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The Difference between Contract for Service and Contract of Service

Distinguishing between a contract of service (employee) and a contract for services (independent contractor) is vital in determining workers rights, and the obligations owed by their employers. Sometimes it is not clear whether a person is an employee or an independent contractor, which can lead to disputes between workers and employers. This essay discusses how to distinguish between a contract of service and a contract for services by looking at the intention of the parties then, by using 4 tests established by the Courts. It also looks at the reasons it is important to distinguish between an employee and an individual contractor because of the differing rights obtained by employees and independent contractors. First the history about how the employer and worker agreement was previously decided, by looking at the Employment Contracts Act, changed to looking at the Employment Relations Act to distinguish.

Previously the Employment Contracts Act 1991 clearly expressed "contractual intentions of the parties prevailed over all other considerations" (http://www.bzone.co.nz/employment/0,,1836-981618,00.html) so if the contract was entirely in writing, that was the end of the inquiry. But now, under the new law, section 6(2), of the Employment Relations Act 2000, states that "the Court or the Authority must determine the real nature of the relationship between them" (Butterworths, 2002, pg. 86). To do this it "must consider all relevant matters, including any matters that indicate the intention of the persons and is not to treat as a determining matter any statement by the persons that describes the nature of their relationship" (Butterworths, 2002, pg. 86). The case TNT (Worldwide) Express (NZ) Ltd v Cunningham [1993] 3 NZLR 681 made it clear that labels or statements regarding a person's employment status are not determinative of determining the real nature of the relationship, although they will be relevant (http://www.findlaw.co.nz/...

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The Difference between Contract for Service and Contract of Service. (1969, December 31). In DirectEssays.com. Retrieved 23:44, October 20, 2014, from http://www.directessays.com/viewpaper/82449.html