PRX and Stella: Employment Law Issues of Contractor and Employee

This report analyzes a legal case involving Stella and PRX, focusing on employment law in Australia. Part A determines whether Stella is an employee or an independent contractor, applying the 'multiple indicia test' and control tests, concluding she is an independent contractor. Part B examines Stella's entitlement to leave under the Fair Work Act, highlighting PRX's failure to provide annual and public holiday leave, thus breaching sections 86, 87, and 114. Part C addresses whether PRX was obligated to provide a termination notice, concluding that PRX breached section 117 of the Fair Work Act by not providing the required three-week notice. The report cites relevant legislation, including the Fair Work Act 2009, and legal precedents to support its conclusions.

Running Head: Law 1
Law

Law 2
Answer 2
Part A
Issue:
Whether Stella is considered as an employee of PRX?
Rule:
The main difference between employee and independent contractor is stated below:
 Employee entered into contract of service, but contractor entered into contract for
services. Employer exercise control over the employee but no control was exercised by employer
on contractor. It is considered as traditional test which was developed in Zuijs v Wirth
Bros (Zuijs v Wirth Brothers Pty Ltd 1995).
 Employer exercise control over the employee but no control was exercised by employer
on contractor.
Multiple indicia test was introduced by common Law in case Stevens v Broadribb Sawmilling
Co Pty Ltd (Stevens v Brodribb Sawmilling Co Pty Ltd 1986). This test was confirmed in case
Hollis v Vabu Pty Limited (Hollis v Vabu Pty Ltd 2001)in the Australia. This test include
following factors:
FACTORS INDEPENDENT
CONTRACTOR
EMPLOYEE
Training If no training is conducted by
employer.
If training is conducted by
employer.

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integration If worker is not integrated into
business.
If worker is integrated into
business such as wearing
uniforms use vehicle of
employer, etc.
Tax arrangements If managed by worker itself If managed by employer.
Duration of service If worker is performing any
specific task
When worker is employed for
indefinite period.
Remuneration Lump-sum amount wages
Control related to place and
hours of work
worker stated the place and
hours of work
Employer stated the place and
hours of work
Delegation of work If worker has ability to
allocate the work to others.
If worker does not have ability
to allocate the work to others
(teacher n.d.).
Supplied and maintenance of
equipment and tools.
If supplied by worker then
independent contractor.
If supplied by employer.
Application:
In the present case, Stella worked for PRX and entered into contract with PRX which states that
she is not the employee of PRX but all the rules of PRX are applicable on her:
 Stella work as per her discretion, and working hours are not decided by the PRX, and as
per multiple indicia test if working hours of the person are not decided by its employer
then such person is considered as independent contractor.

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 She used her won vehicle and did not get any allowance for the same, and if person use
his own vehicle while performing his task then person is considered as independent
contractor.
 She receives percentage on the basis of her sale, and she is also getting fixed amount of
money at the end of the month. However, employee receives the remuneration in the
form of wages but in this Stella is also receiving percentage on the basis of sale.
 She manages her tax herself, and person who is managing her tax by themselves then
such person is considered as independent contractor.
 Training was not conducted by PRX for the purpose of train the Stella, and employer
does not provide training to the independent contractor.
After considering above facts, it is clear that Stella is the Independent contractor of PRX,
because all the factors of indicia test are fall in the context of independent contractor.
In this case, control test which is also known as traditional test is also applied. In this PRX does
not control the activities of Stella which means Stella is not bound to work as per the directions
of PRX. As stated above, Employer exercise control over the employee but no control was
exercised by employer on contractor. It is considered as traditional test which was developed in
Zuijs v Wirth Bros (Zuijs v Wirth Brothers Pty Ltd 1995). Therefore, Stella is worked as
independent contractor.
Conclusion:
Stella is not the employee of PRX, as she works as an independent contractor.

