Summary Note on Employment Law : How to know whether the Employment Contract Exist or not.

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Test to determine whether the Employment Contract is in existence or not.

............................Guys Here it goes.................................

1^ST PART: PERLINDUNGAN TERMA & SYARAT KONTRAK PERKERJAAN

1. Introduction

è General Concept

§      Only those who have non-equal bargaining power will be protected by Employment law.

§      Those who are not protected by the employment law, their protection are based on the contract.

§      It is important to know what it takes to be an ‘employer / worker’.

·      To claim in case relating to tort (vicarious liable

·      To see which laws are applicable to that employee (Eg: Akta Kumpulan Wang Simpanan Pekerja / OSHA / Income Tax /Etc).

è Employment Contract (EC)

§      EC is an oral / written agreement, an express / implied agreement, in which one party agree to take another party to work for him, and that other party agree to work with him.

§      NOTE: Before an EC is being determined, “SETTINGS” must be first discussed.

2. SETTINGS

è General Concept

§      There are 2 types of settings.

  i.        Traditional setting

ii.        Non-traditional setting

§      Settings must 1^st be discussed to see whether the EC is really exist or not.

1)   Traditional Setting

§      Traditional setting set up 3 characteristics as follows:

i.      The working time is fixed.

ii.      The working place is fixed.

iii.      The working day is fixed.

§      There are 2 tests available here, that are ‘Control Test’ & ‘Multiple Test’.

§      Control Test has further developed through 3 different concept.

1^st TEST: CONTROL TEST

·         1^st Concept: Detailed Control Test

Ø Here, the employee will be informed on:

      i.        What to be done

    ii.        When the work should be done

   iii.        Where the work is to be done

   iv.        The manner on how the work is to be done.

Ø  So, it only focus on the above 4 controlled elements.

©       Case: Performing Right Society v Mitchell

FOC: It is about a band which was hired by a hall owner to perform in the respective hall. According to the contract signed by both parties, it was agreed that:

  i.        Choices of song are to be determined by the hall owner

ii.        The band cannot perform at other places

When it comes to the day of the performance, when the band performed the song determined by the hall owner, the original singer of that song was there & listened to that performance. The singer later sued the hall owner for infringement of copyright as he alleged that the band does not seek for his permission in singing that song. The band now want to make the hall owner to be ‘vicariously liable’ for such claim as the band alleged that they were the employee of the hall owner. The hall owner on the other hand said that the band was a mere contractual employee.

Held: The ‘Control Test’ is used. Here, as the hall owner control the choices of the song / the place of the work, he is regarded as the employer of the band and the EC did existed. As for that, he is vicariously liable for the copyright infringement.

·         2^nd Concept: 4 Indicia Control Test

Ø This concept is the concept which replaces the 1^st concept as to accommodate the change in the employment industry during that era.

Ø Here, there are 4 elements need to be focused on:

      i.        The power of the employer to pick & choose the worker (Eg: Via interview).

    ii.        See who pay the salary & consideration in that EC (Employer will pay the salary & Employee will done the work by himself – he cannot subs it to other).

   iii.        Power to control the work done by employer.

   iv.        Power of the employer to suspend / fire the employee.

©       Case: Short v Henderson

FOC: Df hired the pf to work in construction place, & the pf will be placed in the ‘lump labour force’ (self-working system). In England, the Df via the system of ‘lump labout force’ did not have to pay any insurance & did not has to supply tools for the pf. But here, the df still supplies the tools to carry out the work. Later, during the course of work, the pf injured & sued the df as not being able to serve the employee a safe working place.

Held: In determining whether such claim is claimable or not, court has 1^st discussed whether there was any EC on the 1^st place.  Here, court has seen that all the 4 elements for 4 indicia control test have been fulfilled. As for that, the df is liable for such claim.

·         3^rd Concept: Reasonable Control Test

Ø This concept is the concept which replaces the 2^nd concept as there is an existence of ‘specialised employee’ during that era.

©       Case: Cassidy v Minister of Health

FOC: This case involved the legal claim between a patient (the pf) vs the doctor & hospital (the df). The pf here suffered a painful on his hand. The doctor who was a specialised in surgical work has suggested that the patient should undergo a surgery for that illness.  After the surgery has been performed, the pf later cannot move his hand at all. His hand has been permanently impaired. Pf has later sued the hospital for vicariously liable for the doctor’s negligent. The hospital has put up a defence that the doctor is not their employee as the hospital does not has any control over the work done by the doctor who is specialist in the surgery.

Held: Court held that despite there is no control over the work done by the doctor, the hospital still liable for the doctor’s negligent. This is because the hospital has control over the holidays / working policies & etc. This is said to be as a ‘reasonable control’ of the employer over the employee. Court has further stated that it is unfair for court to impose the duty upon the patient for them to ask every staffs / doctor who treats them whether they are employee for such hospital or not. However, the above principle is not to be applied to the ‘hospital’s consultant’ as the nature of the consultant is that, the employee will give advice & work for temporal in nature. Consultant will move from 1 company to another company.

