Workplace Law: Employee or Contractor, Binding Policies, and Justified Dismissal

This study material from Desklib discusses the legal provisions of workplace law for employees and contractors, the binding policies in the employment contract, and justified dismissal. It covers the multi factor test to distinguish between an employee and a contractor, the binding nature of the Code of Conduct, and the fair go principle for dismissal. It also provides an application of these rules to a scenario involving Bob, an employee who made sexually inappropriate comments towards a co-worker.

Running head: WORKPLACE LAW
Workplace Law
Name of the Student
Name of the University
Author Note

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Question 1
Issue
Whether Bob still remained an employee or he is a contractor at present.
Rule
The Employment Laws under the common law regime is applicable only to the employees
with respect to their relationship with the employer. It does not extend to the contractors, as
they are different from employees (Anderson, Brodie, & Riley, 2017). The differentiation
between the contractor and the employee can be made applying the multi factor test that has
evolved under the common law with several cases. The threefold test formulated in the case
of Ready Mixed Concrete Ltd v Minister of Pensions [1968] 2 QB 497, has been the
inception to the multi factor test.
The factor of the multi factor test, which is of paramount importance, will be the control
factor. The control of the work performed is one of the main decisive factors in distinguishing
a contractor from an employee. The control over the work performed by the employees is
mostly exercised by the employer and the employees are required to carry out their duties
under the authority of the employer (Sappideen, O'Grady, & Riley, 2016). On the other hand,
the discretion with respect to the work to be carried out by the contractor lies with the
contractor only. The contractors are basically, independent in performing their work and the
employer does not have any control over the same. The mode that the contractor chooses to
perform his work in, depends upon the desire of the contractor. However, in performing the
work, the contractor needs to make regards to the terms of the contract that has been entered
with the employer.

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The power in relation to delegation is another significant factor of distinction between the
employer and the contractor. The contractors are generally required to appoint other people to
perform their work whereas the employees needs to complete their work by themselves and
no power of delegation is available to them.
Exclusiveness in performing work is yet another factor in drawing distinction between a
contractor and an employee. The services rendered by employees are exclusive to the
employers. However, contractors might deal with more than a single client.
The mode of payment of remuneration is also a factor of difference between the employee
and a contractor. In case of employee the payment of timely remunerations are made while
the contractors are paid in units of work completed.
The timing of the work performed is another decisive factor in making distinction between
the contractor and the employee. The contractor has the discretion of carrying out their work
at any time they prefer. But in case of employees, the work needs to be performed at a time
fixed by the employer and the employee does not have much independence on it.
In the case of Short v J W Henderson Ltd [1946] 62 TLR 427, manner of suspension,
control of conduct, remuneration and dismissal has been identified as the decisive factor.
The obtaining of Australian Business Number (ABN) does not make a person contractor
automatically. The multi factor test also needs to be complied with for becoming a contractor.
Application
The nature of the relationship between Bob and RSL has traces of both an employee-
employer relationship and a client- contractor relationship. The multi factor tests exist to
adequately determine the exact nature of this relationship. The first test is control. In this
scenario RSL has full control and supervision over the actions and activities of Bob. They
determine the nature, scope and all the other details for Bobs work along with the pay. The
next test is the ownership of tools and equipment, as Bob works as a sommelier he only has

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access to all the wine and other material supplied by the club. The third test is financial
involvement, risk undertaken and possibility of making a profit. As Bob has no opportunity
of making a profit, or incurring any business loss, or any operating cost he is only an
employee and not a contractor applying this test. Another test is the integration test, used for
employees that possess a high skill set. If the work of an employee is integral to the business
and not merely an accessory. The tests all help determine conclusively Bob’s status.
Conclusion
Bob is not a contractor but an employee.

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Question 2
Issue
Whether policies contained in the contract of employment is binding upon Bob.
Rule
An employment contract specifies the details of the relationship that an employee and
employer share. The same must specify all the details of employment -the hours of work,
wages, duration of contract, termination and code of conduct (Adams, 2016). Such a contract
cannot be less favourable than the Act itself and has all the legal validity of a contract. An
employment Contract like all contracts are legally binding. The Code of Conduct being a part
of the Employment Handbook and the employee contract are binding on the employees
(Abbott, Mackinnon, & Fallon, 2016).
It has been explained in the case of National Australia Bank Limited v Rice [2015] VSC
10 that the code of conduct is binding upon the employees.
Application
As there have been various interpretations and understanding of the policies and
procedures of the Code of Conduct that are applied by RSL and important people in the
workplace, the same policies must be evaluated to determine their scope of application. As
the Company’s policies do not explicitly have the force of law it must be evaluated if the
same are binding on its employees and the extend of its application.
Code of Conduct being guidelines for all actions and being implemented through training
is binding on all employees of the club. It is an employee’s duty to comply with the Code of
Conduct in the same manner that they comply with legal requirements and mandates. For a
Code of Conduct to be legally binding it is the responsibility of the company to have the

