Workplace Laws Employment Relationship

Questions: 1. Is Maisy an employee or another type of worker? 2.Assuming Maisy is an employee, who is Maisys employer, Technicalities or IS? 3.Assuming Maisy is an employee, has Maisys employer breached any contractual duty owed to her? Answers: Introduction: The chief issue to be discussed in the scenario provided is the nature of the employment relationship existing among the parties, that is, whether the engagement creates a contract of service or a contract for service. Additionally, the paper will also seek to determine the employer or client in the scenario provided depending on the identified type of employment contract. Finally, the discourse will be concluded with an analysis of the contractual obligations of employers to employees in an effort to identify whether there was any breach with regard to the same in the scenario provided. 1. Employment Contracts As aforementioned, the major legal issue arising from the provided scenario is the determination of Maisys employment relationship, that it, what type of worker she is. In order to identify Maisys employment relationship, the type of contract existing between her and either of the organisations is a legal issue that needs to be determined. A contract of service establishes an employee and employer relationship while a contract for services creates that of a client and an independent contractor (Brender, 2006). Various tests have been established with the aim of providing a criterion against which relationships are tested to determine employment (Hopgood Ganim Lawyers, 2011). These tests include; the control test, the organisation test, the multi-indicia test, and the economic reality test. The control test was the first to be applied in determining employment relationships(Hopgood Ganim Lawyers, 2011). It considered the degree of control and the actual exercise of control in any give n case to determine employment. (Brender, 2006). McCardie J, in Performing Right Society Ltd v Mitchell Booker Ltd [1924] 1 KB 762, stated that the nature and degree of control exercised on an alleged servant determined whether they were an employee or an independent contractor. Inadequacies with the control test led to the adoption of the multi-indicia or multi-factor test which considers control, among other factors, in establishing employment relationships(Fair Work Building Construction (FWBC), 2013). The test was outlined in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 where the High Court established that although the control test was significant it was no longer a sufficient and factors such as the mode of payment, working hours, tax deductions, delegation of duties among others also had to be considered (Sewerynski, 2003). Labour hire agencies, like Technicalities, can either directly employ workers or engage them as independent contractors; where workers are employed for contractor services, they usually have their own Australian Business Number (ABN) as provided by tax law(Parliament of Australia, 2004). Odco arrangements give rise to three-party agreements where workers are seen as contractors for the agency and the host company and not as employees(Parliament of Australia, 2004). This was illustrated in Building Workers Industrial Union of Australia v Odco Pty Ltd (1991) 99 ALR 735 where, while applying the multi-factor test, the Full Federal Court found that the labour-hire workers were not employees but independent contractors (Karen, 2004). In Borg v Troubleshooters Available Pty Ltd [1995] WAIRComm 129, the labour hire agency had no control over Borgs work; he also did not receive any payments for leave and paid his own taxes, unlike an employee. These conditions were held to create an independ ent contractor relationship(Karen, 2004). In the case study, it is seen that Maisy took her daily work instructions from Innovative Storage. This allocation of duties and accompanying supervision constitutes a degree of control that under Federal Commissioner of Taxation v J Walter Thompson [1944] HCA 23 would be said to prove employment. Maisy also received training from IS in an account system once a week; in Ace Insurance Ltd v Trifunovski [2011] FCA 1204 this would be a factor distinguishing as an employee. It is, however, important to note that Maisy also had her own ABN, was not paid sick leave and paid her own taxes and superannuation. These issues qualify Maisy as an independent contractor. 2. Labour Hire Workers As Maisy was contracted by a labour-hire organisation, there is a need to identify whether she was contracted as an employee or an independent contractor by Technicalities Ltd. Labour hire workers arise from a situation where an organisation maintains and employs people who are later assigned to work in other companies(Workplace OHS). Where these workers are contracted to be paid by the labour-hire agency then they are considered as employees of the agency. In a labour-hire scenario, two notable relationships exist, the first being between the agency and the worker which is based on employment and the second being between the agency and the host company. If an employment contract exists between the labour-hire agency and the worker, then it is not expected that the worker and host company enter into an employment contract(Century Insurance Co. Ltd v Northern Ireland Road Transport Board, 1942). In the case provided, Maisy was contracted as an office worker in 2014 by Technicalities Ltd, a labour-hire company, who then placed her with their client, IS. The relationships outlined in the discussion above are evident in Maisys case as there is an established relationship between her and Technicalities Ltd and another between Technicalities Ltd and IS. Based on this finding, it can be assumed that Maisy is an employee of Technicalities and is therefore restricted from entering into an employment contract with IS unless she first resigns from employment with Technicalities Ltd. However, as much as it is evident that Maisy was probably a labour-hire worker on casual employment, there are still glaring characteristics of an independent contractor in this employment scenario. At this juncture, it is paramount to discuss the possibility of the existence of a sham contracting agreement. This is an arrangement created when an employer, in order to avoid certain obligations, purports to pass off an employer-employee relationship as one a contract for service (Australian