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The Control Test

1. Is Simone an employee or another type of worker? Use the current common law test?

2. If we assume Simone is an employee, is PR PRO in breach of a common law duty in relation to not giving Simone any days off work or holidays?

3. If we assume Simone is an employee, does she have an entitlement to notice, at common law or pursuant to legislation, if PR PRO decides to replace her?

Rule:

Common law introduced number of tests to identify the status of individual in organization:

First test applicable by the Court’s are “Control Test”. This test is determined by Court in case law Zuljs v Wirth Bros Pty Ltd[1]. In this case, Court held whether employer has right to exercise control over employee is considered as important element as compared to actual control exercised by employer. This element is the strong evidence of employer and employee relationship.

It must be noted that control test and integration test are not the strong evidence on which Court takes their decision. In other words they are not considered stand alone test by Courts.

There is one more test that is multiple indicia test, and this test was established in Steven’s v Brodribb Sawmilling Co Pty Ltd[2]. In this case, the main issue is whether Gray and Steven’s are employees or independent contractors.

Court applied multiple indicia test for determining the employment status of Gray and Steven’s and stated that Steven’s was an independent contractor. However, Court also stated further developments regarding this test are completely based on the interpretation of future judges[3].

Later this test is confirmed in case Hollis v Vabu Pty Limited[4]. In this case Court held that bicycle couriers are not working as independent contractor but they are considered as employee of Vabu Pty Ltd. Therefore, Vabu Pty Ltd is vicariously liable for the act of its employee who never identified on personal basis by individuals because he wears uniform of Vabu[5].

High Court of Australia stated that now a day control cannot be considered as only factor to determine the status of individual in the company. Multiple indicia test includes:


Employee relationship is stated if worker integrated into the business of employer such as wearing uniforms, signage on vehicles, etc.

Employee relationship is stated if worker is entitled to entitlement and allowances such as Leave, superannuation, workers compensation.

The Multiple Indicia Test

A worker is considered as independent contractor if he arranges the taxation matter at his own.

A worker is considered as independent contractor if that person is tradesperson or professionals and conducting their own business.

A worker is considered as independent contractor if he was engaged to perform some particular task, and worker is considered as employee if he was employed for some definite period.

If remuneration is provided in wages then person is considered as employee, and if remuneration is in the form of lump sum, price per volume or as per results then worker is considered as independent contractor. If worker sets his own place and hours of work then he is considered as independent contractor.

If worker have ability to delegate his work then he is considered as independent contractor.

If employer has control over the conduct of worker then he is considered as employee of the company, and if employer has control over the reporting then worker considered as independent contractor[6][7].

Application:

In the present case, Simone working in PR PRO, and she entered into an agreement with PR PRO at the end of 2012, to operate from 1 January 2013 until 31 December 2016. This agreement stated that Simone was not an employee of the company but she is abiding by all the rules of the company.

Simone wears the shirt which had logo of PR PRO and she received agreed percentage of sales she made but she also receive small amount of base payment on a monthly basis. She paid income tax directly to the taxation department. Working hours of Simone are not set and she uses her own car for meeting the clients but she gets no allowance for that. She gets training from specialized agency and PR Pro pays for it.

It is necessary for Simone to keep her phone all the time so she can answer her clients, and she receives extra payment where work took weekend and public holiday hours.


Simone never gets any entitlement related to personal leave or holiday leave and company has never offered her any paid holidays.

In this case all multiple indicia test is applied which discover following factors:

  • Company controls the work of Simone because all the rules of the company are applicable on Simone also.
  • Simone integrated in the business of the company because she wears the uniform of the company.
  • Simone manages her owns taxation matter.
  • She is not conducting her own business.
  • She is employed for the period of 1 January 2013 until 31 December 2016.
  • She receives remuneration in both ways as percentage of her sale and also basic pay rate.
  • She needs to keep her mobile phone with her all the time and it shows that she is on work all the time.
  • She is not entitled for any allowance or other benefits.

Conclusion:

After considering all the above factors it is clear that she work as an independent contractor in PR PRO.

