## Facts

- A driver entered into a contractual agreement with Ready Mixed Concrete Ltd to deliver concrete.
- The contract expressly described the driver as an “independent contractor.”
- The arrangement required the driver to purchase and finance their own vehicle, which had to be painted in company colors and maintained per company regulations.
- The driver was paid according to terms set in the written contract and had to follow operational procedures specified by the company.
- The driver was personally obliged to drive the vehicle and fulfill delivery duties, remaining responsible for vehicle maintenance and associated expenses.
- The status of the driver—whether employee or independent contractor—became the central issue when determining the company’s liability for National Insurance contributions under the National Insurance Act 1965.

## Issues

1. Whether the contractual relationship between the company and the driver constituted a contract of service (employment), despite being labelled as one of independent contracting.
2. Whether the degree of control exercised by the company over the driver’s activities was sufficient to establish an employer-employee relationship.
3. Whether all contractual terms and conditions were consistent with a contract of service as opposed to a contract for services.

## Decision

- The court established a tripartite test for identifying a contract of service: (1) service performed in exchange for remuneration; (2) sufficient control by the alleged employer; (3) contract terms consistent with employment.
- It found that, although the company imposed certain controls (vehicle appearance, repair obligations), the driver retained substantial autonomy, including vehicle ownership, maintenance, and working methods.
- The contractual terms did not establish the requisite degree of control by the company; the driver’s significant independence weighed against employment status.
- The court concluded that the driver was not an employee under a contract of service but operated as an independent contractor.
- The company was not liable for National Insurance contributions in respect of the driver.

## Legal Principles

- The determination of employment status depends on substance, not merely the labels used by parties in a contract.
- The “control test”—considering not just what work is done but how, when, and by whom—remains central but is not the sole determinant.
- Economic realities, including ownership of equipment, financial risk, and opportunity for profit or loss, are relevant to assessing the relationship.
- All contractual provisions must collectively align with a contract of service to establish employee status.
- Legal analysis must evaluate the true nature of the parties’ rights and obligations rather than superficial contractual statements.

## Conclusion

Ready Mixed Concrete Ltd v Minister of Pensions confirmed that the classification of workers turns on the actual terms and practical arrangements of the working relationship, not on contractual labels. By articulating the tripartite test and recognizing the limits of the control test, the decision has become a guiding authority on determining employment versus independent contractor status for statutory and labor law purposes.

Ready Mixed Concrete Ltd v Minister of Pensions [1968] 2 QB 497