John’s regarded them as self-employed but the Contributions Agency ruled they were to be treated as employees by virtue of the Social Security (Categorisation of Earners) Regulations 1978 (“the Regulations”).

St John’s disagreed with that ruling and asked for the matter to be decided formally by the Secretary of State for Social Security (“the SofS”).

The SofS decided

  • neither Mr B nor Miss H were employed under a contract of service by St John’s, so fell within the category of self-employed earner; but
  • they were to be treated as employees under the Regulations
  • St Johns was to be treated as the secondary contributor.St John’s appealed on the grounds that

  • it was not an “educational establishment” within the definition in Regulation 1(2) in the Regulations. That definition should be read as exhaustive rather than non-exhaustive.
  • the VITs were not in employment by it; they were “employed by” the parents. All it did was act as “agent” by putting parents in touch with a VIT, providing the location for teaching, and collecting the fees.

DecisionThe High Court dismissed the appeal on the grounds that

  • St John’s was an “educational establishment” within the meaning of Regulation 1(2); and
  • the VITs were in “employment by” St John’s.

CommentaryThis case is noteworthy in that it is the first to deal with issues on which there is no previous NICs case law authority. Although it was decided on its own facts, the judgement is of general importance as it is gives some guidance on the meaning of “educational establishment” in Regulation 1(2).

On the first point he concluded:

  • there is nothing in the legislation to restrict the meaning of “educational establishment” in the way St John’s contended. “Includes” was to be given its normal dictionary meaning.
  • there may be “places” which might not normally be regarded as an “educational establishment” but which come within the definition in Regulation 1(2). For instance, a town hall would be an “educational establishment” if there was instruction given there – say as part of an evening class designed to lead to a diploma – by a visiting instructor.
  • an “educational establishment” does not necessarily have to be a building. For instance, if instruction is provided in the open air as part of a course designed to lead to a certificate, diploma, degree or professional qualification, that place (ie, the open air) will be an “educational establishment”.
  • a “place” where instruction is provided will be an “educational establishment” irrespective of who provides the instruction.
  • the course provided does not have to be part of the “educational establishment’s” own curriculum; Regulation 1(2) requires simply that the “educational establishment” must be a “place” where such instruction is given.On the second point, Mr Justice Munby commented that “employment” in paragraph 4 (of the Regulations) meant “the state of being employed” and not the inclusive definition in section 122(1) of the Social Security Contributions & Benefits Act 1992 (“employment” includes any trade, business, profession, office or vocation…”). But the crucial issue was what was meant by “employment by”?

For a more detailed commentary of the case see the NICs case law review on the IR Intranet at library/legal/NIC case review/NCR3/2000.