Occupational Health And Safety Law: Legal Position Of Employees Vs Contractors

Issue 1

Discuss about the Occupational Health And Safety Law.

The issue which has to be addressed in this case is to identify to identify the legal position of Vinod that he is an employee or an independent contractor. If he is an employee what are the compensations which he is entitled to.

In order to determine the compensation to be paid to a person it has to be analyzed that he works in the capacity of an employee or an independent contractor.

The relationship between an employee and an independent contractor is determined through the use of legislations as well as common law tests provided through various tests.

The major legislation dealing with the relationship between employee and employer in Australia is the Fair Work Act 2009. The Independent Contractors Act 2006 and the Fair Work Act 2009 set out the entitlements and the rights of contractors and employees in Australia. There are various factors on which the differences between an contractor and employee is based on. A single factor cannot determine whether a person is a contractor or an employee. The totality of the relation is analyzed by the courts looking at each case in order to determine the employment status of a person. A few common factors for the purpose of determining whether a person is an independent contractor or employee are as follows.

 

• Degree of control on how the work is to be performed: the work which is performed by an employee is totally under the control and direction of the employer on a regular basis. An independent contractor has a high degree of control over the work done by them.
• Hours of work: an employee mostly has set hours of work which can have flexible timing. The hours of a casual employee may vary from week to week. On the other hand the contract decides on what hours the work which has been provided to him has to be completed.
• Risks: An employee has no financial risk during the course of employment as the risks are covered by the employer. On the other hand an independent contractor bears the risk associated with making profits or incurring losses on every task. The liability of poor work is also borne by the contractor along with any injury sustained while doing the task. Therefore the contractors have a personal insurance policy.
• Superannuation: an employee has the right to receive superannuation which is paid into a nominated fund by the employer. On the other hand contractors pay their own superannuation however they may have the right to superannuation funds in certain cases.
• Equipments and tools: generally an employee is provide equipments and tools by the employer or else they are given a tool allowance. On the other hand contractors use their own equipments and tools. Alternative arrangements may also be made within the contract or services.
• Tax: The income taxes off the employees are deducted by their employers whereas the contractors pay their own GST and tax to the ATO.
• Method of payment: employees are paid regularly such as weekly, fortnightly or monthly. On the other hand the contractor has ABN and an invoice is submitted by him when the work is completed or he is paid directly after completion.
• Leave: an employee is entitled to leaves which are paid such as annual leave and long services leave or right to a loading instead of leave entitlements such as in case of casual employees. However a contractor is not entitled to any paid leaves.

In the case of Comcare v PVYW [2013]HCA 41 it had been ruled by the high court that the employers would be liable for injuries which have been sustained by the employees during the course of employment. However such compensation does not extend to sexual encounters faced by employees during work trips.

In the case of Hollis v Vabu Pty Ltd [2001] HCA 44 it was held by the high court that a bicycle courier who was paid in accordance to the number of successful deliveries made, but was provided a uniform by the company and was also told when to work and how much money to take and did not have supply to any expensive equipment was based on the common law business integration test an employee.

In this case it has been provided that Vinod is a university student who is a part time worker for Yum Yum pizzas. He has been provided with particular shifts with strict commencements which does not have any specified finishing time. He also has been supplied with a uniform by the pizza company. He is required to wear such uniform at the time of delivering pizzas. He has not been provided with any vehicle by the company for such delivery and uses his own bicycle for the operations. A tool in form of an heat retaining panniers have also been provided by the company to ensures the pizza are hot. He is paid fee according to the deliveries.

Rules

In the given situation it can been seen that it is not clear that whether he is an independent contractor or an employee as no clear idea can be obtained through his employment term. However as discussed above no single term can be used to determine the employment status and it has to be analyzed in accordance to the overall contract.

According to the principles of the Vabo case which has similar situation related to that of Vinod it can be said that the Vinod is an employee of the pizza company as he has also been given a uniform, uses his own equipments, is paid per delivery and is told when to work by the company.

