Free Law Dissertations - Employment Law The Test Currently Used To Determine Employment Status Is
Employment Law
The test currently used to determine employment status is far from satisfactory and, in some cases, produces anomalous and/or unjust results.
Critically discuss this statement.
Introduction
This paper will give a description of the current test that is used to distinguish between contracts of service and contracts for services rendered relationships. This will commence with an explanation for the need to establish a legal test as opposed to use of the contractual terms as an exclusive deciding factor. There will then follow description of historical development to the current test adopted and finally it will be considered whether the current test is satisfactory and if not, whether it produces anomalous and/or unjust results?
AThe importance of establishing a test for employment status
There are four main reasons why there should be a test for the determination of employment status. The first relates to the fact that it is not just that the distinction between the employed and the self employed status should be based purely on the terms of the contract. This used to be the case but it was soon discovered that such a method was unfair on account of the unequal bargaining powers of the parties. S. Webb and B. Webb stated in 1897 that:
Individual bargaining between the owner of the means of subsistence and the seller of so perishable a commodity as a day’ labour must be, once and for all, abandoned. In its place, if there is to be any genuine freedom of contract, we shall see the conditions of employment adjusted between equally expert negotiators acting for corporations reasonably comparable in strength.
The second reason for the adoption of a judicial test is due to the importance that such a distinction brings. There are a number of employment protection measures that are exclusively held for employees, such as those provided for Trade Union health and safety officials.
The third reason is that the self employed are taxed under Schedule D and the employed fall under the Schedule E category. The significance of this distinction lies in the fact that the self employed are allowed to offset expenses against income tax, such as pension contributions, fuel bills, premises rental and all other forms of legitimate business expenses.
Finally, the employer is vicariously liable for the actions of his/her employees and, in relation to this, a duty of care is also owed by the employer for the welfare and safety of employees while they are carrying out obligations under their contract of employment.
B.Historical development of judicial tests
1.
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