FULL RECOMMENDATION
SECTION 28(1), ORGANISATION OF WORKING TIME ACT, 1997 PARTIES : DEPARTMENT OF AGRICULTURE FOOD AND RURAL DEVELOPMENT (REPRESENTED BY CHIEF STATE SOLICITOR) - AND - MAURICE O'REILLY DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Pierce Worker Member: Mr O'Neill |
1. Appeal against Rights Commissioner's Decision WT5842/01/JH.
BACKGROUND:
2. The worker concerned has been employed by the Department of Agriculture, Food and Rural Development as a part-time Temporary Veterinary Inspector since 1966. There are currently about 785 part-time Temporary Veterinary Inspectors providing services on behalf of the Department, in the form of meat hygiene and inspection duties, and assisting permanent veterinary staff at meat export premises throughout the State.
The issue as to whether the worker is employed on a contract for service or a contract of service was referred to a Rights Commissioner for investigation. The Rights Commissioner's decision is as follows:-
"On the basis of the evidence presented and for the reasons set out in the conclusion above, I decide that (the worker) has a valid complaint. As determined by the relevant officers of the Department of Social and Family Affairs, he is employed on a contract of service and as such is entitled to the benefits of the Organisation of Working Time Act, 1997. With regard to redress, it is clear that (the worker) is pursuing the matter for some time. It is my view then he is entitled to receive compensation of a lump sum equivalent to eighteen months holiday and public holiday pay up to the end of August, 2001 – the date when the complaint was received by the Rights Commissioner Service. (The worker) is to receive the benefits of the Organisation of Working Time Act in terms of paid annual leave and public holiday entitlements with effect from 1st September, 2001. If there is a dispute regarding the compensation payment due, it is to be referred to the undersigned for decision. If either side is appealing the finding of this decision to the Labour Court, then it will be a matter for the Labour Court to decide what payment, if any is to be made to (the worker)."
- (The worker was named in the Rights Commissioner’s decision.)
The Department appealed the Rights Commissioner’s decision to the Labour Court in accordance with Section 28(1) of the Organisation of Working Time Act, 1997, on the 14th of January, 2002. The Department submit that the Rights Commissioner had no jurisdiction to hear any complaint as the time limit had run out. The Court heard the appeal on the 14th of May, 2002.
DEPARTMENT'S ARGUMENTS:
3. 1 The case made to the Rights Commissioner was outside the statutory time limit and the Rights Commissioner had no jurisdiction to dispose of the complaint.
- 2. The claimant must show that he is an ‘employee’ in order to benefit from the provisions of the Organisation of Working Time Act, 1997.
- 3. The Department submit that the 1997 Act does not purport to encompass a person engaged on a contract for services/self-employed person.
4. The worker retains the discretion whether or not to work a shift offered. The Meat Plant determines the shifts.
- 3. The Department submit that the 1997 Act does not purport to encompass a person engaged on a contract for services/self-employed person.
- 5. Remuneration is made by fee per shift and the fee is paid regardless of the length of time spent working during the particular shift.
- 6. There is no exclusivity clause required for the worker and he may engage in private practice.
- 7. The worker may engage, as a private practitioner, in TB testing and Brucellosis blood sampling schemes, operated by the Department for which they are remunerated according to another fee structure.
- 8. The Department’s permanent veterinary officials cannot engage in any outside business or activity or employment.
WORKER'S ARGUMENTS: 4. 1. The worker works in excess of 8 hours per week and is subject to the direction of the Departmental official in charge.
- 2. The worker must personally carry out the duties assigned to him.
- 3. The Department supplies all the necessary protective clothing and equipment.
- 4. The worker’s earnings are subject to PAYE/PRSI legislation and the Department issues him with a P60.
- 5. The Scope Section of the Department of Social Community and Family Affairs gave a decision that the worker was employed under a contract of service. The Social Welfare Appeals Officer disallowed the appeal by the Department.
DETERMINATION:
The Department of Agriculture Food and Rural Development (the Department) appealed the decision of the Rights Commissioner WT5842/01/JH, which held that the claimant was an employee working under a contract of employment, and was, therefore, entitled to annual leave and public holidays under the terms of the Organisation of Working Time Act, 1997. The Department are of the view that he is not employed under a contract of service but is an independent contractor employed under a contract for service and, therefore, has no entitlement under the Organisation of Working Time Act, 1997.
