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4 Managerial L. 1 (1968)

handle is hein.journals/ijlm4 and id is 1 raw text is: LORD ADVOCATE v. RELIANT TOOL Co.

Viscount Dilhorne, Lord MacDermott, Lord Guest,
Lord Wilberforce and Lord Pearson.
December 19, 1967
Revenue - Selective employment tax - Qualifying activities - Designers of machine
tools - Whether establishment engaged in activities falling under minimum list
heading 332 Metal-working machine tools in Standard Industrial Classification
- Whether manufacturing - Activities - Selective Employment Payments Act,
1966 (c.32) s 1(2) (a) (i).
The Selective Employment Payments Act, 1966, by section 1(1), requires the
Minister of Labour to refund to certain employers selective employment tax paid
by them and to pay them premiums in respect of their employees. By section 1(2):
. . . this section applies to any employment in, or carried out from, an estab-
lishment where-(a) the establishment is engaged by way of business wholly or
partly in - (i) activities falling under any of the minimum list headings shown
in Orders l1l to XVI of the Standard Classification ...
Order VI of the classification contains minimum list heading
332 Metal-working machine tools Manufacturing metal-working machine
The R.T.Co. did not deal with the general public but designed machine tools on a
contract basis for large manufacturing companies. They applied to the Minister of
Labour for their establishment to be entered on the register kept by the Minister as
one which came within section 1(2) and entitled to a refund of selective employment
tax and payment of premiums. The Minister of Labour refused the application and
R.T.Co. pursuant to section 7(5) of the Act required the question to be determined
by an industrial tribunal.
The tribunal were of opinion that the specialised machine tools could not be made
without being designed; that the designing was a necessary stage in the manufacture,
but it was not the first step since drawings and specifications had usually to be drawn
up by R.T.Co.'s customers; and that R.T.Co.'s establishment was accordingly engaged
by way of business in activities falling under, inter alia, minimum list heading 332, and
was therefore entitled to selective employment premiums.
The Lord Advocate, on behalf of the Minister of Labour, appealed to the Court of
Session who dismissed the appeal.


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