An Independent Contract Worker for the Portland Hotel

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

1BUSINESS LAW
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

2BUSINESS LAW
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