Employment Relationship and Australian Guide to Legal Citation - Essay Example

Law Report Employment Relationship The employment relationship is the outcome of employment. However, no specific legislation provides an exact or explicit definition of the term employment relationship. This necessitates recourse to a number of principles that are based on the common law meaning of this relationship. The common law treats the employment relationship as a contract of service. In addition, it incorporates another concept, namely that of contract for services, so as to define the relationship between an independent contractor and the principal. The employment laws provide legal protection to the employees, on the basis of the nature of the contract of service.1 Nevertheless, section 7 of the Industrial Relations Act 1979 (WA), defines the employer as a company, corporation, firm or person that employs employees. Control Test In Australia, the courts are predisposed to invoke the control test to establish the presence of an employment relationship. This control test is to be applied to the relationship between the plaintiff and the defendant. It has no bearing on the actual work performed by a worker. Therefore, under this test, the courts attach scant importance to whether the work performed by the worker had been completed under the direct control of the employer. As a matter of fact, it attempts to determine the existence or otherwise, of a relationship between these entities.2 Although, this test had been applied with considerable frequency, the courts came to the conclusion that it would be inadequate to rely exclusively on the test of control. Thus, the recognition dawned on the judiciary that the control test should not be the sole basis for classifying the employment relationship. The courts found that in specialised and expert work, employers exercised a modicum of control over their employees. Thus, the difficulty associated with relying solely on the control test came to the fore. Now, Chris had been working as a tour guide for the Australian Coach Tours. His tenure with this company had been of 15 years standing. Specifically, he was under a contract to this company, and each of these was of 2 years duration, which he would immediately renew on the expiry of the old contract. In order to determine whether an individual is an employee, the multi factor test developed in the course of judgements in cases like Hollis v Vabu Pty Ltd,3 is employed. This test questions; first, the extent and nature of an organisation’s control over its workers. Second, the manner in which remuneration is provided to the worker by the organisation. Third, whether the organisation or the worker is responsible for the equipment used in the course of the work. Fourth, extent of the worker’s obligation to work for the organisation. Fifth, the extent to which the worker is entitled to delegate the allotted work.4 In instances, wherein an agreement between an organisation and a worker, it its totality, was aimed at instituting an employment relationship; a contractual clause that explicitly declared that its workers were not employees would not hold good. This was the decision in Narich Pty Ltd v Commissioner of Payroll Tax, in which the Judicial Committee of the Privy Council was of the opinion that the extent of control exercised over the worker by the organisation was sufficient to make the contractual clause ineffectual. This initiative has been described as piercing the veil of self-employment.5 Moreover, clause 3 of the contract between the company and Chris had specified that the latter had been engaged as an independent contractor. As per the decision in Narich Pty Ltd v Commissioner of Payroll Tax the exercise of significant control over the worker renderes the latter an employee and the contractual clause that describes the workers as not being employees would not be valid. This clause is not conclusive of the relationship. In our case, the contract with the Australian Coach Tours, renders Chris responsible for a number of duties. This company would provide the details of the passengers on its tours to Chris. Considerable control was exercised over the work performed by Chris, as he was required to report to the company’s office, gather information about the passengers and provide a commentary during the tour to the passengers. The uniform to be worn by Chris had been specified in the company’s Employee Code of Conduct. This code had also specified the manner, in which he was expected to behave with the passengers. He was required to report twice a day to the company’s office and prepare a detailed report, regarding the various places visited, and the problems that had arisen, with regard to accommodation, food and consumables. This report was to be prepared at the end of every tour. Since, Chris is sufficiently controlled by the Australian Coach Tours company; he is an employee and not an independent contractor. As such, the courts apply the multi – factor test, in order to determine whether a worker is an employee. In addition to the control test, mode of payment, test of who is responsible for the provision of equipment, the extent of the worker’s obligation to work for that company, empowerment of the worker in respect of the delegation of his duties, will be conducted. An agreement with a worker that can be described as a long term agreement is considered by the courts to be contract of service. On the other hand, where the agreement is restricted to specific task can be anticipated to be categorised as a contract for services. This was the decision in Humberstone v Northern Timber Mills. 