IR35 Chronicles XII

This is part twelve of our serialisation of an IR35 enquiry. To access the previous parts please visit our IR35 Chronicles Index.

The meeting between HMRC and BIG IT representatives is in its final stages with just the loose ends to be tied up by Mr Turpin (HMRC).

DT:  How many contractors does BIG IT engage at any one time?
FP:  I could not be certain what the universal figures are for the UK but at this site I would estimate around 50.

DT:  Are they all working on the same project?
PJ:  No, at the moment we have three projects in progress which contractors are all working on.

DT:  Do these contractors work in teams or own their own?
PJ:   Generally in teams. There are a few notable exceptions but these tend to be individuals with very specialised expertise.

DT:  How many would make up a team and would this include BIG IT employees?
PJ:   Typically, there will normally be six in a team, three contractors and three permanent staff members. We like that ratio because it enables our own staff to learn new skills where knowledge maybe lacking within the company.

DT:  Do you expect contractors to mentor your employees?
PJ:   In the right circumstances yes. These guys are being paid handsomely for what they do and BIG IT expect their pound of flesh. If we can improve the knowledge and skills of our own employees by them learning something from the temps then we would be foolish to pass up the opportunity.
FP:  I would add that it is not generally a contractual requirement but the unwritten law.

DT:  Would a contractor have responsibility for a BIG IT employee?
PJ:   In helping and guiding them, yes.

DT:  What about signing off timesheets, agreeing leave, etc?
PJ:   No, the Project Manager has overall responsibility for that sort of thing.

DT:  Who communicates with the Project Manager about progress?
PJ:   Within each team there will be a team leader.

DT:  Is the team leader a contractor or a BIG IT employee?
PJ:   It can vary but more often than not it will be a permanent member of staff as we like to give our employees responsibility as part of their personal development.

DT:  Does the team leader have any authority over other team members?
PJ:   Not really. They are a focal point for communications and help co-ordinate the project more efficiently.

DT:  What about approving leave or responsibility for disciplinary matters?
PJ:   As I have just mentioned, the Project Manager has overall responsibility for that sort of thing although it is necessary for a team member to keep the team leader informed of leave requests.

DT:  Do all team members have to complete timesheets?
PJ/FP:  Yes.

DT:  Why is that?
FP:  So we can ensure that the company pays a worker for the time they are supposed to be working?

DT:  What is the difference between the way contractors and employees are paid?
FP:  Staff members are paid a monthly salary that is directly credited to their bank accounts. With contractors, their timesheets have to firstly be approved and signed off and sent to the relevant agency. The agency then invoices us once a month but it is the agency who are responsible for paying the contractor.

DT:  Are contractors paid an hourly, daily or weekly rate?
FP:  Most of the time an hourly rate.

DT:  Do contractors receive holiday or sickness pay?
FP:  No because they are self-employed which is one of the reasons we use temps, as the company can make economy savings.

DT:  What about pension rights?
FP:   As they are self-employed I assume they make their own pension arrangements but they would not be invited to join BIG IT's pension scheme.

DT:  Does your company provide them with any perks?
FP:  Some of them are provided with car parking spaces.

DT:  Do they have to pay for a space?
FP:  No, these are given free.

DT:  Do they get anything else?
FP:  They can use the site canteen and gym facilities at subsidised rates.

DT:  Do employees have to pay to use the canteen or gym?
FP:  Only if they haven't chosen to have such form part of their remuneration package. BIG IT have a menu of benefits that our employees can choose from. Some of the benefits are provided free to employees but others, such as gym membership for example, are optional. With the gym, we have negotiated a favourable membership fee, so even if an employee does not opt to receive it as a benefit they can still make use of the reduced membership rate.

DT:  Are those rates available to contractors?
FP:  Yes, we don't discriminate and it's the same for the site canteen.

