EMPLOYMENT APPEALS TRIBUNAL
CASE NO.
UD259/2015
MN123/2015
CLAIM(S) OF:
John Brosnan
- claimant
against
Courier Post Limited T/A Fastway Couriers
- respondent
under
UNFAIR DISMISSALS ACTS 1977 TO 2007
MINIMUM NOTICE AND TERMS OF EMPLOYMENT ACTS, 1973 TO 2005
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms. K.T. O'Mahony B.L.
Members: Ms M. Sweeney
Ms H. Kelleher
heard this claim at Killarney on 18th April 2016
Representation:
_______________
Claimant(s) :
Ms Norene Browne, Padraig J O'Connell, Solicitors, Glebe Lane, Killarney, Co Kerry
Respondent(s) :
Brian Foley, Rennick Solicitors, Main Street, Dunboyne, Co Meath
The determination of the Tribunal was as follows:-
Preliminary Issue:
The respondent contended that the claimant was not an employee and that accordingly, the Tribunal did not have jurisdiction to hear the claim under the Unfair Dismissals Acts. The respondent’s position was that the claimant was engaged as an independent contractor.
Background
The respondent (RF) is one of nine regional franchisees, operating under the national master franchisee in Ireland. RF operates in the south west region of the country, covering Kerry, Limerick and Clare and has a regional depot in the area. RF, like all other regional franchisees divided his region into discrete sub-territories and licensed a courier franchisee (courier) to deliver freight in each sub-territory. Each sub-territory is exclusively assigned to a courier and no other courier may operate in that territory. RF has “a next day delivery’ policy and protocols with regards to contacting customers.
Payment to the claimant for delivery and collection services was by way of invoicing. RF generates invoices on behalf of a courier, whereby the latter bills the respondent for delivery and collection services provided by him over the previous month and similarly the respondent invoices the courier for administrative services including inter alia freight sorting and scanner rental for the same period. The respondent then pays the courier the net amount due within 28 days of courier’s invoice. The courier has the opportunity to increase his income by the sale of labels for pick-ups to be delivered within his territory or for onward delivery outside his territory. The respondent company subsidises the income of the couriers in the quieter areas while business is being established in an effort to keep the performance of the overall brand at a high standard.
The claimant had operated as a freight sorter for the respondent after he left school in 2011. Following this, he had worked as a relief driver delivering freight for the respondent on a contract basis on two occasions. In 2014, at the respondent’s invitation the claimant took over the Castleisland run on a permanent basis. He registered to pay VAT and signed a Courier Franchise Deed (the Deed) dated 5 March 2014 but under Schedule 1 he had a commencement date of 3 January 2014. The claimant took legal advice before signing the Deed and signed an annexure to the Deed acknowledging that it had been explained to him by his solicitor and that he had understood its legal and practical effects.
The claimant had hoped to build up the business in his area but he had not been able to do so due to the rural nature of his sub-territory and the short time available to him before the respondent terminated his licence. The claimant accepted in cross-examination that his brother, who is a courier franchisee for the respondent in a nearby sub-territory, has practically doubled his income in the run.
It was the claimant’s position was that following the signing of the Deed, his work continued as usual; he was doing the same work in the same area and working the same hours.
The claimant could not recall paying nominal consideration of €1 for his run. However, he accepted that his brother, who works as a courier for the respondent, had purchased a nearby run from the then courier franchisee.
Determination
The Tribunal has to determine whether the claimant was an employee, employed under a contract of service and eligible to make a claim under the Unfair Dismissals Acts or whether, as alleged by the respondent, he was engaged by the respondent as an independent contractor under a contract for services. This is one of the most vexed questions in employment law and has been considered by the Supreme Court in a number of cases.
The Courier Franchise Deed licensing the claimant to operate within the designated area describes the claimant’s employment status as an independent contractor. However, the labels that the parties ascribe to themselves are not determinative of the status of the employment relationship. In the leading case of Henry Denny and Sons v Minister for Social Welfare [1998] I I.R. 34 the Supreme Court made clear that the adjudicating body must not confine itself to the contract documents when determining this issue or to the labels the parties ascribe to themselves and that each case must be looked at in light of its own particular facts and circumstances having regard to what the real arrangement was on a day to day basis between the parties as well as having regard to the general principles developed by the courts. (Henry Denny and Sons v Minister for Social Welfare [1998] I I.R. 34 and Castleisland Cattle Breeding Society Limited [2004] IR 150). There is no precise test for determining the issue.
In examining the particular facts and circumstances of this case and having regard to what was the real arrangement between the parties the Tribunal is mindful that there is no exhaustive list of criteria relevant to this endeavour, that there are no strict rules as to the weight which the various criteria should carry in any particular case and that no particular criteria is determinative of the issue. Control will always have to be considered, although it is no longer the decisive factor. (Henry Denny and Sons v Minister for Social Welfare [1998] I I.R. 34 and Castleisland Cattle Breeding Society Limited [2004] IR 150).
In ascertaining the true bargain between the parties the Tribunal notes that the respondent exercised a large degree of control in the employment relationship. The courier had to attend the depot early each working day morning to collect and scan the freight and a next-day delivery service. He had to wear the company uniform bearing the company logo and his van had to be less than five years old. Given that the nature of this three-tiered business model, providing a next day freight delivery service, the centralised control was to provide administrative support and to protect and enhance the brand in which all stakeholders from the courier to the national master have a vested interest. Topping up the claimant’s weekly earnings to guarantee a certain level of earnings was to ensure the same quality of service, help build up the run and protect the overall brand. Recognising the significance of brand protection the Tribunal feels that the element of control is not a decisive factor in this case. Several other relevant facts and realities must be looked at.
The claimant was registered for VAT and was responsible for his own tax affairs.
The claimant was not entitled to holiday or sick leave and was responsible for finding and paying his replacement during such absences.
The claimant was not required to personally provide the delivery and collection services within his sub-territory and could delegate the work to a third party.
The claimant invested in his business: he provided his own van for the work and was responsible for insuring it and its contents, for its running costs and maintenance.
He had to have public liability insurance
He paid the mobile phone costs.
He paid the respondent for freight sorting and scanner rental as well as for the company uniform bearing the company logo, which the respondent supplied.
The claimant had the potential, although remote, to profit from the contract.
The claimant was free to sell on his territory or part thereof, subject to sharing capital gains with RF.
Having considered the Courier Franchise Deed and the reality of how the relationship was worked on a day to day basis between the parties, the Tribunal is satisfied that the claimant was employed as an independent contractor and was not an employee.
As the claimant is not an employee the Tribunal does not have jurisdiction to hear the claims under the Unfair Dismissals Acts 1977 to 2007 or the Minimum Notice and Terms of Employment Acts 1973 to 2005.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)