EMPLOYMENT APPEALS TRIBUNAL
CASE NO.
UD620/2013
CLAIM OF:
Daren Blake -claimant
Against
Grand Circle LLC -respondent
under
UNFAIR DISMISSALS ACTS, 1977 TO 2007
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms. K. T. O'Mahony B.L.
Members: Mr J. Hennessy
Mr J. Flavin
heard this claim at Killarney on 3rd July 2014
Representation:
_______________
Claimant: In Person
Respondent: Ms Mairead McKenna B.L. instructed by,
Mason Hayes Curran, South Bank House, Barrow Street, Dublin 4
The determination of the Tribunal was as follows:-
Preliminary issue
The respondent contends that the claimant was an independent contractor and therefore not entitled to claim for redress under the Unfair Dismissals Acts, 1977 to 2007.
Background
The respondent has a tour operations business. The claimant was engaged by the respondent to act as a tour guide/programme director from 2007. The claimant signed a written contract as an independent contractor with the respondent in February 2008. This contract was entitled Independent Contractor Agreement. The claimant, like the other programme directors was given a handbook and some training. As a programme director, like other programme directors, he was required to submit a list of block off dates when he would not be available for work and the respondent then allocated him tours outside those dates.
Determination
The Tribunal has to determine whether the claimant was employed under a contract of service or under a contract for services, in other words whether he was an employee and eligible to make a claim under the Unfair Dismissals Acts.
The claimant signed a written contract as an independent contractor with the respondent in February 2008. This contract was entitled “Independent Contractor Agreement”.
The description of the claimant as an independent contractor in the written contract is not determinative of the issue. The issue whether a worker is employed under a contract of service or a contract for services has come before the High Court and Supreme Court in a number of cases. In the landmark decision of Henry Denny and Sons v Minister for Social Welfare [1998] I I.R. 34 the Supreme Court held that the examination of this issue must not be confined to the written contract and regard must be had to all the circumstances of the employment and as held in Castleisland Cattle Breeding Society Limited v. Minister for Social and Family Affairs [2004] I.E.S the adjudicating body is “bound to examine and have regard to what the real arrangement on a day to day basis between the parties was”.
As regards the entirety of the work relationship between the parties, the respondent relied on the decision of Moriarty J in Sabina Murphy v Grand Circle Travel (22 May 2014) HC, which it was submitted was binding on the Tribunal. In Murphy Moriarty J held that Ms Murphy, a programme director and former colleague of the claimant, who had worked under the same contract as the claimant, was an independent contractor.
The claimant challenged this assertion claiming that the mutuality of obligation missing in Murphy was present in his work relationship with the respondent and that it as well as an increased level of control over how he did his work, since Ms Murphy left the employment, distinguishes his case from that of Ms Murphy’s and were consistent with his employment relationship being one of employer and employee.
The Tribunal will firstly deal with the issue of mutuality of obligation and will later on in its determination deal with the question of control. Subsequent to Ms Murphy’s leaving the respondent the claimant asserted that the level of work commitment required of him increased. While he initially understood that he was an independent contractor when he became a senior programme director he had to promise service for a minimum number of assignments and days per year and to this end he signed an Addendum with the respondent in 2010, committing him to a minimum of 60 days, comprising of at least 5 tours per year at an increased rate of pay. The respondent required more and more from him and because of his level of commitment he could not free up time to work for other tour companies. He had to provide his service personally. The claimant submitted that over the years he only worked for the respondent; because of his good performance he got sufficient work and income from the respondent.
The evidence of another senior programme director, who was even more senior than the claimant, was that she guaranteed to provide her services for 5-8 tours per year. Her position was that senior programme directors guarantee such a level of commitment because the respondent pays the best and in return it requires a high level of service; if a programme director does a good job s/he will be assigned more work. Priority is given to senior programme director. She regarded herself and programme directors as entrepreneurs in business on their own account.
Having considered both sides’ arguments on the level of work commitment, the Tribunal is of the opinion that while the claimant had signed an Addendum committing him to a minimum work requirement with the respondent he could have accepted other work had he wanted to, as asserted by the respondent. The claimant’s own evidence was that he reduced his level of commitment when he adopted a baby and there was no evidence that this was done under the statutory scheme for employees. The Tribunal notes the respondent’s submission that it could not guarantee a minimum number of tours to a programme director but that if it had tours it would assign them. The Tribunal does not know how many senior programme directors are employed by the respondent in Ireland. It further notes that the respondent could at any time unilaterally terminate the Addendum/Agreement. On the balance of probability the Tribunal feels that mutuality of obligation was not present. The legal position is that although mutuality of obligation is an essential element and “the irreducible minimum” that has to be present for a contract of service to exist, its presence is not determinative of the issue as to whether a contract of service exists between the parties and it is necessary to examine the relationship further. (See Edwards J in Minister for Agriculture and Food v Barry and Others [2008] IEHC 216 at 230 & 231).
Even if the Tribunal is wrong in its conclusion as to the mutuality of obligation in the instant case and the contrary were the true legal position the Tribunal feels that in examining the relationship further it is a contract for services and not a contract of service. In Henry Denny & Sons Ltd v Minister for Social Welfare [1998] IR34 Keane J. observed:
“No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of considerations which are relevant in determining that question, nor can strict rules be laid down as to the weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor.”
Firstly, as regards the question of control, the Tribunal notes from the contract the high level of residual control retained by the respondent as indeed was noted by Moriarty J in Murphy and in such a context the Tribunal does not accept the claimant’s argument that the 2011 guidelines (and further guidelines which were not produced) on pre-tour contact with the clients were of significance.
The claimant’s written contract provided for payment on a daily basis, there was no entitlement to holidays, sick pay or a pension, there was no provision for payment if a tour was cancelled and the claimant was to look after his own taxes and social security. The evidence was that there was compliance with these provisions and that the claimant declared himself to be self-employed to Revenue. There was no evidence before the Tribunal that the respondent had a disciplinary policy. Tips were high, sometimes exceeding pay, and these were not collected by the respondent. All these indicia suggest a contract for services. In Castleisland Cattle Breeding Geoghegan J. found the facts that the worker was self-assessed for tax purposes, claimed allowances as a self-employed person, carried his own insurance and was not entitled to any pension were overwhelming evidence that he was an independent contractor. The evidence as to insurance cover was not clear in this case. However, having regard to the entirety of the evidence, including the contra indicators, such as the duty to provide personal service, the Tribunal finds on the balance of probability that the claimant was engaged under a contract for services and not a contract of service. Accordingly, the claimant cannot maintain a claim under the Unfair dismissals Acts 1977 to 2007.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN