FULL RECOMMENDATION
SECTION 17(1), PROTECTION OF EMPLOYEES (PART-TIME WORK) ACT, 2001 PARTIES : DIAGEO GLOBAL SUPPLY - AND - MARY ROONEY (REPRESENTED BY THE IRISH NURSES ORGANISATION) DIVISION : Chairman: Mr Duffy Employer Member: Mr Grier Worker Member: Mr. Somers |
1. Appeal against a Rights Commissioner's Decision PT12424/02/GF.
BACKGROUND:
2. The dispute before the Court concerns a claim by the Union on behalf of its member that she has been treated less favourably than a comparable full-time employee. The Union claims that the Company is in breach of the Protection of Employees (Part-Time Work) Act, 2001, Sections 9(1) and 15(2) by treating the claimant in an unfair manner, selecting her for reduction to her hours of work and changing her pattern of attendance, because of her part-time status.
The Company maintain that the claimant is not an employee of their company but an employee of a Recruitment Agency and that the claim should rest with that organisation.
The dispute was referred to a Rights Commissioner for investigation. The Rights Commissioner's Decision issued on the 9th of July, 2003, as follows:-
"I have given this matter very careful consideration and on the basis of all the evidence produced at the hearings I have come to the conclusion that the claimant has been unfairly treated by her employer whom I decide to be Guinness/Diageo Global Supply.
I am satisfied she has been treated in a less favourable manner than her comparator full time employee colleague and the Company have breached the Protection of Employees (Part Time Work) Act, 2001.
The claimant is seeking the maximum compensation allowed under the Act but I am not convinced the transgression would warrant such an amount. Therefore, I am deciding in the claimant's favour and recommending she be paid three months salary in compensation in full and final settlement of the complaint."
The Company appealed the Decision to the Labour Court on the 15th of July, 2003, in accordance with Section 17(1) of the Protection of Employees (Part Time Work) Act, 2001. A Labour Court hearing took place on the 10th of December, 2003.
DETERMINATION:
The claimant is a registered general nurse and works part-time at the occupational health department at the Guinness brewery in Dublin. She provides cover for other nurses during sick leave, absences and holidays and is called in to work as she is required. The claimant contends that she was treated less favourably in respect of her conditions of employment than a comparable full-time employee of the respondent The respondents contend that they are not the claimant’s employer. They say that at all material times she was employed by Irish Recruitment Consultants (IRC) which is a licensed employment agency. This agency pays the claimant's wages and it is submitted that they are deemed to be her employer by virtue of the definition of that term contained at section 3 of the Protection of Employees (Part-Time Work) Act, 2001 (the Act).
The claimant contends that she never entered into any contractual arrangements with IRC and that they merely acted as the paying agents of the respondent. The claimant further contends that she works under the direction and control of the respondent and is its employee.
The hours of work available to the claimant were reduced in November, 2002. She contends that this was because she refused to take on a full-time job. Further, the claimant is not paid while on sick leave whereas comparable full-time employees are covered by a sick pay scheme.
Issue for Determination.
A part-time employee can only have a cause of action under the Act if he or she is treated less favourably in respect of their conditions of employment than a comparable full-time employee is treated. If the part time employee is an agency worker within the meaning of the Act, the comparable full-time employee with whom comparison is drawn must also be an agency worker. The term “agency worker” is defined by section 7 of the Act by reference to the definition of the term “contract of employment” contained at section 3. The combined effect of these provisions is that a person who is contracted by an employment agency to supply work or service to a third party, is an agency worker.
In respect to the instant case, the respondent informed the Court (and it is not disputed by the claimant) that all locum /part-time staff in the medical centre are employed under the same arrangements as the claimant and on the same conditions. Hence, if the claimant is an agency worker the conditions of employment afforded to full-time nurses employed by the respondent cannot be relied upon to ground her claim as those nurses cannot be regarded as comparable full-time employees for the purposes of the Act. Moreover, if the respondent is not the claimant’s employer they can have no liability to her under the Act and her claim against them cannot succeed.
Consequently, the first issue which the Court must determine is whether the respondent or IRC is the claimant's employer.
This case has raised serious questions as to the circumstances in which part-time, casual or temporary staff can be classified as agency workers for the purposes of the Act. For this reason the Court considers it appropriate to address the issues raised in a level of detail which might not be strictly necessary to determine this particular case.
Status of Agency Workers.
At common law the employment status of agency workers was fraught with uncertainty. In a line of authorities in the UK starting with the decision inConstruction Industry Training Board v Labour Force Ltd [1970] 3 All ER 220it has been held that where a person agrees with another to render services exclusively to a third party, the resulting contract is not one of service. Some later authorities, notablyMcMeechan v Secretary of State for Employment [1997] IRLR 353andMountgomery v Johnson Underwood Ltd [2001] ILRM 269, have accepted that in certain limited circumstances a specific assignment can give rise to a contract of service between an agency worker and the agency. Nonetheless the dominant view, which both of those cases confirmed, is that the typical arrangements entered into between a worker seeking work and an employment agency lacks the necessary elements of control and mutuality of obligations to constitute a contract of service.
