Case Study-EMPLOYMENT LAW

Shane owns a business called "Vic Tours" (VT) located in Lorne. He owns a 5 Busses used to provide Bus Tours for International Tourists - around Victoria.

Because Shane's business was expanding, he approached his Bank for a loan to buy one another Bus.

However, he had insufficient asset security, he was refused the loan.Therefore, Shane asked his friend Michael, to come and work for him. Michael is a Bus driver, who also owns his own Bus.

for the past two years Michael has been working at Shane's business "Vic Tours".

A few weeks ago, while driving his bus for one of the 'Vic Tours' jobs, Michael failed to indicate that he was changing lanes - and - crashed into a car in the adjoining lane.

As a result Jemal the driver and owner of the other car - a Taxicab - was severely injured and suffered extensive damages to his car.

He was taken to hospital where he received medical treatment for a broken arm and a broken leg.

Jemal saw the sign on the side of the bus displayed the words "Vic Tours".

Jemal has now, after his long stay in hospital, has decided to sue Shane as the owner of "Vic Tours".

Jemal as the owner of the Taxi wants to claim the following damages-

a.$10,000 for 'motor repair costs'; and

b.$12,000 for 'loss of profits'; and

c.$8,000 for'medical costs'; and

d.$6,000 for 'loss of deposit'on a Holiday booking. He was just about to go on a Holiday- when the accident happened. He was forced to cancel the holiday and lost his deposit on the accommodation.

Jemal has written to Shane requesting compensation for his losses. Shane absolutely refuses to pay anything. He say that Michael is not his employee but an independent Contractor, who should pay for his own negligent conduct.

The circumstances of Shane and Michael's work relationship are as follows-

1.Shane and Michael have signed a 'Written Contract' stating that Michael is engaged as an 'Independent Contractor'.

2.Michael being the Owner of his Coach, pays for his own maintenance and repairs.

3.Shane pays for the regular internal cleaning, and external washing, of the Coach.

4.Shane has placed his brand name "VIC TOURS' - on both sides of the Coach. This allows him to advertise and market his business extensively.

5.Shane gives directions and instructions to Michael as to the details of the particular Bus including the times and the places for collection and delivery of passengers and the destination.

6.Michael also accepts 'Coach driving work, from time to time, with other Bus Tour companies.

7.Shane pays to Michael $2,000 weekly Salary. He deducts "Pay as you go Tax"(PAYG Tax) and pays the balance of $1,700 into Michael's Bank account.

8.Shane pays Superannuation Contributions to Michael's Superannuation Fund.

9.Michael is allowed to delegate the 'driving work' to another qualified driver - if he's unable to drive due to illness or being busy elsewhere.

10.Michael owns a separate business selling memorabilia to Tourists. These items include little stuffed toys such as kangaroos and koalas. Shane allows him Michael to sell the toys on the Bus Tours in return for a commission on the sales.

11.Michael pays for the maintenance and repairs of his own Bus.

12.Shane pays for the regular internal cleaning, and external washing, of the Bus.

13.Shane has the Sign "VIC TOURS' - painted on Michael's Bus .

Question: Topic: 'Employment Law'

You are required to use legal principles and case precedents, to justify your answers to all the following questions.

1.Explain and discuss why it is important to establish whether a person is an employee or independent contractor, with reference to the issue of 'liability' for theirConduct.

2.Discuss and explain the 'Multi Factor Test' used to determine the nature of a work relationship - with reference to the High Court Case 'Hollis v VabuPty Ltd (2001).

3.List and analyse the 'Multi-Factors', with the use of a 'balance sheet' table, to determine whether Michael is more likely to be an 'Employee' or an 'Independent Contractor'?

4.A.Should Jemal sue Michael or Shane, and why? Explain the concept of 'VicariousLiability'in relation to Shane, if he is regarded to be the Employer. ..........

B.Explain thetwo criteriaunder which Damages are usually claimable.Which of the following damages would NOT be claimable, and why?

a.$6,000 for 'medical costs'; and

b.$5,000 for 'motor repair costs'; and

c.$8,000 for 'loss of profits'; and

d.$4,000 for 'loss of deposit'on a cancelled 'Cruise Ship Booking'. ..................