Real nature of relationships – Builder held to be employee not independent contractor
Cases / 18 June 2021
In a new case from the Employment Court (Court), Barry v CI Builders Limited, a builder was held to be an employee, despite the parties’ agreement recording that he was an independent contractor.
The intention of the parties nor labelling are determinative factors and forms only a part of the other considerations when assessing the “real nature of the relationship”. Simply labelling a worker as an independent contractor does not prevent a finding that the company is exempt from employment obligations.
This is the latest in a line of cases challenging independent contractor status, and there are more coming, along with a review by Government of contractor relationships with a view to setting minimum entitlements for these, as with employment relationships.
In determining that Mr Barry was an employee, the Court held that:
- he worked under the strict direction and control of the company;
- there was no flexibility in terms of his work patterns;
- he was integrated into the company’s operations;
- he was unable to work for others as he worked full-time and had little time or energy to work for others; and
- he did not invoice the company which was unlike others who did contract work for the company.
In summary, Mr Barry was not operating a business on his account, but was providing a service to the company and working for it, in its interests.
Mr Barry is now able to claim employee related entitlements like sick leave, holiday pay and he is entitled to raise a personal grievance claim – rights which are not available to an independent contractor.
Message for Employers
If you are unsure about your contractor relationships and would like to understand your risks around these, please contact us.
Disclaimer: We remind you that while this article provides commentary on employment law, health and safety and immigration topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.