BU1112 Business Law

6 Pages / 1,490 Words Published On: 23-10-2021

Question:

Task:

PRX is a public relations company in Perth. They sell various services to businesses who want to improve their public image. Stella is one of their full time salespersons. She signed an agreement at the end of 2012, to operate from 1 January 2013 until 31 December 2016, stating that she was not an employee and that she would abide by all PRX rules. Until recently, Stella wore a shirt that had a PRX embroidered logo and received an agreed percentage of all sales she made. She also received a small base payment on a monthly basis. Stella paid tax on that income directly to the taxation department. PRX recommends their workers register a business name for these purposes. Stella had no set hours and used her own car to visit clients. She maintained her car and received no allowance for its use. PRX has not trained her or the other salespersons, rather they attend a specialised training agency and PRX pays for it. Stella was required to have her mobile phone with her at all times for work reasons, and she answered calls from PRX and clients at all hours. She was able to claim a top up payment where work took weekend and public holiday hours, as it always did. Stella never discussed her entitlement to personal leave or holiday leave in the four years she worked for PRX and they have never offered her any paid holidays.

On December 1 2016 Stella had a stroke and will not be able to work at all for the foreseeable future. The doctor determined it was due to her high stress level, her obesity and the fact she has had no holidays or weekends free from work for a long time.

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

If we assume Stella is an employee, is PRX in breach of a common law duty in relation to not giving Stella any days off work or holidays?

If we assume Stella is an employee, does she have an entitlement to notice, at common law or legislative, if PRX decides to replace her?

Answer:

Part A

Issue:

Whether Stella is considered as an employee of PRX?

Rule:

The main difference between employee and independent contractor is stated below:

Employee entered into contract of service, but contractor entered into contract for services.
Employer exercise control over the employee but no control was exercised by employer on contractor. It is considered as traditional test which was developed in Zuijs v Wirth Bros(Zuijs v Wirth Brothers Pty Ltd 1995).
Employer exercise control over the employee but no control was exercised by employer on contractor.

Multiple indicia test was introduced by common Law in case Stevens v Broadribb Sawmilling Co Pty Ltd (Stevens v Brodribb Sawmilling Co Pty Ltd 1986). This test was confirmed in case Hollis v Vabu Pty Limited (Hollis v Vabu Pty Ltd 2001)in the Australia. This test include following factors:

FACTORS	INDEPENDENT CONTRACTOR	EMPLOYEE
Training	If no training is conducted by employer.	If training is conducted by employer.
integration	If worker is not integrated into business.	If worker is integrated into business such as wearing uniforms use vehicle of employer, etc.
Tax arrangements	If managed by worker itself	If managed by employer.
Duration of service	If worker is performing any specific task	When worker is employed for indefinite period.
Remuneration	Lump-sum amount	wages
Control related to place and hours of work	worker stated the place and hours of work	Employer stated the place and hours of work
Delegation of work	If worker has ability to allocate the work to others.	If worker does not have ability to allocate the work to others (teacher n.d.).
Supplied and maintenance of equipment and tools.	If supplied by worker then independent contractor.	If supplied by employer.

Application:

In the present case, Stella worked for PRX and entered into contract with PRX which states that she is not the employee of PRX but all the rules of PRX are applicable on her:

Stella work as per her discretion, and working hours are not decided by the PRX, and as per multiple indicia test if working hours of the person are not decided by its employer then such person is considered as independent contractor.
She used her won vehicle and did not get any allowance for the same, and if person use his own vehicle while performing his task then person is considered as independent contractor.
She receives percentage on the basis of her sale, and she is also getting fixed amount of money at the end of the month. However, employee receives the remuneration in the form of wages but in this Stella is also receiving percentage on the basis of sale.
She manages her tax herself, and person who is managing her tax by themselves then such person is considered as independent contractor.
Training was not conducted by PRX for the purpose of train the Stella, and employer does not provide training to the independent contractor.

After considering above facts, it is clear that Stella is the Independent contractor of PRX, because all the factors of indicia test are fall in the context of independent contractor.

In this case, control test which is also known as traditional test is also applied. In this PRX does not control the activities of Stella which means Stella is not bound to work as per the directions of PRX. As stated above, Employer exercise control over the employee but no control was exercised by employer on contractor. It is considered as traditional test which was developed in Zuijs v Wirth Bros (Zuijs v Wirth Brothers Pty Ltd 1995). Therefore, Stella is worked as independent contractor.

Conclusion:

Stella is not the employee of PRX, as she works as an independent contractor.

