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Fish or foul - foster caregiver declared employee not contractor

Dickson v Wesley Community Action Trust, Employment Relations Authority, Wellington, 15 October 2007

In this case the Authority was asked to determine as a preliminary matter whether Mr Dickson was employed as a contractor or an employee and thus able to take a personal grievance for his dismissal under the Employment Relations Act 2000.

Mr Dickson was engaged by Wesley Community Action Trust as a full time specialist foster caregiver for at-risk youth. The role involved a considerable commitment, and Wesley required that its caregivers be solely committed to the task and exercised a high degree of control over the way it was executed. However, the work was ostensibly carried out under a contractor arrangement, and payment for Mr Dickson’s work were classed as "board" and "expenses".

The Authority looked beyond the contractor arrangement and found that Mr Dickson was in fact an employee because he satisfied the definition of a homeworker under s5 of the Employment Relations Act, in being required by his employer to carry out his duties from his own home. This meant Mr Dickson, and others engaged in work like his, are considered under the Act employees by default and can access the personal grievance procedures.

The Authority further determined that, if not a homeworker, Mr Dickson would be classed under the Act as an employee for the following reasons:

• the degree of control exercised by Wesley over the position;
• the role being integral to Wesley’s core business;
• the time and commitment required of Mr Dickson;
• Mr Dickson’s inability to seek any other employment;
• that Mr Dickson was not in business for himself, did not take on any risk or ability to profit, and he treated payments effectively as wages;
• the way the contractual arrangements had been drawn up was to reflect tax arrangements, not employment arrangements.

This case is a strong and significant indicator for the caregiver industry and will have wide repercussions. However, whether contractors fall under the category of homeworker or employee is a question largely dependent on its facts. If you have any questions about your own contract, or contractual arrangements that you may have with your staff, please get in touch.

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