An Independent Contract Worker for the Portland Hotel

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

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The issue in this present case is whether Julia has any employment status.
Julia was a children’s performer who works for the children of the guests at the Portland
Hotel. When she was not performing, she used to act as a babysitter for parents at the hotel
who wish to leave their children. She has been working for the hotel for six years. Her
contract with the hotel states that she is an independent contractor offering children’s
entertainment services. The contract of her employment confers her with the title of an
independent contractor. However, the law does not confer a title of a contractor upon a
person only because it has been expressly stated in the contract effecting the employment.
The multifactor test needs to be satisfied by a person to be rendered to be a contractor.
Under the common law, contractors and employees are two different concepts and the
laws applicable to the employees are not applicable to the contractors. The courts have been
faced with several cases where the difference between employee and contractor has been
questioned. The courts have formulated a multifactor test in order to determine the status of
an employee and draw a distinction between the employees and the contractors. This test has
evolved from the case of Short v J W Henderson Ltd [1946] 62 TLR 4271. This case has
established four requirements that can be applied to differentiate an employee from a
contractor. These requirements include control over work, remuneration, suspension and
dismissal. Another threefold test for the same has also been formulated in the case of Ready
Mixed Concrete Ltd v Minister of Pensions [1968] 2 QB 4972.
These cases has provided five factors that constitutes the multifactor test. Firstly, the
control of the work is a factor of differentiation. This indicates that the contractors exercise
the sole control over their work. Whereas the employees are required to work under the
1 Short v J W Henderson Ltd [1946] 62 TLR 427
2 Ready Mixed Concrete Ltd v Minister of Pensions [1968] 2 QB 497

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control of the employer. However, in the case of a contractor, the independence in the work is
required to be subjected to the terms of the contract between the employer and the contractor.
Secondly, the exclusiveness of the services provided by a person is another factor to
differentiate between an employee and a contractor. The employees render their services
exclusively to the employer. However, the contractor has the scope of working with more
than one client.
Thirdly, the power to delegate can be treated as another important factor in differentiating
an employee from a contractor. The contractor has the power to delegate their work to other
people. They generally hires people to carry out his work. However, the employees do not
have the scope of delegating their work. They are required to perform their work themselves.
Fourthly, the timing within which the work is required to be performed by a person also
decides his status of employment. The contractors are generally supposed to carry out the
work assigned at any time they wish. However, the employees are under an obligation to do
the work within the stipulated timing of an office.
Fifthly, the remuneration is another key factor in separating an employee from a
contractor. The basis on which an employee is paid remuneration is timely but a contractor is
generally paid on the basis of the units of completed work.
Lastly, the place where the work needs to be carried out is another key decisive factor in
separating a contractor from an employee. An employee is required to carry out his work
within the office premises. However, a contractor has the discretion to carry out their work at
any place where they desire to do the same.
In this case, the contract of Julia with the hotel requires her to be available to work for the
hotel up to 40hrs per week. During this time, Julia needs to be available for work whenever
the hotel authorities will require her services, which includes Saturdays and Sundays. In

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reality, she works 8hrs a day from Wednesday to Sunday and gets Monday and Tuesday off.
This does not satisfy the time factor that renders a person to be a contractor. The contractors
are generally supposed to carry out the work assigned at any time they wish. However, the
employees are under an obligation to do the work within the stipulated timing of the office.
This renders Julia to be an employee of the Portland Hotel as she is required to carry out the
work assigned to her within the stipulated time as mentioned by the employer.
In this instance, Julia has been given a uniform to wear. She works exclusively from the
premises of the hotel and her work is supposed to carried out under the supervision of the
hotel manager, Deepak. This attracts both the control test as well as the exclusiveness test.
Julia does not exercise the sole control over her work. She required to work under the control
of the hotel manager Deepak. Whereas the contractors exercise the sole control over their
work. Moreover, wearing a uniform makes it very evident that the control of the work carried
out by Julia is under the control of the employer. Moreover, the services rendered by Julia is
to be carried out within the office premises and she does not have the discretion of carrying it
out at any place she desires to carry out. This also satisfies the place of work test, which
renders Julia to be an employee. The services rendered by Julia is for the hotel exclusively
and she does not have the option of serving multiple client.
The payment is made to Julia as a remuneration for her services to the hotel is paid £400
per week through the hotel’s PAYE system. If she gets tips from the parents, she gets to keep
them. The remuneration that has been paid to Julia is on a weekly basis. This makes her an
employee as the mode of remuneration on a timely basis renders a person to be an employee
under the multifactor test. Again, remuneration paid under the PAYE system is only
applicable to employees and not contractors.

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However, it can be contended that a term in her contract entitles her to bring a friend to
work as a substitute, in case she is unable to work. This might have the probability of her
being a contractor as she has been conferred with the power to delegate. However, the friend
is required to be suitably skilful and there needs to be a prior approval of the same from the
manager of the hotel. Moreover, when she has applied for the same the manager refused her
request to bring a friend to work in place of her and prohibited her to do the same in future.
This makes Julia an employee under the power to delegate test.
Hence, it can be stated that applying the multifactor test, Julia can be treated to be an
employee and not a contractor.
Hence, it can be concluded that Julia is an employee of the Portland Hotel.
Another issue pertaining to this present scenario is whether Julia has any employment law
claims against the Portland Hotel.
In the present situation, the government passed a new law which will requires hotel
babysitters to have a childcare qualification by July 2019. Julia has not got a childcare
qualification so Deepak agreed to allow her to attend college one day a week to get one.
Unfortunately, last month Julia failed her end of year exam and will have to resit the year.
When Deepak has been made aware of the news of Julia’s failure to pass the examination he
was disappointed and asked Julia to attend a capability assessment. He also informed Julia
that if she could not continue to babysit the children her contract would be terminated. This
cannot be justified for the employer to terminate the contract of Julia for her failure to
continue with the babysitting. This is because the employment contract by which the
employment of Julia has been instituted mentions her to be a children’s entertainer who is
supposed to provide children’s entertainment services. This requires Julia to be a children’s
entertainer and the babysitting is not the main objective of her employment. Hence, the hotel