2^nd TEST: MULTIPLE TEST

Ø There are 3 elements need to be focused on:

      i.        Payment of salary / other type payments

    ii.        There is reasonable control by employer

   iii.        Every term in the EC must be ‘Consistent’ with each other. (No Consistency = No EC)

Ø LABEL

·         Label is one of the important issues for ‘consistency of term’.

·         Label is referring to the statement within the EC.

·         Eg: “the employee is self-employed / contractually employed”.

·         The principle regarding the label is that:

      i.        Label is important in showing the intentions of the parties whether to make a contractual employment agreement / permanent employment agreement.

    ii.        However, if it does not picturing the intention & real relationship of the parties, such label can be set aside by the court.

©       Case: Ready Mixed Concrete v Minister of Pensions

FOC: In this case, the Ready Mixed co has entered into an agreement with Mr. Latimer. It was stated in the agreement that Mr. Latimer is a ‘self-employed’ employee (label). The other agreed matters were as follows;

      i.        Mr L must use the Ready Mixed co’s logo on his lorry.

    ii.        Payment will be done based on millage.

   iii.        Mr. L must wear the Ready Mixed co’s uniform during the course of work.

   iv.        Mr. L’s account will be audited by the Ready Mixed co.

     v.        Mr. L is allowed to hire other driver to drive his lorry & payment to that worker will be done by Mr. L himself.

Later, Mr. L has claimed for the co to enter insurance for him as Mr. L alleged that such practice should be obeyed by the employer. Min. of Pensions has decided that the Ready Mixed co has to enter such insurance for Mr. L as the co is an employer for Mr. L. The co has appealed by saying that the contract that existed is not an employment contract (ie the ‘contract of service’), as it is a mere ‘contract for service’.

Held: The appeal was accepted by court. Court held that the co is not an employer to the employee as there is inconsistency of the terms within the agreement itself. Referring to the 3 elements under the ‘multiple test’, court held as follows;

      i.        Payment of salary - Here, Mr. L has been given right to make payment to other subs driver. The contract of service need the employer be the only party who pay the salary to the employee.

    ii.        There is reasonable control by employer – Despite, there is control on the uniform / logo / etc, but the fact that Mr. L is allowed to subs other worker, make this 2^nd element to be contradicted.

   iii.        Every term in the EC must be ‘Consistent’ with each other. – Mr. L is said to be a ‘self-employed’.

2)   Non-Traditional Setting

§      Non-Traditional setting set up 3 characteristics as follows:

iv.      The working time is not fixed.

v.      The working place is not fixed.

vi.      The working day is not fixed.

§      There are 2 tests available here, that are ‘Hakikat Economy’ & ‘Mutual Obligation’.

1^st TEST: HAKIKAT ECONOMY

Ø Here, court will focuses on 4 qs:

      i.        Whether there is control?

    ii.        Whether there is chance for profit?

   iii.        Whether there is ‘monetary risk’?

   iv.        Which party own the tools of the business?

©       Case: Market Investigation v Minister of Social Security

FOC: It is about Mrs Ann who was one of the interviewers in the agreement.  These are the terms agreed by the company and the interviewers:

  i.        The interviewers are allowed to work with other firms.

ii.        The interviewers were given a list of the people that they should interview.

iii.        The interviewers are given a list of qs that need to be asked & the way the interviewers recorded the answer & ask for further inquiry for any uncertain answer for the qs also is determined by the co.

iv.        Once the interviewers out on their field, they cannot be contacted & fired.

However, they were given time to complete such task.

Held: Court held that, as for the 4 elements in the test of ‘hakikat economy’, the most important element to be discussed in the element of ‘control’ which has a few issue here. Court still regarded Mrs Ann as the co’s employer, ie the EC is existed, despite the fact that Mrs Ann was not to be contacted during her field work. The limited discretionary given by the co to Mrs Ann on when she should do her work cannot change the nature of the contract of service. There is apparent control which the co has the right to exercise & it is indeed very extensive.  

2^nd TEST: MUTUAL OBLIGATION

Ø This test come into existence as an alternative for if the 1^st test cannot be used.

Ø Here, court will focus on the ‘informal arrangement’ that have existed for quite some time.

Ø So, court will focus on the following:

          i.        Whether the employer has given out the task to the employee?

        ii.        Whether the employee has done the task given?

       iii.        Whether such practice has been done for quite some time?

©       Case: Nethermere v Gardiner

FOC: In this case, a co was producing children’s pants. The pants were sewed in a factory. As the pants contained lots of pocket, half of those pockets will be sewed by the factory, and another half went to the housewives. There was no specific rule given by the company on matter of where the housewives should work / when the work should be done. In another word, the housewives are free to work wherever & whenever they wanted to. Later, the co decided not to send their pants to the housewives anymore. Housewives here sued the co for a ‘wrongful termination’.

Held: Here, in order for the suit to be claimable, the housewives must 1^st be regarded as ‘an employee’ to that company.  Referring to the test of ‘mutual obligation’, the housewives are the ‘employee’ of the co.

      i.        1^st element: Yes, the co did asked the housewives to sew those pocket of pants.

    ii.        2^nd element: Yes, despite no time frame, but there is prove that the van of the co did get the finished product and send the new batch of pants to be sewed to the housewives.

   iii.        3^rd element: Yes, it has been practice for quite some time.

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