Hcm535 Employment Law - And Assessment Answers

Answer:

Issue 1

Whether Lewis is an employee of the company, or not?

Rule

Certain differences are present between a person who is deemed as an independent contractor and the one who is deemed as an employee. A contract of service or an employment contract is drawn between the employee and employee, through which, the employer gets a control over the employee. Due to these reasons, the employee cannot delegate the work to another person, which is possible in the case of a contractor (Murray 2016). Further, upon the relationship of an employee and an employer, the agency law is applicable and so, the employer can be held vicariously liable for the employee’s acts. A contract for service can also be entered with an independent contractor and the work in such cases is done for a pre agreed price. Generally, the working hours and the subcontracting of the work of a contractor are not in the hands of the employer. Further, for the acts of the contractor, the employer cannot be held vicariously responsible (Giliker 2010).

A number of tests have been given under the common law so that the status of a person can be determined as being an independent contractor or an employee. A traditional test in this regard is the control test which was initially given in the case of Zuijs v Wirth Brothers Pty Ltd [1955] HCA 73. In this case, it was held that the right of exercising control over another individual, irrespective of the actual control which an individual has over the other is key factor and is also deemed as a strong indicator which helps in deciding the presence of an employee employer relationship.

Another helpful test in this regard is the integration test in which the classification of workers is done on the basis of the degree of the integration of the person in the business.  Hence, in case an individual wears a uniform which is provided by the other person, it is an indication of the presence of the status of an employee as was held in Humberstone v Northern Timber Mills (1949) 79 CLR 389. However, due to these tests not being so popular, the integration and control test are not considered as standalone tests (Marshall 2006).

Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1 was the case where the multiple indicia test was initially formed and later on, was confirmed in the matter of Hollis v Vabu Pty Limited (2001) 207 CLR 21. Since then this test has been used the most in every nation. The reason for giving this test was stated by the High Court in this case. They stated that the control could not be regarded as the sole factor and so, the relationship had to be seen in the entirety to decide upon the status of the person (Find Law 2017).

Under the multiple indicia test, the circumstances which surround the employment had to be evaluated so as to decide upon the type of working relationship. A sole list cannot be made which could show which relationship was present, and the relevant things have to be evaluated (Turner 2013). Certain common factors are to be acknowledged to judge the relationship. Hence, if the sign of the employer is present on the vehicle of the person, the person would be deemed as an employee. If the taxes are personally arranged by the individual, then such an individual would be an independent contractor.

The allowances and entitlements are also a crucial factor. Hence, if the person is given superannuation, workers compensation or leaves, the person would be deemed as an employee. The type of task which has been given also has to be considered. So, an independent contractor is a professional or a tradesperson. And if the person has been employed just for undertaking a particular work, the person would be deemed as an independent contractor. And if the person has been employed for an indefinite period, the person would be deemed as an employee (CCH 2010).

The manner in which the remuneration is paid also denotes the relationship. Hence, if a person is being paid on price per volume or is being paid a lump sum amount, the person would be an independent contractor. The control over the place of work and the hours also helps in differentiating between the two. The control which a person has over the manner, in which the task is to be undertaken by the other person, also is a common factor. All of these factors, in a combined manner, clarify if the relationship of employee employer is present or not (Marshall 2006).

Application

In the given case study, in order to decide upon the status of Lewis being a contractor or an employee, all the relevant facts have to be taken into consideration. The first factor in this regard is the payment, which is made on hourly basis and where the deductions are made for his truck usage. This truck usage includes vehicle registration and insurance. This shows that Lewis was an employee as he is being paid in a regular manner and the costs of the truck, i.e., the material, is provided by the company. Even though his hours are not fixed but the time of delivery is fixed, so he is an employee. Since Lewis does not wear a uniform, he would be deemed as an independent contractor. However, he abides by the depot rules and this makes him an employee of the company. As he has never been paid sick leaves; though, is given unpaid annual leaves, he would be deemed as a worker. Hence, on the basis of multiple indicia test, Lewis would be deemed as an employee of the company.

On the basis of control test, the employer has control over the rules which Lewis has to follow, the truck, his leaves and his hour of work, he would be deemed as an employee. On the basis of integration test, he is integrated in the business of the company and hence, is an employee.

