Case Study - EMPLOYMENT LAW

Ben, the owner of "Baba Tours" provides Private Bus/Coach Tours to tourists throughout the Australian country and regional areas. He has a number of workers who act as drivers for him. One day he gave a job to Ken 'a Bus Driver'...to pick up some passengers from Morwell Railway Station. As Ken was running late, he was speeding and-as he changed lanes, he crashed into the rear of a Hire Limousine in front of him. As a result, Imran, the Limousine Owner suffered damages to his car and required medical treatment for a fractured arm and broken ribs. Imran observed a Sign, on the rear of the Coach bearing the words "Baba Tours". Imran, has since learned that although Ken is the driver who collided with him - Ben is the owner of "Baba Tours" and now thinks Ben is the one liable for his losses.

The damages he is seeking from Ben are as follows-

a. $7,000 for 'Vehicle Repair Expenses'; and

b. $6,000 for 'Medical Costs'; and

c. $4,000 for 'Loss of Income'; and

d. $500 for 'Loss of Deposit on a "Motel Booking" - cancelled due to the accident.

Ben ('Baba Tours') is refusing all liability - saying that Ken is an 'Independent Contractor' (not an Employee), and therefore liable for his own damages for negligence.

The facts/circumstances of Ben (Baba Tours) and Ken's Work Relationship are as follows -

1. Ken owns and drives his own Coach and pays for his own maintenance and repairs.

2. Ben pays for the regular internal cleaning, and external washing, of the Coach.

3. Ben gives instructions to Ken- as to the details of the Tours (pick-up and destination times and places).

4. Ben has placed his brand name "Baba Outback Tours" - on the Rear of the Coach - for advertising and marketing his business.

5. Ken also does some casual part time 'Coach driving work' - for another Bus Tour Company "Baba Tours" - each Sunday from 2pm to 5pm.

"Baba Tours" is his employer in that situation - and pays Ken a fixed salary of $600 for his 3 hours works every week.

"Baba Tours" also deducts the PAYG TAX from Ken's salary.

6. Ben and Ken have signed a 'Written Contract' stating that Ken is engaged as an 'Independent Contractor'.

7. Ben pays Ken $2,500 a 'Weekly Salary'. He deducts "$500 Pay as you go Tax" (PAYG Tax) and pays the balance of $2,000 into Ken's Bank account.

8. Ben pays Superannuation Contributions to Ken's Superannuation Fund.

9. Ken is not allowed to delegate his 'driving work' to another driver - if unable to drive due to illness or any other reason.

10. Ken pays for the 'Motor Vehicle Insurance' on his Bus.

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Assignment Questions: Topic: 'Employment Law'

1. "Under Employment Law it is important to establish whether a person is an employee or independent contractor, in order to determine 'liability' for their conduct". Explain, analyse and discuss this statement.(9 Marks)

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2. Explain and discuss how the 'Multi Factor Test' was utilised by the High Court to determine the nature of a work relationship in the Case 'Hollis v Vabu Pty Ltd (2001). (9 Marks)

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3. List and analyse the 'Multi-Factors' (in the case study) with the use of a 'Multi-Factor Balance Sheet' table, to determine whether Ken is more likely to be an 'Employee' or an 'Independent Contractor'? (9 Marks)

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4. a. Who is the proper Defendant; Should Imran sue Ken or Ben, and give reasons for your answer? Explain the concept of 'Vicarious Liability' in relation to Ben, if he is regarded to be an Employer. (5 marks)

b. List the four specific damages being claimed by Imran and explain - for each one of those damages - whether Imran would be successful in claiming them (4 marks) (5 Marks + 4 Marks = Total 9 Marks)