Contract of Employment and Vicarious Liability - Week 10 Flashcards
Law of Employment Regulations
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
Workers, Employees and Independent Contractors
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
Workers
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
Definition of Worker
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
Employees
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
Independent Contractors
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
Employee, Worker or Contractor
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
The Contract
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
Financial Risk and Capital Outlay
Does the employer provide all the necessary equipment?
An employee is entitled to payment and to have equipment provided by the employer
Delegation or Personal Performance
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
Pimlico Plumbers v Smith (2017)
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
IWGB v Deliveroo (2017)
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
Control
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
Formation
The form of a contract of service
The Form of the Contract of Service
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
Do contracts of employment have to be in writing?
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
What is the statement designed to provide?
The statement is designed to provide these employed with some of the conditions of their employment → it doesn’t cover everything
What must the statement include?
- 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
Must include full particulars of:
- 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
Vicarious Liability
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
Vicarious Liability and Employers
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
Relationship Akin to Employer/Employee
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
Cox v Ministry of Justice (2016)
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
Close Connection Test
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
Mohamud v Morrison Supermarkets (2016)
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
Analysis of above case study
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.
