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The Construction Industry Training Board has a snappy new name. It calls itself CITB-Construction Skills. So said the judge. Houdini would be even snappier, accurate too. Yet again the CITB is at odds with the industry, especially the specialist subcontract industry 鈥� and yes, it鈥檚 all about the levy.

Beacon Roofing is a typical building contractor, subcontractor putter-upperer. Its blokes are all labour-only self-employed. That鈥檚 because the blokes want to do it that way, also because the work-load is unpredictable; they can move to other roofers when things tail off. And don鈥檛 get the idea that the labour-only lads are iffy. Don鈥檛 get the idea that they don鈥檛 train. They do. Dads teach sons; uncles teach nephews (and nieces). They train on the job. They don鈥檛 want to know about CITB levy on earnings, nor about the so-called grants in return. The CITB needs money to survive. So it knocks on your door. In a busy year it holds its hands out at Beacon for a 拢70,000 cheque. In all it coins 拢90m in levy; a tax. The levy on every self-employed operative is 1.5%. Hurts. Rotten PR.

By now the word was out that Beacon had tied the board in knots. Forty-two other firms played the same card. And if it works, that 拢90m levy would eventually have a great big hole in it

A few years ago Beacon was approached by one of these new fangled 鈥渂ack-office鈥� firms, Hudson. It said to Beacon it would manage the paperwork for all these weekly payment outgoings including the Inland Revenue 鈥渟cheme鈥� and PAYE stuff. It charges Beacon 拢15 per week per head. Part of this neat arrangement is that Hudson became the firm that now engaged the operatives and paid them. In practical terms, Beacon organised what workforce it wanted and where and when. Nothing really changed. Then Beacon had a brainwave. Since Hudson was sending 鈥渋ts鈥� Hudson blokes to Beacon鈥檚 roofing works, Beacon was outside the grasp and reach of CITB levy. CITB decided that it could not reach for Hudson instead, so demanded that Beacon still pay up. By now the word was out that Beacon had tied the board in knots. Forty-two other firms played the same card. And if it works, that 拢90m levy would eventually have a great big hole in it. So CITB sued Beacon for its money.
Levy litigation comes to the Employment Tribunal. Beacon won hands down. No levy payable. Houdini wrestled. The CITB appealed to the High Court. The decision went the other way. Levy payable. Beacon went to the Court of Appeal. The CITB triumphed. But it鈥檚 one of those decisions that could go the other way if it comes to the Supreme Court.

锘緽eacon has a roof or two that it would like to string up the CITB from. But there is a queue of volunteers in front of it

The act of parliament that breaths the lingering kiss of life into the training board of the sixties says the amount of levy to be assessed is 1.5% of all payments made under labour-only agreements in respect of work carried out鈥� and a labour-only agreement is wholly or mainly the provision of services to the employer in his trade or business. Well then, said Beacon, it鈥檚 not us that is supplying the services. We just tell Hudson what and who we want. All we want from Hudson is payroll administration. The appeal court couldn鈥檛 buy that. It said: 鈥溾�� it seems to [the court] that the main purpose of the contract was for Hudson to supply Beacon with the services of the roofing operatives who were going to perform the work that Beacon contracted to do. Without such operatives, Beacon would not begin to perform its contractual obligations to its customers which were the very reason for its existence as a construction company. If it was not going to contract with them directly, it would have to contract for them to be supplied by some company such as Hudson. No doubt part of the attractiveness of the package offered by Hudson was its willingness to deal with PAYE, national insurance etc and to provide a shield from any awkward inquiries from the revenue authorities. That may be why Beacon made the arrangement with Hudson rather than continue contracting with the operatives itself. But the main purpose of the contract was to make roofing operatives available to Beacon to enable it to continue its business. The rest was icing on the cake, or as the judge put it, 鈥榓ncillary services鈥�.鈥�

Apart from the Chinese water torture trick, Houdini鈥檚 favourite trick was to make an escape from a regulation straitjacket while being suspended by a crane high up on a New York skyscraper roof. Beacon has a roof or two that it would like to string up the CITB from. But there is a queue of other volunteers in front of Beacon. CITB hasn鈥檛 triumphed at all. It remains as popular as it always has been.

Tony Bingham is a barrister and arbitrator at 3 Paper 好色先生TVs Temple