Statutes cannot be thoroughly explicit in classifying a worker as an employee or an independent contractor (Employee or independent contractor - law needs to be clear, by Aware; Jan 4).
A worker is an employee when the business has the right to direct and control the work performed by the worker, even if that right is not exercised.
Prima facie, a contract stating whether a worker is an employee or an independent contractor is not sufficient to determine the worker's status.
Classifying an employee as an independent contractor with no basis for doing so makes employers liable for employment taxes.
Certain employers who can provide a basis for not treating a worker as an employee may have the opportunity to avoid paying employment taxes.
An individual who faces financial risk, bears all responsibility for profit or loss and accounts for all costs incurred in the pursuit of profit is likely to be determined a contractor.
A contractor is paid per job as opposed to receiving an annual salary and uses his own equipment.
An employee is obliged to accept work offered and won't be able to get someone else to do the work for him.
Even the United Kingdom has not consolidated a comprehensive definition of the people to whom employment rights and duties apply.
The contractual hallmark of the employment relation is the standardised implied terms that accompany it. The courts will construe the implied terms to reflect the reasonable expectations for the parties.
Today, the employer is given the ability to vary the terms of work in accordance with business need.The courts have allowed this to continue so long as it does not contradict a contract's express terms.
Heng Cho Choon