Part B

Issue:

Whether Stella has right to get any days off from work or holidays under Australian employment law?

Rule:

Employees has right to take leaves under employment law of Australia for different reasons, and these minimum leave entitlements are stated by National Employment Standards (NES). Employees of the company takes laves because of various reasons, and employer has no right to refuse the leave entitlement of employee.

Employer is under obligation to provide these minimum leave entitlements to their employees.

Section 86 and 87 of Act states the annual leave entitlement of employee, and as per these sections, employee has right to take for each year of service:

4 weeks of paid annual leave; or
5weeks of paid annual leave if other provisions are applicable(Act, Section 86 2009).

Section 114 of the Act states that employee has right to take leave on public holidays (Act, section 114 2009). As per this section, employee has right to be absent from work on public holiday either for whole day or part day. However, employer can make request to employee for work on public holidays if such request is reasonable in nature. Employee has right to refuse the request of employee if such request is not reasonable in nature and refusal is reasonable.

Application:

In the present case, Stella is the employee of the company but PRX fails to provide her leaves which breach the right of Stella stated under employment law. PRX does not compiled with the section stated under section 86, 87, and 114. PRX breach provisions of Fair work Act stated under section 86 and 87 if they fail to provide leave to Stella because as stated above Employer is under obligation to provide these minimum leave entitlements to their employees.

Section 86 and 87 of Act states the annual leave entitlement of employee, and as per these sections, employee has right to take for each year of service:

4 weeks of paid annual leave; or
5weeks of paid annual leave if other provisions are applicable.

It must be noted that an employee who is not casual employee has right to get accumulates four weeks of paid annual leave for each year of service employee carried with the employer. An employee is entitled to annual leave on the basis of number of ordinary hours they work on continuous basis for their employers. It must be noted that annual leave continuously accumulates when an employee takes a period of paid annual leave or paid personal/carer’s leave. However, it is not possible for employee to accumulate annual leave on the basis of unpaid leave unless it is community service leave or it is provided for in an award or registered agreement (FWO 2017).

PRX also breach section 114, because as per this section, employee has right to be absent from work on public holiday either for whole day or part day. PRX also fail in providing this right to Stella.

Conclusion:

Section 86 and 114 is breached by PRX if they fail to give leave to Stella.

Part C

Issue:

Whether PRX is under obligation to serve notice of termination to Stella?

Rule:

Section 117 of the Fair Work Act 2009 state (Act, section 117 2009), that employer must provide proper notice to the employee before terminating the employee, and such notice must be issued in writing. Notice of terminating the employee is the right of employee, and this right is defined under section 117 of the Act.

Minimum time period of notice is completely based on the time period of continuous services of employee with the employer, and this period is stated below in following table:

Length of service	Minimum period notice
Service performed by employee of less than 1 year with the employer.	Notice off minimum period of one week.
Service performed by employee of at least 1 year but less than 3 year with the employer.	Notice off minimum period of 2 week.
Service performed by employee of at least 3 year but less than 5 year with the employer.	Notice off minimum period of 3 week.
Service performed by employee for more than 5 years.	Notice off minimum period of 4 week.

Application:

In the present case, Stella worked with the PRX from 2013 to 2016which means her period of continuous service with PRX is 3 years andStella has right to get termination notice of minimum period of 3 weeks. As per section 117, employer must provide proper notice to the employee before terminating the employee, and such notice must be issued in writing. Minimum time period of notice is determine on the basis of service which means if service is performed by employee of at least 3 year but less than 5 year with the employer then employer is under obligation to serve notice of 3 weeks. Therefore, PRX breach section 117 of the Act

Conclusion:

PRX breaches its obligation under section 117 of the Act by not serving 3 week termination notice to Stella.

Bibliography

Act, Fair Work. "section 114." 2009.

—. "section 117." 2009.

—. "Section 86." 2009.

FWO. Annual leave. 2017. https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/minimum-workplace-entitlements/annual-leave (accessed 09 28, 2017).

Hollis v Vabu Pty Ltd. 44 (HCA, 2001).

Info, work place. Termination of employment. https://workplaceinfo.com.au/resources/downloads/downloads/pocket-guide-for-termination. (accessed 09 28, 2017).

Stevens v Brodribb Sawmilling Co Pty Ltd . 1 (HCA, 1986).

teacher, law. An Employee Or Independent Contractor. https://www.lawteacher.net/free-law-essays/employment-law/an-employee-or-independent-contractor-employment-law-essay.php (accessed 09 28, 2017).

Zuijs v Wirth Brothers Pty Ltd . 73 (HCA, 1995).