Worker claims expanded duties beyond maintenance, including shopping and appointments
The Employment Relations Authority (ERA) recently dealt with a case involving a worker who claimed to be an employee of an elderly woman, asserting that he was owed money for services rendered. The employer, represented by her daughter under an Enduring Power of Attorney, denied these claims.
The worker presented several arguments to support his claim of an employment relationship. He pointed to a typed agreement outlining terms of service, including specific hourly rates.
The worker also highlighted the regular nature of his lawn mowing duties, which he performed from December 2018 to November 2019, along with additional ad hoc tasks such as driving the employer to medical appointments.
He argued that these factors, combined with the use of some of the employer's equipment, indicated a shift from his previous contractor status to that of an employee.
This case underscores the importance of clearly defining working relationships from the outset.
A long-standing work relationship
The worker had been providing services to the employer since 2004, initially carrying out building work on her property. These early engagements were on a contractor basis, with the worker quoting for jobs, invoicing, and being paid accordingly.
In December 2018, the nature of the work changed when the employer asked the worker to assist with lawn mowing. The worker claimed that at this point, the relationship shifted to that of an employer-employee. He provided a quotation for mowing four acres of lawn at $400 per month and weed trimming for $50 per month.
The worker presented an unsigned, typed agreement that outlined the terms of their arrangement. This document specified rates for lawn mowing and other labour, with the worker to be paid $25 per hour and any helpers at $18 per hour.
Conflicting claims and services
The worker maintained that he provided lawn mowing services from December 2018 to November 2019, along with additional ad hoc tasks such as driving the employer to medical appointments. He stated that he issued invoices for all tasks performed, some of which were paid in cash, while others remained unpaid.
A key point of contention was the level of autonomy the worker had in carrying out his duties. The worker claimed he had flexibility in deciding when to perform the work, using a mix of his own equipment and that provided by the employer.
"[The worker] said he provided the lawn mowing services from December 2018 until November 2019. In addition to the lawn-mowing, [the worker] said [the employer] also asked him to undertake some ad hoc tasks including taking her to medical appointments and collecting items from stores."
Employee or contractor?
The ERA examined several factors to determine the nature of the working relationship. These included the intentions of the parties, the practical operation of the relationship, the degree of control and integration, and whether the worker was operating as an independent business.
The ERA noted that while a written agreement can indicate an employment relationship, the document presented was unsigned and did not meet the mandatory requirements for an employment agreement under the Employment Relations Act 2000.
The ERA considered how the relationship operated in practice:
"Looking at how the relationship operated in practice, [the worker] was not paid wages into his bank account but continued to be paid upon production of an invoice, he paid his own ACC contribution and continued to have his accounts and tax return professionally prepared on the same basis as previously."
ERA’s determination
After considering all the evidence, the ERA concluded that the worker was operating as an independent contractor rather than an employee. Several key factors influenced this decision:
"Having considered all the circumstances, I determine that [the worker] was in business on his own account and working an independent contractor whilst working for [the employer]."
This conclusion was based on various aspects of the working relationship, including:
"Whether that is the case or not, an annual report produced by [the worker]'s accountants for the financial year ended 31 March 2019 shows trading income of $2,769.00 from carpentry. There is no income from lawn mowing or other gardening services shown. This would support the conjecture that [the worker] did perform work for other clients during the period he was working for [the employer]."
The ERA also noted:
"[The worker]'s bank statements show as a deposit payment of Covid subsidy made by the Ministry of Social Development (MSD) on 9 April 2020. The payment was received by [the worker]. An independent contractor could make a claim for a Covid subsidy payment."
The ERA's decision provided further background information. The employer was an elderly woman in her mid- to late-80s by 2018. The worker had previously performed building and maintenance jobs for her and her husband, which were invoiced and paid as contractor services.
The ERA noted:
"By 2018 [the employer] was in her mid- to late- 80s and it is unclear whether or not she would have understood that [the worker] was discussing a fundamental change in their relationship from that of an independent contractor providing services to her on the same basis as previously whereby he provided invoices for work he carried out, or that they were entering into an employment agreement whereby he provided her with service to be remunerated at an hourly rate of $25.00."
The ERA also considered evidence from another worker who claimed to be employed by the employer. However, this worker's testimony suggested he was actually engaged by the main worker as a sub-contractor:
"It was [the other worker]'s evidence that [the worker] made all the arrangements for his working on her property with [the employer], [the worker] who issued instructions to him, and it was [the worker] he expected to raise the issue of his non-payment with [the employer]."
