ADJUDICATION OFFICER DECISION

Adjudication Decision Reference: ADJ-00000215

Complaint for Resolution:

Date of Adjudication Hearing: 21/01/2016

Workplace Relations Commission Adjudication Officer: Pat Brady

Procedure:

In accordance with Section 41(4) of the Workplace Relations Act, 2015 and Section 8(1B) of the Unfair Dismissals Act, 1977, following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.  

Complainant’s Submission and Presentation:

The complainant is an actor who supplied entertainment services to the respondent. He was one of two actors engaged to provide the services on speciality tours. He undertook about sixty-five of these per year and there was some seasonality about the frequency. Each ‘shift’ lasted about three hours. But he had an expectation of some work every week and would be advised of the availability of work by text message.

He had been doing the work for six years.

He submitted invoices to the respondent for payment and was responsible for his own income tax returns.

He submitted that information provided by the respondent to the Department of Social Protection was an indicator that it regarded him as an employee.

In due course dissatisfaction arose with his performance and the respondent terminated his service.

The complainant says that he is an employee with entitlements under the Unfair Dismissals Act in that the respondent determined how and when he worked and that he was within their control at all times. Also he could not subcontract the work nor was he required to bring any equipment to work. He had no financial interest in, nor could he have influenced the success of the enterprise. The respondent also issued him with payslips.

The complainant says he was entitled to due process in respect of any such termination and that this did not happen.

The complainant submitted a list of twelve criteria published by the Department of Social Protection which, if applicable to a claimant ‘would normally’ make that person an employee, i.e. on a contract of service and asserted that they did apply in this case

He also complains that he was not given a statement of his Terms of Employment as required by Section 3 of the Terms of Employment (Information) Act 1994.

Respondent’s Submission and Presentation:

The respondent says that the complainant was engaged on a contract for services and that after each tour he submitted an invoice. There was no ‘mutuality of obligation’ and indeed no obligation to provide him with work at all. It said that no significance should be attached to the returns made to the Department of Social Protection as these were done on the only form the respondent has for such purposes.

In relation to the payslip referred to by the complainant no tax was deducted.

In direct evidence D said his job was to manage the tours and that he had recruited the actors. He made it clear to them at that point that they were not employed by the respondent or by him.

In relation to the process leading to the termination D said he had a meeting with the HR manager of the respondent to outline his serious concern at the complainant’s performance and that he intended to terminate the engagement. He also met the complainant and outlined the areas of improvement necessary, following up this conversation with an email.

In due course he observed that there had not been any improvement and recommended to the HR manager that the complainant’s services be discontinued. She authorised this course of action and a letter issued on June 2^nd 2015 advising him that his services were no longer required.

They viewed this as a courtesy to him rather than the formal termination of a contract. No written

Conclusions and Findings

I have considered all the relevant evidence and submissions that were laid before me, oral and written in the course of the hearing and prior to it.

Section 41(4) of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint(s)/dispute(s) in accordance with the relevant redress provisions under Schedule 6 of that Act.

Section 8(1B) of the Unfair Dismissals Act, 1977 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.

This issue turns quite simply, (although it is not a simple matter) on whether the complainant met the definition of a person engaged on a contract of service or on a contract for services. Between the easily recognisable contractor on the one hand (the totally independent tradesperson who calls to carry out a repair, to take a clear example) and the full time worker on a contract of indefinite duration there is a wide spectrum of contractual situations.

Distinguishing whether a person on the spectrum falls into one category or the other has occupied a good deal of judicial attention and there is a ‘Code of Practice in Determining Employment Status’ already referred to in the submission from the complainant.’

A number of key principles apply.

First, each case turns on its own facts and the adjudicator must take into account all aspects of the relationship. It is an objective test and the parties’ own description of the relationship may be irrelevant. Quite often the need to define the status may arise outside the strict employment rights field, as will be seen below where leading authorities stem from cases addressing social welfare entitlements or under Company law.

Likewise there may not be a single test and a number of tests have been evolved to ascertain the true status of the relationship. More than one may be necessary to determine the issue.

A good flavour of the underlying principles can be gleaned from the following statement, in which the purpose of making the distinction is described as being;

‘to correctly identify those who should fall within the embrace of Employment law and to exclude those who have sufficient independent existence to make it unnecessary to protect them’

Upes, Benny and Handy Labour Law (2^nd Edition, OUP 2006)­­­ at 46 quoted in ‘Employment Law in Ireland’, Cox et al.

The question is often framed relatively simply as ‘whether the person is in business on their own account’ and this is a good starting point. Market Investigations v Min. of Soc. Security [1969] 2 Q.B. 173, Cooke J, at p. 184.

This opens up such criteria as to whether the person has the opportunity to benefit financially or improve or disimprove his earning possibilities by his actions, for example.

The leading case on the matter is Henry­­ Denny v Minister of Social Welfare [1998] 1 I.R. 34 which concerned a supermarket demonstrator and was a case determined under the Social Welfare (Consolidation) Act 1981 to establish the applicant’s status as ‘an insured person’ for the purpose of social welfare payments.

