Difference between Employees and Independent Contractors

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Employment Law

TASK 2

2.1. Difference between Employees and Independent Contractors

Since time memorial, there have been some distinctions between craftsmen and servants that still operate in today’s business relationships. During the Roman times, servants, who are equal to today’s employees, worked for masters who in return paid them. On the flip side, craftsmen worked on their own account producing goods like jewelry. Today, the term craftsmen has become vague, but consultants and repair persons working on their own account still exist. Craftsmen are equal to modern day independent contractors who contract with business owners for their services (McCallum, 23). Independent contractors perform certain duties and tasks for a business owner or organization for an agreed fixed fee. The contracting party does not have the mandate to control an independent contractor regarding the means through which he or she performs the contact apart from setting requirements to be adhered. As for employees, they work for employers who set and control the work and a manner of achieving the desired outcomes. A business or organization that deals with an independent contractor does not have that control (Ashcroft and Ashcroft, 65).

Indicators and Differences

Important indicators can help in determining whether someone is an independent contractor or an employee. First, the degree of control regarding work exhibits clear differences. An employee does work under the control and direction of the employer on a continuous basis. On the other hand,independent contractor holds higher control in the manner with which work he or she performs work. Apart from the degree of control, the employee’s hours of work differ from those of an independent contractor. Standard employees normally have standard working hours, unless they are casual workers. Independent contractors, however, can decide how many hours they will need to complete a certain task. In addition to that, a business or organization will only engage an independent contractor for a certain task but place an ongoing expectation on employees. Since an employee works under the rules of the employer, there is no financial risk. However,independent contractor has to bear the risk if for losses or profits related to every task (Ombudsman, 1).

Several requirements and entitlements further exhibit the difference between an independent contractor and an employee. Employees are entitled to superannuation and their employers pay a certain amount to a nominated fund. Independent contractors are not entitled to superannuation, but they pay for themselves. While working, employees enjoy certain privileges that independent contractors do not. Employers provide tools and equipment to workers, but they independent contractors are not entitled to such provision. Taxation is also different for the two groups. Employees have their tax deducted while the law requires independent contractors to forward their income tax to relevant authorities. Importantly, employees are entitled to regular pay unlike independent contractors who receive payments after the project is complete. Lastly, employees are entitled to be remunerated while on leave, something that is not applicable to independent contractors (Blazek, 45).

2.2. Nature and Scope of Contracts

Agreements are of different types and present different characteristics. Collective contracts and individual contracts are the main types of agreement in employment. Employment agreements can be either collective or individual. Collective contracts involve unions and apply to members who meet coverage clauses. Individuals can also negotiate with employers directly (Sole and Costa, 24). With these two main categories, work arrangements can be permanent, fixed, or casual. Permanent workers can have regular, part time, or seasonal arrangements or working schedules (DairyNZ, 1). Employment contracts dictate the type of engagement or exchange in organizations. Exchanges can be economic, social, or work related. Transactional relations majorly place emphasis on economic exchange and are the basis of transactional contracts (Sole and Costa, 75).

Contract law presents several features of contracts and procedures that should take place when signing into a contract. Frey (4) states that contracts entail two main components: the contract offer and its acceptance. The offer is representation of willingness to take part in the bargain. The person making an offer is the offeror while the one receiving it is known as the offeree (Frey and Frey 4). A contract can be either bilateral or unilateral. Bilateral contracts occur when an offeree accepts an offer by making a promise to perform. Hence, this kind of contract involves two promises, one from the offerer and the other fro(Lowisch, 117)m the offeree. On the other hand, unilateral contacts refer to situations where an offeree only needs to complete the contract performance. Hence, it is merely a promise for an action (Miller and Jentz, 120). It is also essential to note that contracts can be either formal or informal. Formal contracts are only enforceable once they are in writing. Informal contracts do not have legal ties in their enforcement (Frey and Frey, 117).

