Reference no: EM133041347
Instructions: Advise as to whether the workers are employees or independent contractors. Case references should be applied and the relevant test should be examined to reach your final decision. Tests to be used are: control test, mixed test, integration/organisation test, multiple factor test and economic reality test.
Answer the following questions. Each question is worth ten (10) marks.
1. Peter has been employed for the past seven years by ABC insurance company as a sales representative. The following facts are disclosed in his discussion with you. He is paid by commissions earned on policies sold on behalf of ABC. He is not paid holiday pay but must take holiday in January yearly. The company gives him with office space, secretarial assistance, and stationery supplies. The contract of employment specifically states that Peter is an independent contractor. He is required to always work under the 'supervision' of a 'Unit Manager' and was specifically restricted from working for any competitor of ABC. John is asked to troubleshoot the company's computer network. John has a contract with a specific goal of fixing the networking system outlined. John brings one of his employees with him to work on the job, uses his own tools, and is allowed to pick his own schedule for the job.
2. Anna and Elroy are taxi drivers with Chase Taxi Ltd., a company that operates a fleet of taxis. Both have worked at the company for seven (7) years. Employees of the company receive both holiday and sick pay. The contracts state that each taxi-driver is self-employed but on different terms. Anna is paid on a commission basis. Her taxi is provided by the company, but Anna must maintain it. She receives no holiday or sick pay; she pays his own tax and national insurance and is permitted to substitute another driver if she wishes. Elroy is paid a weekly minimum wage but is allowed commissions on earnings which exceeds the limit set by the employers. He is not allowed a substitute driver. He receives no sick or holiday pay and pays his own national insurance and tax.
3. Oakland is the owner of a minibus and employs Smith to drive the bus on the following terms. Smith is required to fully maintain the bus; he must pay the road tax and insurance on the bus. However, he is required every day to bring the bus to a special depot belonging to Oakland, where it is left overnight. Under his contract, Smith is described as self-employed, and he is required to pay his own national insurance. He is also required to take holiday every March for which Smith is not paid. The bus is registered and insured in Oakland's name. Additionally, Sarah is hired by Oakland as a Sales Representative. She must report to a Sales manager twice per week and work 40 hours per week. She is free to perform her job duties with a less oversight than normal due to her experience in sales. Her travel and business expenses are reimbursed by the software company, and she is provided with a company car. She is provided with paid training and with financial resources to help her achieve her sales goals, and she is paid a base salary.