DEFINITION OF TERMS

Who is a worker?
Generally speaking, the Labour Act applies only to workers and not employees. The question is whether the word ‘worker’ means the same as ‘employee’. S. 52, Trade Union Act and S. 47, Trade Dispute Act define a worker as “any employee, that is to say any public officer or any individual (other than a public officer) who has entered into or works under a contract with an employer, whether the contract is for manual labour, clerical work or otherwise, express or implied, oral or in writing, and whether it is a contract of service or of apprenticeship.”.
The relationship between the employer and employee is stipulated in the terms of contract. Under the Common Law, the concept of laissez-faire (freedom of contract) was operative. The concept comprehends that contracts derive their source as well as validity from mutual agreement, and they are the result of the parties’ free choice. Thus, the court will not rewrite the agreement between both parties but will enforce it provided there’s a consensus ad idem. The At-will employment was also notorious under common law. Here, an employer was allowed to dismiss his employee for any reason, that is, without having to establish just cause and without warning. In Chukwuma v Shell, the court reiterated the common law position that an employer could fire for a good reason, bad reason or no reason at all.   The At-will employment has been criticized for its hardship on employees.
There is now a paradigm shift from a contract relationship to a status relationship. The latter means that despite the agreement between both parties, an employee enjoys certain rights which are protected by law. Employees in status relationship are those in the public sector. 
            A contract of service is one where the employee is told what to do and how to do it. The relation is often considered as a Master-Slave relationship, with obvious reference to employer as master. On the other hand, a contract for service is one where the employee is told what to do but not how to do it. Here, the contract allows the contractor to work for people other than the employer and the employee is often described as an independent contractor or self-employed.
The importance of this distinction include: a. The Labour legislations apply to only people under contracts of service b. the issue of vicarious liability which is to the effect that an employer is liable for wrongs committed by an employee during the course of employment but not for an act done by an independent contractor under a contract for service c. an employee under a contract of service enjoys certain rights under common law exclusively d. the mode of payment of tax under contract of service (PAYE) differs from that under the contract for service. In SHENA SECURITY v AFROPAK, one of the questions before the court was whether the contract between the parties was a contract of service or otherwise. The court noted that where there is a dispute as to which kind of contract the parties enter, there are factors which usually guide a court of law to arrive at a right conclusion. For instance:

[a] If payments are made by way of "wages" or "Salaries" this is indicative that the contract is one of service. If it is a contract for service, the independent contractor gets his payment by way of "fees". In alike manner, where payment is by way of commission only or on the completion of the job, that indicates that the contract is for service.
[b] Where the employer supplies the tools and other capital equipment there is a strong likelihood that the contract is that of employment or of service. But where the person engaged has to invest and provide capital for the work to progress that indicates that it is a contract for service.
[c] In a contract of service/employment it is inconsistent for an employer to delegate his duties under the contract. Thus, where a contract allows a person to delegate his duties thereunder, it becomes a contract for services.
[d] Where the hours of work are not fixed it is not a contract of employment/of service.
[e] It is not fatal to the existence of a contract of employment/of service that the work is not carried out on the employer's premises. However, a contract which allows the work to be carried on outside the employer's premises is more likely to be a contract for service.
[f] Where an office accommodation and a secretary are provided by the employer, it is a contract of service/of employment.
            On the basis of the above criteria set by the court, it held that the contract was one of service. Having found the termination unlawful, the court held that the employee was only entitled to one month’s notice to terminate the contract or one month’s payment in lieu thereof.

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