InMinister for Labour v PMPA Insurance [1986] JISLW 215, Barron J had to consider if a temporary typist supplied to the defendant by an employment agency was an employee of the defendant. The person had entered into an agreement with the agency to undertake temporary, casual or holiday relief work for clients of the agency. On foot of that agreement the typist was assigned to work for PMPA and she did so under the direction and control of PMPA management. It was held that the person could not be an employee of PMPA because she had never entered into a contract with that company but was assigned to them on foot of a contract which they had with the agency.
These cases highlighted a lacuna in the law. A person on the books of an employment agency could not generally be regarded as an employee of the agency because they did not work under the control of the agency. The client of the agency, for whom the worker did work, could not be regarded as the employer because no contractual relationship existed between them; the only contract being between the agency and the client.
To overcome this anomaly the legal meaning of a contract of employment, and the term employer, was modified in most employment legislation to include contracts, and the parties thereto, whereby an individual agrees with an employment agency to perform work for a third party. The Act contains such a provision at section 3, as follows:
- “Contract of Employment” means-
The term “employer” is defined by reference to the definition of “contract of employment” and provides as follows:
- “ Employer” means, in relation to an employee, the person with whom the employee has entered into or for whom the employee works under (or, where the employment has ceased, entered into or worked under) a contract of employment subject to the qualification that the person who under a contract of employment referred to in paragraph (b) of the definition of “contract of employment” is liable to pay the wages of the individual concerned in respect of the work or service concerned shall be deemed to be the employer.
It seems clear that these statutory definitions are based on the proposition that agency workers are not engaged on a contract of service (or apprenticeship) with anyone. If they were engaged on such a contract they would be covered by paragraph (a) of the definition of a contract of employment and their employer would be the other party to that contract. This is also clear from the wording used in paragraph (b), which refers to“any other contract” and must be taken to mean any contract other than a contract of service or apprenticeship.
Consequently the Court is of the view that it should first consider if the claimant is engaged by the respondent on a contract of service. If she is engaged by the respondent on such a contract there is no need to consider the applicability of paragraph (b) of the definition of contract of employment. Likewise, the deeming provision in the definition of employer, upon which the respondent relies, would also be inapplicable since it is only operative where the contract is one which is designated as a contract of employment by paragraph (b) of the definition.
Is there a Contract of Service?
Over time the Courts have developed a variety of test to determine whether a particular employment relationship is to be regarded as constituting a contract of service. In many cases the question for determination is whether a person is engaged as an employee or is self-employed on a contract for service. In such cases the modern approach is to apply an enterprise test. This essentially asks if the person is in business on their own account or are they an integral part of the business of the other party. (see O’Coindealbhan v Mooney, [1990] 1 IR 422,Denny v Minister for Social Welfare [1998] 1 IR 34andTierney v An Post [1999] ELR 293. However, this test is not appropriate in the present case, as it is not suggested that the claimant is self-employed.
A useful and frequently relied upon test for determining the existence of a contract of service is that formulated by McKenna J inReady Mixed Concretes Ltd v Minister for Pensions 1962 2QBHere three essential characteristics of a contract of service were identified as follows:
1. The employee agrees that in consideration of a wage or other remuneration he or she will provide his or her own work and skill in the performance of some service for the employer.
2. The employee agrees, expressly or impliedly that in the performance of that service he or she will be subject to the others control in a sufficient degree to make that other the employer.
3. That the other conditions of the contract are consistent with it being a contract of service.
Did the Claimant Work under a Contract with the Respondent?.
Applying that test to the present case it is first necessary to consider if the claimant concluded an agreement with the respondent which conforms to part 1 of the test. If she did conclude such an agreement it would then be necessary to consider if it is a contract of service.
The evidence disclosed that on or about April 1991 the claimant became aware of a vacancy for a nurse to work part-time with the respondent. She wrote a letter of application to Ms Mary Ryan who was the sister in charge of the respondent’s Occupational Health Centre. The complainant was subsequently contacted by Ms Ryan and was interviewed by her for the post. Ms Ryan later offered her the post and her hours of work, rate of pay and other particulars of her duties and benefits were agreed with Ms Ryan.
On being initially employed the claimant was told by Ms Ryan that her wages would be paid through IRC. Throughout the continuance of her employment the claimant’s wages were paid by IRC and her P60 tax form was issued by IRC.
However, the claimant never met with any person representing IRC and did not negotiate with them in relation to her conditions of employment.
