Employment Relationship and Contract
Topic: The Employment Relationship and Contract
question
Dan operated a business providing statistical analysis in the financial services sector. Eve and Fred have both worked for Dan for three years. They were both described as self employed and both paid tax as self employed persons. Dan provided their entire specialist computer equipment and software. Eve was required to work solely on the projects Dan provided and she had to attend Dan’s premises everyday 9am until 5pm.
Fred on the other hand usually worked at home and was allowed to work on other projects. Fred could even arrange for his work for Dan to be done by someone else if he was too busy to do it personally.
As a result of the downturn in the financial services sector Dan has told Eve and Fred that there will be no more work for them and that they will not receive any further payment or compensation from him for their loss of work.
Required 1. Advise Eve and Fred as to whether they are employees or self employed.
2. Explain how the courts decide whether someone is an employee or is self employed.
3. Advise Eve and Fred what rights they have on their dismissal by Dan.
answer
(1) An employee is seen as someone who is employed under legal obligation of service. Such persons often have to do work that is assigned and does not have the choice to refuse work or assign their work to someone else. The employer is obligated to provide for an employee who does work in exchange for that obligation. A self employed person however is often free to choose his own work and can delegate the responsibility to perform such work to other persons. A self employed person has a legal obligation for services that are provided. The employer of a self employed person has limited obligation to provide for that person. A key distinction between a self employed person and an employee is that the employer has limited control over a self employed person as work and demand for services can be
question
Dan operated a business providing statistical analysis in the financial services sector. Eve and Fred have both worked for Dan for three years. They were both described as self employed and both paid tax as self employed persons. Dan provided their entire specialist computer equipment and software. Eve was required to work solely on the projects Dan provided and she had to attend Dan’s premises everyday 9am until 5pm.
Fred on the other hand usually worked at home and was allowed to work on other projects. Fred could even arrange for his work for Dan to be done by someone else if he was too busy to do it personally.
As a result of the downturn in the financial services sector Dan has told Eve and Fred that there will be no more work for them and that they will not receive any further payment or compensation from him for their loss of work.
Required 1. Advise Eve and Fred as to whether they are employees or self employed.
2. Explain how the courts decide whether someone is an employee or is self employed.
3. Advise Eve and Fred what rights they have on their dismissal by Dan.
answer
(1) An employee is seen as someone who is employed under legal obligation of service. Such persons often have to do work that is assigned and does not have the choice to refuse work or assign their work to someone else. The employer is obligated to provide for an employee who does work in exchange for that obligation. A self employed person however is often free to choose his own work and can delegate the responsibility to perform such work to other persons. A self employed person has a legal obligation for services that are provided. The employer of a self employed person has limited obligation to provide for that person. A key distinction between a self employed person and an employee is that the employer has limited control over a self employed person as work and demand for services can be
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