6 This difficulty has been addressed, in some contracts, by incorporating the provision that a specific task is to be performed in connection with a continuing agreement, by means of a separate request that is made at the time of the provision of that service. In this context, any payment that is on the basis of a specific task or job is likely to be deemed to be indicative of an independent contract. However, a contract of service is generally presumed, if the remuneration to a worker is either regular or periodic.7 In a similar fashion, the industrial laws provide several benefits to the parties who work under a contract of service. As such, a contract of service is deemed to be an employment relationship, by the courts. The latter have developed a number of tests and approaches to recognise an employment relationship. On the change of management, Chris was not provided with a month long list of tours to be supervised by him. The new owners NR required Chris to report after every tour and find out the details of the next tour. As such, Chris was employed by the organisation, named NR, in such a manner that he had to furnish the details of his tour, every time as a separate task. In accordance, with the above discussion, Chris can be considered as an independent contractor. In Sweeney v Boylan Nominees, a refrigerator mechanic utilised his own tools and equipment, in the course of his work. Moreover, he used to prefer an invoice for the work done by him, on a task to task basis. Furthermore, he was required by the company to maintain his own insurance. This mechanic was deemed to be an independent contractor by the court.8 In our problem, although, Chris has taken care of taxation arrangements and preserves the receipts for the expenses incurred, he can be considered an employee, because of the long term agreement entered into with the company. The law, hither to, had proclaimed that any employee who sustained an injury, due to the infringement of a regulation or Act, was entitled to prefer a claim for damages, against the employer. Such regulation or Act should specifically aim at protecting employees and ensuring their safety from injury, at work.9 The Occupational Safety and Health Act 1984 The provisions of the Occupational Safety and Health Act 1984, relate to a situation, wherein an employee is injured, on account of the failure of the employer to provide plant and equipment that are safe to use. In such cases, action under the common law for the injury caused, and prosecution for the infringement of the Occupational Safety and Health Act 1984, could transpire.10 An injured worker is not provided with a common law action, against the employer for every infringement of the statute. Such common law action is dependent on the establishment of several elements. First, the infringement of the statutory obligation should be such that it affords the worker with a personal right of action. In other words, the worker, in question, should be a member of the class of individuals that the statue specifically intends to protect. This condition indicates that such protection is not limited to those who are engaged in the relationship between an employer and an employee. Second, it is imperative to prove that an obligation under the statue is inherent in the entity against whom the action is initiated. Thereafter, it has to be established that the obligation prescribed by statute has been infringed, and that the injury to the plaintiff can be ascribed to such infringement. In addition, the plaintiff has to prove that the injury sustained is of the very nature that the statute was aimed at precluding. Moreover, there is no requirement, as is the case with the infringement of common law duties, to establish foreseeability, inevitability or absence of the exercise of reasonable care. In Dairy Farmers Co – operative Ltd v Azar, the plaintiff successfully brought in an action for damages, in respect of breach of statutory duty by the defendant.11 Moreover, in Kelly v Dowell Australia, the plaintiff contended that the defendant had breached a duty of care. While upholding this contention, the court also ruled that the defendant was guilty of a breach of statutory duty.12 With regard to Moira, Chris should have exercised much greater care. As the manager of the tour, he should have abstained from making her indulge in a very active dance, involving considerable physical risk. Therefore Chris is liable for the injuries caused to Moira. However, she cannot claim compensation from NR, as she sustained an injury while dancing with Chris, which is outside of the course of employment. Hence, the NR company is not liable for any damages to Moira. Furthermore, Chris drove a bus negligently and caused an accident. The outcomes of this accident were injuries. Chris had conducted himself in a manner that had not been specified by his employer, therefore, NR is not liable for the injuries suffered by Chris and Bob. In addition, Chris