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Institutional Affiliation


In January 2014 Technicalities Ltd., a labour hire company, hired Maisy, an office worker. She was re-entering the workforce after being a full-time mother at home for two years. Technicalities placed her with a client, Innovative Storage. IS had Maisy work for them regularly throughout the year, and again in early 2015. Maisy also worked for other firms, but only on a casual basis. Technicalities reported that IS was satisfied with her work in May 2015, when they told her they would continue to need her until further notice, and she worked full-time for them until December 2015. 
When she started work for Technicalities Maisy registered an Australian Business Number, as required by them. Technicalities said this was so they could pay her a flat hourly rate for all of the hours she worked and not offend any laws about penalty rates. She did not take work instructions from Technicalities though, but accepted directions from IS on a daily basis. She does not get paid when she takes sick leave or carers leave. Maisy always wore the IS uniform while at work and was receiving training in an accounts system on Friday afternoons in a spare office at IS until December 2015. Maisy made her own superannuation contributions and taxation payments. IS told Maisy when her hours of work were, what her duties were and with whom she would be working. 
In late November Maisy had an accident at work. She slipped and fell down some stairs while carrying office equipment. A spill had occurred the day before, and although the cleaner had mopped up the oil, there was a residual coating on the stairs. Maisy injured her back, shoulder and left arm. She took a couple of weeks off work and asked IS to pay her medical expenses. They were reimbursed in full. Maisy continues to have a sore back and shoulder. 
In early December 2015, Maisy saw a job advertisement online. It was for an office worker at IS. She applied in writing but did not succeed in her application. Maisy was not sure why she missed out and was not advised that the position advertised would make her continued services obsolete. The following week and after making inquiries of management she was informed by IS that she would receive two weeks pay in lieu of notice. Maisy has not received any further work allocations from Technicalities. 

(a) Is Maisy an employee or another type of worker? 

(b) Assuming Maisy is an employee, who is Maisy’s employer, Technicalities or IS? 

(c) Assuming Maisy is an employee, has Maisy’s employer breached any contractual duty owed to her? 



Issue: In this question, the issue that needs to be decided on the basis of the facts is if Maisy can be considered as an employee or if they can be treated as an independent contractor. 

Rule: Since first of July, 2009 most of the workplaces and Australia are governed by the new system that has been introduced by the Fair Work Act, 2009. But a question is still arise regarding the status of a worker and it has to be decided if the worker can be treated as an employee or as an independent contractor (Gibson and Fraser, 2003). There are several factors that need to be considered in this regard and these factors play a significant role for the purpose of deciding the differences that exist between employees and independent contractors. In this regard, it has to be mentioned that there is no single factor on the basis of which, it can be decided if the person can be considered as an employee or an independent contractor. This issue has been the decided keeping in view the individual merits of the work arrangement that has been set in place by the parties. 

In order to decide if the worker can be considered as an employee or independent contractor, a multifactor test has to be used by the courts. Therefore, there is no single factor on the basis of which alone, the employment status of the winter can be decided. However there are certain factors that play an important role in this determination, particularly the factors like the right to control over the manner in which the work is being performed (Waarden, 2013). Similarly, in a number of cases, it is possible that the parties have not recorded in writing the terms of engagement. As a result, it is possible that the dispute may arise in such a case regarding the fact that the worker can be treated as an employee or contractor on the basis of the terms of the contract (Pittard and Naughton, 2011). As a result of this reason, it is advisable that the parties should record in writing, the terms of engagement before the relationship commences. At this point, it is worth mentioning that only on the basis of the fact that the worker has an Australian Business Number or a registered business name, the nature of relationship between the parties cannot be decided (Vermeesch and Lindgren, 2001). In such a case, therefore the courts may still look behind the contract for the purpose of determining the true nature of the relationship that is present. 

Application: for the purpose of deciding if in a particular case, the worker is and employee or contractor, the first step is to apply the common law test. In this regard, traditionally the nature of relationship has been examined by the courts by using a wide range of factors that are commonly used for determining the real nature of the relationship that exists between the parties (Patty v Commonwealth Bank, 2002). This test can also be applied to see if Maisy is an employee or contractor. In case of this test, there are certain factors that have to be considered an identified for determining where the balance lies. For example, the measure of control that the principal exercises on the worker needs to be considered. The result is that generally in case of an employee, the employee enjoys the right of controlling how, when and where the duties will be performed by the employee. But this is not the case with an independent contractor, as in this case, contractor works according to its own with a view to achieve a pre-decided result. Therefore, in this case, the contractors enjoy flexibility and discretion in terms of the manner in which the work is to be completed although the other party may specify certain terms regarding the way materials have to be used and the method of performance (Logan v Otis Elevator Company Pty Ltd., 2001). In this case, it also needs to be seen if the worker has the right to delegate. While it is the personal responsibility of the employers to perform the role and as a result, they cannot delegate the performance of the work to another party unless the employer has authorized such delegation of work. However, this is not the case with the contractors. The contractors have an inherent right to delegate the work to another party and similarly, other person may be hired by the contractor for performing the services although there are certain cases where the consent of the principle may be required in such a case.