DT:  Are contractors able to attend BIG IT social functions?
FP:  Yes, everyone who is in the employ of the company is invited. Normally, each section or department will hold its own social functions throughout the year and the company will either pay for these or make a contribution. With the Christmas party, we do ask contractors to make a subsidised contribution.

DT:  Do contractors provide their own equipment to carry out their work?
PJ:   No, everything is provided for them. Some of the equipment that they work with is highly sophisticated and it is unlikely they would be able to afford to buy it themselves. We don't allow temps to bring onto site things like laptops, for instance, because of security issues.

DT:  What facilities do you provide contractors with to work in?
PJ:   They will be given some work space, a desk and chair, a laptop, telephone.

DT:  Would they have access to company stationery?
PJ:   If necessary, yes.

DT:  Does BIG IT issue business cards to contractors?
FP:  No, only to staff members who warrant having business cards.

DT:  Do the names of contractors appear on internal organisation charts, e-mail and telephone listings?
FP:  Yes, all of those.

DT:  Could you print off a copy of each of those where Mr Down's name appears please?
FP:  Yes, certainly.

DT:  Are contractors given passes to get in and out of sites?
PJ:  Yes.

DT:  Are they any different to the ones issued to full time members of staff?
PJ:   Yes, contractors use a green pass whereas employees are given a blue pass.

DT:  What would happen if a contractor produced a piece of work that was defective? Would you expect them to correct it in their own time?
PJ:   I can't recall that that's ever happened but, in principle, yes.

DT:  Would BIG IT pay them whilst they were carrying out the rectifications?
FP:  Most certainly not.
PJ:  I would add that, because of the nature of most of our projects, any glaring mistake is likely to be costly to the extent that a temp could well be dismissed for negligence.

DT:  Would they not be covered by your company's professional indemnity insurance?
FP:  No, all contractors are expected to provide their own business insurances.

DT:  Do you allow contractors to work for other clients whilst they are working for BIG IT?
PJ:   We require our workers to concentrate on their task with us and expect to give that work their priority and undivided attention. Again, I would repeat what I said earlier about temps being well paid and because of that we expect a degree of loyalty and commitment in return.
FP:  Also, the contract may state that a contractor is prohibited from working for another customer. They certainly would not be able to offer their services to a competitor.

DT:  Are there any areas within a BIG IT site that are off limits to a temporary worker?
FP:  There are certain secure areas where only employees are allowed access to but, in the main, a contractor would be able to enter most parts of a site.

DT:  Well that's all the questions I want to ask for the time being. May I thank you both again for taking the time to meet with me. The information you have provided has been most useful. Fiona, if you could let me have copies of the documents previously discussed, within say the next two weeks, that would be most helpful. Before we go, is there anything either of you wish to add or mention at this stage?
FP:  Nothing that springs to mind.
PJ:   No.

DT:  In that case, my colleague, Mr Hind, will type up the notes of today's meeting and post a copy to you. Once you have read the notes and are satisfied that they accurate, could you then both sign and date them and return a copy to me. I may need to ask for additional information in the future. Will that be o.k?
PJ:   What kind of information?

DT:  It maybe that I need to confirm my understanding of facts or that Mr Down provides contradictory evidence that I will need to clarify with you.
FP:  That should be o.k. How long is this process likely to take though as we don't really want to be spending valuable working time on this type of thing?

DT:  I can't tell you exactly how long my enquiries are likely to last as this depends on a number of factors. I am conscious of the fact that your time is valuable and will therefore try to limit my enquiries, where possible, so as to keep to a minimum any disruption or inconvenience to yourselves.
FP:  Thank you, I'd appreciate that.

DT:  If Mr Down requests a copy of the notes of today's meeting would you object to me providing him with a copy?
FP:  This meeting should be treated like any other meeting that takes place within our organisation, that is, in confidence and only for those who need to know. We would not consider Mr Down as being someone who would rank as being privileged to view such a document, so I would ask that you do not let him have a copy of the notes.  

After some 3 hours the meeting was closed and messrs Turpin and Hind left the building.

Next week:  Fallout

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