Conclusion

To conclude, on the basis of control test, integration test and integration test Lewis is an employee of the company.

Issue 2

If Lewis is an employee, was the Fair Work Act breached when the company asked him to acknowledge that Lewis was a contractor?

Rule

The Fair Work Inspectors have the power to investigate upon the alleged sham contracting arrangements and also the prohibited conduct with regards to reform opt-in arrangements. A sham contracting arrangement can be stated as such an arrangement in which the attempts are made by the employer to disguise the employment relationship as being an independent contracting arrangement. Such conduct is undertaken so that the responsibilities with regards to the employee entitlements can be avoided (Fair Work 2017a).

Under the provisions of the Fair Work Act, 2009 with regards to sham contracting provisions, an employer is prohibited from misrepresenting an employment relations or a proposed arrangement of employment I as being an independent contracting arrangement. The restrictions are also in place for dismissing or threatening to dismiss the employee so as to engage them as an independent contractor. And lastly, they are also restricted from making a false statement knowingly so as to influence or persuade an employee to be an independent contractor. In case these penalties are contravened, the Fair Work Act, 2009 provides grave penalties for their breach (Fair Work 2017b).

Division 6 under Part 3-1 of the Fair Work Act, 2009 contains the details with regards to the sham arrangements (Australasian Legal Information Institute 2017). Section 357 of this act prohibits the employer from misrepresenting employment as an independent contracting arrangement. Section 358 contains the prohibitions with regards to the dismissal of an employee if they refuse to engage as an independent contractor. And section 359 contains the previsions regarding the misrepresentation on part of an employer to engage as an independent contractor. Under this section, the employer is prohibited from making false statements (Federal Register of Legislation 2017).

Application

In the given case study, it has already been established that Lewis was an employee of the company. And he was told by his employee that he had to sign a form to show that he worked as an independent contractor of the company. This requirement on part of the company to acknowledge Lewis as a contractor would breach the provisions of the Fair Work Act, 2009. This would breach both section 357 and section 359 of this act, as the employer wants to represent Lewis as an independent contractor when he is an employee, and further, he makes a false statement and is also influencing Lewis to sign a statement which is false, in the form which Lewis has been asked to sign. Due to the actions of the company, they would be liable to grave penalties.

Conclusion

On the basis of the provisions highlighted above, it can be concluded that as Lewis is an employee, the Fair Work Act would be breached when the company asked him to acknowledge that Lewis was a contractor.

References

Australasian Legal Information Institute. 2017. Fair Work Act 2009. https://www.austlii.edu.au/au/legis/cth/num_act/fwa2009114/

CCH. 2010. Australian Master Human Resources Guide 2010. 8^th ed. Sydney: CCH Australia Limited.

Fair Work. 2017a. Independent contractors. https://www.fairwork.gov.au/find-help-for/independent-contractors

Fair Work. 2017b. Contractors and employees – what’s the difference? https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/rights-and-obligations/contractors-and-employees-whats-the-difference

Federal Register of Legislation. 2017. Fair Work Act 2009. https://www.legislation.gov.au/Details/C2017C00144

Find Law. 2017. What is an independent contractor and how does an independent contractor differ from an employee? https://www.findlaw.com.au/articles/4515/what-is-an-independent-contractor-and-how-does-an-.aspx

Giliker, P. 2010 Vicarious Liability in Tort: A Comparative Perspective. Cambridge: Cambridge University Press.

Hollis v Vabu Pty Limited. 2001. 207 CLR 21.

Humberstone v Northern Timber Mills. 1949. 79 CLR 389.

Marshall, Brenda. 2006. “Working it out- Employee or independent contractor?” The National Legal Eagle, 12(2): 14-19.

Murray, Jean. 2016. Difference between Independent Contractor and Employee. https://www.thebalance.com/independent-contractor-or-employee-what-s-the-difference-397912

Stevens v Brodribb Sawmilling Co Pty Ltd. 1986. HCA 1.

Turner, C. 2013. Key Facts: Employment Law. 3^rd ed. New York: Routledge.

Zuijs v Wirth Brothers Pty Ltd. 1955. HCA 73.