Section 2 of the Act defines an “employee”
- means a person of any age, who has entered into or works under (or, where the employment ceased, entered into or worked under) a contract of employment and references, in relation to an employer, to an employee shall be construed as references to an employee, employed by that employer; and for the purposes of this Act, a person holding office under, or in the service of, the State (including a Civil Servant within the meaning of the Civil Service Regulation Act, 1956) shall be deemed to be an employee employed by the State or Government, as the case may be, and an officer or servant of a local authority for the purposes of the Local Government Act, 1941, or of a harbour authority, health board or vocational education committee shall be deemed to be an employee employed by the authority, board or committee, as the case may be;
- means a person of any age, who has entered into or works under (or, where the employment ceased, entered into or worked under) a contract of employment and references, in relation to an employer, to an employee shall be construed as references to an employee, employed by that employer; and for the purposes of this Act, a person holding office under, or in the service of, the State (including a Civil Servant within the meaning of the Civil Service Regulation Act, 1956) shall be deemed to be an employee employed by the State or Government, as the case may be, and an officer or servant of a local authority for the purposes of the Local Government Act, 1941, or of a harbour authority, health board or vocational education committee shall be deemed to be an employee employed by the authority, board or committee, as the case may be;
Time Limits
The Court examined the issue whether the claimant’s complaint is within the specified time limits laid down under Section 27 (4) of the Act:
- (4) A rights commissioner shall not entertain a complaint under this section if it is presented to the commissioner after the expiration of the period of 6 months beginning on the date of the contravention to which the complaint relates.
- (4) A rights commissioner shall not entertain a complaint under this section if it is presented to the commissioner after the expiration of the period of 6 months beginning on the date of the contravention to which the complaint relates.
The claimant first lodged his complaint with the Rights Commissioner on the 26th of April, 2001. Prior to that he had in 1997 utilised internal procedures within the Department seeking a number of statutory rights including holiday pay. This claim was refused in October, 1997, on the grounds that he was employed under a contract for services, not a contract of service. In April, 2001, in another matter, the Department of Social Welfare held that he was employed under a contract of service and he subsequently brought this claim before this Court. The Department now submits that the statutory period of six months within which a person must bring a claim under the Act commenced in October, 1997, and, therefore, the claimants claim is statute barred.
The Court cannot accept this submission. This Court cannot accept that an exchange of letters between the claimant and the Department, in 1997 would debar the claimant from making a claim in respect of his holiday entitlements in the Year 2000/2001.
The right to holiday pay under the Act is in the view of the Court a continuing right. In each case it attaches to a specific year from the 1st of April to the 31st of March. By agreement the year may be extended to the 30th of September. Section 27(4) states that the contravention must have occurred within 6 months of the complaint. The claimant is, therefore, only entitled to lodge a complaint in respect of the holiday year commencing the 1st of April, 2000, and ending the 31st of March, 2001.
Claim for additional payment for working unsocial hours.
At the hearing, the claimant accepted that this claim should not form part of the Court’s adjudication, as it has no legal basis under the Organisation of Working Time Act, 1997.
Employment Status of the Claimant
The Facts: -
- The Department has engaged the claimant since 1966 as a part-time temporary veterinary inspector (TVI).
- He provides a service in the form of meat hygiene and inspection duties on behalf of the Department and assists the permanent veterinary surgeon at a meat factory whose exported meat is required by law to be approved by the Department. A meat plant cannot obtain a meat export licence without inspection and approval.
- He applied for eligibility for inclusion on the panel of TVI’s; this application did not involve a competitive interview. Approval was granted by the Minister for Agriculture, Food and Rural Development on the basis of his qualifications and his inclusion on the Register of Veterinary Surgeons of Ireland.
- He completed the requisite 2 weeks training course at his own expense.
- He had the choice to decide on his location of work and could choose to be included on up to four panels. However, he chose to be included on one panel. He is the most senior person on the panel and accordingly, the first person to be selected for duty when required.
- He is not prohibited from engaging in his capacity as a private veterinary practitioner.
