Employment Law

Contractors and employees – again

Litigation about the difference between employees and contractors and who belongs to which group  has been around for a long time. Parcel delivery services, courier drivers, and also film technicians (in the NZ saga of Three Foot Six v Bryson) had their fair share of days in court. It is sometimes easy to see and understand why contractors consider themselves to be employees and why they take the matter to court. The more integrated into the employers business, the more subject to the employers instructions, the easier it is to argue that in fact the contractor does not provide independent services. But the line is often very blurred and the often long and tiresome lawsuits are a clear sign that legal definitions can only provide so much guidance.

In the recent case of McDonald v Ontrak the Employment Court could not decide whether the employee of a Labour Agency, who was assigned to do work for the railway company Ontrack,  had become in fact an employee of Ontrack or both.   The Court applied the test in section 6 of the ERA and held that the individual must establish whether there is a “contract of service” with the client of his (prime) employer. 

However, I wonder why in the case no one asked who paid the wages. Whoever pays is arguably the employer, unless there is evidence to the contrary.  Right?

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