The relevant question to ask is whether the
worker is an employee or an independent contractor. This involves consideration
of a range of factors.
Not every factor will be relevant in every
case, nor will all be given the same weight.
Control (that the employer has over the worker) remains the central
element.
Other relevant factors include:
1. Mode of remuneration;
2. Provision and maintenance of equipment;
3. Obligation to work;
4. Hours of work;
5. Provision of holidays;
6. Deduction of income tax;
7. Delegation of work by the employee;
8. Whether uniform provided;
9. Provision of training.
An employer is liable for the conduct of an
employee committed in the course of employment.
If the person who committed the liability was
an independent contractor and not an employee, then the employer will not be vicariously liable for that
conduct unless a non-delegable duty exists.
Independent
contractors
The person who employs an independent
contractor will only be liable for that contractor’s conduct if the employer
owed a personal duty of care to the victim and
that duty was a non-delegable duty of care. A non-delegable duty is a duty of
care which the court regards as being unable to be discharged or ‘outsourced’.
Example:
An
employer company hires an independent contractor to operate a forklift, taking
pallets from a warehouse to an awaiting truck. The forklift driver, desperate
to get home decides to speed things up. Manoeuvring at twice the usual speed,
the contractor hits an employee of the company. The employee may bring an
action against;
- The independent
contractor for negligent forklift operation,
- The employer
company for negligently failing to provide a safe working environment,
notwithstanding that the employer is seemingly faultless.
Where there is no non-delegable duty, an
employer is not liable for the conduct of an independent contractor, even if
that party was undertaking duties for the employer.
The words used to describe the relationship are
not definitive of the legal nature of the relationship (just because they name
themselves principal and contractor does not mean the law sees it as such), it
is a matter for the courts to decide objectively.
Where an employee is lent by one employer to
another employer, the company who retains control will be vicariously liable.
It is not sufficient that the new employer is in control of payment, if all
other forms of control remain with the original employer.
Was the
conduct committed during the course of employment?
If it is established that the person who
committed the act was an employee then the next question to be addressed is
whether the act was committed in the course of his/her employment.
An act or omission is still considered to be
in the course of employment if it is either a wrongful mode of committing an
authorised act or a wrongful act actually authorised by the employer
If an employee takes an opportunity during
employment to use time or resources for personal purposes the employer is not
liable. This is referred to as the “frolic” doctrine If it is argued that the employee was on a
frolic, both the purpose and extent of the deviation must be considered (for
example, where a driver deviated slightly off route to get refreshment from a
hotel, the employer was still held liable). If the employee is engaged on
employer business and on personal business at the same time, the employer may
still be liable.
An express prohibition by the employer of a
wrongful act will not necessarily be a defence to the employer if the
employee’s act was still a mode of doing what the employee was employed to do.
An employer may be vicariously liable for
both intentional and unintentional acts committed by an employee.
For
a more thorough consideration of this complex area of law, or if you would like
to know whether you are an employee or an independent contractor, make an
appointment to speak with one of our experts about your position and rights.
