UGANDA PENTECOSTAL UNIVERSITY

LABOUR LAW

GROUP COURSE WORK

GROUP TWO MEMBERS

NAME

TUMUSIIME AMON U/2020/LLB/O44/D

MUSIIME ALEXANDER U/2020/LLB/O77/E
UWIMANA SHARON U/2020/LLB/O98/E
NANTAYI BRIDGET U/2020/LLB/O58/E
OLABORO INNOCENT U/2020/LLB/O71/E
NAKAYIMA IRENE CISSY U/2020/LLB/O26/E
TUMUSIIME PHIONA U/2020/LLB/O31/E
LUBYAYI BORNYFACE U/2020/LLB/O65/E
KOMUNTALE FAITH U/2020/LLB/O64/E
NABUKERA HAIRAH U/2020/LLB/O59E
BABIRYE GRACE U/2020/LLB/137/E
WAMPULA DENIS U/2020/LLB/O57/E

Qn ; write short notes on the following

a) Independent contractors
b) Contract for service
c) Contract of service
INDEPENDENT CONTRACTORS

This is a person appointed by the employer under the contract for service to accomplish a given duty. An
independent contractor differs from a servant or employee (a servant being a person who works under
the contract of service and he or she is under a close supervision of the employer or master).

The key elements to determine an independent contractor were illustrated in the case of Market
investigation Vs Social security (1969). Where J defined the factors as follows;

a. Whether or not provides personal services which will no doubt always have to be considered
although it can no longer be regarded as the sole determining factor.?
b. Whether the employer or worker provides tools and equipment.?
c. Whether the worker hires his or her own helpers?
d. What degree of financial risk the worker takes if any and how far the worker profits directly
from good work

The above was further elaborated in the case of Ready mixed concrete Ltd Vs minister of pensions and
National insurance (1968)2 QB 497. Where Lord mc Kenna commenced by categorizing the facts of the
case into either self-employment (independent contractor) or employment (employee). He then
examined the facts against three conditions that require building a contact of employment;

1. The skills provided must be in exchange of wages.

2. Control element should exist on the employer (control test).
3. Contract provisions must be inconsistent with the control of services

As in this case, it was held that due to the freedom of delegation, the contract between the plaintiff and
the defendant was a contact for service (self-employment or independent contractor).

An independent contractor his degree of controlled is limited, he is not subject to control and command
of the employer or master as in what to do, how to do it, when to do it and even equipment to be used.

If the employer only determines what is done not how, then the worker is an independent contractor.
This was illustrated in the case of Honey Will and stain Ltd Vs Lakin Brothers Ltd (1934)1 KB 19. LJ
slasher. Said that, the determination whether the actual wrong doer is a servant or agent, on the one
hand is or an independent contractor, it depends on whether or not the employer only determines what
is to be done but retains the control of the actual performance of the work. if the employer while
prescribing the work to be done leaves the manner of doing it to the doer, later is an independent
contractor.

The test also reflects on the ownership of means of production combined with the possession of
technical knowledge and skills. However here, the factor of superintendence and control is of little use
as a test is whether or not a contract is of service, where a person concerned is a professional man
engaged for his skills and experience. The illustration here is clear in the case of Gold Vs Essex County
Council (1942)2 KB 293. Court of Appeal held that a radio grapher was a servant of the hospital that
employed him and thus it was vicariously liable for his negligence in the course of his duty, even though
the hospital authorities were not competent to dictate him on how he should exercise his skills.

Under integration or organization test, when the work of the employee is fully integrated into the
business, then the employee is not an independent contractor and he or she is under the contract of
service whereas where the person’s work is only accessory to the business, then that person is not an
employee but an independent contractor. this was illustrated in the case Stephenson Jordan and
Harrison Ltd Vs MC Donald and Evans (1869)1 TLR 101. Where Lord denning Held that, one feature
which tends to run through the instances is that under a contact of service, a man is employed as part of
the business and his work is done as an integral part of the business whereas under a contact for service
his work although done for the business is not integrated in the business but is only accessory to it.

Note: According to Winfield the question is always whether the damage is caused due to employer’s
breach of duty. The duties of the employer are divided into delegable and non-delegable. This means
that the non-delegable function must be performed by the employer himself, but if he delegates such
functions to an independent contractor, the employer himself is liable.

Conclusion

Lastly when the employer personally interferes and gives direction to the independent contractor, the
employer becomes personally liable. All such contracts entered into by the company can be broadly
divided into two categories-

CONTRACT FOR SERVICE

This is not defined anywhere in the Act. However, for a contract for service as opposed to a contract of
service, the worker is not is not an employee of the company but an independent contractor where he
or she is in the business on their own account. To determine the employment status of workers, if he or
she is under a contract for service, there are a number of elements and tests to be considered. These
include;

Parties: A contract for service is an agreement that is entered into by the company with a third-party for
availing its services. The third-party is an independent service provider, not an employee of the
company.

The third party is not entitled to the benefits that the employees of the company receive or are entitled
to from time to time during the course of their employment. This can be clearly understood from the
case of Market investigation Vs Social security (1969) where J Cooke defined the factors as follows;

a. Whether or not the worker provides services (control) which will no doubt always have to be
considered although it can no longer be regarded as the sole determining factor.
b. Whether the employee or worker provides the tools and equipment for himself?
c. Whether the worker hires his or her own helpers?
d. What degree of financial risk the worker takes if any and how far the worker profits directly
from the good work done?

