Worker held to be employee not a contractor...

The Employment Relations Authority has decided that a worker was an employee, after the employer claimed that she was a contractor. The employee raised the claim after she was not given any employee benefits from the employer throughout the course of her employment.

Upon her hiring, the employee signed an agreement with the employer that stipulated that she was an independent contractor, and that she would work 40 hours per week, and would be paid at a rate of $25 per hour for her work.

The employee worked for the employer for a year, during which time the employer cut the amount of available hours to 25 a week.

After a few months of this, the employee resigned and brought a claim to the Authority, seeking a declaration that she was in fact an employee rather than a contractor.

The Authority first looked at the amount of control that the employer had over the employee’s daily activities and duties. The Authority decided that the employer had fairly significant control over the employee. She had to give notice of leave and could not choose her own working hours.

The Authority also looked at how integrated into the workplace the employee had become. The employee in this scenario was integral to the operation of the workplace.

Lastly, the Authority looked to whether the employee was working in a business, or if she was working on her own account. The Authority determined that the employee was working for the business as she did not have the independence that is associated with working as a contractor.

The Authority concluded that the worker was not a contractor, but an employee. This means that the employer failed to meet the requirements associated with employee rights during the course of the employment.

The case is set down for next year, in which it is likely that the employer will have to compensate the employee for the unpaid wages for the hours she was entitled to work, holiday pay and sick leave that they failed to pay over the course of the employment relationship. They may also be liable for constructive dismissal of the employee for unilaterally reducing her hours and therefore payment for wages for any time the employee was not able to gain employment at the same rate of pay.

If there is confusion around an employee’s entitlements in an employment relationship, it is wise to seek advice from a professional with experience in the area.

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Alan Knowsley & Matthew Binnie