Employment Notes PDF

Preview

Summary

Siti Nurlaila Abdul Ghani LEB Tasha Lim Yi Chien LEBEMPLOYMENT LAWPart 1: Terms and Conditions of a Contract C1: Diving Into Employment Law 1 Introduction - Has very much to do with vicarious liability1 Statutory Provisions - Once you are recognized as a worker, these acts apply: EPF Act 1991, SOCSO...

Description

Lim Chun Yuan LEB140053 Siti Nurlaila Abdul Ghani LEB140108 Tasha Lim Yi Chien LEB140116

EMPLOYMENT LAW Part 1: Terms and Conditions of a Contract C1: Diving Into Employment Law 1.0 Introduction - Has very much to do with vicarious liability 1.1 Statutory Provisions - Once you are recognized as a worker, these acts apply: EPF Act 1991, SOCSO 1991, OSHA 1994 and Pencen 1980. - More so, when you are under a company. - An employer has certain duties towards a worker. 1.2 Employment Contract - What is an employment contract? Look at S2 - Cases: Melaka Farm Resorts (M) S/B v Hong Wei Seng [2004] 6 MLJ 506 Chan Whye& Sons Contractors (suing as a firm) v Sarawak Shell Bhd [2003] 5 MLJ 68 1.3 The Many Damned Tests 1.3.1 Control Test 1.3.1.1 Pure Control - Originated from the Master-Servant relationship. - Detailed control from the master: what to be done, when, how, where - Why? Because masters ‘knew’ everything going on Performing Right Society Ltd v Mitchell & Booker Ltd [1924] 1 KB 762 The Dfs were sued for the breach of copyright by a jazz band. The Df occupied a dance-hall and had agreed in writing for a band to play at the hall as long as it did not infringe any copyright in the music it chose to perform. Unfortunately, they chose to play some music without the Pf’s permission. The Pf then decided to sue the Df looking to hold them responsible for the actions of the band. Issue: Whether the band was an employee of the Dfs Held: The court looked at the facts of the contract to determine the relationship: 1. There were regulr hours worked each day by the band 2. There was a fixed period of employment 3. The band had been told where they should work 4. They had exclusivity of service 5. A right to sumarily dismiss the band for the breach of any reasonable instructions or requirement Hence, they were regarded to be an employee because there was very detailed control. Principle: The court looked at the ‘nature and degree of detailed control over the person alleged to be a servant’.

Lim Chun Yuan LEB140053 Siti Nurlaila Abdul Ghani LEB140108 Tasha Lim Yi Chien LEB140116

1.3.1.2 4-Individual Test Short v Henderson (J&W) Ltd [1946] 62 TLR 427 Four points of a contract of service: 1. The master’s power of selection of his servant 2. The payment of wages or other renumeration 3. The master’s right to control the method of doing the work 4. The master’s right of suspension or dismissal - All must exist. If one is missing, it is still a contract. Unlike the first test whereby if one is gone, move on to another test. - Any can be missing but what must be there is the control. The element of control must be there. 1.3.1.3 Reasonable Control Test - Still control but looked from another perspective. - If it is a professional, one cannot control. So? i) Reasonable control test: not the work but the administration ii) Integral part of the organization test: Whether part of the organization or employer Cassidy v Minister of Health [1951] 2 KB 343 Mr Cassidy went for his routine operation on his hand but came away with stiff fingers because of the negligence of one of the doctors. He attempted to sue the Ministry of Health in its capacity as an employer (since it was a public hospital). The Ministry argued that it could not be held responsible and had no vicarious liability, relying on Collins v Hertfordshire where it had been suggested that a surgeon was not the ‘servant’ of his employee. - Public hospitals and private hospitals are treated differently - Court had to consider the liability in negligence of the Respondent for the negligence of doctors employed by it. Held:  The Ministry was held liable for the negligence of doctors who were employed by it on contracts of service.  Although the hospital had no control over the way the operation was conducted, they held that the surgeon was an employee of the hospital because: 1. Hospital had control over post-surgery procedures 2. Had power to approve and reject holidays 3. [Doctors are] an integral part of the organization.  But this is for public hospitals, the same cannot be same for private because of the proliferation of private independent contracts to rent the hospitals’ premises by doctors. The same does not apply to government doctors because they are residential.  Denning LJ (dissenting) said that: ‘whenever they accept a patient for treatment, they must use reasonable care and skill to cure him of his ailment. The hospital authorities cannot, of course, do it by themselves: they have no ears to listen through the stethoscope, and no hands to hold the surgeon’s knife. They must do it by the staff which they employ; and if their staff are negligent in giving the treatment, they are just as liable for that negligence as is anyone else who employs others to do his duties for him.’ and ‘where a person is himself under a duty to use care, he cannot get rid of his responsibility by delegating the performance of it to someone else, no matter whether the delegation be to a servant under a contract of service or to an independent contractor under a contract for services.’ *include picking your own lawyer/doctor vs any lawyer at a firm/doctor at hospital

