Bryson v Three Foot Six Ltd: A Case on the Real Nature of the Employment Relationship

When is a worker an employee, and when are they an independent contractor? The answer to this question has major implications for employment rights, tax obligations, and other legal matters. The New Zealand case of Bryson v Three Foot Six Ltd provides valuable insights into how to determine the true nature of the employment relationship.

Bryson was a model maker for the Lord of the Rings movies. When he was made redundant, he filed a personal grievance for unjustifiable dismissal - an option available only to employees. However, the Employment Relations Authority ruled that Bryson was a contractor and could not pursue a personal grievance. The Employment Court, on the other hand, found that Bryson was an employee, despite the written contract referring to him as an independent contractor. The Court of Appeal overturned the Employment Court's decision, but the Supreme Court ultimately restored it.

The Supreme Court held that determining whether a worker is an employee or contractor is a question of fact, not law. It emphasized that all relevant matters must be considered, including the written and oral terms of the contract, the way in which the relationship operated in practice, and the level of control and integration. The fundamental test is whether the worker is effectively working on their own account.

The Chief Judge of the Employment Court, in the case of Singh v Eric James & Associates Ltd, provided further guidance on determining the real nature of the relationship. Industry or sector practice is relevant but not determinative. Taxation arrangements are also a consideration, but their impact should be examined carefully. Ultimately, the intention of the parties and the way in which the contract is implemented in practice are key.

Bryson v Three Foot Six Ltd serves as an important precedent in New Zealand employment law. It highlights the importance of considering all relevant factors and taking a holistic approach to determining the employment relationship. It also shows that even if a written contract refers to a worker as an independent contractor, they may still be an employee in practice.