According to the principles of the Comcare case Vinod is entitled to compensation from the Yum Yum pizza as he has been injured during the course of employment.

Conclusion

Vindo is an employee of the company and is entitled to compensation from Yum Yum pizza.

Is Penelope entitled to compensation, if so who is liable to pay such compensation

It has already been established in the above discussion that Vinod is an employee of Yum Yum Pizzas.

According to the principles of vicarious liability an employer is liable for the action of their employees. The common law principles is established in Australia if two elements are provides. Firstly, there must be a relationship between the wrongdoer and the person to be held vicariously liable. The person must have a degree of control over the working of the wrongdoer. The wrongful action must have been committed in the course of employment. The fact that such act was not authorized by the employer does not have any effect on his position to be held liable for the actions of the employee as provided by the case of Pioneer Mortgage Services Pty Ltd v Columbus Capital Pty Ltd [2016] FCAFC 78. In this case both the employee and the employer are jointly and severally liable. However in Australia the employee may not have any right to recover the loss from the employee for negligence.

The concept of negligence arises when a person has a duty of care towards another. It was first provided in Donoghue v Stevenson 1932 AC 522. The duty has to be breached and harm has to be suffered by the other person because of such breach in duty. Any harm which is caused due to the negligent act has to be compensated by the wrong doer.

Application

However there is a specific defense which a wrongdoer may use in case of a claim for negligence. The defense is known as contributory negligence. Whether a person has made a contribution towards his injury or not is assessed using the same principles which are used for analyzing a negligent activity. In case of contributory negligence the partial or whole claim for negligence can be defeated. The concept had been used in the case of Podrebersek v Australian Iron and Steel [1985] HCA 34.

Whether a duty of care is there or not is seen through the application of the neighbors principle provided by the Donoghue v Stevenson case. Whether the duty has been violated is seen by making a reasonable person in same situation and comparing the original action to his actions. The harm is caused by the breach is analyzed by the “but for” test which means that whether the injury would have happened if there was no negligence.

In this case it has been already established that Vinod is an employee of the pizza company.

As per the principles of vicarious liability if it is established that vindo has been negligent towards Penelope than the pizza company would be held liable to pay compensation to Penelope.

This is because the act was done during the course of employment as Vinod was going to deliver a pizza. Even if he had collected alcohol during in between his shift the accident took place when he was actually going to deliver a pizza. In addition it has been discussed above that even if authority is provided by the employer he can be liable for the actions of his employees during the course of employment. Thus Yum Yum Pizza would be liable if it is established that Vinod was negligent towards Penelope.

Coming to the accident it has been provided clearly that Vindo was paddling in excess of the speed limits as he was getting late. According to the neighbor principles he has duty of care to any pedestrian as his negligence could have caused them harm. A reasonable person would have not been paddling in excess of the speed limit. In addition if he would have paddled in a normal way he could have avoided the accident. The injury to Penelope would not have been caused if there was no negligence. Thus a claim for negligence is established.

However, as discussed above contributory negligence can be used as a defense by a wrongdoer. In this case thus it would be analyzed that whether Penelope was himself negligent towards the injury or not. It is provided in the scenario that Penelope was intoxicated and knowingly played chicken with the traffic. A reasonable person in the same situation would not have done so. If this was not the case injury would have been avoided easily. Thus he is contributory negligent and the claim for compensation would be reduced or defeated as decided by the court

Conclusion

Penelope can claim compensation from Yum Yum Pizza but is likely to have the compensation proportionate according to the principles of contributory negligence.

References

Comcare v PVYW [2013]HCA 41

Donoghue v Stevenson 1932 AC 522

Fair Work Act 2009

Hollis v Vabu Pty Ltd [2001] HCA 44

Pioneer Mortgage Services Pty Ltd v Columbus Capital Pty Ltd [2016] FCAFC 78

Podrebersek v Australian Iron and Steel [1985] HCA 34

The Independent Contractors Act 2006