Lim Chun Yuan LEB140053 Siti Nurlaila Abdul Ghani LEB140108 Tasha Lim Yi Chien LEB140116

Dacas v Brook Street Burreau (UK) Ltd [2004] ICR 1437. Bata Shoe Co Ltd v EPF [ 1967] 1 MLJ 120. Facts: Pf entered into a written agreement with the shop managers in which the shop managers are given power to hire salesmen to assist them in managing the shops. The issue in this case is whether the salesman are the employees of the plaintiff. Held: - A contract of service is to be distinguished from a contract for services because a person who contracts to provide services for another person is not a servant but an independent contractor. - In this case, the company has no control over the salesmen because the company does not select such salesmen for appointment, does not pay them wages, and has no direct control over the manner in which the work is to be performed by the salesmen. - The company has no power to issue any direct orders to such salesmen over the head of the shop manager. - Therefore, if there is detailed control, there is contract of service. EPF v M S Ally[ 1975] 2 MLJ 89 Facts: The business of the R’s company was conducted and managed by a group of persons known as working assistants who were rewarded by a share of the profits. The capital was by the company whereas matters with regard to labour force and skills were provided by the assistant workers. They sought EPF contributions by the company on their behalf. Issue: Whether the working assistants are employees of the company. Held: - Even though the Working Assistants are not subject to strict control towards their method of carrying out the work, and they have flexible working hours, the Working Assistants are employees of the company because they are subject to reasonable control by the company. - As they were still controlled by the company in regards to the general procedures of carrying out the work. For example, 1) they were required to obtain permission from the employer to withdraw money from the company’s account; 2) They also need to inform the company before they could go away on long leave; 3) They can be dismissed or given warning for dishonesty and 4) The company will determine the ratio (how much money they get from the share) each year. KL Mutual Fund Bhd v JB Leo [1988] 2 MLJ 526 Court went back again that there must be some sort of control. Great Eastern Mills Bhd v Ng Yuen Ching [1998] 6 MLJ 214 UCL (M) Sdn Bhd v Abdul Aziz Bakar [2001] 1 ILR 441 Unipoenix Corporation Bhd v Raymond Leong Ah Kat [2004] 6 MLJ 90 Mary Colete John v South East Asia Insurance Bhd [2010] 6 MLJ 733 Norafizah bt Japperi v Asian Supply Base Sdn Bhd [2010] 3 MLJ 403 Advantage: - Court only looks at one factor: Control (seems to be most important)

Lim Chun Yuan LEB140053 Siti Nurlaila Abdul Ghani LEB140108 Tasha Lim Yi Chien LEB140116

1.3.2 Multiple Test Must have 3 things: - Label - Payment - Reasonable Control Ready Mixed Concrete v Minister of Pensions[1968] 1 All E R 433 Facts: RMC was in the business of making and selling ready mixed concrete. The company had engaged an independent haulage contractor to deliver the concrete to customers but that ctt was terminated and RMC decided to introduce a scheme whereby concrete was delivered by owner-drivers working under written ctts. The owner-drivers entered into a hire purchase agmt with Readymic Finance Ltd to purchase a lorry but the mixing equipment on the lorry was the company’s property. In 1965, the company asked the Minister of Social Security for a determination of the employment status of one of the onwer-drivers, Mr Latimer. Issue: Whether an owner-driver of a vehicle used exclusively for the delivery of a company’s ready mixed conrete was engaged under a ctt of service or a ctt for services. Held: The court first looked into Mr Latimer’s ctt:  he was entitled with the consent of the company to appoint a competent and suitably qualified driver to operate the truck in his place but this was subject to the company’s entitlement to require him to drive the truck himself unless he had a valid reason for not doing so  he was responsible for paying any substitute  he had to wear a company uniform  he had to carry out all reasonable orders from any competent servant of the company  he had to maintain the lorry at his own expense and pay its running costs  there was a mutual intention that Mr Latimer was an independent contractor. Other facts found were  he did not work set hours and had no fixed meal break  the company did not tell him how to drive the truck or what routes to take  the nine owner-drivers in the depot arranged the dates of their own holidays to ensure that only one driver was away at any time and between them. They engaged a relief driver contributing equally to his weekly wage of £25.  during the busy season the company engaged three or four additional drivers under contracts of service. -