Government, 2013). An example would be where the employee is required to have an ABN and submit invoices and a contractor agreement is relied on to make the working relationship appear legitimate(RP Emery Associates). Damevski v Guidice (2003) 202 ALR 494 is a case that illustrates how certain employers can take advantage of the contradiction in common law between employees and independent contractors to their workers disadvantage (Karen, 2004). In the given scenario, Technicalities Ltd. had requested Maisy to register an Australian Business Number so as to be able to receive her pay. This statement can be said to be a misrepresentation that led Maisy to enter into a contract without her knowledge. This misrepresentation can be said to have allowed Technicalities Ltd to avoid responsibilities such as paying superannuation and taxes on Maisys behalf. It can, therefore, be concluded that Technicalities, as Maisys employer, attempted to represent her as an independent contractor without prior notice or agreement and is thus liable for various penalties under the Fair Work Act 2009. 3. Duties of Employers The case study gives rise to the issue of employers obligations especially with regard to entitlements or awards and safety at work. Workers are entitled to the relevant modern awards as well as National Employment Standards (NES) regardless of the standing arrangements at the host company (Australian Government, 2013). These awards include the employees right to; receive pay for work done which is inclusive of tax deductions and superannuation, paid carer and sick leaves among others stipulated in statute(Australian Taxation Office (ATO), 2016). Additionally, an employer is restricted from transferring employees to other employers without their consent. An employer is also tasked with ensuring mutual trust and confidence in the employment relationship and as such cannot conduct themselves in a manner that destroys this trust (Woods v WM Car Services (Peterborough) Ltd, 1982). An employer also has a duty to provide work for the employee. That major issue arising with regard to an employers duties in this scenario is the duty of care with regard to workplace safety. An employer is tasked with the duty to ensure the safety of employees at the workplace which is implied into employment contracts by common law(Scally v Southern Health Social Services Board, 1992). Lord Wright categorised the duties of an employer as the duty to provide; competent fellow employees, safe plant and equipment and a safe system of work(Wilsons Clyde Coal Co. v English, 1937). The standard test for the duty of care is that of reasonableness, that is, what would a reasonable employer do under the same circumstances(Latimer v AEC, 1953)? Employees are entitled to care and safety in the workplace as guaranteed by the Work Health and Safety Act 2011. In the case of labour-hire workers, this duty is imposed on both the host company and the labour-hire organisation as seen in Drake Personnel Limited v WorkCover Authority of New South Wales [1999] 90 IR 432, where it was held that in as much as the host company owes a duty to the employee, the labour hire agency has an obligation to ensure that the premises are safe for their employee(Emerald Group Publishing, 2006). As per the facts, Maisy received her remuneration from Technicalities who paid her at a flat hourly rate. However, she not paid sick leave as well as carer leave and her medical expenses after her injury at Innovative Storages premises were reimbursed by the host company. Technicalities Ltd has therefore breached various NES requirements with regards to the awards and entitlements due to Maisy. The duty of care to Maisy with regard to workplace safety has also been breached as the cleaning of the spill was not sufficient to ensure the workers did not slip. Additionally, any changes in the terms or conditions of a labour hire contract can be said to construe a dismissal. Although the labour-hire worker remains lawfully employed by the agency, where the agency fails to provide further work the employee can assume a dismissal. It is advisable to seek advice as soon as possible as the law only allows 21 days to file a case against unfair dismissal for labour hire employees(Nick, 2013). As it is the agencys duty to provide its employees with work; an implied duty as in most cases it would lead to a reduction in actual or potential earnings as illustrated in Turner v Goldsmith [1891] 1 QB 544. In Maisys case, IS employed a new worker which led to the termination of her services with the host company. Although this may seem as a dismissal, Maisy has been established as an employee of Technicalities and is therefore not dismissed as a worker. It is Technicalities duty to provide work for Maisy as lack of work means she cannot earn her keep. Ad ditionally, as Maisy is a labour-hire worker, she cannot enter into a contract with IS as an employee until she has duly resigned from the labour hire agency as earlier mentioned. Conclusion In conclusion, the discussion above provides evidence that affirms that Maisy is a labour-hire employee, contracted by Technicalities Ltd. There is no employment contract existing between Maisy and IS as the host company is merely a client of Maisys employer. Technicalities can also be said to have used a misrepresentation to exclude itself from various contractual obligations owed to Maisy as an employee and as such was in breach of its contractual duty. Maisys could also not get the job advertised at IS as she is a Technicalities employee and would have to resign if she wished to work elsewhere. Additionally, Maisys termination from work with IS does not constitute an unfair dismissal as she is still legally employed by Technicalities, however, should her employer fail to provide her work she could sue for unfair dismissal as they will have failed to uphold their duties. References Angela, W., Daniel, G. (2013, February 28). The differences between employee and contractor . Retrieved from Chartered Accountants: https://www.charteredaccountants.com.au/News-Media/Charter/Charter-articles/Business-management/2013-03-The-differences-between-employee-and-contractor.aspx Australian Government. (2010). Types of Employees. Retrieved from Fair Work Ombudsman: https://www.fairwork.gov.au/employee-entitlements/types-of-employees Australian Government. (2013, December). 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