In this case, although Maisy had an Australian Business Number but in view of other factors like she was getting daily instructions from the IS and moreover, she was wearing the uniform of IS and the fact that she received training from the company, point out towards the fact that she was an employee. 

Conclusion: under the circumstances, it can be said that Maisy is an employee. 


Issue: In this question, the issue arises if Maisy can be treated as an employee of Technicalities Ltd or if she can be considered as an employee of IS. 

Rule: The main test that is used for this purpose is known as the control test. For the purpose of deciding this issue, it has to be considered who has the right to control or power and also the right to direct the employees, when, where and how the task has to be completed (Gamble, 2008). However in certain cases, conclusive results may not be provided by the control test and therefore in such cases, integration tests may be used by the courts for the purpose of deciding if the employment relationship exists between the parties (Fair Work Ombudsman v Metro Northern Enterprises Pty Ltd., 2013). This test has also been used in Freestone v Morris & Partners Pty Ltd. (2009) for the purpose of deciding if the person who is conducting a business, while providing services or if the activities can be treated as an integral part of the operation of the person by whom the services are being availed.

Application: although in this case, Maisy was in touch with Technicalities Ltd as it was a laborer hiring company but she has been placed with a client of Technicalities Ltd, Innovative Storage. Since then, she has been continuously working for Innovative Storage. Although, she had a registered Australian Business Number, but only on the basis of this fact, it cannot be said that she is not an employee. In this case, the factors that need to be considered include the fact that Maisy was wearing the uniform of IS and IS was giving the instructions regarding the work. Moreover, IS and also provided training to Maisy in accounts. Similarly, Innovative Storage also decided the working hours of Maisy and also the duties that need to be performed by her. Therefore in view of the test that has been mentioned above, it is clear that Innovative Storage has control over Maisy's work. IS gave instructions to Maisy how this work has to be completed and when it has to be completed.

Only as a result of the fact that she has an Australian Business Number, it is not possible to claim that she is a contractor and not the employee of Innovative Storage. Therefore when the issue is to be decided if Maisy can be treated as an employee of Technicalities Ltd or if she is an employee of IS, it is clear that Maisy is working for IS and cheese employee of Innovative Storage. This can be said on the basis of the fact that Innovative Storage as the real control on Maisy's work. In the same way, the work that was being done by Maisy was also an integral part of Innovative Storage. IS had the authority to decide the working hours of Maisy and also the way in which the work has to be performed by her. Innovative Storage also gave daily instructions to Maisy regarding the work. 

Conclusion: under the circumstances, it can be said that Maisy is employee of IS and not of Technicalities Ltd.                                                               


Issue: The issue that arises in this question is a has been assumed that Maisy is an employee, if the employer has breached the contractual obligations owed towards Maisy 

Rule: Chapter 6 discusses the duties of the employer and among these responsibilities, it is also the responsibility of the impact that there should be no discrimination among the employees. The employer has to offer equal employment opportunities. Therefore if a person fulfills the inherent requirements related to the particular job, such a person should be given an equal chance by the employer to do the job (Gibson and Fraser, 2007). Similarly, certain duties have also been imposed on the employees. A large number of these duties have been imposed for the purpose of preventing injuries and diseases that are associated with the occupation. Due to this reason, a responsibility has been imposed on the employees that they should take all reasonable and necessary precautions so that their health and safety can be ensured and also of the other persons at the workplace (Graw, 2008).

Risk and rectification of poor work is another relevant factor. For example, in employment relationship, generally the employees have very little or no responsibility at all to rectify the poor work. On the other hand, when the weather is an independent contractor, it is the responsibility of the contractor to rectify the poor work done by him and its own cost and effort. In the same way, the contractor also bears the risk of the loss that may be suffered by the principle due to the poor work done by the contractor. 

Application: In the present case, if it is assumed that Maisy is an employee, it has to be seen that the employer, IS had breached its obligation as an employer when the company decided that Maisy will be relieved from service after having many years of regular service.

As a result, it can be said that in this case, as an employer of Maisy, Innovative Storage has committed a breach of its contractual obligations when it was decided by IS that another employee will be hired by the company to do the work that was being done by Maisy. 

Conclusion: on the basis of the above-mentioned law and its application to the facts of this case, it can be said that as an employer of Maisy, Innovative Storage has breached its contractual obligations towards Maisy.  


Gamble, R. 2008, Principles of Business Law, Law Book Co: Ed. 2008

Gibson A. and Fraser, D., 2003, Commercial law, Lawbook Co: 1st Ed.

Gibson, A. and Fraser, D., 2007, Business law, 3th ed.

Graw, S., 2008, An Introduction to the Law of Contract, Lawbook Co: 6th ed.

Natalie Van der Waarden, 2013, Understanding Employment Law, Concepts and Cases, 3rd Edition, LexisNexis Butterworths

Pittard and Naughton, 2011, Australian Labour and Employment Law, 2015  

Vermeesch, R.B. and Lindgren, K.E., 2001, Business Law of Australia, 10th ed.

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