Reference no: EM133163954

USE THE IRAC METHOD (Apply legal principles from cases and statutes)

Marty Wilkins has established a start-up company that is looking to deliver puncture repair kits to stranded cyclists, by drone. The company is located in Newcastle, NSW, and is named "BikeDrop".

Marty operates out of a co-working space in the West End of Newcastle, named "2gethA". This means he rents a desk in a large building where other start-ups companies and young professionals who are freelancing rent a desk and share a co-working space (including meeting rooms, and a receptionist).

BikeDrop requires bespoke software to be created to operate the drones it intends to use. Marty has the skills to develop the software, but doesn't have the time, as he is too busy doing the marketing and promotion for BikeDrop. Whilst at 2gethA, Marty meets Simon Withers. Simon also rents a desk at the co-working space and is an IT specialist with skills in software development. Simon does some freelance work and operates from 2gethA so that he has meeting facilities he can use and to be able to meet other young professionals and pick up work.

Marty and Simon get talking. Marty explains what he is doing, and Simon gets excited and proposes a "collaboration". Marty makes clear that he is not interested in a business partner but does require "an IT specialist". Simon tells Marty that "work-life balance" and "flexibility" are important to him. After some emails back and forward and a few lattes, Marty and Simon agree on the following:

BikeDrop will pay Simon $30 an hour for software services.

Simon will only be available between 9-6pm, Monday-Friday, and 9-12pm Saturday.

Simon must prioritise work for BikeDrop over work he does for anyone else.

Simon will perform 38 hours a week of software development.

Simon must continue to rent a desk at 2gethA but will move his desk next to Marty.

Marty will have access to the software and review it regularly and BikeDrop will "own" the software once it is produced.

Marty and Simon will schedule a reoccurring meeting for "weekly software progress review and approval".

BikeDrop will provide Simon with a high-powered specialist laptop to produce the software and the laptop must stay at 2GethA.

Marty and Simon shake hands but do not commit anything to writing. About a week later, Simon asks Marty when he'll be paid. Marty says he will pay him on a fortnightly basis by EFT. With each deposit, Marty emails him a word document saved as "Simon Invoice" that displays the hours Simon has worked and the amount paid to him.

After a couple of weeks, Marty asks Simon to attend a series of meetings with potential clients. Because the potential clients are located overseas, the meetings are scheduled for 9pm. Marty says to Simon: "I will give you $40 for out of hours meetings". The next time Simon is paid, he receives a separate amount on the invoice for "out of hours work". Simon is referred to in meetings with potential clients as "BikeDrop's Chief Developer".

After about six months developing software, Marty and Simon travel to visit a client in Broken Hill. Whilst at a meeting, Simon's laptop battery explodes, and he is badly burned. Simon let his own insurance lapse once he started developing software for Marty, so he explores whether he is eligible for a workers compensation payment.

Assume that Simon's workers compensation claim will be successfully if he is found to be an employee of BikeDrop.

Is Simon an employee of BikeDrop or is he an independent contractor?

Note 1: You do not need to identify whether the valid elements of a contract exist (offer, acceptance, consideration, etc). You can assume there is a valid contract.

Note 2: Please include a reference list. The list does not count towards the word count.