Medium2 marksMultiple Choice
Corporate and Business LawSection BSyllabus CEmployment Law

ACCA · Question 49 · Corporate and Business Law

SCENARIO: Harvest Horizon is an agri-tech firm. They hired Marcus as a drone operator. Marcus uses Harvest Horizon's drones, must wear their uniform, and is told exactly which fields to survey each day. However, his contract explicitly states: 'Marcus is an independent contractor and is responsible for his own tax.' Marcus has worked there for 3 years. Following a dispute over safety protocols, Harvest Horizon told Marcus not to return to work.

Based on the multiple test, what is Marcus's likely employment status?

Answer options:

A.

He is an independent contractor because the contract explicitly states so.

B.

He is an employee, because the reality of the relationship outweighs the label in the contract.

C.

He is a worker, but not an employee, because he operates machinery.

D.

He is an independent contractor because he is responsible for his own tax.

How to approach this question

Apply the multiple test to the facts, ignoring the contractual label.

Full Answer

B.He is an employee, because the reality of the relationship outweighs the label in the contract.✓ Correct
Under the multiple (economic reality) test, factors such as Harvest Horizon providing the equipment (drones), dictating the work (control), and requiring a uniform indicate an employer-employee relationship. The courts will disregard a 'sham' label in a contract if it does not reflect the reality of the situation (Autoclenz v Belcher).

Common mistakes

Believing a signed contract stating 'independent contractor' is legally binding regarding status.

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