Rule:

Annual leave is also known as holiday pay in Australia which means employee must be paid while having time off from work. Annual leaves entitlement introduced by National Employment Standards (NES). Any time of award or agreement cannot provide annual leaves less than those stated by NES but they have right to give more annual leaves.

Entitlement to Annual Leave

Annual leaves become part of NES standards 1 January 2010 and standards of NES apply to all employees covered by the national workplace relations system. All employees except casual employees have right to get paid annual leaves[8]. An English case law Morley v Heritage plc [1993] IRLR 400. In this case, there is general rule which stated that every employee was entitled to annual leave for the period of four months per year.

Full time and part time employees of the company have right to get 4 weeks of annual leave, and these leaves are based on their ordinary hours of work.

Employer cannot breach standard of NES and in case of breach of NES standards court imposed penalty of $10,800 for an individual and $54,000 for a company[9].

Accumulation of annual leaves:

Annual leaves accumulate from the day of joining of employee, even though probation period of employee is not over. Accumulation of annual leave is done when employee is on:

  • Paid annual leave and paid sick leave.
  • Long service leave.
  • Leave related to community service and it also includes duty of jury.

Accumulation of annual leave is not done when employee is on:

  • Unpaid annual leave
  • Unpaid sick leave
  • Unpaid parental leave[10].

Application:

In the present case, on 1/12/2016 Simone had a stroke because of which she lost her capability to work in the foreseeable future, and doctor stated that reason of stroke was high stress level, and her obesity. The reason behind this is that she had no holidays or weekends free from work for a long time.

Simone has right to get 4 week annual leave as an employee of the company and company breach their duty under common law by not providing annual leave to Simone. Therefore, PR PRO breach their and court can impose penalty of $54,000 for breach of NES standards.

Conclusion:

In this case, PR PRO breaches their duty under common law by breaching the standards of NES for annual leave.

Rule:



Employee has right to receive notice from employer, and employer cannot terminate the employment unless he gives written notice to the employee. It is necessary that employer must issue notice to the employee personally, send the notice at last updated address, and sending notice to employee by pre paid post[11].

 Minimum time period for serving notice to the employee:

An employer’s cannot terminate their employees unless they give minimum period of notice or make complete payment of employees they have worked.

Minimum time period of notice are:

Total employment period of employee

Notice period

Employment period of employee is not more than 1 year

1 week

Employment period of employee is more than 1 year but less than 3 years

2 weeks

Employment period of employee is more than 3 year but less than 5 years

3 weeks

Employment period of employee is more than 5 year

4 weeks[12]

Every employee of the company is entitled to receive minimum period of notice or payment under FW act, and the period of notice is depend on the length of service of employee. It is the duty of employer to ensure that whether employee is entitled for higher period of notice[13]. This can be understand with the case law that is Lavarack v Woods of Colchester [1967] 1 QB 278 ('Lavarack'). In this case, Court sets out the general principle that in case of termination, employee has right to claim for what he is legally entitled.

Notice Requirements for Termination

Application:

In the present case, PR PRO decided to replace Simone because of her disability to work in near future. In this case, Simone is working in the company from last 4 years and as per the requirement of FW Act PR PRO is under obligation to serve minimum notice period to Simone.

As per the requirement to serve minimum notice period the length of service of employee is considered. Simone is working from last four years in the company and she is entitled to receive notice for the minimum period of three weeks.

Conclusion:

PR PRO is under obligation serve 3 weeks’ notice period to Simone under FW Act.

Case law

Zuljs v Wirth Bros Pty Ltd (1955) 83 CLR 561.

Stevens v Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16.

Hollis v Vabu Pty Ltd [2001] HCA 44 207 CLR 21; 75 ALJR 1356; 181 ALR 263

Websites

High Court of Australia, “Hollis v Vabu Pty Ltd [2001] HCA 44”  9 August 2001, accessed on 27th January 2017, https://eresources.hcourt.gov.au/downloadPdf/2001/HCA/44.

ATO, “Employee/contractor decision tool”, accessed on 27th January 2017, https://www.ato.gov.au/calculators-and-tools/employee-or-contractor/.

Law Teacher, “An Employee Or Independent Contractor”, accessed on 27th January 2017, https://www.lawteacher.net/free-law-essays/employment-law/an-employee-or-independent-contractor-employment-law-essay.php#ftn7.

FWO, “Annual leave”, accessed on 27th January 2017, https://www.fairwork.gov.au/leave/annual-leave.

FWO, “Annual leave”, accessed on 27th January 2017, https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/minimum-workplace-entitlements/annual-leave.

Australian Union, “Types of leave and public holiday entitlements factsheet”, accessed on 27th January 2017, https://www.australianunions.org.au/types_of_leave_factsheet.

Pattie Walsh, “Termination of Employment in Australia: Best Practice Guide”, 20 August 2013, accessed on 27th January 2017, https://www.mondaq.com/australia/x/257796/employee+rights+labour+relations/Termination+of+Employment+in+Australia+Best+Practice+Guide.

FWO, “Notice of termination & redundancy pay”, accessed on 27th January 2017, https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/minimum-workplace-entitlements/notice-of-termination-and-redundancy-pay.

FWO, “Dismissal - how much notice”, accessed on 27th January 2017, https://www.fairwork.gov.au/ending-employment/notice-and-final-pay/dismissal-how-much-notice.

Zuljs v Wirth Bros Pty Ltd (1955) 83 CLR 561.

Stevens v Brodribb Sawmilling Company Pty Ltd(1986) 160 CLR 16.

Brenda Marshall, “Working it out- Employee or independent contractor”, 12, no. 5 (2006). https://epublications.bond.edu.au/cgi/viewcontent.cgi?article=1102&context=nle. (Accessed on 27th January 2017).

Hollis v Vabu Pty Ltd [2001] HCA 44 207 CLR 21; 75 ALJR 1356; 181 ALR 263.

High Court of Australia, “Hollis v Vabu Pty Ltd [2001] HCA 44”  9 August 2001, accessed on 27th January 2017, https://eresources.hcourt.gov.au/downloadPdf/2001/HCA/44.

ATO, “Employee/contractor decision tool”, accessed on 27th January 2017, https://www.ato.gov.au/calculators-and-tools/employee-or-contractor/.

Law Teacher, “An Employee Or Independent Contractor”, accessed on 27th January 2017, https://www.lawteacher.net/free-law-essays/employment-law/an-employee-or-independent-contractor-employment-law-essay.php#ftn7.

FWO, “Annual leave”, accessed on 27th January 2017, https://www.fairwork.gov.au/leave/annual-leave.

FWO, “Annual leave”, accessed on 27th January 2017, https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/minimum-workplace-entitlements/annual-leave.

Australian Union, “Types of leave and public holiday entitlements factsheet”, accessed on 27th January 2017, https://www.australianunions.org.au/types_of_leave_factsheet.

Pattie Walsh, “Termination of Employment in Australia: Best Practice Guide”, 20 August 2013, accessed on 27th January 2017, https://www.mondaq.com/australia/x/257796/employee+rights+labour+relations/Termination+of+Employment+in+Australia+Best+Practice+Guide.

FWO, “Notice of termination & redundancy pay”, accessed on 27th January 2017, https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/minimum-workplace-entitlements/notice-of-termination-and-redundancy-pay.

FWO, “Dismissal - how much notice”, accessed on 27th January 2017, https://www.fairwork.gov.au/ending-employment/notice-and-final-pay/dismissal-how-much-notice.

Cite This Work

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"Employment Status And Common Law Duties." My Assignment Help, 2018, https://myassignmenthelp.com/free-samples/an-employee-or-independent-contractor.

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[Accessed 16 July 2024].

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My Assignment Help. Employment Status And Common Law Duties [Internet]. My Assignment Help. 2018 [cited 16 July 2024]. Available from: https://myassignmenthelp.com/free-samples/an-employee-or-independent-contractor.

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