The Court is satisfied that there was an offer of employment made by Ms Ryan which was accepted by the claimant. Whilst the agreement was not reduced to writing it defined the rights and duties of the parties inter se, and there was valuable consideration. There was also mutuality of obligations in the sense that the respondent undertook to provide work and the claimant undertook to perform that work. Whilst it was agreed that the consideration, in the form of wages, would be paid through IRC, this does not mean that consideration did not pass from the respondent. The Court is satisfied that IRC were acting on behalf of the respondent in paying the claimant’s wages from funds provided by the respondent. The law has long regarded it as possible in appropriate contexts that an act which A procures B to do should be regarded as done by A. Accordingly, the Court is satisfied that a concluded contract existed between the claimant and the respondent and that at all material times the claimant worked under that contract.
Was the Contract one of Service?
In determining if the contract under which the claimant works is one of service, the second part of the Ready Mixed Concrete test indicate that it is necessary to consider the extent to which she was controlled in her work and who could exercise that control. InRoach v Kelly [1969] IR 100,Walsh J observed:
- “[W]hile many ingredients may be present in the relationship of master and servant, it is undoubtedly true that the principle one, and almost invariably the determining one, is the fact of the master’s right to direct the servant not merely on what is to be done but as to how it is to be done. The fact that the master does not exercise the right as distinct from possessing it, is of no weight if he has the right”
The control test has diminished in importance in some modern employment relationships or in some occupations where employees have a significant degree of autonomy in carrying out their work. It nonetheless remains as a highly relevant factor in defining a contract of service.
The control test was recently applied by the Employment Appeals Tribunal for Scotland in a case which was very similar on its facts to the instant case. InMotorola Ltd v Davidson and Other [2000] ILRM 4, the claimant (Mr Davidson) responded to an advertisement for a job repairing mobile telephones with Motorola at their plant at Bathgate. He worked at the plant for two years and was then suspended by Motorola’s regional manager who later terminated his assignment with the company.
Throughout his employment the claimant was paid by an employment agency and he was regarded by Motorola as working under terms and conditions between him and the agency which were set out on the back of a time sheet which he signed each week. These conditions described him as working for the agency on a contract for service. He made a complaint of unfair dismissal to an industrial tribunal which held that he was employed by Motorola and that his case should proceed against that company.
In upholding the decision of the Employment Tribunal, the EAT, per Lindsay J, analysed the degree of control which Motorola exercised over the claimant and observed as follows:
- “Once Mr. Davidson was at the Motorola site he became largely subject to control much as would have been the case had he been an ordinary full-time employee. He went through a Motorola induction course. He worked at the Motorola site; he received instructions from Motorola employees. He used Motorola tools for all his work. If he wanted a holiday he would get permission from (and only from) Motorola. He arranged absences from work directly with his Motorola superior. If he had a grievance, he simply contacted his Motorola supervisor, Tommy Wright. His evidence was that he had to be available for overtime if his Motorola foreman required that. He obeyed, he said, the usual Motorola factory rules. He wore a Motorola uniform with Motorola badges. When he caused, or was thought to have caused, some disciplinary offence, it was a Motorola manager, John Carslaw, and Mr Wright that constituted a disciplinary hearing for him. It was Mr Carslaw who suspended him and it was Mr Carslaw who, after discussion with Mr Wright, ‘decided that he would terminate Mr Davidson’s assignment with’ Motorola”.
In this case the respondent’s Director of Medical Services directed the claimant in her employment at all material times. From time to time the claimant sought increases in pay and this was negotiated and agreed with the respondent. The claimant was required by the respondent to be a member of a trade union and they paid the union contribution on her behalf. The respondent determined the claimant’s hours of work and when she was required for work the respondent would contact her. The Court is satisfied that she was contractually bound to attend for work when so contacted.
The reduction in the claimant’s hours of work, which gave rise to this claim, was decided upon by the respondent and was conveyed to her by the respondent. The complainant works exclusively at the respondent's Occupational Health Centre. She has never been assigned to other locations during periods in which the respondent does not require her services.
Against that background, the Court is satisfied on the evidence that the contract between the parties allows the respondent to exercise control over the claimant in the performance of her work to such a degree as to make them her employer.
Other aspects of the Contract.
Finally, the Court must consider if the other aspects of the contract are consistent with it being one of service. In that regard, as has already been observed, the complainant's wages were paid through IRC and this might not seem consistent with the respondent being her employer. However, the Court is satisfied that IRC was at all times acting on behalf of the respondent as its paymaster. As was also already observed, the contract between the parties provided that the respondent would make work available to the claimant which she would personally perform. The claimant worked exclusively for the respondent and did so over a period of eleven years. Her work was integral to the medical service provided by the respondent and she appears to have been accepted as part of the staff of the Medical Centre in that she always attended the staff Christmas party.