Once the Above is done by the worker, the he or she is an independent contractor under the
contract for service

Control: The company or employer does not exercise control over the third-party. If the employer only
determines what is to be done not how, then the worker is an independent contractor under the
contract for service. This is well illustrated in the case of Honey Wills & stain Ltd Vs Lakin Brothers Ltd
(1934)1 KB 19 Slasher LJ said that the determinant whether the actual wrong doer is a servant or agent
on the one hand is an employee or independent contractor depends on whether or not the employer
only determines what is to be done but retains the control of actual performance in which case the doer
is a servant or agent. If the employer while prescribing the work to be done leaves the manner of doing
it to the control of the doer, the later is an independent contractor under the contract for service.

Purpose and ownership of intellectual property: The company enters into such contracts where they
want the service provider to assign the ownership of the intellectual property rights in the created work
to it and in return pay for the work done by the service provider.

Examples where a contract for services is entered into-

A company taking the assistance of a third party to develop a website for them, development of certain
artwork, etc.

A company hiring the services of a photographer for their new jewelry. Collection.

A film producer hiring the services of an animation artist for his movie.

CONTRACT OF SERVICE

Under section 10 of the contract act 2010, a contract means an agreement between two parties with
free consent of the parties with capacity, for a lawful consideration and with a lawful object, with
intention to be legally binding.

Section 2 of the Employment act 2006 further defines a contract of service to mean any contract oral or
written, express or implied where a person agrees in return for remuneration to work for an employer
and includes a contract of apprenticeship.

Section 2 of the Employment act defines employee to mean any person who has entered into a contract
of service or an apprenticeship contract including without limitation, any person who is employed by or
for the government of Uganda including the Uganda public service, a local authority or parastatal
organization but excludes a member of the UPDF

Section 2 defines an employer to mean any person or group of persons including a company or
corporation, a public, regional or local authority, a governing body of an incorporation association, a
partnership, parastatal organization or other institution or organization whatsoever, for whom an
employee works or has worked or normally worked or sought to work, under a contract of service and
includes the heirs, successors, assignees, and transferors of any person or group of persons for whom an
employee works, has worked or normally works.

According to the case of Ready mixed concrete limited v minister of pension & national insurance
[1968] 2 QB 497, Lord MC Kenna J gave a wide description of contract of service and he stated that, a
contract of service is where the employee under takes to provide his/her own work or skills to the
employer in return for a wage, the employees agrees to be subject to the employers control sufficient
degree to make others master and that other provisions of the contract are consistent with its being a
contract of employment.

Courts have over time applied various test to determine the status of a person’s employment and
whether it’s for a contract of service which status is paramount in determining the employer’s
responsibility towards the test including the following;

The traditional criteria of establishing a contract of service or employer and employee relationships is
the degree of control by the employer. In many cases a servant has been seen as a person who is subject
to the command and control of the employer in ‘’ what to do, how to do, when to do it and where to do
the work’’ and equipment’s to be used. If the contract gives an employer an excessive control over the
work to be done then we can conclude that it’s a control test. If the contract gives an employer an
excessive control over the work to be done then we can conclude that it’s a contract of service. In the
case of Short v J,W Henderson Ltd [1946]62 TLR 427, the court identified many factors would show that
the master had control over the servant. These include the power to select, the right to control the
method of working etc.

Multiple test

The courts in recent times recognized that a single test of an employment is not satisfactory and may
produce confusing results. The answer under this test is to consider whatever factors may be indicative
of a contract of employment. These may include power to dismiss or suspend an employee, NSSF
payment, insurance payments, annual leave, holiday payments and mode of payments and among
others.

In particular three conditions should be met;

 The employee agrees to produce work or skills in return for wages

 The employee expressly or impliedly accepts that the work will be subject to the control of the
employer.
 All other considerations in the contract are consistent with there being a contract of
employment rather then any relationships between the parties

This test was first applied in the case of Ready mixed concrete limited v minister of pension & national
insurance [1968] 2 QB 497, lord MC Kenna J held that there were three conditions for a contract of
service;

a) The employee under takes to provide his/her own work or skill to the employer in return for a
wage.
b) The employee agrees to be subject to the employer’s control to a sufficient degree.
c) That the other provisions of the contract are consistent with its being a contract of employment.

Organization/integration test

It has also been known that due to the increased technical complexity of modern industry and
commerce and the greater likelihood that the employee will be sought out because its his/her that has
the expertise the control test can be problematic. In certain instances, the organization test has been
applied. This asked two questions that ‘’ was he in the business in his own a count assuming the risk and
responsibilities as well as the benefit of the enterprise’’ & ‘’ was the would-be servant part of his
employers’ organization, was his work subject to co-ordinational controls as to where and when rather
than how’’. In the case of Stevenson Vs Mac Donald [1952] 1 TLR 101, Lord denning held that, for a
contract of service a man is employed as part of the business and his work is done as an integral part of
the business.

Economic/business reality test

This takes into account whether the worker is in the business or is an independent entrepreneur or
works for another person who takes the ultimate risk of loss or chances for profit. This test probes
whether the worker is in fact working for himself in that the worker has made financial investments in
the work, can reap profits from effective performance of the job and whether there is a financial risk in
undertaking the work. In the case of Markey Investigations Vs Minister Of Social Security [1969] 2 QB
justice Cooke stated that the fundamental test to be applied in this is the person who has engaged
himself to performing them as a person in business or his/her own account? If the answer is no then it’s
a contract of service.

In conclusion therefore, the above presentation is basically about a contract of service having
appreciated what a contract is, a contract of service, an employee and employer using employment act
of 2006 and using the four tests to establish a contract of service and case law as discussed above. We
beg to submit.