Legal Scenarios - Case Study Example

Parties to a contract of employment cannot alter the nature of the contract by simply putting a label on it. In this scenario, ‘indicia’ conspicuously balance the relationship in favor of an employment. To begin with, the level of control exerted by Big Time over Glenn suggests an employee. The more the control exercised by one party over the other, the more the relationship weighs in favor of a contract of services. The exercise of control over the way in which work is carried out, and degree of such control are to be examined and applied as prominent distinguishing factors (Abdalla, Abraham v.

Viewdaze Pty Ltd (2003)122 IR par. 23). The control test looks not only whether it is the employer who dictates what is to be done, but also the means of doing it, when it is to be done and where it is to be done (Employment Status, p.9). Big Time exercises great control over Glenn, in that it dictates the destination of the products, while Glenn is required to follow instructions. The second ‘indicia’ relates to the right to delegate. In Express and Echo Publications Ltd v. Tanton [1999] IRLR 367, the court held that a wide power of substitution is inconsistent with a contract of services.

The general rule is however not absolute. . y, Sargeant and Jefferson, 2013, p.17).In this scenario, Glenn has a limited power to delegate given that he must seek prior consent from the management of Big time. The manager was not obliged to accept every request, and could, therefore, dictate when Glenn could delegate. The third indicium rests to the fact that Glenn used his own truck and tools to do the work. Where an employee provides his own tools of trade, the relationship is more likely to be one for services (Abdalla, Abraham v Viewdaze Pty Ltd).

Nevertheless, not every instance that an employee provides their own tools that the balance tilts in favor of independent contractors. In Hollis v Vabu Pty Ltd (2001) 207 CLR 21 the court considered that bicycles that the workers provided are not tools that could be used exclusively for the courier work that they had been contracted. Similarly in this scenario, a truck cannot be used exclusively for delivery of fresh produces exclusively. However, it is material if Glenn had adapted the truck for delivery purposes only.

The fourth ‘indicia’ arise from the fact that Glenn is required to make his own arrangements for taxation purposes. If the employer deducts tax on a PAYE basis, it is an indication of a contract of services. It follows that where the worker makes his own tax arrangements, the relationship is more likely to be one of an independent contractor. However, not all relationships where the worker makes his own tax arrangement are a contract for services as in Federal Commissioner of Tax v J Walter Thompson (1944) 69 CLR 227.

Finally, the other indicia concern the bearer of a financial risk in case of a loss. Where the employer bears the risk of any financial loss or injury that arises in the course of the worker discharging his duties, the contract is