Last week I mentioned that our Employment Rights Act gives some guidance on the issue of whether a contract of employment exists, since only workers who are employees can take advantage of its provisions.
After mentioning the factors that must be considered in order to determine whether a worker is an employee, there is a note at the bottom of the First Schedule to the act which reads:
“This list is not exhaustive, and the factors are all elements in a balancing exercise to determine the nature of the contract. No one factor, therefore, is by itself conclusive, and the weight to be attached to any one of the factors is a matter of adjudication.”
When I look at the First Schedule of the act, I cannot help but reflect on the case of Sagicor vs Livingstone Carter et al (2007) in which the then Chief Justice Sir David Simmons had to consider whether four life insurance agents working for Sagicor were employees or independent contractors.
Sir David reviewed the control test and the other principles used by the courts to determine whether a worker was an employee before concluding that the agents were employees. He explained:
“[119] In coming to my decision, I have taken into account the affidavit evidence, the material written terms in the various contracts, the factors that are common to all the contracts as well as those which are specific to the particular type of contract. I have avoided an evaluation of the contracts based upon a mechanistic or arithmetic calculation of the factors pointing towards a contract of service vis-à-vis a contract for services.
[120] Rather, I have allowed myself time to stand back from the mass of information provided by Counsel in order to understand the business realities and to make an informed, considered and qualitative appreciation of the entire arrangements as disclosed on the evidence. I think that the answer to the question raised in the Originating Summonses required an evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details.
“[121] The picture which emerged is that the defendants are professional persons engaged by Sagicor to sell its insurance products. None of the defendants was free to set his/her own standards of performance. They all had ‘to observe the rules, regulations and instructions’ of Sagicor, if I may adapt and apply the language of Lord Hope in Hanna. They require specialist training constantly to update their knowledge base and make them proficient in the insurance business. All of this redounds to the benefit of Sagicor whose profitability, in my view, is directly linked to the skill, resourcefulness and expertise of the workers in this case. Those are the business realities.
“The fact that these workers have no fixed hours of work, are skilled, highly trained, competent and do not require detailed and close supervision does not preclude a finding in favour of a contract of service. A contract of service may exist even though control does not extend to prescribing how work must be done; Morren vs Swinton and Pendlebury Borough Council [1965] 1 WLR 576. The opportunity to deploy individual skill and personality is frequently present in contracts of service. In this regard, the workers in this case are very much like the doctors in the hospital cases where the integration/organisation test was developed.
“[122] I find that the defendants, in consideration of payment by commission, provided their own work and skill in performance of service for Sagicor. In performance of that service, there was a sufficient degree of control and supervision reserved to Sagicor in respect of the manner in which its products should be sold to make Sagicor employer.
“The other material provisions of the contracts are not inconsistent with contracts of service. Indeed, many of the factors common to all of the contracts point in the direction of a contract of service. The defendants are employed as part of Sagicor’s business; their work is an integral part of its business and not merely accessory to it. They are not in business on their own account as entrepreneurs.”
In the old English case of Yewens vs Noakes (1880), Bramwell L.J. described an employee as a person who is “subject to the command of his master as to the manner in which he shall do his work”. This formulation of the control test has its historical roots in the concept of vicarious liability under the tort of negligence where control over the employee was a necessary ingredient for liability on the part of the employer for the negligence of his/her employees.
What the Sagicor case demonstrates is that control or the right to control the worker is still a very significant factor in determining whether the worker is an employee. However, control in the traditional sense of exercising control over the manner in which an employee carries out his work is not required.
Cecil McCarthy is a Queen’s Counsel. Send your letters to Everyday Law, Nation House, Fontabelle, St Michael. Send your email to [email protected].
