THE GOVERNING OF THE EMPLOYMENT STATUS BY ORTHODOX LAW PRINCIPLES Essay

THE GOVERNING OF THE EMPLOYMENT STATUS BY ORTHODOX LAW PRINCIPLES - Essay Example The importance of sham self-employment is to disguise a person that he or she is self-employed while in essence they are actually not. This could be the case for a number of reasons which could be known to the employee and the company or the employee could be uncharacteristically oblivious of the on goings. The employers could at times stand to gain and so would the employees from time to time. Plans are underway to engage workers as independent contractors wherever the parties intend to create working relationships with adaptations that do not reflect their genuine intentions. It is common knowledge that disguising the employment status is possible through various ways. This could also happen under written contracts to both the employee and the employer as well as when an employee is hired on an informal basis to offer labour and is at times told that they are a contractor just like any other. Some businesses often do not register their workers as employees since it is a benefit to the business and the employees because they are treated as self-employed in regard to insurance remittals and income tax. This is a tricky situation in which the employees would find themselves in since there is no basis for protection of rights. Most of the companies will be of the view that their employees are not contracted for employment but rather for provision of services and consultancy. These, quite simply put, define sham contracts. Such contracts are mostly entered into by immigrant workers who are in desperate need for jobs and also lack the necessary immigration papers. Thus it is easier for them to try and avoid the authorities. Diplock LJ in Snook v London and West Riding Investments Ltd (1967) gives adequate consideration of what would be considered a ‘sham’. In his judgment, he said: "As regards the contention of the plaintiff that the transactions between himself, A uto Finance and the defendants were a ‘sham’, it is, I think, necessary to consider what, if any, legal concept is involved in the use of this popular and pejorative word. I apprehend that, if it has any meaning in law, it means acts done or documents executed by the parties to the ‘sham’ which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create. The one thing, I think, is clear in legal principle, morality and the authorities (see Yorkshire Railway Wagon Co v Maclure and Stoneleigh Finance Ltd v Phillips), is that for acts or documents to be a ‘sham’, with whatever legal consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance o f creating. No unexpressed intentions of a ‘