262 Chapter 9Nuisance, trespass, defamation and vicarious liability
In Lee vChung (1990)the Privy Council held the appropriate question to be ‘Is the person
who has engaged himself to perform these services performing them as a person in busi-
ness on his own account?’ If the answer is yes, as in the example of the bricklayer building
the wall in my garden, then the person providing the services is an independent contractor.
If the answer is no, as in the example of the bricklayer working for the local authority, then
the person providing the services is an employee. The Privy Council also accepted that
no absolute test or strict rules could ever decide the matter conclusively. It recognised that
control of the work would always have to be considered. However, this would have to be
considered along with other matters such as:
(i) whether the worker provided his own equipment;
(ii) whether the worker hired those who helped him;
(iii) the amount of financial risk the worker took; how much responsibility the worker took
for investment and management; and
(iv)the extent to which the worker had an opportunity to profit from performing a service well.
In Hall vLorimer (1994)the Court of Appeal indicated that every case needed to be decided
on its own particular facts and that ‘mechanical tests’ should be avoided.
It can be very difficult to say whether casual workers are employees. The ‘mutuality of
obligation’ test looks at whether the employer has a duty to provide work, and whether the
worker has a corresponding duty to accept the work. If there are no such obligations going
both ways then it is likely that the worker is not an employee.Sometimes workers who are in fact employees agree to be called self-employed. This does
not mean that they are independent contractors. The courts will consider the reality of the
situation rather than what was agreed.Carmichael vNational Power (1999) (House of Lords)Two married women worked at a power station as hourly-paid casual guides. They had
begun working in 1990, doing less than four hours a week, and by 1995 they were working
up to 25 hours a week. They were paid by the hour. The women claimed that because they
were employees they were entitled to written particulars of the terms of their employment.
(See p. 357 in Chapter 13.) The women were on the payroll for PAYE purposes but they
worked only when they were available and chose to work. The question for the court was
whether the women had a contract of employment when they were not working.
HeldThere was no contract of employment when the women were not working because
the power station had no contractual obligation to provide work and the women had no
contractual duty to accept it. The parties did not intend there to be a contract. This could
be deduced mainly from the fact that the women chose whether to work or not. There had
been no question of disciplining them when they had chosen not to work. Other matters
which indicated that the parties did not intend there to be a contract were that the women
were not part of the full-time employees’ sickness, holiday or pension schemes and that
the usual grievance and disciplinary procedures did not apply to them.
CommentIn this case the House of Lords also made it plain that they were not consider-
ing whether the women were employees when they actually were working as guides. They
were deciding whether or not the women had a contract of employment.