2.3. European Union and Employment Relations

The impact of the European Union on labor and management of human resource in Europe cannot be overelaborated. The powers of the union to regulate relations between employers and employees in the workplace have risen greatly. Its powers to set the regulations and laws governing places of work and the relations that exist there have been on the rise from the early 1990s (Judge and Gennard, 134). In 1992, the European summits made important conclusions regarding employment issues. The Amsterdam Treaty, in particular, implied that employment had finally become a community agenda (Goetschy, 117). United Kingdom, for instance, has had to embrace the initiatives of the EU in its employment field. Some of the central elements include collective redundancies, acquired rights, change of undertakings, proof burdens in equality issues, part time employment or work, temporary work, fixed-term contracts, maternity and pregnancy rights, working time, leaves, and equal opportunity (Judge and Gennard, 134). The EU’s influence in these areas is direct and continues to affect human resource and personnel relationship.

Human resource managers and personnel need to appreciate the laws made at the European Union level and allow them to take precedence over laws made domestically by member states. This is applicable to employment legislation as well as legislation in other areas. Innovations in labor relations since 1993 encourage the participation of workers and employers in the process of making laws in the employment field (Judge and Gennard, 135). European Community member states have to comply with agreements contained in the International Labor Organization, which they had a take on its ratification. The labor regulations do not affect the domestic regulations of member states and members only incorporate them in their national laws (Lowisch, 116).

The European Union has an important role of shaping the lives of people working in Europe. The EU obliges countries to have several laws that define an employment relationship. The Working Time Regulations of 1998 sets the maximum hours that employees should engage in a day or week. The Equality Act 2010 covers issues related to discrimination from sex, religion, race to belief. The Agency Workers Regulation 2010 deals with equal treatment of workers under agencies with reference to permanent workers. Other important laws include laws for part time workers, fixed term employee regulations, and the Equality Act of 2010 (May, 1). These laws stand as incentives as well as disincentives that assist in improving productivity and skills. Labor legislation influence efficiency of firms and their competitive advantage. The laws also impact movement of human resource internationally and locally (Lowisch, 117).

2.4. Termination of Employment Relation

Termination of employment relations should be within general regulations included in labour codes. These codes cover all types of relationships without any substantial variations. Subjective legal facts advanced by employment relationship parties can lead to the termination of a relationship in employment. These facts include agreement to end the relationship as a bilateral contract, notice of cessation of employment as a unilateral contract, instant cessation as a unilateral contract by the offeror or offeree, and termination during the period that is defined as probationary. Contracts can also end by virtue of officially made decisions. Official decisions include enforceable decisions of relevant and competent authority and court decisions. Finally, contracts can end due to objective legal realities and facts. These facts include expiration of the employment relationship and/or death (Reitz, 277).

TASK 3

3.1. Discrimination

The EU anti-discrimination laws ensure equality at places of work in various ways. The laws ensure that places of work uphold human rights and equality in all senses. They enable and provide an opportunity for equality and diversity to exist. They stand as the ideal vehicle upholding sex equality in employment and workplace relations. Some of the key concepts in the anti-discrimination laws include sex, part-time, nationality, ethnic origin, sexual orientation, and age. The laws have evolved significantly over time because of the changing manifestations of discrimination issues. The Court of Justice of the European Union (CJEU) also classifies discrimination into direct and indirect discrimination. (Ellis and Watson, 100).

In the EU, the Racial Equality Directive require member states to prevent particular forms of discrimination, which are indirect and direct discrimination, commands to discriminate, and harassment, on ethnic or racial grounds. The laws cover those with self-employment, employment, vocational training, and occupation. This directive also limits the scope of protection granted to employers and employees. Under these laws, workers should be free from any harassment and discrimination because of their orientation, religious stand, or disability. The commitment of the EU to prevent discrimination was reassured in the Charter of Fundamental Rights passed in 2000. This charter defined ground on which one is not to be discriminated further. The new ground included birth, political opinion, and property (Somek 145–147)

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3.2. Developing Discrimination Laws and HRM

The European Network of Experts ensures that the employment fields are free from discrimination of any sort. The Migration Policy Group (MPG) and the Human European Consultancy manages this non-discrimination. Twenty-seven countries throughout the European Union as well as three candidate nations, namely Turkey, Croatia, and the Former Yugoslav Republic of Macedonia fall under the coverage of the network. The Network’s main mandate is to assess anti-discrimination directives at country levels and offer the EU with independent information and advice. It also offers annual reports for countries regarding the state of discrimination and reviews discrimination law (Lawson and Schiek, 11).

