EMPLOYMENT CONTRACTS

Nature of Contract of Employment

In Laws v London Chronical (indicator Newspapers) ltd (1959) Lord Evershed held,
a contract of service is but an example of contracts in general, so that the general law of
contract is applicable
Who is an Employer-section 2 of Employment Act of 2006-is any person, partnership,
corporate body or unincorporated association who (or which) employs one or more persons
under a contract of employment.
Who is an employee-section 2 of the Employment Act provides-any person who has
entered into a contract of service or an apprenticeship contract, including, without limitation,
any person who is employed by or for the Government of Uganda, Uganda Public service,
local authority or a parastatal organization but excludes a member of the UPDF
Contract of Service or Contract for Service
The basic distinction between the two is-those who are employed persons work under a
contract of service while those who are self-employed, work under a contract for service.
Importance of Distinction
The distinction between employees and independent contractors is of fundamental
importance to employment law but that distinction is not clear-cut. This is important because
most of the modern protection legislation applies only to the employer-employee relationship
and not independent contractors.

Importance of the Distinctions

Distinction is important to employment law but the distinction is not clear cut. Most modern
statutory protection applies only to employer-employee relationships and not independent
contractors. Smith & Wood, Industrial law 6th Ed. independent contractor may be in a better
monetary position while working but at grave disadvantage if any accident happens or is
sacked.
Vicarious liability makes employers liable for employee torts in course of employment, but
not necessarily for contractors Muwonge v. AG [1967] EA 17
Employment Act makes employees preferential creditors with regard to arrears of wages in
case of bankruptcy or winding up of the employers business s. 48
Employers must adopt higher standards of care towards their employees than independent
contractors who work for them.
Factors that courts take into account when determining whether person concerned was
an employee or independent contractor.

1. Control Test
The traditional criterion of distinguishing an employee from an independent contractor is the
right and degree of control. In many cases a servant has been seen as anyone subject to
command of employer in what to do, and how, time & place and equipment etc.- express or
implied. If contract gives employer extensive control over work to be done it is a contract of
service absent of which, is a strong indication to contrary from other factors of relationship.
In Mersey Docks & Harbour Board vs. Coggins &Grifiths & Anor.
It was held, if employer only determines what is done not how, then the worker is
independent contractor.

Honey Will & Stain Ltd v. Lakin Brothers Ltd [1934] 1 KB 19Slaser LJ said the
determination whether the actual wrong doer is a servant/an agent or an independent
contractor depends on whether or not the employer only determines what is to be done but
retains the control of the actual performance in which case the doer is a servant or agent if
the employer while prescribing the work to be done leaves the manner of doing in to the
control of the doer, later is an independent contractor.
Performing Right Society Ld v. Michell& Booker Ltd [1924] 1 K.B 762 in which the
liability of the dependants depends on whether the band was their servant or not. An
independent contractor is one who undertakes to produce a given result, but so that in the
actual execution of the work, he has not under the order or control of the person for whom he
does it, and may use his own discretion in things not specified beforehand.
The fact that the master does not exercise the right is of no weight if he has the right.
This test is criticized as being more appropriate for an earlier age. It reflects the state of
society in which ownership of means of production coincided with possession of technical
knowledge and skill- which was acquired largely by being handed down from one generation
to the next by old tradition and not being systematically imparted in institutions of learning.
As specialist skills of employees increased, the unskilled employer was less and less able to
control their work.
With Doctors and such Gold v. Essex County Council [1942] 2 KB 293 Court of Appeal held
that a radio grapher was a servant of the hospital that employed him and thus it was
vicariously liable for his negligence in the course of his duty, even though hospital authorities
were not competent to dictate him on how he should exercise his skill
Collins v. Hertfordshire County Council &Anr [1947] 1 ALLER A negligent and not fully
trained operating surgeon erroneously prescribed treatment that led to the death of a patient.
The county council (owned and managed the hospital) was held reliable because they could
control the manner in which the resident medical officer did her work. Hence her actions
were in course of employment and the council was responsible.- that they emphasized the
correct procedure for the nurse, the cocaine would not have made its way to the patients
body. Hilbery J.
Cassidy V. Ministry of Health [1951] 1 ALLER; the plaintiff was operated on a couple of
fingers of his left hand, but due to inaction of the doctors not responding to his alarms of
feeling pain he ended up losing feeling and sensing in the entire hand by the time the
bandages were removed. Denning- liability of hospital authorities for the negligence of a
doctor on permanent staff of hospital does not depend on whether he is employed under a
contract of service or for services. It depends on who employs him. If patient himself selects
and employs the doctor, the hospital authorities are not liable for his negligence. Where
doctor consultant or not employed and paid by hospital authorities, authorities are liable for
his negligence in treating the patient. the negligence in the duty itself was the employers
duty to provide. The defendant was therefore liable
Thus emphasis on control test reduced. It can be outweighed.
Ready Mixed Concrete (South East) v. Minister of Pensions and National Insurance (read
facts)-Mackenna J held; there were 3 conditions necessary to establish that a contract of
service existed;

1. Employees agreed to provide work and skill in performance of a service to employer

2. An element of control exercisable by the employer;
3. Other terms of contract must not be inconsistent with existence of contract of employment.
Macmarman v Glasgow City Coucil 2001