Worker found to be an employee despite contractor agreement…

The Employment Court has held that a worker was an employee of a company he worked for, even though his contract said he was an independent contractor.

Before the employee began working, he was required to purchase work equipment and sign a contract that said he was an independent contractor.

The employer set his work tasks and hours, organised his tax invoices, provided paid holidays, required him to wear a uniform, and didn’t allow him to work for any other similar business in the area.

The Court decided that the employer had significant control over the employee and had substantially made him a part of the business.

The Court emphasised that just because a contract says a person is an independent contractor, this isn’t necessarily the case. The job that the person does and how the employer treats them may lead to a different conclusion.

Since the Court found the man to be an employee, he we was entitled to benefits including parental leave, KiwiSaver contributions, minimum wage, and holiday pay. These are benefits independent contractors do not receive.

It is important to understand the distinction between an employee and contractor, particularly as employers owe a great number of obligations to employees under the law. If there are concerns about status or agreement, it is wise to speak with a professional experienced in the area.




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Alan Knowsley
Employment Lawyer
Wellington