Contract of Employment and Vicarious Liability - Week 10

Question 1

Law of Employment Regulations

Answer 1

The law of employment regulates that employer/employee relationship from interview to when they leave (due to retirement, resignation or dismissal)

Not just from when someone’s employed

Question 2

Workers, Employees and Independent Contractors

Answer 2

Workers and employees work under a contract of service → a contract of employment

Independent contractors work under a contract for services → they provide a service under a contract to a business or individual

Question 3

Workers

Answer 3

Generally employed on a part time/ casual and agency basis

Employer is responsible for paying National Insurance contributions and for deducting tax

They’re not entitled to sick pay

They can claim holiday pay and are entitled to the minimum wage

Also have protection against discrimination

Question 4

Definition of Worker

Answer 4

The definition of a worker can be found in the Employment Rights Act 1996

In this Act worker (except in the phrases shop worker and betting worker) means an individual who has entered into or works under (or where the employment has ceased, worked under)

1) A contract of employment

2) Any other contract, whether express or implied and if its express, whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual

Any reference to a worker’s contract shall be construed accordingly

Question 5

Employees

Answer 5

Entitled to claim all employment rights

E.g. sick pay, holiday pay, unfair dismissal and redundancy

Definition is contained in the ERA 1996

In this Act employee means an individual who has entered into or works under or where the employment has ceased, worked under a contract of employment

Question 6

Independent Contractors

Answer 6

Can take many forms, for example, company, partnership, self employed person

Have less rights than employees, for example, no right to sick or holiday pay, they pay their own national insurance contributions and income tax

One of the difficulties with this area of law is deciding if someone is an employee, worker or independent contractor

For example, when a contractor → graphic designer is engaged in a full time ongoing contract and is classed as self employed but works under conditions similar to those of a permanent employee

Question 7

Employee, Worker or Contractor

Answer 7

There are several factors that can help the court to determine the status of employee, worker or independent contractor

Factors which may help the court to determine status

Question 8

The Contract

Answer 8

What do pirates call themselves

The label given to a person isn’t conclusive evidence but the court will nonetheless consider how they identified themselves

Question 9

Financial Risk and Capital Outlay

Answer 9

Does the employer provide all the necessary equipment?

An employee is entitled to payment and to have equipment provided by the employer

Question 10

Delegation or Personal Performance

Answer 10

A contractor can delegate while an employee/worker must perform their contract in person → personal performance is a requirement for employees and workers, they can’t delegate their work

Question 11

Pimlico Plumbers v Smith (2017)

Answer 11

Smith was held to be a worker for Pimlico rather than an independent contractor as stated in his contract because of the lack of rights to substitute, despite otherwise having a high degree of autonomy

Mr Smith had worked as a plumber for Pimlico for 6 years

He had to wear Pimlico uniform, drive vans with the Pimlico logo and could only be contact by customers through Pimlico

Contracts and estimates were issued in the name of Pimlico and payment was made to Pimlico

Question 12

IWGB v Deliveroo (2017)

Answer 12

Deliveroo drivers weren’t workers as they did not have a contractual obligation to perform work personally, they could substitute their jbs both before and after accepting a job

Question 13

Control

Answer 13

This covers the extent to which employer controls working hours and how much direction as to how to do their work an employer can give

It’s not always easy especially with more flexible working patterns to distinguish between employees, workers and independent contractors

Question 14

Formation

Answer 14

The form of a contract of service

Question 15

The Form of the Contract of Service

Answer 15

The relationship between employee/worker and employer is governed by the contract of employment, which forms the basis of the employee’s/workers employment rights

Question 16

Do contracts of employment have to be in writing?

Answer 16

Contracts of employment don’t have to be in writing. However s ! ERA 1996 requires the employer to provide an employee and worker with a written statement of the key terms of the employee’s contract

Question 17

What is the statement designed to provide?

Answer 17

The statement is designed to provide these employed with some of the conditions of their employment → it doesn’t cover everything

Question 18

What must the statement include?

