What is Multi factor test?

Answer 1

Multi-Factor Test is where the court will look for 1) WAGE-WORK EXCHANGE, 2) CONTROL BY MASTER & 3) ALL TERMS CONSISTENT WITH CONTRACT OF SERVICE. Read the case of Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] (UK). A lorry driver who delivered cement for RMC Ltd signed a contract as “self-employed” and had to obey company orders. He bought the lorry from RMC Ltd on higher-purchase, has to paint the lorry with company colours and logo and drive it on company’s business for a certain number of hours per week, wearing the company uniform. He was paid based on the amount of cement delivered per mile and had to hire a replacement if he could not work. The court held that “A contract of services exists if these 3 conditions are fulfilled. Firstly, the servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some services to his master. Secondly, he agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master. Thirdly, the other provisions of the contract are consistent with its being a contract of service.” Hence, the court held that the lorry driver was an independent contractor engaged on a contract for services.

Answer 2

The multi-factor test is used in legal and regulatory contexts to determine whether an individual is an independent contractor or an employee. It examines various factors such as control over work, financial arrangements, and the nature of the relationship between the parties to determine the individual's classification. The test helps assess whether a worker should receive employment benefits and protections.