- He may choose which shift he wishes to work on and has accordingly chosen the early shift from 7.00 am to 10.00 am
- He is paid a fee of €168.32 per shift as negotiated with Veterinary Ireland on behalf of all TVI’s. This fee is reviewed in accordance with national wage agreements.
- His fee per shift is paid regardless of the duration of his work. If he finishes prior to 10.00 am he is free to leave.
- The Department provides him with all protective clothing and equipment.
- The amount of work per shift depends on the number of cattle to be killed, which varies depending on the time of the year
- The permanent veterinary inspector located at the meat plant may from time to time instruct him on work to be done. However, his work is so routine that he does not normally need direction.
- He must perform the work personally; he is not allowed to send a substitute in his place. He has the freedom to decline offers of work without penalty so as to meet the demands of his own private practice, and for recreation, sickness, maternity, or sabbatical reasons.
- Persistent refusal to attend a shift - quantified at 16% within a three-month period - will result in a loss in seniority on the panel. Dismissal from the panel has never occurred in almost 40 years and would be unlikely to occur, according to the Department.
- The TVI has control over the amount of work he undertakes and consequently on the level of his earnings. The Department indicated to the Court that they have a shortage of TVI’s and, therefore, there is plenty of work available for those on the panel.
- His fee is subject to PRSI and PAYE deductions.
- On the 24th of April, 2002, the Chief Appeals Officer of the Social Welfare Appeals Office determined that “there was a significant body of evidence indicating that the employment of TVI’s by the Department is under a contract of service”.
The Law
Legal complexity surrounds the area of the distinction between a contract of service and a contract for service. A series of tests have evolved at common law to assist in this identification process. It is accepted that the distinction is a fine one and may be difficult to apply in borderline cases. Traditionally, the existence of a contract of employment was dependent in part on the amount of control exercised by the employer, but the Court accepts that this test is not an absolute one.
Clear pointers as to the criteria that may be used in determining whether a contract is one of service or for services were given by the High Court (Blayney J.) inEP O’Coindealbhain (Inspector of Taxes) v Thomas B. Mooney[1994] IRL 422.
- The extent and degree of control exercised by the employer and whether the employed person was in business on his own account.
The contracting party must have agreed to provide his own work or skill in the performance of some service for the contract to be one of service.
The right of the employer to terminate the employee’s contract upon notice is not consistent with the contract being one for service.
- The extent and degree of control exercised by the employer and whether the employed person was in business on his own account.
In this case, the Chief Appeals Officer of Social Welfare Appeals Office has determined that the worker is employed under a contract of service, a decision that this Court must take cognisance of although it accepts that such a decision is not a definitive one.
InMcAuliffe v Minister for Social Welfare[1994] ELR 239 a wholesale distributor of newspapers used the services of various persons to deliver newspapers for him.
He challenged a finding of a Deciding Officer of the Department of Social Welfare that these persons were employed under contracts of service. The High Court (Barr J) allowed the appeal. In arriving at the Court’s decision, he considered the terms of the contracts in dispute against the terms of hypothetical contracts for services and of service for a business involved in the carriage of goods and he found that as the service provided by the claimants were in common with the type of delivery contract and were not characteristic of the contract of service and, therefore, found without hesitation that they were independent contractors.
In the case ofO'Kelly v. Trusthouse Forte Plc[1983] IRLR, the plaintiffs all worked as “regular casuals” for Trusthouse Forte in the Banqueting Department at the Grosvenor House Hotel. They complained to an Industrial Tribunal that they had been unfairly dismissed by the Company for being members of a Trade Union and for taking part in the activities of that Union. They applied to the Tribunal for interim relief under S.77 of the Employment Protection (Consolidation) Act.
As a preliminary point, the Industrial Tribunal considered whether or not the claimants were “employees” of the Company within the meaning of S.153 (1) of the Act, which is a prerequisite for a claim under the interim relief provisions. In determining this question, the Industrial Tribunal directed itself in accordance with the following test: “What we derive from the authorities is that the Tribunal should consider all aspects of the relationship, no single feature being in itself decisive and each of which may vary in weight and direction, and having given such balance to the factors as seems appropriate, to determine whether the person was carrying out business on his own account.”
