TUTORIAL 1 contract of service - LIA 3024 EMPLOYMENT LAW

1. Briefly, why is it necessary to distinguish between

contract of service and contract for service?

Section 2(1) – Contract of Service means any agreement,

whether oral or in writing and whether express or implied,
whereby one person agrees to employ another as an employee
and that other agrees to serve his employer as an employee
and includes an apprenticeship contract

- Written or oral. Express or implied.

- Must pay kwsp, socse, income tax, vicarious liability

C of Service – worker considered as employee

C for service – worker considered as independent contractor

- To establish employee-employer relationship. To

determine a individuals legal point
- To hold the employer accountable for damages caused by
negligence of the employee since they are vicariously
liable.
- To determine the obligations of the employer
- To determine the remedies that are available to the
employee
- Employee will follow the terms as it is fixed in the
terms of the contract and specifically from time to
time. Way of work, period of work, place of work, attire
and tools used.

2. What are the tests for determining contract of service? Why

are there so many tests? (discuss the relevant authorities)

a) Control test – establishes a master-servant

relationship, where the master has the full control
over the work done by the servant

Performing Right Society v Mitchell and Booker : the

employee was the owner of the dance ballroom. The
employee has the power to fix the song that is paid,
when and how it is played, and detailed control over
the band. Here, the members of the band are said to
be employees as the dance hall company had control
over the members of the band.

Short v Henderson : Four elements that indicates

control by the employer is the power to appoint, to
pay, to control and the power to sack.

In certain situations not necessarily the employer

can fix how the job is done when it involves
professional employees.
 Control is the given priority by the Malaysian Courts
Bata Shoe Co v EPF : salesperson I Bata shop is not
employee. The way and when they work is not
controlled by Bata, but controlled by the owner of
the franchise who appointed them to work. Hence Bata
has no employer-employee relationship and does not
have to contribute to their EPF

b) Multiple test
Contract of service exist if three elements exists :
- Payment of wages
- Reasonable control
- Terms indicate it’s a c of service

Multiple test to overcome the weakness in the control

test, when there is a lack of control not necessarily
mean it is not c of service. The terms in the
contract can indicate there is employer-employee
relationship. Hence, the courts has to determine the
relationship

Ready Mixed Concrete v Minister of Pensions :

Contract to deliver cement to location determined by
Ready Mixed. each driver of the company must buy his
own vehicle and paint it in the company’s colours.
They must wear the company’s uniform as well and must
be available for work when needed. Their salary was
paid based on mileage rate for the work that has been
performed for the company. Here, the drivers are
independent contractors and not employees as they
were operating at their own financial risk. The
drivers are free to find a replacement to carry out
their work, bayar upah pemandu gentian, free to
choose the path, fix their own vehicles.

Label fixed by contract is not neccesarily accepted

by the court. They label might be to escape from the
liability such as epf and vicarious liability. Label
must reflect the reality of the relationship. Must
show real nature

Ferguson v John Dawson : P. Ferguson fell some

fifteen feet from a flat roof on which he was working
and suffered serious injuries. He claimed damages for
breach of statutory duty from the D, Dawson

The court looked at the real intention, what is done

by P. not blindly following the label. Might have the
factor of public interest. The labelling done for the
employer to escape obligation

c) Joint obligation

Employment is not only in conventional places as

factory. Even working from house. Employment does not
have fixed working hours, sometimes depends on the
demands.
A long term relationship exists turning it into a
relationship of employee-employer

Whether machinists working irregular hours at home on

equipment supplied by the factory owner were employed
under contracts of service. The machinists had no
obligation to accept work and were paid according to
the level of work done. The workers claimed unfair
dismissal following a dispute over holiday pay

Nethermere v Gardiner and Taverna : The applicants

sewed trouser flaps part-time in the factory of
Nethermere Ltd. work from home. Each worked 5 to 7
hours a day, and for all but 8 or 12 weeks a year.
They used sewing machines provided by Nethermere Ltd.
Their hours varied according to the employer's needs,
they were paid according to the quantity of trouser
flaps they made and they were not formally obliged to
accept work.
There was a dispute about an entitlement to holiday
pay, and when the employer refused to give them the
entitlement, they claimed they had been unfairly and
constructively dismissed.
So the preliminary question on appeal was whether the
ladies were "employees" under a "contract of
employment" and therefore entitled to unfair
dismissal rights

The Industrial tribunal held that there was a

contract of employment, applying the test of whether
the ladies could be said to be in business "on their
own account". The Employment Appeal Tribunal
dismissed the employer's appeal on this point,
finding in favour of the ladies. The employer
appealed again.

whether a contract created a contract of service (and

therefore a contract of employment) rather than a
contract for services was one of fact, not of law. It
followed that the ladies were under a contract of
employment

Shift from master-servant relationship to

‘transaction’, which creates a two way obligation.
Casual workers, if engaged in such a way that is
difficult to differentiate them from ‘conventional
worker’ make them deserving of rights/treatments as a
worker, additionally such a long term profitable
relationship to the company should be allowed to be
exploitative of the casual/informal contractor.
 d) Economic Reality

3. Uber v Aslam [2018] EWCA Civ 2748

[https://www.judiciary.uk/wp-content/uploads/2018/12/uber-bv-ors-v-
aslam-ors-judgment-19.12.18.pdf ]
(a) Write a brief note on Uber v Aslam (focusing on the
rationales behind the decisions) for class discussion.

(b) What are the impacts of UBer v Aslam on the pre-existing

test on contract of service? Is the control test still
significant?