Minister’s Decision: Mr Latimer was employed under a ctt of service Appeal to HC, Mackenna J: Mr Latimer was running a business of his own (a small business man) and not a servant. The ctt was not one of service but of carriage.

MacKenna J: “A contract of service exists if these three conditions are fulfilled. (i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master.

Lim Chun Yuan LEB140053 Siti Nurlaila Abdul Ghani LEB140108 Tasha Lim Yi Chien LEB140116

(ii) (iii)

He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master. The other provisions of the contract are consistent with its being a contract of service.

As to (i), there must be a wage or other remuneration. Otherwise there will be no consideration, and without consideration no contract of any kind. The servant must be obliged to provide his own work and skill. Freedom to do a job by one’s own hands or by another’s is inconsistent with a contract of service, though a limited or occasional power of delegation may not be….”  In order to find where the right of control resides, one must look first to the express terms of the contract; if they deal fully with the matter one may look no further. If the contract does not expressly provide which party shall have the right, the question must be answered in the ordinary way by implication.” Principle: This established that in order for there to be a contract of service there must be  The worker has to be subject to a right of control. If there is no right of control of any kind then you will not have a contract of service. However, it was also made clear in the judgment that, although a right of control is an important factor in determining employment status, it is not necessarily a determining factor;  Personal service must be given. However, the court did make the important point that a limited right of delegation was not inconsistent with a contract of service. This has been reaffirmed by later case law (see ESM7220); and  the other factors present are consistent with a contract of service. Factors such as ownership of significant assets, financial risk and the opportunity to profit are not consistent with a contract of service. Market Investigations Ltd v Minister of Social Security[1968] 3 All E R 732 So it becomes ONE of the factors, not the only factor. So when we want to know the labels that apply to a person – whether employee or not, you have to look at the contract as a whole: 1. Requesting for another to do your job on your behalf 2. Paying someone else 3. Label of a ‘freelance’ or ‘self-employed’ looks at intention (the court looks at the terms of ctt) Ferguson v John Dawson & Partners [1976] 3 All E R 817 Ferguson made a ctt with the firm as a ‘lump labour force’ and is a seasonal worker. The Plf whilst working for the Dfs had fallen from a roof and wanted to claim for insurance, saying that he was their worker. Issue: Whether the Plf was an employee or a self-employed independent contractor. Held: - The real relationship of the parties was that of master and servant but they had put the wrong label on it by regarding him as working on ‘the lump’. - Lawton LJ (dissenting) thought that the partners had deliberately put the right label on their relationship. - The man was on ‘the lump’. He had all the benefits of it by avoiding tax. - It was contrary to public policy that, when he had an accident, he could throw over that relationship and claim that he was only a servant.

Lim Chun Yuan LEB140053 Siti Nurlaila Abdul Ghani LEB140108 Tasha Lim Yi Chien LEB140116

