EMPLOYMENT LAWS Issue 1 Whether Bob can be inferred to a contractor or an employee in the Club

Running head: EMPLOYMENT LAWS
Employment Laws
Name of the Student
Name of the University
Author Note

1EMPLOYMENT LAWS
Issue 1
Whether Bob can be inferred to a contractor or an employee in the Club.
Rule
Under the common law, the employment Laws holds good only in case of employees and
does not extend to cover the contractors. The distinction between an employee from a
contractor can be drawn applying the multi factor test that has been formulated by the courts
over the years. This test is an extension of the three fold test that has come up with the case of
Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National
Insurance [1968] 2 QB 497. This test requires a person to satisfy three criterion to gain the
status of an employee. These criterion are the control of work, payment of remuneration and
the contract of employment. However later these factors have been elaborated to form the
multi factor test in its present form.
The control of the work is the first factor that recognises a person to be a contractor or an
employee. The work carried out by a contractor is outside the scope of the control of the
employer as contractors are meant to perform their work in an independent manner. Again,
certain terms relating to the work entrusted upon the contractor are mentioned in the contract
between the employer and the contractor are need to be abide by. However , in case of
employees the control over the work they perform lies with the employer and the employee is
required to carry out the work in the manner prescribed by the employer.
The second factor distinguishing between employee and contractor is the delegation power. A
contractor has the power to delegate the task he has been contracted for to perform two other
people. The contractor hires workers in order to complete the task on their behalf.

2EMPLOYMENT LAWS
The decisive factor that comes thought is the exclusiveness of the work performed. The
services provided by an employee is exclusive to the employer. Whereas a contractor might
provide services to more than single client. A contractor generally provide services to many
clients.
The time within which the work is to be performed indicates the fourth decisive factor. The
contractor are not required to perform their job within any specified timings, they have the
discretion to choose their own timing to perform the work. However the work of the
employees is required to be carried out during the hours fixed by the employer.
The fifth decisive factor drawing distinction between contractor and an employee is the
remuneration. The employees are paid regular remuneration based on time whereas a
contractor is paid in accordance with the unit work performed.
Short v J W Henderson Ltd [1946] 62 TLR 427, is one of the cases with which the multi
factor test has evolved. In this case the four decisive factors distinguishing contractor from
employees has been formulated, namely suspension dismissal remuneration and control.
Under the Australian laws, the obtaining of Australian business number does not
automatically render a person do a contractor. All the decisive factors must also be satisfied
in this respect.
Application
In the instant situation, RSL club has employed Bob to be an employee in their company. The
company after several years of service ask Bob to obtain the ABN to serve the company as a
contractor. This has been influenced by the decision of the company to operate their business
with respect to the bar through a contractor. An ABN can be obtained by a contractor for
preparing invoices. The availing of the ABN will not make Bob a contractor. He needs to
comply with the multi factor test with that respect.