The issue based on the facts is to determine whether Daniela whom has been working with Fragrant is considered to be an employee or an independent contractor. The illustration of whether she was treated as an employee or an independent contractor is raised through a range of tests and relevant cases to support the final decision.
Whilst there is no clear definition of what is an employee, one clear emphasis is whether Daniela engaged in a contract of service or a contract for service. It is important to recognise the difference between these terms because this is one of the first key signs of contrasting between an employee and an independent contractor. Another important concept that may be presented is vicarious liability. Vicarious liability is where the employer is held responsible for any wrongdoings by an employee in the workplace. Examples include injuries, discrimination, harassment or any other wrongdoings in the workplace. The use of case law examines this further. The cases that are relevant to this matter are Hollis v Vabu and Fair Work Ombudsman v Metro Northern Enterprises. Analysis:
In the Hollis v Vabu case, this involved a bicycle courier doing deliveries and. Vabu believed that this was a ‘contract for service’ where they claim they were not liable for injuries by Hollis but also provided their own equipment such as the bikes they used to take out the deliveries and any other work related expenses. As this is utilising their own equipment and supplies, the first indication might suggest that the couriers are independent contractors. However, the worker was not running the business themselves and instead were helping the business, they claimed to have worn work uniforms, there were no skills or qualifications required and that the couriers could not refuse the work given.
In the Fair Work Ombudsman v Metro Northern Enterprises Pty Ltd case, this presented persons / individuals selling kitchenware products to consumers and were advised that they are to work as independent contractors and will be paid on a commission basis. The court adjudged that they were employees where they breached sham contracting. Whilst there is no distinct definition, the concept is where “an arrangement for an independent contractor if both parties (worker and employer) were in an employment relationship.”
Another case of sham contracting was Fair Work Ombudsman v Foodora. Foodora, a food delivery company with competitors such as UberEats, Deliveroo and Menulog was investigated after it was found that the delivery workers were not given the full entitlements and were eligible to receive minimum wages and conditions. The Fair Work Ombudsman implemented the multi-factor test and stated that the three workers were employees where they also worn Foodora’s brand of uniform and were not conducting their own business. However, the case went unreported because Foodora decided to cease operations in Australia and was in breaches of the Fair Work Act, which therefore is another example of sham contracting.
To summarise this issue, Daniela is considered to be an employee because she is provided a Fragrant uniform, she is engaged as a ‘contract of service’ due to the ongoing relationship and Rossini provides all the necessary equipment for Daniela to use to sell perfume products. Thus, in Hollis v Vabu , FWO v Metro Northern Line and FWO v Foodora all three cases present the level of skills required to complete the job is limited and that the workers don’t have control of the tasks given similarly to Daniela and they weren’t in a capacity to delegate the job to others or to reject work.
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