Employee or independent contractor? Beautiful and Bold case study
Forrester Creations, a designer and manufacturer of high end fashion garments located at Surfers’ Paradise, advertised for a night shift security officer. The advertisement read:
Night Shift Security Officer
A suitably experienced person is required to work as a night shift security officer for an internationally recognized fashion house. Duties will include regular patrolling of internal and external premises as well as monitoring security surveillance equipment. Employment will be on a casual basis with at least 18 hours work offered each week. For details please phone Ridge Forrester on 075 555555. Application forms may be obtained from the Forrester Creations website: www.forrestercreations.com
Jack Nightingale responded to the advertisement and was subsequently interviewed. The discussion of the employment revealed that Forrester did not want an exclusive contract with him and they had no objection to him doing other work. They were able to offer him at least 18 hours of work each week, with the exact number of hours varying week by week. These hours would be based on Jack’s availability each week, so he would be required to let the office know in advance of his weekly schedule. He would be responsible for his own income tax provisions.
Either party could terminate the arrangement with 24 hours’ notice. No sick leave or annual leave was included, but Jack would be provided with a Forrester Creations uniform (parka and a jumper with Forrester Creations logo) free of charge. Although there was a security supervisor on the day shift Jack would be unsupervised on the night shift – there would be few if any other employees on site when he was working. He would be required to record his attendance on site, and log any incidents that occurred for follow-up by the day shift. Jack was required to advise Forrester Creations if he was unable to carry out his duties at any time so they could arrange a replacement.
Jack was offered work with Forrester Creations as a night shift security officer and accepted. As a consequence of the interview discussion, Jack established a company (Nightingale Security Pty Ltd). His weekly payments for his security work at Forrester were paid into a newly established company account so that Jack could keep his finances in order to deal with his income tax arrangements.
Jack joined Forrester Creations just after a very successful fashion line was launched. He found the buzz following the launch exciting, and was soon on friendly terms with other workers he met who were working longer hours as a result of increased production of the new lines. Over the next 6 months the excitement levels dropped as the company prepared for the launch of its next year’s fashions. By the time the next line was ready to be introduced Jack had been working for Forrester for 12 months. Although he had initially considered trying to use his newly set up company to seek additional security work, Jack discovered that Forrester had more than enough work to keep him occupied.
An exclusive arrangement had been made with a jewellery designer to have a range of jewellery created to complement the new fashion line. This range contained precious and semi-precious gems, and when completed was secured in the Forrester Creations safe until the fashion parade and launch of the new line. The night before the launch of their new fashion line, thieves broke into the Forrester Creations’ premises. Jack had been doing an external patrol in a different part of the complex when the break-in occurred, but he returned to the surveillance room in time to see the thieves ransacking the safe. He managed to get a call in to the police and then went to attempt to stop the thieves leaving with the jewellery and the clothing. Unfortunately for Jack the thieves were armed, and he was shot. He was seriously wounded and was to undergo several operations before he could return to employment.
Jack spoke to Ridge Forrester about workers’ compensation for his injuries, and while Ridge was sympathetic to his situation the company maintained that he was an independent contractor and needed to take care of his medical expenses and income issues himself.
(1) You are to discuss the general context of 2 legal tests used to determine if a worker is an employee or an independent contractor- the economic dependence test and the multi-factor test- by exploring their use, their elements and characteristics, and any issues related to the test(s) that might be problematic to provide a context for their application to the case study material.
(2) You are to apply the same 2 legal tests (economic dependence and multi-factor test) to explore/analyse the issues in the case study. You are to come to an initial determination for each test (based on the general factors of the situation related to the test characteristics and elements) as to whether it appears that the worker is an employee or an independent contractor.
(3) You are then to provide an argument/justification (as a court would do) to reach a final determination of the worker’s employment status. This final argument/justification would include the use of precedent cases and evidence both for and against your position. Ensure that when using precedent cases you explain how/why the case applies (or distinguishes itself) from these circumstances – don’t leave it up to the reader to try to interpret what you mean.
In your conclusion you should make some reference to the link between your final determination and Jack’s ability or inability to take an action for workers’ compensation, but otherwise should not be concerned with OHS or workers’ compensation law.
This case study should be read in conjunction with the FAQ document and the CRA for this particular assessment item. All are available on blackboard.
Don’t forget that successful submission of this assessment item requires your hard copy to be submitted by 5.00pm on Wednesday of week 6. You should also upload a complete electronic copy to SAFE ASSIGN within 24 hours of your hard copy submission.