| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Christchurch |
| Reference No | CA 41/09 |
| Hearing date | 18 Nov 2008 - 19 Nov 2008 (2 days) |
| Determination date | 06 April 2009 |
| Member | P Cheyne |
| Representation | J Shingleton ; D O'Rourke |
| Location | Christchurch |
| Parties | Te Amo v Becon Ltd |
| Summary | JURISDICTION – Whether employee or independent contractor – Majority of respondent’s evidence preferred - Applicant experienced businessmen and invited by respondent’s director (“L”) to participate in formation of Good Stuff Investments (“GSI”) and respondent company (“Becon”) – Becon was GSI’s operational company – Everyone involved in establishment of Becon agreed applicant be contracted to help set up business - Becon intended to employ applicant as full-time operations manager after establishment phase – Applicant and L orally agreed applicant be contracted on management consultancy basis for 6 months and payment for service included GST – L reported details of agreement to Becon – All applicant’s payments included GST, no PAYE deducted and payments were called “Becon Canterb Mgnt Fees” – Applicant requested existing GST registered partnership be used as invoicing entity - L’s loan application confirmed applicant contractor but intended to give offer of employment when contract ended – GSI considered negotiating employment agreement (“EA”) with applicant and raised issue with applicant - Applicant made clear wanted to remain contractor – Three months later, applicant sought advice regarding benefits of becoming employee and presented report to respondent – Report requested respondent consider formalising “labour contract” rather than “employment contract” based on five grounds – Applicant currently paid for own travel expenses, Becon’s consumables and container lifters – Applicant also deployed own equipment for Becon’s use and invested capital in Becon – Respondent offered applicant EA based on report – Applicant declined offer due to disagreement with conflict of interest clause in EA – Applicant proposed amendments to EA - Respondent did not accept amendments – Respondent withdrew employment offer and terminated applicant’s existing contract – Applicant raised personal grievance – Authority found complete absence of control mechanisms usually established between company and senior managers supported applicant was contractor – Found no job description established, no performance objectives set and no accountability structure – Found applicant’s work integral to establishing Becon and performed responsibilities with discretion and flexibility consistent with a senior manager under EA – However applicant’s work also consistent with businessmen working in conjunction with business partners - Found applicant performed services with Becon fundamentally as person in business on own account – Applicant provided capital, deployed own equipment and personally paid for Becon’s expenses - Found applicant had substantial business knowledge to know payment structure was for payment of services not salary - Found applicant’s report written was in response to discussions regarding possibility of entering into EA therefore supported applicant was contractor – Found applicant independent contractor – No jurisdiction – Senior Manager |
| Result | Application dismissed ; Costs dismissed |
| Main Category | Jurisdiction |
| Statutes | ERA s6 |
| Cases Cited | Bryson v Three Foot Six Ltd [2003] 1 ERNZ 581;Stevenson Jordan & Harrison Ltd v Macdonald [1952] 1 TLR 101 |
| Number of Pages | 10 |
| PDF File Link: | ca 41_09.pdf [pdf 36 KB] |