Back to basics: Employee or Independent Contractor

Back to basics – Employee or Independent Contractor

 If you own a van and work as a courier driver for a company, and if you’ve signed an independent contracting agreement which confirms in writing that you are an independent contractor – then are you a contractor or an employee?

The question as to whether a person is engaged as an independent contractor or employee has been discussed at length in numerous cases before the Authority and the Employment Court.

It is an important issue, as the special legal status of ‘employee’ opens the door to numerous benefits, protections, and privileges under the law which remain securely locked away from those not possessing the key.

In Leota v Parcel Express the Employment Court recently considered whether Mr Leota was an employee or an independent contractor. In all the correspondence between the parties – Mr Leota was referred to as a contractor. He owned his own van.

The Court applied the legal tests, set out in Bryson v Three Foot Six, to determine whether Mr Leota was an independent contractor or an employee.

The Court explained the core issue:

“Stripped back to its fundamentals, the essential issue in a case such as this is whether the worker serves their own business or someone else’s business”.

The Court looked to the economic reality at the heart of the matter, asking was the person building his own business or that of Parcel Express? When his time with Parcel Express came to an end, what could Mr Leota take with him? Customers? New leads? Goodwill? Or would he simply leave with his van.

Mr Leota was declared an employee.

This fundamental issue, as to the definition of ‘employee’, is perhaps not as straight forward as one might expect.

 

If you need advice on your specific situation please contact the Watermark team directly to make an appointment.

Jonathan Charlton

Solicitor