suffered an injury while removing the belongings of Moira from the bus. Due to the negligence of the bus driver, Chris suffered an injury. Moreover, he drove the bus to the airport in a negligent manner. On account of the negligent driving of Chris, the bus met with an accident. Therefore, NR is not responsible for the damages caused to Bob. Moreover, Chris injured himself when he attempted to collect Moira’s belongings. The bus driver had negligently left the luggage in the aisle. Therefore, NR is liable for the damages caused to Chris. Occupiers of land or properties are under a duty of care towards entrants, with regard to several aspects relating to the property. An occupier is held responsible for the condition of the premises and for activities that take place at that place. They must take reasonable steps for the safety and protection of the entrants. They are expected to prevent risk of injury to the entrants. Moreover, the occupant should take all reasonable measures to prevent injuries that can be foreseen. In Bowles v Canton, the plaintiff Bowles was a customer in the defendant’s restaurant. She was exposed to second-hand smoke in the restaurant, due to which she suffered an asthma attack. As a result, she was ill and could not attend her work for a week. She suffered from the illness for over six subsequent weeks after she developed the asthmatic attack. She brought legal action against the defendant for breach of duty of care. The court accepted her claim and awarded $10,000 as compensation for her suffering. However, the judge reduced the damages paid to the plaintiff, on discovering that she had been guilty of contributor negligence.13 Chris cannot claim common law damages, as he did not undergo any permanent impairment. Since, there is no permanent loss or impairment, Chris cannot claim damages under the provisions of the Workers Compensation Law. As per section 67 of the Worker’s Compensation Act 1967, an injured person can claim damages, only if there is a 10 % or more of permanent impairment. Breach of Statutory Duty In employment cases, employers are under a statutory duty to protect their employees from disease or injury during the course of employment. If the employer violates this duty and if the employee sustains injuries or contracts disease, during the course of employment, then the employee can sue the employer for damages, on the charge of breach of statutory duty. Employees can also sue employers if they fail to take reasonable steps for providing safety to employees and if such failure results in causing injuries to the employees. 14 The NR Company should have taken steps for the maintenance of the bus safety. In Carroll v Melbourne Metropolitan Transit, the plaintiff Sean Carroll was a bus driver. He was exposed to tobacco smoke in the workplace, which caused him to develop lung cancer. The parties arrived at an out of court settlement, wherein the defendant company paid an amount of $65,000 to the plaintiff towards compensation. 15 The Workers Compensation and Injury Management Act 1981 (WA) In accordance with the provisions of the Workers Compensation and Injury Management Act 1981 (WA), an employer will be liable for the injuries sustained by the employee while doing the authorised work. However, in our present problem, Chris sustained injuries while driving the bus. The latter work is not a part of the work to be done by Chris. Therefore, the employer NR will not be liable to Chris for the injuries caused to the latter. Bob sustained injuries, due to the accident caused by Chris, while driving to the airport. He can claim damages for the suffering caused by the injury to his neck, from Chris. However, he cannot claim compensation from the NR Company, as Chris had driven the bus outside of his employment duties. Physical harm is not the only issue related to a work injury. Such injuries can cause anxiety, panic attacks and sleeplessness. In general, compensation cannot be claimed for injuries caused, while travelling from and to work or the home. An injured individual could be entitled to motor vehicle third party insurance benefits, provided the concerned individual had been injured while travelling in a motor vehicle. 16 As such, Chris cannot claim damages for the stress that he had undergone, on account of his injuries. Bibliography Andrew Stewart, Stewart’s Guide to Employment Law (2008) 47 Bowles v Canton Pty Ltd (Unreported 13 September 2003, Magistrate Court of Victoria) Breach of statutory duty Legal Services Commission of South Australia at 24 September 2010 Carroll v Melbourne Metropolitan Transit Authority (Work care claim, Victorian Accident Compensation Tribunal, July 1988) Dairy Farmers' Co-operative Ltd v Azar (1990) 170 CLR 293 Hollis v Vabu Pty Ltd (2001) HCA 44 Humberstone v Northern Timber Mills (1949) 79 CLR 389 Kelly v Dowell Australia (1988) ATR 80 Ken Phillips, Beyond Loyalty: Alternatives to Employment < http://epress.anu.edu.au/agenda/003/03/3-3-NA-3.pdf > at 25 September 2010 Narich Pty Ltd v Commissioner of Payroll Tax (1983) 50 ALR 417 Occupational Safety and Health Act 1984 (WA) Sona Bendix Common law treats the employment relationship (2001) Juta and Company Ltd Sweeney v Boylan Nominees Pty Limited (2006) HCA 19 Workers Compensation and Injury Management Act 1981 (WA) Read More