To prove whether Johnny is an independent contractor or employee is important because should Johnny be deemed as having an employment relationship with Autumn Fashion, the Fair Work Act Australia (2009) is applicable to Johnny together with all the entitlements and awards binding to it.
And on regards on the verbal promise, it is a fact that negotiations with existing employees on the variation of the employment contract hold the characteristics of trading and commerce.
Rule of the Law
There are is an importance to proof whether or not Johnny is an employee in the eyes of the common law, a test will be used in courts to proof it; in particular, the multi factor test, (Performing Right Society v Mitchell and Booker (Palais de Danse) Ltd (1924)).
What facts will a multi factor test use before deciding if Johnny is an employee or independent contractor?
• Control over task performed; company controls how the worker works indicates employment
• Tools or equipment ownership; tools owned by worker indicates independent contracting
• Working hours; standard hours indicates employment
• The way wages are paid; paid per task indicates completed indicates independent contracting
• Affected by profit or loss from the job; independent contracting will be affected
• Liable for own work; worker liable or own work indicates independent contracting (Stevens v Brodribb Sawmilling Co. Pty Ltd (1985))
• Freedom of working for others; indicates independent contracting
• Duration of contract; if duration of contract is unknown, it indicates employment
• Ability to delegate work to others: should it exist, it indicates independent contracting
• Tax deduction by employer; indicates employment
• Holidays and sick leaves paid for; indicates employment
• Rendering of own tax invoices for payment; indicates independent contracting
It is therefore, in the eyes of the law that Johnny would more likely be deemed to be an employee. Should he be deemed as an employee