Reference no: EM131307324

Assignment Question 1:

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?

a) With the involvement of Technicalities Ltd, a labour hire company, and Innovative Storage, a client of Technicalities Ltd, as well as Maisy, the worker, a tri-partite relationship is formed. Therefore, there are only two contracts involved - between Technicalities Ltd and Maisy, as well as Technicalities Ltd and Innovative Storage. Thus, there is a need to determine first if Maisy is an employee of Technicalities Ltd or only an independent contractor.

In order to determine if Maisy is an employee or independent contractor of Technicalities Ltd, the multi-factor test applies.

Although Maisy did not have to submit invoices for her services, which would indicate a sign of being an independent contractor, Maisy was requested to create an Australian Business Number (ABN) when she started work with Technicalities Ltd. The creation of a business number indicates that Maisy is likely to be an independent contractor.

In addition, with regards to her work, she does not take instructions from Technicalities Ltd. Maisy also contributes to her own superannuation fund and receives no annual leave or sick leave from Technicalities Ltd.

Moreover, Maisy worked for other firms while she was working for Technicalities Ltd and its client, Innovative Storage.

As majority of the factors indicate that Maisy is an independent contractor, it is likely that she is not an employee of Technicalities Ltd, but an independent contractor whose services are purchased by Technicalities Ltd.

However, in May 2015, Innovative Storage indicated the need for Maisy's services till further notice, which then resulted in her working for them full-time.

Therefore, it is essential to determine also if there is an employer-employee relationship between Maisy and Innovative Storage.

Similarly, the multi-factor test is applied.

Maisy takes directions from Innovative Storage regarding hours of work, work duties and whom she works with. Additionally, she wears Innovative Storage's uniform, and receives training in an accounts system from their spare office, which aresigns of control.

Furthermore, Innovative Storage had the right to terminate her employment by giving her two weeks' worth of pay in lieu of notice, which is a significant sign of control over Maisy. These are all signs that indicated it was possible that Maisy is an employee of Innovative Storage.

Also, Innovative Storage had reimbursed her for her medical expenses after sustaining injury at work.

However, control is merely one of a number of indicia (Stevens V Brodribb Sawmilling, 1986), and while Innovative Storage has high control over Maisy's employment, she is obligated to adhere to their instructions as part of her job. Also, no other terms had changed, meaning Maisy was not entitled to any annual leave or sick leave and still had to make her own superannuation fund and tax contributions. The one-time medical reimbursement from Innovative Storage was also likely on the basis that it was an injury sustained at work, for which Innovative Storage was obligated to fulfill workplace safety obligations.

Considering the imbalance of the other indicia, Maisy is not an employee of Innovative Storage either. She is only under the obligation to fulfill her role after being outsourced to Innovative Storage by Technicalities Ltd.

(b) Assuming that Maisy is an employee, there is a need to determine which firm her employment is under.

In order to determine who is Maisy's employer, the multi-factor test should be applied.

When Technicalities Ltd hired Maisy, she was requested to create an Australian Business Number (ABN), which is a significant indication that she is an independent contractor to Technicalities Ltd. In addition, they do not supply her any uniforms, provide medical or annual leave, nor contribute to her superannuation funds. Also, they do not provide instructions on her work, except to report to their client, which is Innovative Storage.

As most of the factors indicate that she is an independent contractor, it is likely that Technicalities Ltd is not her employer.

Innovative Storage, however, provides Maisy with daily instructions on where to report, who to work with and what to do at work. Additionally, she wears the Innovative Storage uniform, which, in the eyes of a third party, is an indication that she is representative of the company. Furthermore, Innovative Storage had provided her with two weeks worth of salary in lieu of notice, which is another sign that she could be an employee, as most independent contractors do not receive pay in lieu of notice, unless otherwise stated in their contracts.

Therefore, if Maisy was an employee, it is likely for her to be employed under Innovative Storage.

Issue
Rule:
Application:
Conclusion: