Contracts of Employment

• Pages: 88-108

CHAPTER 3

CONTRACTS OF EMPLOYMENT

PARTIES TO THE CONTRACT OF EMPLOYMENT

An employment relationship is established when an employer and an employee enter into a

contract of service. The defi nitions of ‘employee’ and ‘employer’ and the contractual tenets

that defi ne the scope of their relationship must be examined as separate issues. In the

Commonwealth Caribbean, the use of legislation to provide appropriate explanations of who

is an employee is pervasive. However, much reliance on case law has been necessary to estab-

lish whether the individual relationship is one of ‘contract of service’ or ‘contract for services’;

the latter being characteristic of a relationship between an employer and an independent

contractor, while the former is indicative of the classic employer/employee relationship. We

will fi rst examine the statutory provisions in this regard before turning our attention to the

common law context, considering how the intersection of the two arenas impacts a determina-

tion of employment status.

Who is an employee or worker?

Statutory provisions defi ning who is an ‘employee’ or ‘worker’ are not standard throughout the

Commonwealth Caribbean or even within each jurisdiction. Rather unhelpfully, both terms

are often used interchangeably, purporting to encompass similar persons, with the purpose for

which the law was made being the deciding factor in examining how each term is utilized.

1

This is to be contrasted with the position in the UK, where the term ‘employee’ is used to cover

persons in the classic employment relationship who are usually the recipient of more benefi cial

statutory protections such as unfair dismissal and redundancy. On the other hand, in that

jurisdiction, the term ‘worker’ is a more expansive term covering certain persons working in

non-standard employment relationships and affording access to a limited range of these statu-

tory benefi ts such as holidays with pay.

2

The Labour Relations Act of Grenada

3 provides that: ‘“employee” means a person who

has entered into or works under a contract of employment with an employer, whether such

1 In Section 2 of the Jamaican Employment (Termination and Redundancy Payments) Act, ‘employee’

is defi ned as: ‘an individual who has entered into or works (or, in the case of a contract which has been

terminated, worked) under a contract with an employer, whether the contract be for manual labour,

clerical work or otherwise, be express or implied, oral or in writing, but does not include- (a) any person

employed by the Government; (b) any person employed in the service of the Council of the Kingston

and St. Andrew Corporation or in the service of any Parish Council’, whereas the Maternity Leave Act

defi nes ‘worker’ as an individual of the female sex who has entered into, or works under, a contract

with an employer, whether the contract is express or implied, and (if it is express) whether it is oral or

in writing and whether it is a contract of service or of apprenticeship, and includes any such individual

employed in the service of the Government (including service in the Jamaica Defence Force and the

Jamaica Constabulary Force).

2 See Section 230(1) of the UK Employment Rights Act, which defi nes ‘employee’ as ‘an individual who

has entered into or works under (or where the employment has ceased, worked under) a contract of

employment’, vis-à-vis Section 230(3) relating to ‘worker’ as ‘(except in the phrase “shop worker” or

“betting worker”) means an individual who has entered into and works (or where the employment has

ceased, worked) under: a contract of employment; or any other contract … whereby the individual

undertakes to do or perform personally any work or service for another party [who is not] a client or

customer of any profession or business undertaking carried on by the individual’.

3 No 15 of 1999. See s 2.

Chapter 3: Contracts of Employment 89

contract be expressed or implied, oral or written;

4 the term employee may be used inter-

changeably with the term “worker” and has the same meaning’.

However, the Employment Act from that jurisdiction defi nes an employee as a person who

offers his services under a contract of employment and this includes a dependent contractor and,

where appropriate, a former employee.

5 The dependent contractor refers to a person who

performs work or service for another person for compensation or reward on such terms and condi-

tions that he is in a position of economic dependence on, and under an obligation to perform duties

for, that employer and who operates in a relationship that more closely resembles the relationship

of employee rather than an independent contractor.

6 This relationship is established whether or

not the person is employed under a contract of employment. It is clear from this designation that

the intention of the legislature was to provide protection to this particular category of workers, who

have not only been marginalised but deliberately excluded from the classic benefi ts reserved for

‘employees’ by virtue of the nature of the contract under which they are engaged.

7

The St. Lucia Labour Code

8 provides an expansive defi nition of ‘employee’ to mean any

person who offers his or her services under a contract of employment, whether written, oral or

implied, including a managerial employee, a dependent contractor, an apprentice, a part-time

employee, a casual worker, a homeworker, a temporary worker, a seasonal employee and a

person who is remunerated by commission where that person is not an independent contractor

and, where appropriate, a former employee. The dependent contractor is cast in similar terms

to the Grenadian equivalent.

In contrast, the Labour Relations and Industrial Disputes Act of Jamaica adopted the

nomenclature ‘worker’

9 in deference to ‘employee’.

10 Further, in 2002, the defi nition of

‘worker’ was reformulated, arguably to safeguard against the perceived imbalance of power

in the employment relationship and the employee’s inability to negotiate on an even keel.

11

The defi nition now states that ‘worker’ means ‘an individual who has entered into or works

or normally works (or where the employment has ceased, worked) under a contract, however

described , in circumstances where that individual works under the direction, supervision

and control of the employer regarding hours of work, nature of work, management of

discipline and such other conditions as are similar to those which apply to an employee’.

12

4 Similar defi nitions may be found in the Industrial Relations Act of Bahamas 1971. See s 2 (1).

5 Act 14 of 1999, s 2.

6 Ibid.

7 See discussion in Taylor, O. (2001) National Study in Jamaica on the Employment Relationship (Scope) National

Studies (ILO publication) where he bemoaned the fact that Jamaican legislation needed to be amended

to take account of ‘dependent contractors’ who were being employed in disguised relationships (p. 28). It

should be noted that, even though the LRIDA was amended in 2002, it still has not fully taken account

of such individuals – see discussion below.

8 See s 2.

9 1975, Jamaica. See s 2. Deakin suggests that ‘the “worker” concept shifts the boundary between autonomous

and independent work, replacing a test of formal contractual commitment (mutuality of obligation) with one

based on economic dependence (is the work contract located in a professional context or supported by and

independent business?)’. See Deakin, S. (2007) ‘Does the “Personal Employment Contract” provide a basis

for the reunifi cation of employment law?’ Industrial Law Journal March, Vol. 36, Issue 1, p. 68 at p. 74.

10 This is mirrored in s 2 of the Industrial Relations Act of Trinidad and Tobago.

11 Note the conclusions advanced by Davies, P. and Freedland, M.(1999-2000) ‘Labor Markets, Welfare

and the Personal Scope of Employment Law in “Employed or Self-Employed?”’ 21 Comp.Lab.L & Pol’y

J . 231. They assert that the use of the term ‘worker’ in English legislation has potentially broadened the

scope of the defi nition of employee and possibly created a new intermediate category between employee

and independent contractor.

12 The only case to fully delve into this new defi nition was Motor Sales and Service Company Limited v National

Workers Union (IDT 1/2004) (unreported) delivered February 22, 2005, where by majority the IDT ruled

that certain individuals working at the company who were seeking union representation were ‘workers’

within the meaning of the Act. The tribunal relied on the common law tests of employment in coming

to their conclusion – discussed further below.