Employment Law

1 Employment contract

Employee

“An employee is someone who is employed under a contract of services”

Independent Contractor

“Independent contractor is someone who works under a contract for services.”

The distinction between these two terms is necessary because each type of contract has different rules for taxation, health and safety, provisions, protection of contract and different liability in tort and contract.

2 Factors that distinguish Employee and independent contractor

A contract of service is distinguished from a contract for services usually because the parties express the agreement to be one of service. This does not always mean that an employee will not be treated as an independent contractor by the court, however; much depends on the three tests.

• Control test
• Integration test
• Economic reality test

2.1 Control test

The court will consider whether the employer had control over the way in which employee perform his duties or not.

Case law: “Mersey Docks & Harbour Board v Coggins & Griffiths (Liverpool) 1947

Another example of this test is in Walker v Crystal Palace FC 1910 

Where it was held that professional footballer was an employee as the club hold control over the form of training, pay and discipline.

2.2 Integration test

The courts consider whether the employee is so skilled that he cannot be controlled in the performance of his duties. Lack of control indicates that an employee is not integrated into the employer’s organization, and therefore not employed.

Case law: Cassidy v Ministry of Health 1951

2.3 Economic reality test

Courts also consider whether the employee was working on his own account and require numerous factors to be taken into account.

Case law: “Ready Mixed Concrete (South East) v Ministry of Pensions & National Insurance 1968”

3 Agency Workers

There are two factors that determined  agency worker whether they are employee or independent

Contractor

They are not employees of client rather employees of agency (principal)

(a)      Length of services

Case law: Case law “Franks v Reuters Ltd 2003”

(b)     Control over the worker  

 Where the client of agency have sufficient control over agency worker, it could  be held that they are in fact the true employer.

Case law: “Motorola v Davidson and Melville Craig 2001”