Hence, the court said that he is self-employed and must take care of his own insurance and income tax. *General Knowledge: In Malaysia, people who earn less than RM4k have no need to pay income tax and are automatically part of SOCSO. But once you leave this salary group, you cannot get back into the SOCSO Scheme. Massey v Crown Life Insurance Co [1978] 2 All E R 576 Massey worked as Crown Life’s manager under 2 contracts, one as a contract of employment (a monthly pay) and the other a contract of general agency (as an insurance agent to be self-employed). Tax and other contributions were deducted from wages paid under the former, while commission was paid under the agency contract. Under the agency contract Massey could work for other insurance brokers. Later, after an advice from someone, and with Crown Life’s agreement, Massey registered himself as Massey & Associates and, trading under such name, entered into a new contract as a self-employed person with Crown Life in 1973. With that, the company gave him back all his money such as those for the pension initially kept for him. Massey’s duties under the new contract remained the same, although tax and other contributions were no longer deducted from monies paid to him. The company said that he was an independent contractor, not an employee. He had in law been an employee, but at his own request had been treated as self employed. Hence, he failed at the tribunal – had argued that he was wrongfully terminated. Held: Massey’s appeal was dismissed. The deed prepared by the plaintiff and accepted by the company was entered into freely and was clear. He was not an employee and had no right not to be dismissed unfairly. Lawton LJ said: ‘In the administration of justice the union of fairness, commonsense and the law is a highly desirable objective. If the law allows a man to claim that he is a self-employed person in order to obtain tax advantages for himself and then allows him to deny that he is a self-employed person so that he can claim compensation, then in my judgment the union between fairness, commonsense and the law is strained almost to breaking point. The applicant is asking this court to adjudge that he is entitled to make claims with two different voices.’ Lord Denning MR said: ‘The law, as I see it, is this: If the true relationship of the parties is that of master and servant under a contract of service, the parties cannot alter the truth of that relationship by putting a different label upon it. If they should put a different label upon it and use it as a dishonest device to deceive the Revenue, I should have thought it was illegal and could not be enforced by either party and they could not get any advantage out of it – at any rate not in any case where they had to rely upon it as the basis of a claim. See Alexander v. Rayson (1936) 1 King’s Bench 169. An arrangement between two parties to put forward a dishonest description of their relationship so as to deceive the Revenue would clearly be illegal and unenforceable. On the other hand, if their relationship is ambiguous and is capable of being one or the other, then the parties can remove that ambiguity, by the very agreement itself which they make with one another. The agreement itself then becomes the best material from which to gather the true legal relationship between them.’

Lim Chun Yuan LEB140053 Siti Nurlaila Abdul Ghani LEB140108 Tasha Lim Yi Chien LEB140116

1.3.3 Mutual Obligation - Contract that requires company give work and the worker does it - Applied when someone has no fixed place (working place) Requirements: 1. There is already an arragement (in written form; ctt) going on between the parties for some time. 2. Which means, there is a job 3. The job is being carried out 4. Must be more than one year! The longer the better. Airfix Footwear v Lope [1978] 1 CR 1210 The court considered that the continuing relationship between the parties over 7 years had created a contract of employment. Principle: A worker can be an employee of a company for purposes of unfair dismissal law notiwthstanding that the company is under no obligation to provide work. Nethermere v Gardiner & Taverna[1983] IRLR 103 - The applicants (Mrs Taverna and Mrs Garinder) sewed trouser flaps part-timein the factory of the Pf. What usually happens is that the Pf would produce boy shorts and then send them to a group of female workers to sew pockets. One car will do the transportation between the factory and the place where the group of females worked. These women worked from home at any time and the amount must be deemed ‘worthwhile’ for the car to commune between the two places. - At different times, both Dfs became pregnant and had to work from from home, 5 to 7 hours a day and for all but 8 or 12 weeks a year. They used the sewing machines provided by the Pf. Their hours varied according to the employer’s needs and were paid accoridng to the quantity of the trouser flaps and were not formally obliged to accept work. - There was then a dispute about an entitlement to holiday pay in which the Pf denied and later dismissed them. The Dfs then argued that they have been unfairly and constructively dismissed. Issue: Whether the ladies were “employees” under a “contract of employment” and therefore entitled to unfair dismissal rights. Held: The majority said yes, they were employees. What about the definition in Carmichael v National Power plc? Clark v Oxfordshire Health authority [1998] IRLR 125 Cheng Yuen v Royal hong Kong Golf Club [1992] 1 CR 131 Praterv Cornwall County Council [2006] 2 All ER 1013 1.3.4Economic Realities - To determine whether one a worker or not, court will ask whether that individual did the job for own business or not. - Looks at model, profit, monetary risk and equipment.

Lim Chun Yuan LEB140053 Siti Nurlaila Abdul Ghani LEB140108 Tasha Lim Yi Chien LEB140116

-

Must be able to show that: o There is an investment – a right to profit

Investigations Ltd v Minister of Social Security[1968] 3 All E R 732 Tried using multiple test but failed and thus, relied on this. Facts: Ms Anne Irving from time to time did market questionaries. There was a dispute between the business for whom she did the surveys, Market Investigatins, and the Minister for Social Security over whether National Insurance contributions should have been ma...