The Industrial Tribunal found that:
- Five factors were found to be inconsistent with the relationship being that of employer and employee. These were:
- The engagement was terminable without notice on either side.
- The applicants had the right to decide whether or not to accept work, although whether or not it would be in their interest to exercise the right to refuse work is another matter.
- The respondents had no obligation to provide any work.
- During the subsistence of the relationship it was the parties' view that casual workers were independent contractors engaged under successive contracts for services.
- It is the recognized custom and practice of the industry that casual workers are engaged under a contract for services.
The majority of the Industrial Tribunal then went on to say that whilst the relationship did have many of the characteristics of a contract of employment, there was one important ingredient missing – mutuality of obligation. The Industrial Tribunal rejected the argument put forward on the claimants' behalf that there was an implied obligation on the Company to offer work to the regulars and for them to do the work when offered. According to the Tribunal, the position whereby preference was given to the regular casuals who in turn did the work as rostered was attributable not to any legal obligation but to economic forces, i.e. the economic strength of the Company on the one hand and the desire of the regular casuals to remain on the list on the other.
Taking account of all these factors, the Industrial Tribunal held that the claimants “were in business on their own account as independent contractors supplying services and are not qualified for interim relief because they were not employees who worked under a contract of employment”.
The Court has considered a number of other cases cited by the Department in deciding whether the claimant is under a contract for service as distinct from a contract of service, includingGraham v Minister for Industry and Commerce[1993] IRL 156 andMarket Investigation Limited v Minister for Social Security[1969] 2QB 173and Henry Denny & Sons (Ireland) Limited v Minister for Social Welfare[1998] 1 IR 34all of which refer to the Control Test to determine the status of employment. The Court has also considered the case of Ready Mixed Concrete (South East) Limited v Minister for Pensions[1968] 2QB 497 as an illustration of the control test:-
In that case it was held that an employer should have :
“the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when and the place where it shall be done”
The Court has also examined the finding of the Employment Status Group which was set up under the auspices of the Programme for Prosperity and Fairness. This group was set up because of the growing concern that there may be increasing numbers of individuals categorised as “self-employed” when the “indicators” may be that “employee” status would be more appropriate. The Group produced a“Code of Practice for Determining Employment or Self-Employment Status of Individuals”to eliminate misconceptions and provide clarity.
This Code of Practice indicates that the overriding consideration or test will always be whether the person performing the work does so “as a person in business on their own account”. “Is the person a free agent with an economic independence of the person engaging the service?”
The proposition that there can only be one test to decide the question of whether a contract of service exists is erroneous. The precise quality to be attributed to the various individual facts is a matter of degree.
The Court finds that the following factors in the relationship between the appellant and the respondents are inconsistent with a contract of employment:-
- he has the right to choose his place of work and has the right to choose to work in one location or more, up to four locations
- he has the right to choose his time of shift
- he has the right to decide on how much work to do and consequently how much his income will be
- he has the right to refuse work
- he is free to work in his own private business any time he wishes, even at the times he normally works his shift
- he is free to take time out for personal reasons
- there are no disciplinary or grievance procedures applying nor were such considered necessary due to the nature of the contract
- no dismissal or termination of his contract has ever taken place
- the appellant retains ultimate control over the way he does his work
The Court has given consideration to the Code Of Practice and all the arguments advanced by both parties. It has come to the conclusion that due to the factors above including, in particular, the right to refuse work and the degree of control exercised by the claimant over the performance of his duties, that heis a free agent with an economic independence of the person engaging the serviceand, therefore, this Court is satisfied that he is employed under a contract for service.
Determination
Based on the facts presented, when considered in the light of the various tests and the Code of Practice, the Court has come to the conclusion that the claimant is employed under a contract for service and is, therefore, not an “ employee” as defined under Section 2 of the Organisation of Working Time Act, 1997.
The decision of the Rights Commissioner is overturned. Therefore, the Department’s appeal is allowed.
The Court so determines.
Signed on behalf of the Labour Court
Caroline Jenkinson
17th June, 2002______________________
CH/MBDeputy Chairman
NOTE
Enquiries concerning this Determination should be addressed to Caroline Hayes, Court Secretary.