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is not justified dismissing the employee on the basis of her failure to pass the childcare
qualification test. However, the hotel as Julia to bring a colleague along for support.
Section 94 of the Employment Rights Act 1996 confers upon the employees a right to
avail protection against the unfair dismissal3. However, an employee needs to be continuing
services with the employer for not less than one year and is also required to prove that a
dismissal has been effected by the employer. A dismissal is said to be an unfair one if the
same does not have any valid reason backing the same. However, the Act provides for certain
reasons under which the employer is justified in effecting a dismissal of the employee. A
dismissal, which has been carried out without any valid reasons confers the employee with a
right to claim damages. The discretion to declare the dismissal to be unfair falls on the
tribunal. In determining the same, the tribunal will consider whether the employer had some
justified reason for effecting such dismissal and will apply several test to arrive at a
conclusion with respect to the same.
However, section 98 of the Employment Rights Act 1996 provides for certain grounds
under which the employer is justified in dismissing an employee. The first ground that has
been provided under this section justifying the dismissal of an employee by his employer is
the qualification or the capability. In this context, capability implies the skill or physical and
mental condition of the employee and qualification implies any degree or diploma that is
necessary for continuing the employment. However, before effecting a dismissal under this
ground, the employer is under an obligation to communicate to the employee his expectation
from the employee. In such an instance, the employer needs to provide an opportunity to the
employee to response to the same. In case of any inadequacies in the qualification of the
employee, which is necessary for the purpose of the employment, the employer needs to
arrange a training to extend support to the employee and needs to give time to the employee
3 The Employment Rights Act 1996

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to make improvements. This can be illustrated with the case of Alidair Ltd v Taylor, 1978,
ICR 445, CA4. In the case of Archibald v Fife Council [2004] UKHL 325, it has been
contended by the court that before employer is required to explore all the grounds that might
not support the dismissal of the employee before effecting the same.
The second ground provided in the act which makes the dismissal of an employee fair is
the gross misconduct that an employee has committed to compel the dismissal. The same can
be illustrated with the case of British Home Stores Ltd v Burchell [1978] ICR 3036. The third
ground that renders a dismissal to be fair is when the employing of the employee has been
rendered illegal by some subsequent event. As a fourth ground, the employer is also justified
in dismissing an employee if they can establish redundancy. The same can be illustrated with
the case of Pfaffinger v City of Liverpool Community College [1996] IRLR 508, EAT7.
In case a dismissal has been effected, the employee needs to challenge the fairness of the
same in the tribunal. In such a situation, the tribunal is to determine the reasonability of the
action of the employer in effecting such a dismissal. It must also considered the manner
following which the employer has dealt with the circumstance and has effected the dismissal.
In case tribunal is of the opinion that the dismissal that has been carried out is not justified
and the same can be construed to be unfair, the tribunal may extend remedies to the employee
with respect to such a dismissal. These remedies include Reinstatement, Reengagement and
compensation. The compensation in this context consists of basic award and compensatory
award.
However, the tribunal is required give due consideration to the terms of the employment
contract if any while deciding upon a case of unfair dismissal. The dismissal that has been
4 Alidair Ltd v Taylor, 1978, ICR 445, CA
5 Archibald v Fife Council [2004] UKHL 32
6 British Home Stores Ltd v Burchell [1978] ICR 303
7 Pfaffinger v City of Liverpool Community College [1996] IRLR 508, EAT

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carried out by an employer is required to be in conformity with the terms provided in the
employment contract. The same can be illustrated with the case of Johnstone v Bloomsbury
Health Authority [1991] ICR 269 CA8.
In that assessment meeting, Julia argued that she should be given another chance to
complete the course and that a substitute could be used in the meantime for babysitting. She
also argued that she could continue to give her performances even if she could not babysit.
This is valid as in case of any inadequacies in the qualification of the employee, which is
necessary for the purpose of the employment, the employer needs to arrange a training to
extend support to the employee and needs to give time to the employee to make
improvements. The hotel manager said he has no reason to keep her on if she cannot babysit.
Moreover, the hotel manager also contended that her performances have been substandard for
several months as she has not learnt any of the latest children’s songs. This can be treated as a
fair ground for dismissal but applying the principles of the case of Alidair Ltd v Taylor, 1978,
ICR 445, CA, she is required to be provided with time to make improvements.
Moreover, the hotel decided to terminate her contract and gives her one month’s notice.
Although the hotel authorities are justified in dismissing the employee but as the ground for
the dismissal is not justified Julia has employment law claims against the Portland Hotel.
Hence, it can be concluded that Julia has any employment law claim against the Portland
Hotel.
8 Johnstone v Bloomsbury Health Authority [1991] ICR 269 CA

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References
Alidair Ltd v Taylor, 1978, ICR 445, CA
Archibald v Fife Council [2004] UKHL 32
British Home Stores Ltd v Burchell [1978] ICR 303
Johnstone v Bloomsbury Health Authority [1991] ICR 269 CA
Pfaffinger v City of Liverpool Community College [1996] IRLR 508, EAT
Ready Mixed Concrete Ltd v Minister of Pensions [1968] 2 QB 497
Short v J W Henderson Ltd [1946] 62 TLR 427
The Employment Rights Act 1996