Topic 1: Definitions & Quotes Flashcards
Defining a contract of employment
Terms of Employment (Information) Act 1994 (s 1) defines a contract of employment as:
“(a) a contract of service or apprenticeship, and
b) any other contract whereby an individual agrees with another person, who is carrying on the business of an employment agency within the meaning of the Employment Agency Act 1971, and is acting in the course of that business, to do or perform personally any work or service for a third person (whether or not the third person is a party to the contract)”.
Contract of services - employee.
Contract for services - contractor.
What is the difference?
1.statutory employment protection; 2. entitlement to state benefits;
3. tax assessment purposes;
4. social welfare contributions;
5. vicarious liability;
6. treatment as a preferential creditor if an employer is wound-up or put into receivership
Further definitions of contract of employment
Payment of Wages Act 1991 and the National Minimum Wage Act 2000 apply a wider definition of a contract of employment.
Both Acts define a contract of employment as occurring in contracts where an individual has agreed with another person to do, or perform personally, any work or service for “a third person (whether or not the third person is a party to the contract) whose status by virtue of the contract is not that of a client or customer of any profession or business undertaking carried on by the individual”
Davidov, G. (2005) ‘Who is a worker?’ Industrial Law Journal
The article focuses on the term worker, which is replacing the traditional term employee in a growing number of Acts and Regulations. The interpretation given to this term by the Employment Appeal Tribunal is reviewed, and a different interpretation is suggested, with the aim of better achieving the purpose of the new category. It is argued that the protection afforded to those classified as workers should cover every work relationship that is characterized by significant dependency on the putative employer, even without the presence of democratic deficits (or subordination).
Conlon, M. (2014) “Mutuality of obligation” before the Irish courts. Irish Employment Law Journal. Vol.2 pp.44-52
UK case law suggests that the main practical importance of mutuality is that it is a way of satisfying statutory “continuous employment” qualification periods in employment rights statutes.
It should be obvious that there was a work contract in place when the worker was working and whether the worker was an employee when working should be ascertained by reference to matters such as control, although the fact that a worker has no long term work contract with a company may occasionally have some bearing on the nature of his short-term work contract.
Integration test was introduced by Denning LJ in Stevenson, Jordan & Harrison Ltd. Macdonald & Evans Ltd,
‘under a contract of service, a man is employed as part of the business and his work is done as an integral part of business; whereas under a contract for services, his work, although done for business, is not integrated into it but is only accessory to it.’