The Court is further satisfied that the other aspects of the claimant's contract with the respondent are consistent with it being a contract of service.
Conclusion
Consequently, the Court is satisfied that the respondent is the claimant’s employer and that she is entitled to maintain these proceedings against them. Furthermore, the Court is satisfied that the full-time nurses employed by the respondent are comparable employees for the purposes of the Act.
For the sake of completeness, and while it is not strictly necessary to do so, the Court has considered if the claimant had any contractual relationship with IRC. In response to questions from the Court,the respondent was unable to indicate if a contract had ever been concluded between the claimant and IRC and if so, what it contained. For her part, the claimant was emphatic that she had never entered into any form of agreement with IRC. On the evidence, the Court is fully satisfied as a matter of fact that the claimant never had any contractual relationship with IRC. Consequently, paragraph (b) of the definition of contract of employment, and the deeming provision in the definition of employer, could have no application in this case.
Subsistence of the complaints.
The claimant contends that she was treated less favourably than a comparable full-time nurse in that she was not paid while on sick leave. This is not denied. This constitutes less favourable treatment of the claimant of a type prohibited by section 9. Accordingly this aspect of the complaint is well founded.
The complainant also contends that she was penalised within the meaning of section 15 in having her hours reduced because she refused to work full-time. It is not denied that the claimant’s hours were reduced. It is, however strenuously denied that this was any form of penalisation. The Court is satisfied that the claimant was advised that two full time vacancies were to be filled. She was offered an opportunity to apply for them. In this respect the respondent was fulfilling its obligation under Article 5 of the Framework Agreement annexed to Directive 97/81/EC (Part-Time Work Directive). The claimant did not apply for full time work, preferring to continue working part-time.
Section 15 of the Act provides that penalisation occurs where an employee is subjected to unfavourable treatment, inter-alia, for refusing to accede to a request by the employer to transfer from performing part-time work to performing full-time work. The evidence in this case indicates that the respondent informed the complainant of full-time vacancies. There is no evidence that the respondent requested the complainant to transfer from part-time work to full-time work. It follows that the reduction in hours could not be regarded in any sense as penalisation of the claimant for having refused to accede to a request to transfer to full-time work.
The INO on behalf of the complainant argued in the alternative that the reduction in the claimant's hours of work constituted less favourable treatment contrary to section 9(1) of the Act. This line of argument is based on the fact that the respondent employed additional full-time staff rather than offering additional hours of part-time work to the claimant. The respondent pointed out that the claimant's hours of work always varied and was dependent upon the availability of locum and other relief work covering temporary absences. They submitted that the reduction in the amount of work available to the claimant was due entirely to the reduction in the requirement for the type of temporary cover which she provided.
It is acknowledged that nurses employed full-time by the respondent did not have their hours of attendance changed. In effect, the respondent contended that if the claimant was less favourably treated, such treatment was objectively justified. Section 9(2) of the Act provides that a part-time worker can be afforded less favourable treatment than a comparable full-time employee provided the less favourable treatment is objectively justified. Section 12 of the Act provides, in effect, that objective justification can only arise where the less favourable treatment is for the purpose of achieving a legitimate objective of the employer and such treatment is appropriate and necessary for that purpose. In the normal course,an employer would be expected to have considered alternative means of achieving the objective being pursuant which might have a less detrimental affect on the part-time worker concerned. It is only if it can be demonstrated that there are no viable, less discriminatory means of achieving the objective being pursued can the defence of objective justification succeed.
The complainant's trade union sought to invoke the respondent’s grievance procedure for the purpose of discussing the reduction in hours with the respondent. However, the respondent refused to meet with the union claiming that they were not the claimant’s employer. It is at least probable that had a meeting taken place some alternative arrangements could have been agreed having a less deleterious affect on the complainant's employment. In these circumstances, and in the absence of any evidence of alternatives having been considered, the Court cannot be satisfied that the reduction in the claimant's hours was objectively justified.
Determination.
The Court is satisfied that the complainant was treated less favourably than a comparable full-time employee in not being paid whilst on sick leave and in having her hours of work reduced. The Court considers that the appropriate order to make in this case is one directing the respondent to pay the claimant her full remuneration in respect of her absence on sick leave on the same terms and conditions as apply in the case of comparable full-time employees. The Court further directs that the respondent provides the claimant with access to the same grievance procedure as is available to comparable full-time employees for the purpose of processing her complaints regarding the reduction in her hours of work.
The Court further determines that the complainant be paid compensation in the amount of €2000.
With the modifications contained herein the decision of the Rights Commissioner is upheld and the respondent' appeal is disallowed.
Signed on behalf of the Labour Court
Kevin Duffy
15th January, 2004______________________
MG.Chairman
NOTE
Enquiries concerning this Determination should be addressed to Madelon Geoghegan, Court Secretary.