Patterson Hood comes to you for advice. He gives you the following contract to look over:

Agreement dated 1 May 2014 Between Patterson Hood (Trainer)and Total Wellness Limited

(Company).

1. Appointment

The Trainer is engaged to provide services of conducting training sessions for individual

clients (Personal Training Services) at the Company's facilities at 332 Ellerslie-Panmure

Highway.

2. Term

The term of this Agreement shall commence on 1 February 2014 and will last for a period of 3

years, subject to clause 9.

3. Trainer's Roles and Responsibilities

3.1 Throughout the Term the Trainer agrees to:

a) perform the Personal Training Services diligently;

b) observe proper professional standards;

c) follow all Company policies or procedures;

d) consult regularly with the Head Instructor about training programmes and the

nature of the Personal Training Services provided to Clients.

3.2 In addition to the Personal Training Services, the Trainer shall provide on an "as

needed" basis additional services to the Company.

3.3 The Trainer will when providing the Personal Training Services and additional

services:

a) Dress in the Company uniform at all times;

b) Maintain a professional image, including being well groomed;

c) Wear the Company name badge;

d) Follow the directions of the Head Instructor or other authorised representative

of the Company.

4. Payment for Services

4.1 The Trainer will provide a weekly detailed invoice to the Company for the hours of

work conducted pursuant to clause 3. The hourly rate for Personal Training Services

is $30 per hour. All other services will be charged at the office rate of $17 per hour.

4.2 Unless otherwise agreed, all invoices should be submitted no later than Wednesday

4pm. Submission of an invoice later than this may result in the delay of payment to

the Trainer. Pay periods for claiming are Monday to Sunday of the previous week.

4.3 The Trainer acknowledges that the Trainer is liable for payment of taxes and other

levies in respect of the consideration paid by the Company to the Trainer pursuant to

this Agreement.

4.4 Travel or related expenses are the responsibility of the Trainer and the Company

shall not reimburse any travel or related expenses.

5. Holidays

The Trainer is entitled to three weeks holiday per annum, provided that such holidays only be

taken with the prior written approval by the Company, such approval not to be unreasonably

withheld.

6. Indemnity

The Trainer shall at all times keep the Company indemnified from any liability it may incur

which arises from:

a) Breach of this Agreement;

b) Negligent or wrongful performance of Personal Training Services;

c) Breach of any law.

7. Subcontracting/Assignment

Neither the Trainer nor the Company may assign their rights or obligations under this

Agreement, including for the avoidance of doubt, subcontracting the provision of the Personal

Training Services.

8. Restraint of Trade

During the Term and thereafter for a period of three months, the Trainer shall not solicit any

engagement that directly competes with services offered by the Company, either for its own

account, or as a partner, shareholder, officer, director, employee, or agent of any company,

with clients that it comes into contact as a result of work performed for the Company.

9. Termination

9.1 Either party may terminate this Agreement immediately on the provision of written

notice to the other where:

a) The other party breaches a term of this Agreement and such a breach is not

able to be remedied;

b) The other party becomes bankrupt or insolvent;

c) The other party is convicted of a criminal offence.

9.2 Either party may terminate this Agreement for any reason by either party on the

provision of at least three weeks' written notice.

10. Entire Agreement

Each party acknowledges that this Agreement contains the whole and entire agreement

between the parties as to the subject matter of this Agreement.

Signed by Company Signed by Trainer

Patterson explains that Total Wellness Limited (TWL) is a provider of fitness and gym

services in Ellerslie, Auckland. It has around 12 staff members, with around half employees

and the other half Trainers. This is consistent with the industry as a whole, which hasa50/50

split between employed and contracted trainers.

Patterson got involved with TWL after he responded to an advertisement in the local paper.

Prior to his involvement with TWL, Patterson was a part-time employee at a petrol station.

Patterson explains that he is not an experienced gym instructor, but has been training in a

gym most of his life. At his interview with TWL, the Head Instructor, Rory, told him that he

would be provided training and "everything would be sweet". Patterson was offered the job

on the spot, given the contract and told to think about the offer. Without giving it much

thought Patterson accepted the job and signed the contract.

When he turned up to work on the next day Patterson was given a uniform and a name badge.

Over the next couple of weeks Patterson spent most of his time with Rory. Rory instructed

him on how to write basic fitness programmes, how to deal with clients and TWL's

requirements set down in the policies. At the end of the first week, Rory told Patterson he

should provide a list of his hours worked to Charlene, who would sort out his pay for him.

From the first week on, Patterson received pay-slips from Charlene that showed withholding

tax deductions. Patterson was not registered for GST.

After this initial training, Rory put up some advertisements in the gym on behalf of Patterson.

The advertisement did not have Patterson's contact details, but included the details of TWL.

Patterson explains that the usual practice was for clients to contact TWL directly. Client

appointments for each week were then notified to Patterson and the other instructors each

Monday. Unless he rearranged them, Patterson was expected to keep the client appointments.

Rory told Patterson that he was not permitted to solicit clients via email drops or other private

advertisements. Patterson could "walk the gym floor" and talk to gym-goers, who could

become clients - but they still had to organise appointments through TWL. Rory also told

him he should be turning up around 6am each morning because even if he didn't have a client

appointment, he could help out around the gym and could charge those hours at the "office

rate". Patterson explained that he would be asked to cover the receptionist, when she was

away sick or on leave. Other times Patterson supervised the gym or did some cleaning of the

gym equipment.

Patterson was expected to attend "education sessions" at least twice a month, where all the

instructors and Rory would discuss ideas around training, such as new research findings, new

exercises or new equipment. Patterson did not include these hours in the list he gave to

Charlene.

By June, Patterson thought things were going really well. He had started to have quite a full

roster of clients. Patterson even turned up to work on 2 June, which was Queen's Birthday.

There weren't many clients in that day, but Patterson was kept busy on the gym floor. In his

invoice submitted the following Wednesday, Patterson claimed time and a half for the hours

he worked on Queen's Birthday because he had heard employees were entitled to this rate if

they worked on a public holiday.

However, when Charlene processed his invoice she did not pay him for time and half. When

Patterson queried this with Rory, Rory told him he was an independent contractor and not an

employee.

REQUIRED:

Advise Patterson whether he is an employee or an independent contractor.

this is an example question to practise for the test and we have a limit of 500 words