Answer 18

• Parties name and addresses
• The date the employee started work
• The date on which the employee’s continuous employment began (this might be relevant where an employee has moved posts within the same firm)
• A note of any disciplinary or grievance procedure

Question 19

Must include full particulars of:

Answer 19

• Pay entitlement
• Hours of work
• Any holiday entitlement and pay
• Any sick leave and pay entitlement
• Any pension rights
• Length of notice to be given (by both parties)
• Job title and brief description
• If it’s fixed term or continuous
• Place of work of the employee
• Any collective agreement directly affecting the job

Question 20

Vicarious Liability

Answer 20

The law of tort covers the rules relating to vicarious liability

Vicarious liability commonly arises in relation to employers with regard to the wrongful behaviour of their employees

An employer may be vicariously liable for the wrongful acts of employees. Not normally for those of independent contractors

Vicarious liability imposes liability on a person (employer) who doesn’t have primary liability → not at fault

The concept has found favour with courts and claimants, because realistically, the employer is likely to have the money to pay for any claim for damages, whereas the employee won’t

The imposition of vicarious liability may seem harsh on the employer such an approach has been justified on the grounds of social convenience and rough justice

Question 21

Vicarious Liability and Employers

Answer 21

Vicarious liability doesn’t mean that the employee will escape liability

The employer can insist that he or she is joined in any action or if the employer is found to be vicariously liable, may insist on the employee paying towards any damages imposed on the employer → employer is vicariously liable but the employee is personally liable

Question 22

Relationship Akin to Employer/Employee

Answer 22

A court may be prepared to impose vicarious liability on the grounds that a relationship akin to employment exists between an employer and a party acting under their direction

Question 23

Cox v Ministry of Justice (2016)

Answer 23

Mrs Cox worked as a catering manager in a prison

20 prisoners worked in the kitchen under her supervision

A prisoner dropped a sack of rice and it burst open

Mrs Cox bent down to try and contain the spillage

While she was doing this, another prisoner, Mr Inder, attempted to carry two sacks past her, lost his balance and dropped one of the sacks on Mrs Cox’s back, causing her injury. It’s accepted that Mr Inder was negligent

Question before the court was whether the prison service was vicariously liable for the act of a prisoner in the course of his work in a prison kitchen, where the act was negligent and caused injury to a member of the prison staff

At first instance, Mrs Cox failed in her claim as the prisoner wasn’t employed by the defendant

The Court of Appeal held the defendant vicariously liable because the relationship between the prisoner and the Ministry of Justice was akin to an employment relationship

The prisoner was carrying out work for the benefit of the defendant saving it the expense of paying the full market rate
There was no reason why the defendant shouldn’t carry the financial burden resulting from this, as well as the benefit

Question 24

Close Connection Test

Answer 24

The close connection test is used when the activity carried out by the employee consists of intentional wrongdoing → it’s applied to determine whether an employer should be held vicariously liable for an employee’s unauthorised, intentional wrongdoing

This test states that if the activity which gave rise to the rot was sufficiently closely connected with carrying out designated contractual duties, the employer is liable, even if the employee was negligent or disobeying orders concerning the execution of those duties

The law takes the view that employers are obliged to supervise their workforce properly

Question 25

Mohamud v Morrison Supermarkets (2016)

Answer 25

In this case, the Supreme Court considered whether or not a supermarket was vicariously liable for an unprovoked racial assault on a customer committed by one of their employees

The claimant, M, checked his tyre pressure at the defendant’s petrol station and then went into a small kiosk which acted as a small convenience store
M asked if he could have some documents printed

K, the employee, racially abused M.
When M returned to his car K came onto the forecourt and physically abused him

Question 26

Analysis of above case study

Answer 26

There had been no reason for K to carry out the attack and his supervisor had encouraged him to go back to the kiosk at the time when the assault took place
Here the court decided that a close connection between K’s duties and the attack resulted in the supermarket being vicariously liable → there was sufficient close connection between K’s behaviour and the tasks he was employed to do to make the supermarket vicariously liable

Interacting with customers to provide information and assistance was within the scope of the employee’s job description although the abuse was an inexcusable way of carrying out his duties

It was a gross abuse of his orders, but he was purporting to carry out his job when he pursued the claimant and told him to leave and not come back. It was irrelevant that he was motivated by racism rather than a desire to assist the employer’s business.