English common law is imported to Australia from origin England, decisions of the high court of Australia, decisions of the federal court of Australia and decision of the supreme court of the states and territories. Common law helps to define employment relationship, perform an interpretive of legislation, awards and agreements, identifying imply terms that states in a contract of employment. Under common law of employment, it comprises decision which handed down by the specialist industrial tribunals and courts that include Fair Work Australia. There is no direct guideline to all cases due to statutes and other regulations that exploit in different rationale. Workplace law is related to the act of individual employment relationship and collective relationship.
Identify the legal issues
This problem solving case study aims to evaluate the nature of employment between Benny Brown and Greenest Trees Pty Ltd (GTPL). Based on the facts available in provided assignment, it is distinguishing that: • Benny was to provide his own van to transport the necessary tools and equipment and to attend to calls for urgent garden repairs and event gardening from GTPL members. Benny would receive an allowance for vehicle maintenance but was required to pay for his own petrol. • Benny was to be paid a flat hourly rate based on the number of hours he attended at each job.
• Benny was to provide all his own tools and equipment. • All jobs were allocated on a call by call basis by GTPL and Benny was permitted to attend private jobs as long as they did not prevent him from attending any job allocated by GTPL and GTPL jobs had priority. • Jobs were checked at random by the manager of GTPL for quality control purposes and GTPL dealt with any dissatisfied customers or complaints.
• Tax was deducted from Benny’s payments each week and he was given 3 weeks leave each year in late December, early January. During this 3 weeks Benny continued to receive payments from GTPL based on his average payments from the preceding 3 months work. • Benny was not required to wear a uniform however; GTPL requested that he have his van emblazoned with GTPL logo and signage. Relate the relevant principles oflaw
Fair Work Act 2009 legislation has introduced terms of an employee but it does not identify as much as a precise worker (FAIR WORK ACT 2009 2009). Australia common law recognizes that an employee is one who works under a contract of employment, whereas an independent contractor works under a contract of services (Fair Work OMBUDSMAN (20 December 2011) 2011). Independent Contracting relationship is usually covered by general commercial law, not employment. When judge finds that both employee and independent contractor are too identical, they would perform a couple of tests to justify their answer.
Control test is one of the key principles to determine the nature of the control and the degree of the control (N. L. Ltd 2000-2012). Apart from using control test, multi factor test is another application that carries out commonly in Australia.
In this problem case scenario, Benny commenced his job with GTPL on July 2010 without any signing any contract or agreement. Regardless of this issue, a work contract still exists between Benny and GTPL, based on an oral agreement that Benny had with Janet James, owner/manager of GTPL (Vettori 2001). Following in January 2012, Benny had signed an “Independent Contracting Agreement” document.
The only differences between both agreement was that Benny would required to submit weekly invoices for the jobs allocated and statement clearly mention that both were not related in any employment relationship. There is no legal requirement to be formally written and signed between both parties in Australia as common law has instinctively imply duties in a worker’s contract (WorldLink for Law – Labour/Employment data for Australia (Victoria) 2009). These duties focal point justify on whether a contract is workable or not, does it bring to fairness.
Application of principles to facts
Based on case study of Vabu v FCT (1996) 81 IR 150, the court’s decision in this case is important because it evidently express that identical issues lies within an independent contractor due to provide services with his personal vehicle (Waarden 2010). Other elements include earning flat hourly rate salary base on successful attend, using own gardening tools and equipments to service, and payment of own petroleum were all include to the considerations of an independent contractor. Therefore base on above factors, Benny can be identifying as an independent contractor instead of employee of GTPL.
Definition of an employee in a common law is often unexplainable. Despite knowing that certain facts can consider Benny as an independent contractor, there are also other several factors that could also determine him as an employee. In case study of Hollis v Vabu (2001) 207 CLR 21, there is a work relationship between both parties because Benny’s job was scheduled and controlled by GTPL on a call to call basis (Hodgson 2002).
Benny is likely to be identifying as an employee when he needs to priorities his work in exchange for no restriction of him handling other jobs whereas independent contractor does not acquire such arrangement. Benny’s action was conducted like an employee when GTPL manager provides a random check on his jobs servicing the client although it claims to reduce customer’s complaint. Income Tax deductions are managed directly by GTPL which clearly show the work relationship between both parties. If Benny were to pay his own Income Tax with the Australian Taxation Office, he will consider as an Independent Contractor (How to determine if workers are employees or independent contractors 2011).
Another consideration that can relate Benny as an employee is having leaves entitlement in December and January. Even though having these entitlements, Benny is also being paid during his absentee in these periods. Supported case study of Ready Mixed Concrete (South East) Ltd. v. Minister of Pensions and National Insurance (1968) 2 QB 497, the court decide that even vehicle painted with company logo, the contract was for service of delivery (Waarden 2010). Although GTPL does not required Benny to wear any uniform but their minimum of expectation is to have GTPL logo or signage emblazoned on his vehicle (F. P. Ltd 2012). This argument is not very decisive between an independent contractor and employment relationship.
To recognize a relationship establishing vicarious liability, a master will be vicariously liable for the torts of his or her servant committed during the course of the servant’s employment (McCarthy 2002). In case study of Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 63 ALR 513, the court decision was made as both workers were independent contractors after applying a multi-factor test (Waarden 2010). Benny was injured when removing a large native tree in this scenario. At that point of situation, GTPL who acts as the employer has little or zero degree of control for his safety environment. It is also a duty of care for company to prevent such accident happens (Review of the Law of Negligence 2002). Therefore, it is not determinative to who is liable for the degree of the control.
This report concludes that using multi-factor test; it shows several key elements of Benny being an employee more than an independent contractor. Even though legislature has modified the approach to statutory obligations with surrounding environment change, it is based on findings and comparisons of case study that carried out important analysis between GTPL and Benny’s relationship.
As new conditions offered in 2012 agreement formed the basis of a suggested Independent Contractor’s Agreement; it did not eliminate the other terms or conditions that brought forward from Benny’s previous oral agreement. As a result, Benny still retains his employment benefits unchanged which shows that the company still accepts vicarious liability for any of Benny’s injuries.
Word Count: 1016 words not including Cover Page, Table of contents, Headers, Sub-headers, References and Bullets.
FAIR WORK ACT 2009. 2009. http://www.austlii.edu.au/au/legis/cth/consol_act/fwa2009114/ (accessed May 22, 2012).
Fair Work OMBUDSMAN (20 December 2011). December 20, 2011. www.fairwork.gov.au/resources/fact-sheets/workplace-rights/pages/independent-contractors-and-emplyees-fact-sheet.aspx (accessed May 24, 2012).
Hodgson, Helen. “Employee vs Contractors: Let The Games Begin.” An assessment of the distinction between employees and contractors further to Hollis v Vabu, 2002: Issue 37 No.5.
How to determine if workers are employees or independent contractors. January 13, 2011. www.ato.gov.au/content/4540.htm (accessed May 26, 2012). Ltd, First Point Media Pty. Business Registration and Licensing Fact Sheet. 2012. http://www.smallbusinesshq.com.au/factsheet/11949 (accessed June 01, 2012). Ltd, Net Lawman. “Independent contractor or employee?” 2000-2012. http://www.netlawman.com.au/info/independent-contractor-or-employee-australia.php (accessed May 31, 2012). McCarthy, Luke. Vicarious Liability in the Agency Context. 2002. http://www.austlii.edu.au/au/journals/QUTLJJ/2004/18.html (accessed June 02, 2012).
Review of the Law of Negligence. September 02, 2002. http://revofneg.treasury.gov.au/content/Report2/PDF/NonDelegable.pdf (accessed June 03, 2012). Vettori, Stella. “The Employment Contract and the Changed World of Work.” In The Employment Contract and the Changed World of Work, by Stella Vettori, 30-31. Burlington: Publishing Company, 2001.
Waarden, Nataile van der. Employment Law – an outline. Victoria: LexisNexis Butterworths, 2010. Wilmot, Philip Brunner and Kylie. Australia: Workplace risk legal update: On call Interpreters – the independent contractor vs employee distinction. 2011. http://www.mondaq.com/australia/x/143136/Employment (accessed May 31, 2012). WorldLink for Law – Labour/Employment data for Australia (Victoria). 2009. http://www.worldlink-law.com/businfo/australia/employment.htm (accessed May 29, 2012).