BU1112 Business Law


PRX is Perth’s public relations agency.

They provide a range of services for businesses looking to improve their public image.

Stella is one their full-time salespeople.

Stella signed an agreement in 2012 to work from the 1st of January 2013 to 31st December 2016. This stated that she was not an Employee and would adhere all PRX rules.

Stella was a PRX-embroidered shirt wearer. She received a certain percentage of sales.

On a monthly basis, she also received a small amount of base pay.

Stella paid the tax directly to the department.

PRX recommends that employees register a business name to these ends.

Stella was flexible with her hours and used her car to visit clients.

She took care of her car and was not paid any allowance.

PRX hasn’t trained her nor any other salespersons. They attend a specialized training company and PRX pays for it.

Stella was required to keep her mobile phone with them at all times, for work-related reasons. She also answered all calls from PRX clients at all hours.

As it has always done, she was able to request a top up payment for work that took place on weekends and public holidays.

Stella did not discuss her entitlement to holiday and personal leave during the four years that Stella worked for PRX. They also have never offered Stella paid holidays.

Stella suffered from a stroke on December 1, 2016 and will no longer be able work in the future.

She was obese, high stress and had not taken any weekends or holidays for a while. The doctor concluded that this was the cause.

Stella is Stella an employer or another type worker?

You can use the common law test.

If Stella is assumed to be an employee, does PRX breach a common law obligation in relation not giving Stella any vacations or days off?

If Stella is assumed to be an employee, would she have the right to notice, at common or legislative law, if PRX chooses to replace Stella?


Part A

Stella is PRX considered an employee?

Here’s the difference between independent contractor and employee:

The employee entered into a contract of service, while the contractor entered into a contract for services.

Although the employer had control over the employee’s conduct, no control was given to the contractor.

It is the traditional test, as it was in Zuijs. (Zuijs.v Wirth. Pty Ltd 1995).

Although the employer exercises control over an employee, it is not possible for them to exercise any control over a contractor.

Common Law introduced multiple indicia tests in Stevens, v Broadribb Sawmilling Co Pty Ltd.

This test was validated in Hollis V Vabu Pty Limited, (Hollis U Vabu Pty Ltd2001) in Australia.

The following factors are considered when analyzing this test:





If the employer does not provide training.

If training is done by the employer.


If the worker is not integrated into the company.

When worker is integrated in business, such wearing uniforms and using the vehicle of employer, etc.

Tax arrangements

If the worker is responsible for managing it

If managed by the employer.

Durability of the service

When a worker performs a specific task

Worker is employed for an indefinite amount of time.



Control over hours and places of work

The worker indicated the work place and hours.

Employer indicated the work hours and location

Work delegation

If worker is able to delegate work to others.

A worker who lacks the ability to delegate work to others (teacher, n.d.).

Maintenance and supply of equipment and tools.

If provided by worker, then independent contractor.

If employer provides.

Stella worked as PRX’s employee and signed a contract with PRX. Stella states she isn’t PRX’s employee, but all PRX rules are applicable to her.

Stella can work at her discretion. The PRX does not determine Stella’s hours. As per multiple indicia testing, Stella is considered an independent contractor if Stella’s hours are not determined by the employer.

She used her vehicle, which she won. She did not receive an allowance. However, if a person uses his vehicle while performing his task, he is considered an independent contractor.

She gets a percentage of the sale and a fixed amount at the end each month.

The employee gets the wages, but Stella also receives the percentage on the sales basis.

She handles her own tax, so a person who does her taxes alone is considered an independent contractor.

PRX did not train Stella. Employer does not provide training.

Stella is now the Independent contractor for PRX. All the factors indicia are relevant to Stella.

Control test, also known as the traditional test, is used in this instance.

Stella is free to do her own thing, and PRX has no control over Stella’s actions.

As mentioned above, the employer has control over an employee but no control was given to the contractor.

It is a traditional test, which was first developed in Zuijs and Wirth Bros (Zuijs and Wirth Brothers Pty Ltd 95).

Stella therefore works as an independent contractor.

Stella is not employed by PRX. She works as an independent contractor.

Part B

Stella’s right to take days off from work and holidays as per Australian employment law.

Employers have the right to take Leaves under Australian Employment Law for various reasons. These Minimum Leave Entitlements are set out by National Employment Standards.

Employees may request leave from the employer for different reasons. The employer cannot refuse an employee’s right to leave.

Employer must provide minimum leave entitlements to employees.

Section 86 of Act outlines the annual leave entitlement for employees. These sections allow employees to take each year of service.

4 weeks of annual paid leave

If other provisions apply (Act, Section 86) 5 weeks paid annual leave

Section 114 (Act, section 112 2009) states that employees are entitled to leave for public holidays.

According to this section, employees have the right to be absent for part or whole days on public holidays.

Employer can request employee to work on public holiday if the request is reasonable.

If such request is not reasonable and is not reasonable, the employee can refuse to comply.

Stella is the employee in this case. PRX does not provide Stella with the leaves she needs, which breaches Stella’s rights under the employment law.

PRX did not comply with sections 86,87, and114.

PRX violates the Fair work Act provisions under section 86,87, and 114 if it fails to give Stella leave. The reason is that as stated above, the Employer must provide these minimum leave entitlements.

Sections 86-87 of the Act define employee’s annual leave entitlement. According to these sections, employees have the right to take each year of service.

4 weeks of annual paid leave

Five weeks paid annual leave, if applicable.

Not all employees are considered casual employees. An employee with a service record of at least four years can accrue four weeks of annual leave.

The employee’s hours worked on a regular basis for their employers determines whether they are entitled to annual leave.

An employee’s annual leave accrues even if they take paid annual or personal/carer leaves.

An employee cannot accumulate unpaid annual leave, unless it’s community service leave or provided for by an award/registered agreement (FWO 2017).

PRX also breaches section 114. According to this section, employees are entitled to be absent on public holidays for a whole or part of the day.

PRX fails to provide Stella with this right.

PRX can break Sections 86 and 114 if they don’t give Stella permission to do so.

Part C

What is the obligation of PRX in terminating Stella’s employment?

Section 117 (Act, section 112 2009) states that the employer must give notice to an employee before terminating their employment. This notice must be written.

Section 117 of the Act defines the right of an employee to be notified of his or her termination.

The minimum time period for notice is determined solely by the amount of continuous services provided by the employee to the employer. This period can be found in the following table:

Service duration

Employees who have served less than one-year with the employer.

Notice: Minimum period of one week.

Service rendered by an employee for at most 1 year, but less than 3 years with the employer.

Notice of minimum 2 weeks notice

Service by an employee who has been employed for at least 3 years but less than 5 years with the employer.

Notice of minimum 3 week notice

An employee who has been performing service for more than five years.

Minimum notice period of four weeks

Stella worked for PRX from 2013-2016, which means that Stella’s continuous service to PRX was 3 years. Stella is entitled to a notice of termination of no less than 3 weeks.

The section 117 states that an employer must give proper notice to employees before terminating them. Such notice must be written.

Minimum notice period is determined based on service. This means that if an employee has served at least 3 years, but less than 5 years with the employer, the employer must give notice for a minimum of three weeks.

PRX breaches section 117 of this Act.

PRX fails to give Stella a notice of termination within 3 weeks as required by section 117.

Annual leave.

Hollis V Vabu Pty Ltd. 44, (HCA 2001).

Termination of employment.

Stevens v Brodribb Sawmilling Co Pty Ltd

An employee or independent contractor.

Zuijs against Wirth Brothers Pty Ltd

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