The comparisons with the complainant’s case here are interesting.

In that case the worker had a written contract which specified that she was not an employee, but an independent contractor. Indeed she specifically agreed to the exclusion of the Unfair Dismissals Act 1977 to her employment. There is no written documentation governing the employment relationship in this case.

It was also stated that she was responsible for her own tax affairs (as was the current complainant) and her fees discharged on a fortnightly basis on production of completed invoices (also as in this case).

She was supplied with a uniform and was unsupervised but obliged to abide by the company rules. She could not nominate a substitute.

Some features of that case are not present here such as a non-compete clause

The Supreme Court in that case concluded that the worker was employed on a contract of service. For the sake of clarity it is worth quoting from the judgment of Keane J. at some length

It is, accordingly, clear that, while each case must be determined in the light of its particular facts and circumstances, in general a person will be regarded as providing his or her services under a contract of service and not as an independent contractor where he or she is performing those services for another person and not for himself or herself. The degree of control exercised over how the work is to be performed, although a factor to be taken into account, is not decisive. The inference that the person is engaged in business on his or her own account can be more readily drawn where he or she provides the necessary premises or equipment or some other form of investment, where he or she employs others to assist in the business and where the profit which he or she derives from the business is dependent on the efficiency with which it is conducted by him or her.

The question remains as to whether the appeals officer, in the light of the legal principles to which I have referred, was entitled to arrive at the conclusion he did on the facts as found by him. I have no doubt that he was. Obviously, having regard to the nature of the work for which she was employed, there was no continuous supervision of Ms Mahon by the appellant. That cannot be regarded as a decisive factor, any more than it was in the case of the market researcher, the nature of whose employment was in issue in the case decided by Cooke J On the other side of the equation are the facts that Ms Mahon was provided by the appellant with the clothing and equipment necessary for the demonstration and made no contribution, financial or otherwise, of her own and that the remuneration she earned was solely dependent on her providing the demonstrations at the times and in the places nominated by the appellant. The amount of money she earned was determined exclusively by the extent to which her services were availed of by the appellant: she was not in a position by better management and employment of resources to ensure for herself a higher profit from her activities. She did not as a matter of routine engage other people to assist her in the work: where she was unable to do the work herself, she had to arrange for it to be done by someone else, but the person in question had to be approved by the appellant.

Keane J

See also in re Sunday Tribune [1985] IR 505 where the status of a number of ‘employees’ fell to be decided. This illustrates well the breadth of the criteria and the fact that they will be applied on the individual facts of each case, as, of the three applicants two succeeded and one did not.

In Patrick Woodworth’s case, his employment satisfies the simple test of control by the employer. He worked at specified times under the guidance of the chief sub-editor and to his instructions. The fact that he worked part-time does not change the nature of his employment. A person may be an employee even though employed part-time: Market Investigations v. Minister of Social Security. In addition, a person may be employed by different employers: Jones v. Scullard. Therefore, I am satisfied that Mr. Woodworth was employed by The Sunday Tribune under a contract of service.

In Mary Holland’s case, I am of opinion that her employment was an integral part of the business of the newspaper. The column was to run for 50 of the 52 weeks of the year. She took part in editorial conferences. There was provision for the equivalent of holiday pay. Her case is not dissimilar to that of the plaintiff in Be/off v. Pressdram Ltd. Therefore, I am satisfied that she was employed under a contract of service.

In Ronit Lentin’s case, I am of opinion that her employment was not an integral part of the business of the newspaper. In my opinion, she was a freelance contributor who secured commissions in advance. She was under no obligation to contribute on a regular basis. Presumably, if she did not negotiate a commissioned article, the company’s editor would get articles from some other source. Therefore, I am satisfied that she was not employed under a contract of service but was an independent contractor in respect of the articles she did provide.

The first two were employees of the company (in this case for the purposes of the Companies’ Act), while the third was not such an employee (even though her work was similar to that performed by Mr. Woodworth.)

On these principles it seems clear that the complainant in the current case falls within the criteria and I find that his employment status is that of a contract of service.

The failure of the respondent in this case, which is a large company with a mature HR service to correctly identify the nature of the employment and to provide the necessary documentation may have been untypical. It appeared to partly delegate the management of this part of its business to a specialist contractor who it would appear had less familiarity with the requirements of employment law.

In the circumstances, while it may have had some valid complaints about the employee’s conduct or performance it is obliged to apply the rules of fair procedure and natural justice in any process of termination and it failed to do so.

The letter of June 2^nd 2015 peremptorily terminating the employment on the basis that ‘your services are no longer required’ fell very short of these criteria, a fact pointed out by the complainant in his response on June 24^th, 2015.

Therefore I find that the termination of the employment without any fair procedure constitutes an unfair dismissal.

Decision:

The complainant was employed under a contract of service and he was unfairly dismissed. For the Unfair Dismissal I award him €7,500 which is compensation for the breach of his rights under the Act and is therefore not taxable. I further award him two weeks wages for the failure to provide him with a statement of his terms of employment in the amount of €552.

Dated:   3^rd March 2016