Case Study - EMPLOYMENT LAW

Terry provides international tourists with Coach Tours throughout Australia. He owns "Lulu Tours" a business located in Berwick. In his business he employs 20 people. He has both employees and independent contractors working as his drivers.

One day when Mathew was driving on one of the "Lulu Tours" jobs, he travelled through a red light as he was speeding along. He collided with a taxicab in front of him. As a result, Jo, the driver and owner of the taxicab suffered injuries to his legs and huge damages to his car. His losses were considerable. As Jo was being driven away from the scene of the accident- Jo observed a sign, on the rear of the Coach bearing the words "Lulu Tours".

Though Mathew is the Coach Driver who collided with him - Jo has found out that, Terry is the owner of "Lulu Tours". Therefore, Jo is now seeking to recover damages from Terry for his losses. The damages he is seeking from Terry are as follows-

a. $5,000 for 'Medical Costs'; and

b. $4,000 for 'Vehicle Repair Expenses'; and

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

d. $2,000 for 'Loss of Deposit on a Cruise Ship Booking' that he lost when he was forced to cancel the booking.

Jo has sent a letter of demand for the compensation, but Terry is refusing any liability whatsoever. He claims that Mathew is operating as an Independent Contractor, not as an Employee, and is therefore directly liable for Jo's damages.

The background fact/circumstances of Terry and Mathew's Work Relationship are as follows-

1. Terry is paying Superannuation Contributions to Mathew's Superannuation Fund.

2. Mathew is permitted to delegate the 'driving work' to another qualified driver - if he's unable to drive due to illness or being busy elsewhere.

3. Mathew pays for the 'Motor Vehicle Insurance' on his Bus.

4. Mathew pays for his own maintenance and repairs on the Coach.

5. Terry pays for the regular internal cleaning, and external washing of the Coach.

6. Terry instructs Mathew as to the details of the Tours (pick-up and destination times and places).

7. Terry has placed his brand name "Lulu Tours" - on the two sides of the Coach - for advertising and marketing his business.

8. Mathew also does some casual part time 'Coach driving work' - for another Bus Tour Company "Eiffel Tours" - each Sunday from 2pm to 5pm. "Eiffel Tours" is his employer in that situation - and pays Mathew a fixed salary of $600 for his 3 hours works every week. "Eiffel Tours" also deducts the PAYG TAX from Mathew's salary.

9. Terry and Mathew have signed a 'Written Contract' stating that Mathew is engaged as an 'Independent Contractor'.

10. Terry pays Mathew a 'Weekly Salary'. He deducts Pay as you go Tax" (PAYG Tax)

and pays the balance of the Salary into Mathew's Bank account.

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QUESTIONS : Employment Law

1. It has been said that under Employment Law- assessing the difference between an employee and an independent contractor- is vital - as it relates to the issue of 'liability' for negligent Conduct"... Explain and discuss this statement. (9 Marks) .....................................................................................................................................................................................

2. 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). Explain and discuss this case - and how the Multi-Factor test was applied in that case. (9 Marks) ...........................................................................................................................................................................................................................................................................................................................................................

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

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

b. List the four specific damages being claimed by Jo and explain - for each one of those damages - whether Jo would be successful in claiming them - taking into account the above said circumstances. (4 marks) (Total 9 Marks)

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5. Please answer 'Yes' or 'No' - to each of the following questions. You are NOT required to give any explanation. This is for you to check that you have fulfilled Assignment Referencing Requirements.

In this Assignment -

i. Have you used 'In-Text' Referencing? - (Yes or No?)- (2 Marks)

ii. Have you included a 'Reference List'? - (Yes or No?)- (2 Marks) (Total 4 Marks)