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latest news in employment law

Union goes to Court to define Employee or Contractor

Published 05 Aug 2018

FIRST Union has begun proceedings in the Employment Court to determine the employment status of courier drivers, employees or contractors.

Generally courier drivers and some truck drivers are considered contractors and sign independent contractor agreements. They usually own their transport, pay for their own equipment and aren't afforded any form of leave from those who engage their services.

However, some businesses who engage these contractors do so and enforce exclusivity of work and vehicle branding, such as NZ Post. FIRST Union will of course argue the drivers are then employees, not contractors.

The union has in the past attempted to get this kind of restriction of exclusivity of service banned through private members Bills, but they've never made it through Parliament. So this time they're lodging  directly with the Employment Court.

The result of this would undoubtedly have knock-on effects for other industries and limitations for use of independent contractor agreements, not to mention any remedial actions for these workers against their 'Employers'.

If the Court is required to determine the 'real nature of the relationship' between parties they will look at all relevant matters, and will not treat the title that the parties use to describe the relationship as conclusive.
In other words, just because you and the worker decide to call the worker a contractor, it doesn’t mean that the Courts, (and the IRD) will agree that they are one.

Over the years the Courts have adopted a number of tests to help determine whether the relationship is really an employee/employer relationship, or that of a contractor/principal. We also have compiled such a list for the benefit of our clients. This test list is available in the Library section of our Employers Toolbox for subscribers, or as a free download this month to our readers.

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