In last week’s article it was noted that the traditional expression of the control test was that a worker was an employee if the master (that is, the employer) not only could control him or had the right to control what he did, but also the manner in which he did it.
A test drawn so narrowly was bound to prove inadequate where societies became more developed and there was a significant emphasis on skilled labour. For while an employer may have the right to control what the skilled worker did, invariably it could not be said that he also controlled the manner in which the work was done.
Therefore, in the English case of Cassidy vs Ministry of Health [1951] where the hospital sought to deny liability for the actions of one of its surgeons on the basis that they did not control how he discharged his work, this view was rejected. Lord Justice Somervell observed that the control test could not be universally applied and he gave the example of the master of a ship who may be employed by the owners even though they had no power to navigate the ship.
In the case of Stevenson Jordan & Harrison vs McDonald & Evans (1952) Lord Denning formulated what has come to be known as the integration or organization test, the essence of which is captured in the following words: “It is often easy to reorganize a contract of service when you see it, but difficult to say wherein the difference lies. A ship’s master, a chauffeur, and a reporter on the staff of a newspaper are all employed under a contract of service, but a ship’s pilot, a taximan, and a newspaper controller are employed under a contract for services.
“One feature which seems to run through the instances is that under a contract of service, a man is employed as part of the business, and his work is done as an integral part of the business; whereas, under a contract for services, his work, although done for the business, is not integrated into it but is only accessory to it.”
In another case Lord Denning observed: “The test of being a servant does not rest nowadays on submission to orders. It depends on whether the person is part and parcel of the organization.”
Another test that is sometimes applied by the courts is the “economic reality test”. Lord Wright is credited with having laid the foundations for this test in the case of Montreal vs Montreal Locomotive Works (1947) where he observed that the complex conditions of modern industry required the application of more complicated tests. He proposed a fourfold test requiring a consideration of control, ownership of tools, chance of profit and risk of loss.
In the local case Sagicor vs Carter discussed last week, Sir David Simmons referred to the explanation of the economic reality test found at page 160 of the text Labour Law by Deakin and Morris: “The test of business or ‘economic’ reality essentially asks whether the worker is a business on his or her own account, as an entrepreneur, or works for another who takes the ultimate risk of loss or chance of profit.”
This test was applied in the case of Market Investigations vs Minister of Social Security (1969), another British case, where the issue was whether an interviewer was employed under a series of contracts of service or contracts for services.
The essential facts were that Market Investigations, a research company, employed a small number of full-time interviewers but also engaged from time to time a number of part-time interviewers drawn from a parcel. The case related to one interviewer from the latter group.
The facts showed that all interviewers were issued with or had access to the company’s “interviewers guide” which outlined interviewing techniques; there was no obligation to accept work when it was offered; interviewers were usually asked to work for two or three days during a ten- or 14-day period; interviewers were free to work for other firms during this period; interviewers could not send a substitute unless they got prior permission from the company; during the period of 81 weeks the interviewer worked for 61 full days and eight half-days and was paid on a daily basis plus expenses; on her first few assignments she was accompanied by a supervisor; on occasions she could be required to attend briefing meetings.
The Minister of Social Security decided that the interviewer worked under a contract of service and the company appealed the decision.
In arriving at his decision Cooke J. observed: “The fundamental test to be applied is this: ‘Is the person who has engaged himself to perform these services performing them as a person in business on his own account’? If the answer to that question is ‘yes’ then the contract is a contract for services. If the answer is ‘no’ then the contract is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining [whether there is a contract of employment]; nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases.
“The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task.”
• Cecil McCarthy is a Queen’s Counsel.