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Seminar 2Who is the Employee and Employer?Why is there a need to determine whether a person is an employee?A person may do work, under a contract of service; if so he would be an employee.However sometimes, a person may do work under a contract for services (for instance, an independent contractor); if so he would not be an employee.It is important to distinguish between these two for various reasons. For instance:Case law imposes certain obligations in the employer-employee context (such as the implied duty of good faith, vicarious liability, etc) which may not be applicable in other contexts. Some statutes impose obligations on employer in respect of employees (such as the CPF Act, Employment Act, Work Injury Compensation Act, etc) and not in respect of non-employees.Examples of case law differencesGood FaithX company is the employer and Y is the employee. If Y has confidential information about X company, is it implied that he cannot work for Z company (a competitor) during his free time?X company gets Y company to renovate its premises. If Y company acquires some confidential information about X company in the process, is it implied that it cannot renovate Z companys (a competitor) premises? Vicarious LiabilityY is a driver employed by X company. If Y is careless while driving to make a delivery and knocks down Z, who can Z sue? X orders pizza to be delivered to his house. The pizza companys driver is Y. If Y is careless while driving to make a delivery and knocks down Z, can Z sue X?Test to be used as gathered from case law:Originally, the courts only looked at one factor, namely, control to determine whether a person was an employee. Collins v Herfortshire: In a contract for services the master can order or require what is to be done, while in the other (contract of service) he can not only order or require what is to be done but direct how it shall be done.What is wrong with looking only at this one factor?

Test to be used as gathered from case law:Subsequently, the courts started looking at just another factor, namely whether, the job was an integral part of the business if it was then the person performing it was an employee.What is wrong with looking only at this one factor?

Test to be used as gathered from case law:Current position look at the above factors and all other relevant factors. No one factor may be conclusive. Different factors may point in different directions. If there is a dispute, court would have to weigh and balance all the factors and come to a determination.What could be some other relevant factors?

Some Other Relevant Factors:Method of PaymentContract stipulates working hoursContract speaks of right to dismissThe power of selectionCan work be delegated to outsiders?Who bears the risk of loss or the chance of profit?Is there a mutuality of obligation?How is the relationship classified in the contract or other relevant documents?Kureoka Enterprises Pte Ltd v Central Provident Fund BoardIssue arose whether part-time hostesses were entitled to CPF.Hostesses were paid according to number of customers entertained.Hostesses had to give good reasons if they did not turn up.Company had control over them eg: they could not choose their own customers/pricing and were subject to various other rules.Contract effectively provided that they could be dismissed on one days notice.No CPF was paid.No annual leave.No medical coverage.Night transport was provided for the hostesses.Hostesses were required to attend meetings.Hostesses could not delegate duties to outsiders.Work of hostesses formed at integral part of the Kureoka Enterprise.

Some Specific Situations:Casual/Temporary WorkersEmployment AgenciesMotorola Ltd v DavidsonDavidson got a job at Motorola, through an Employment Agency (EA).Davidson was chosen by EA, but detailed specification as to what sort of person they were looking for, was given by Motorola.If Davidson had to take holiday leave, he had to get permission from Motorola.Davidson wore Motorolas uniform and badge.Davidson was subject to Motorolas control and was subject to Motorolas Disciplinary Hearing Procedures.Payment (salary) was made by EA to Davidson after Motorola paid EA.If Davidson was unacceptable, Motorola would inform EA and EA would terminate the contract.Some Specific Situations:National Servicemen/PrisonersCompany DirectorsPartners-Who is the employer? Problem can arise in different contexts. One such common situation: When workers are hired out:-- A person may be employed by X and then he may be hired out to/used by Y temporarily. In such a case, would X or Y be considered as the employer?Generally, X would continue to be the employer.However, if Y has some degree of control over the employee during the duration of the hire, the position may be different in some respects.(When would it be easier to imply that Y has some degree of control - in cases where the work done by the employee is unskilled or skilled?)In such an event Y may be taken to be the employer.However, note: Even if Y is taken to be the employer for the duration of the hire it may be only for a limited purpose (eg: for the purposes of vicarious liability) and not for other purposes such as for paying salary or making contributions under the CPF Act. X will be treated as an employer for such other purposes.

12Chua Chye Leong Alan v Grand Palace De-Luxe Nite Club Pte LtdIn this case, the question arose whether the club was vicariously liable for the negligence of its jockeys, as a result of which the plaintiff lost his car. The jockeys were employees of one Lim Soo Kuang, who was a labour supplier. However, at the material time, Lim had supplied some of his employees to work at the car park of the Nite-Club. The car park belonged to and was operated by the Nite-Club.The Nite-Club gave the jockeys the necessary instructions and had overall control over them and had the right to dictate the manner and mode of parking cars.The jockeys wore shirts which had the name of the club imprinted on them.SummaryIt is important to distinguish between an employee and a non-employee for various reasons.Various factors are relevant for this purpose. These various factors have to be weighed and balanced before arriving at a final determination.Sometimes, while it may be clear that a person is an employee, it may not be clear who his employer is and hence this may also have to be determined.

Readings:Basic Text: 1.17-1.43, 1.45-1.46, 1.50-1.55, 1.61-1.63, 1.66-1.71.Singapore case (available in lexis.com) referred to in Tutorial 1.