Employment Law
Categories of a Worker
1
, Employment Law
Categories of a Worker
» Why is it important to determine if someone is an employee or
not?
Most common law and statutory
rights of protection only apply to
employees
2
, Employment Law
Categories of a Worker
» What is the definition of employee and where does it come
from?
‘An individual who has entered into or works under a contract
of employment’ (s 230(1) Employment Relations Act 1996
(ERA 1996)/s 295 Trade Union and Labour Relations
(Consolidation) Act 1992 (TULRCA)).
3
, Employment Law
Categories of a Worker
» What is the difference between a contract of services
and a contract for services?
A contract of services is what an
employee works under whereas an
independent contractor is said to work
under a contract for services.
4
, Employment Law
Categories of a Worker
» What tests havebeen developed at
common law to define the relationship
between employer and employee?
(1) The first test was the CONTROL test – that is, does the employer control both what
the person does and the manner of how he does it? If so, then the person was said to be
an employee. This test is now seen as out of date with modern working practices and
should be only considered as one of the factors.
One profession which highlights the inadequacy of the control test is Doctors, who are in
the main, employees, but their employer does not control the manner in which they
operate. See Cassidy v Ministry of Health [1951].
(2) The second test was the INTEGRATION test – that is, is the person fully integrated
into the employers concern, or independent of it? If the latter, then that person was not
an employee. Again, this test is now seen as out of date and should only be viewed as
one of the factors.
One example of why this test is no longer adequate relates to employees who work from
home and so may not be fully integrated into the employers concern but would still be
considered employees. See Airfix Footwear Ltd v Cope [1978].
5
, Employment Law
Categories of a Worker
● What tests have been developed at common law to define the
relationship between employer and employee?
(3) The third and modern approach has been to abandon the
search for a single test and adopt a MULTIPLE test approach,
weighing up all of the factors for and against the existence of a
contract of employment to determine whether the worker is ‘in
business on his own account’.
6
, Employment Law
Categories of a Worker
» Ready Mixed Concrete (South East) Ltd v Min. of Pensions and
National Insurance [1968]
FACTS: The minister claimed that the Plaintiff company was liable to pay NI
contributions in respect of a driver employed by it to transport concrete. The
contract between the driver and the company stated that he was an
independent contractor and provided that, for a fixed period, he would carry
nothing but the company’s concrete in a vehicle which he would hire purchase
from the company. He had to wear the company’s uniform and the vehicle
was to be painted with the company’s colours and insignia. Repairs to the
vehicle could be required by the company, the driver being responsible for all
running and repair costs. If, at any time, the driver was unable to carry out the
company’s requirements because of illness, he could hire another driver for
the vehicle.
7
, Employment Law
Categories of a Worker
» Ready Mixed Concrete (South East) Ltd v Min. of Pensions and
National Insurance [1968]
HELD: A contract of employment exists if three conditions are satisfied;
1.The servant agrees that, in consideration of remuneration, he will provide his
own work and skill in performance of some service for his master.
2.He agrees, expressly or impliedly, that in the performance of that service he
will be subject to the other’s control in a sufficient degree to make that other
master.
3.The other provisions of the contract are consistent with its being a contract
of service.
In this case, the driver was held not to be an employee mainly because the
ownership of assets, the chance of profit and the risk of loss in the business of
carriage were his and not the company’s.
8
Categories of a Worker
1
, Employment Law
Categories of a Worker
» Why is it important to determine if someone is an employee or
not?
Most common law and statutory
rights of protection only apply to
employees
2
, Employment Law
Categories of a Worker
» What is the definition of employee and where does it come
from?
‘An individual who has entered into or works under a contract
of employment’ (s 230(1) Employment Relations Act 1996
(ERA 1996)/s 295 Trade Union and Labour Relations
(Consolidation) Act 1992 (TULRCA)).
3
, Employment Law
Categories of a Worker
» What is the difference between a contract of services
and a contract for services?
A contract of services is what an
employee works under whereas an
independent contractor is said to work
under a contract for services.
4
, Employment Law
Categories of a Worker
» What tests havebeen developed at
common law to define the relationship
between employer and employee?
(1) The first test was the CONTROL test – that is, does the employer control both what
the person does and the manner of how he does it? If so, then the person was said to be
an employee. This test is now seen as out of date with modern working practices and
should be only considered as one of the factors.
One profession which highlights the inadequacy of the control test is Doctors, who are in
the main, employees, but their employer does not control the manner in which they
operate. See Cassidy v Ministry of Health [1951].
(2) The second test was the INTEGRATION test – that is, is the person fully integrated
into the employers concern, or independent of it? If the latter, then that person was not
an employee. Again, this test is now seen as out of date and should only be viewed as
one of the factors.
One example of why this test is no longer adequate relates to employees who work from
home and so may not be fully integrated into the employers concern but would still be
considered employees. See Airfix Footwear Ltd v Cope [1978].
5
, Employment Law
Categories of a Worker
● What tests have been developed at common law to define the
relationship between employer and employee?
(3) The third and modern approach has been to abandon the
search for a single test and adopt a MULTIPLE test approach,
weighing up all of the factors for and against the existence of a
contract of employment to determine whether the worker is ‘in
business on his own account’.
6
, Employment Law
Categories of a Worker
» Ready Mixed Concrete (South East) Ltd v Min. of Pensions and
National Insurance [1968]
FACTS: The minister claimed that the Plaintiff company was liable to pay NI
contributions in respect of a driver employed by it to transport concrete. The
contract between the driver and the company stated that he was an
independent contractor and provided that, for a fixed period, he would carry
nothing but the company’s concrete in a vehicle which he would hire purchase
from the company. He had to wear the company’s uniform and the vehicle
was to be painted with the company’s colours and insignia. Repairs to the
vehicle could be required by the company, the driver being responsible for all
running and repair costs. If, at any time, the driver was unable to carry out the
company’s requirements because of illness, he could hire another driver for
the vehicle.
7
, Employment Law
Categories of a Worker
» Ready Mixed Concrete (South East) Ltd v Min. of Pensions and
National Insurance [1968]
HELD: A contract of employment exists if three conditions are satisfied;
1.The servant agrees that, in consideration of remuneration, he will provide his
own work and skill in performance of some service for his master.
2.He agrees, expressly or impliedly, that in the performance of that service he
will be subject to the other’s control in a sufficient degree to make that other
master.
3.The other provisions of the contract are consistent with its being a contract
of service.
In this case, the driver was held not to be an employee mainly because the
ownership of assets, the chance of profit and the risk of loss in the business of
carriage were his and not the company’s.
8
