TESTS DETERMINING CONTRACTS OF EMPLOYMENT
1. Control Test:
The control test was introduced as the master servant relationship where the only determining factor was the degree of control the employer had over the employee. It was established by the courts the degree of which the employer has, whether he could control not only what was done but also the manner in which it was done. As stated in the case of Yewens v Noakes, the servant is subject to the orders of his master to the manner in which shall do his work.
One major shortcoming of this test is that it is grossly inadequate to determine the nature of the employment of professionals and experts like doctors, engineers, lawyers, accountants etc.
2. Organization or Integration Test:
This test seeks to ascertain whether the workman is employed as part of the business; and his or her work is an integral part of the business, or whether it is only an accessory to it. In the former case, it is said to be a contract of service or employment; while in the latter, it is classified as a contract for service (Lord Denning in STEVENSON, JORDAN & HARRISON v MACDONALD & EVANS). A secretary in a law firm can’t be an integral part of that firm.
The test has been criticized for being controversial.
3. Economic Reality Test:
The distinction depends not on physical control but financial control. If the individual in question has ultimate responsibility for the profit or loss of the contract, he is regarded an independent contractor (contract for service). On the other hand, where the profits and losses are not borne by him, a contract of service is inferred. The extent to which the individual uses the property of the employer in the course of the contract is also considered.
Can the above test work where there is only one client and the profit made is from same and what happens where the client is off in terms of financial autonomy.
4. Multiple test:
The test gathers all the other tests to provide a broad avenue for ascertaining when a contract of employment or of service exists. See MIXED CONCRETE v MINISTER OF PENSIONS & NATIONAL INSURANCE.
5. Triangular Relationship (An employee with two masters):
If A who is an employee of ABC is redeployed to work for XYZ and while working for the latter, he commits a tort, who should be liable, ABC or XYZ? In BULL & Co SHIPPING v WEST AFRICAN SHIPPING, the court noted that the responsibility for the act of a transferred servant lay on him whose employment the man was in at the time when the act complained of was done. This means it is the person who has a right at the moment to control the doing of the act.When a servant has two masters, the responsibility for a tort committed by him lies exclusively upon the master for whom he was working when he did the act complained of. It must lie on this or the other but not on the two.