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Part B
Issue:
Whether Stella has right to get any days off from work or holidays under Australian employment
law?
Rule:
Employees has right to take leaves under employment law of Australia for different reasons, and
these minimum leave entitlements are stated by National Employment Standards (NES).
Employees of the company takes laves because of various reasons, and employer has no right to
refuse the leave entitlement of employee.
Employer is under obligation to provide these minimum leave entitlements to their employees.
Section 86 and 87 of Act states the annual leave entitlement of employee, and as per these
sections, employee has right to take for each year of service:
 4 weeks of paid annual leave; or
 5weeks of paid annual leave if other provisions are applicable (Act, Section 86 2009).
Section 114 of the Act states that employee has right to take leave on public holidays (Act, section 114
2009). As per this section, employee has right to be absent from work on public holiday either for whole
day or part day. However, employer can make request to employee for work on public holidays if such
request is reasonable in nature. Employee has right to refuse the request of employee if such request is not
reasonable in nature and refusal is reasonable.
Application:
In the present case, Stella is the employee of the company but PRX fails to provide her leaves
which breach the right of Stella stated under employment law. PRX does not compiled with the

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section stated under section 86, 87, and 114. PRX breach provisions of Fair work Act stated
under section 86 and 87 if they fail to provide leave to Stella because as stated above Employer
is under obligation to provide these minimum leave entitlements to their employees.
Section 86 and 87 of Act states the annual leave entitlement of employee, and as per these
sections, employee has right to take for each year of service:
 4 weeks of paid annual leave; or
 5weeks of paid annual leave if other provisions are applicable.
It must be noted that an employee who is not casual employee has right to get accumulates four
weeks of paid annual leave for each year of service employee carried with the employer. An
employee is entitled to annual leave on the basis of number of ordinary hours they work on
continuous basis for their employers. It must be noted that annual leave continuously
accumulates when an employee takes a period of paid annual leave or paid personal/carer’s
leave. However, it is not possible for employee to accumulate annual leave on the basis of unpaid
leave unless it is community service leave or it is provided for in an award or registered
agreement (FWO 2017).
PRX also breach section 114, because as per this section, employee has right to be absent from work
on public holiday either for whole day or part day. PRX also fail in providing this right to Stella.
Conclusion:
Section 86 and 114 is breached by PRX if they fail to give leave to Stella.
Part C
Issue:
Whether PRX is under obligation to serve notice of termination to Stella?

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Rule:
Section 117 of the Fair Work Act 2009 state (Act, section 117 2009), that employer must provide
proper notice to the employee before terminating the employee, and such notice must be issued
in writing. Notice of terminating the employee is the right of employee, and this right is defined
under section 117 of the Act.
Minimum time period of notice is completely based on the time period of continuous services of
employee with the employer, and this period is stated below in following table:
Length of service Minimum period notice
Service performed by employee of less than 1
year with the employer.
Notice off minimum period of one week.
Service performed by employee of at least 1
year but less than 3 year with the employer.
Notice off minimum period of 2 week.
Service performed by employee of at least 3
year but less than 5 year with the employer.
Notice off minimum period of 3 week.
Service performed by employee for more than
5 years.
Notice off minimum period of 4 week.
Application:
In the present case, Stella worked with the PRX from 2013 to 2016which means her period of
continuous service with PRX is 3 years andStella has right to get termination notice of minimum
period of 3 weeks. As per section 117, employer must provide proper notice to the employee
before terminating the employee, and such notice must be issued in writing. Minimum time
period of notice is determine on the basis of service which means if service is performed by

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employee of at least 3 year but less than 5 year with the employer then employer is under
obligation to serve notice of 3 weeks. Therefore, PRX breach section 117 of the Act
Conclusion:
PRX breaches its obligation under section 117 of the Act by not serving 3 week termination
notice to Stella.

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Bibliography
Act, Fair Work. "section 114." 2009.
—. "section 117." 2009.
—. "Section 86." 2009.
FWO. Annual leave. 2017. https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-
sheets/minimum-workplace-entitlements/annual-leave (accessed 09 28, 2017).
Hollis v Vabu Pty Ltd. 44 (HCA, 2001).

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Info, work place. Termination of employment.
http://workplaceinfo.com.au/resources/downloads/downloads/pocket-guide-for-termination. (accessed
09 28, 2017).
Stevens v Brodribb Sawmilling Co Pty Ltd . 1 (HCA, 1986).
teacher, law. An Employee Or Independent Contractor.
https://www.lawteacher.net/free-law-essays/employment-law/an-employee-or-independent-
contractor-employment-law-essay.php (accessed 09 28, 2017).
Zuijs v Wirth Brothers Pty Ltd . 73 (HCA, 1995).