Over the recent past, human resource managers have had to follow anti-discrimination laws strictly in all policies of organizations. The laws are evolving at a fast pace defining various issues involved at places of work into more detail. Discrimination laws are going through serious proliferation and producing positive effects in terms of equality. This will consequently lead to an increase in the areas covered by discrimination laws. More employees will believe that they can depend on equality law to correct the wrongdoings they see and experience while working. Considering the EU law, several changes are taking place that will affect human resource management. During the passage of the Treat of Amsterdam in 1997, the EU was given power to legislate regulations guarding against sex, ethnic, racial, disability, and any other form of discrimination. Binding laws followed suit in 2000 defining part time work further. Recently, the Treaty of Lisbon has brought on the table the new proliferation. The Charter of Fundamental Rights addresses discrimination on several grounds including genetic features, social origin, color, political affiliation, language, and property (Lawson and Schiek, 102).

3.3. Tort Laws and Employment Relations

Tort law has gone through a lot of development, much of it in the twentieth century. During this time, several ideas charted the way forward for tort law in Europe. Today, tort law features in myriad discussions occurring at different levels. The laws exist in three major tiers: upper tier, the lower tier, and the link between the upper and the lower tier. The law is not only present in national and EU laws, but also in global treaties that govern liability for various risks including those that have an international influence (Dam, 8). The European Group of Tort law review torts regularly and give important directions towards this direction. This group has published several principles of tort law similar to those of contract law. The principle divides the torts into general liability, liability bases, defenses, multiple tort, and remedies (EGTL, 1). Harmonization still seems to be in the process to ensure that workers are properly protected while in contracts or at work.

The tort laws and systems are important in the business environment. They give the average person an opportunity to influence institutions and businesses and change the policies and practices they work with. In addition to that, tort laws deter organizations from considering profits more important that the safety of employees. Paying for damages is expensive for any organization and they therefore prefer to put all measures to prevent injuries from taking place. Tort laws also limit the role of the government. Without this system, governments would probably have a greater role in ensuring that unscrupulous businesses do not disregard the health and safety of workers (Bar and Drobnig 25).

Summary

Employment laws are important for the safeguarding of employees and contractors in any nation. The laws and regulations help in ensuring that all procedures are followed. An understanding of the different rights entitled to different people in the work environment is also essential. People enter into different types of contract and the relationships they hold with their employers should follow laid down guidelines. The EU is doing much to ensure that both workers and employers co-exist in a harmonious manner.

Works cited

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Dam, Cees van. European Tort Law. Oxford University Press, 2013. Print.

EGTL. “European Group on Tort Law.” N. p., 2011. Web. 5 Feb. 2014.

Ellis, Evelyn, and Philippa Watson. EU Anti-Discrimination Law. Oxford University Press, 2012. Print.

Frey, Phyllis, and Martin Frey. Essentials of Contract Law. Cengage Learning, 2000. Print.

Goetschy, Janine. “The European Employment Strategy: Genesis and Development.” European Journal of Industrial Relations 5.2 (1999): 117–137.

Judge, Graham, and John Gennard. “The Importance of the European Union.” Introduction to Managing Employment Relations. 5th ed. CIPD, 2010. 134–175. Print.

Lawson, Ms Anna, and Professor Dagmar Schiek. European Union Non-Discrimination Law and Intersectionality: Investigating the Triangle of Racial, Gender and Disability Discrimination. Ashgate Publishing, Ltd., 2013. Print.

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McCallum, Ronald Clive. McCallum’s Top Workplace Relations Cases: Labour Law and the Employment Relationship as Defined by Case Law. CCH Australia Limited, 2008. Print.

Miller, Roger, and Gaylord Jentz. Cengage Advantage Books: Business Law Today: The Essentials. Cengage Learning, 2010. Print.

Ombudsman. “Fair Work Online.” N. p., Oct. 2013. Print.

Reitz, Anders Etgen. Labor and Employment Law in the New EU Member and Candidate States. American Bar Association, 2007. Print.

Sole, Jordi Gual i, and Joan E. Ricart i Costa. Strategy, Organization and the Changing Nature of Work. Edward Elgar Publishing, 2001. Print.

Somek, Alexander. Engineering Equality: An Essay on European Anti-Discrimination Law. Oxford University Press, 2011. Print.