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same Code converted to a legal instrument that is signed by its employees, the same becomes
true when the code is incorporated in the Employment Contract. In such an instance a
violation of the policy attracts disciplinary and legal actions being a breach of contract. As
the employment Contract, when the Code is incorporated in the Contract, the Code is binding
and have the legal force of a contract. However, in this instance Bob and the Club were in
close proximity and thus the Code of Conduct extended to Bob and he was liable under the
same.
As Bob is an employee of the Club and as a result of the employment contract that he has
signed with them he is under all the liabilities and obligations that an employee has. An
employee has the responsibility to fulfill all the work assigned to him and maintain the
decorum of the place of employment and respect other co-workers. As the policies are a part
of the Employee Handbook and hence the Contract of Employment all the employees are
bound to follow the Codes that are set out in the Handbook. The Company has additionally
taken measures to incorporate the principles and codes of the company within the employees
through continuous training.
Conclusion
The policies are binding upon Bob by virtue of being an employee.
Question 3
Issue
Whether dismissal of Bob on this ground would be justified and in compliance with legal
provisions.

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Rule
When an Employee is found guilty for misconduct after proper inquiry they can be
terminated without notice. The employee should be given an opportunity to defend himself.
Additionally, Employment Contracts must also have provisions outlining the termination
procedure (Mamic, 2017). The law does not specify acts that amount to misconduct but can
be found in the employment Contract.
In Re Loty and Holloway v Australian Workers' Union [1971] AR (NSW) 95, it was
established that there had to be a valid reason for the dismissal of an employee and the same
must follow procedural correctness. The case established a fair go principle where both the
employee and employer must be given a fair opportunity when the employment contract
ends.
In Phoenix House Ltd v Stockman and another [2016] IRLR 848 EAT was established
that an employer does not need to resort to Code of Conduct when there are other reasons for
dismissal.
Application
The evidence shows that Bob had made sexually inappropriate comments towards Iris a
co-worker that caused feelings of discomfort, embarrassment and anger such acts amounted
to bullying and harassment as defined under Company’s Employee handbook. The acts of
Bob therefore amounted to a violation of the Code of Conduct as the evidence shows. After
singling out Iris, a co-worker Bob made sexually inappropriate and offensive comments for
her. Previously there were trainings conducted to acquaint the workers with the policies of
the Code.
In this case Bob was given an opportunity to explain his misdemeanors and was also
trained to understand the Code of Conduct. Having failed at both and there being evidence to
show that his acts towards his co-worker Iris amounted to sexual harassment the Club would

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be justified in taking all necessary disciplinary action even if termination of contract is one of
them. The reason is valid and proper procedure must be followed to execute the same. In this
act Bob’s actions are not only violative of the Club’s internal Code but also national Law. All
instances of sexual harassment at workforce can amount to criminal liability and if the club
fails to take adequate measures they can become vicariously liable for the same.
Conclusion
Dismissal of Bob on this ground would be justified and in compliance with legal
provisions.

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Reference
Abbott, K., Mackinnon, B. H., & Fallon, P. (2016). Understanding Employment Relations.
OUP Catalogue.
Adams, E. M. (2016). Human rights at work: Physical standards for employment and human
rights law. Applied physiology, nutrition, and metabolism, 41(6), S63-S73.
Anderson, G., Brodie, D., & Riley, J. (2017). The Common Law Employment Relationship:
A Comparative Study. Edward Elgar Publishing.
Mamic, I. (2017). Implementing codes of conduct: How businesses manage social
performance in global supply chains. Routledge.
National Australia Bank Limited v Rice [2015] VSC 10
Phoenix House Ltd v Stockman and another [2016] IRLR 848 EAT
Re Loty v Australian Workers’ Union 1971 AR (NSW) 95
Ready Mixed Concrete Ltd v Minister of Pensions [1968] 2 QB 497
Sappideen, C., O'Grady, P., & Riley, J. (2016). Macken's Law of Employment.
Short v J W Henderson Ltd [1946] 62 TLR 427