Contractors / Sub Contractors or Employees – That is the Question?

Labour Hire = Hire (Higher) Costs To Your Business
August 9, 2011
The Composites Industry – How to reduce premiums or minimise increases
August 11, 2011

Contractors / Sub Contractors or Employees – That is the Question?

Basic Legal Principle dictates :

a. Employers are generally held vicariously liable for the negligence of their employees.

b. A Principal will also be held vicariously liable for the negligence of it’s Agents providing they are acting within the scope of their Agency Agreement.

However the basic rule of Common Law is that a Principal is not vicariously liable for the negligent act or omissions of an independent contractor, nor is the independent contractor liable for it’s sub contractors.

There are various reasons why businesses use Contractors and Sub Contractors and escaping vicarious liability is a major one.

But the Law will not allow an Employer to escape liability merely by “appointing” or “labelling” people as Contractors or Sub Contractors.

The Law, in determining if a person is an Employee or Contractor, will look at a number of issues including :

a. The Control exercised over the person.

b. The manner of performance of work.

c. Ownership of tools and Equipment.

d. Method of Payment.

e. Workers Compensation.

f. Operational status. i.e. Company or Business Name.

We recommend you review all Contractor and Sub Contractor arrangements to ensure compliance as the alternative may be very costly indeed.

Action Plan :

VeriSure are Specialists Risk Advisors.

Our commitment to providing the very best Policy Terms and Conditions at the most competitive Premium together with our professional Claims Advocacy is paramount.

Contact us for an extensive Risk Assessment today.

Knowledge then Security.

 

 

x Logo: Shield
This Site Is Protected By
Shield