FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 8 (1), TERMS OF EMPLOYMENT (INFORMATION) ACTS, 1994 TO 2012 PARTIES : NADIAS CLEANING SERVICE (REPRESENTED BY MS ALMA SOPTEREAN) - AND - AMALIA FAGARAS (REPRESENTED BY MR MARIUS MAROSAN) DIVISION : Chairman: Ms Jenkinson Employer Member: Mr Marie Worker Member: Ms Tanham |
1. Appeal Of Adjudication Officer Decision No r-158713-te-15.
BACKGROUND:
2. This is an appeal under Section 8(1) of the Terms of Employment (Information) Acts, 1994 to 2012. A Labour Court Hearing took place on the 9th of March 2016. The following is the Court's Determination:
DETERMINATION:
This is an appeal by Ms Amalia Fagaras (hereafter the Complainant) against the Decision of a Rights Commissioner / Adjudication Officer in her claim against Nadias Cleaning Service (hereafter the Respondent) under the Terms of Employment (Information) Act 1994 (the Act) .
The Rights Commissioner found that the Complainant was not an employee within the meaning of Section 2 of the Act and that he lacked jurisdiction to investigate the substantive claim. The Complainant appealed to this Court.
The first issue to be considered by the Court in this case is whether the Complainant was engaged on a contract of service or a contract for service. If, as contended by the Respondent, she was engaged as an independent cleaner on a contract for service, she lacks the necessary legal standing (locus standi) to pursue a claim under the Act.
Facts
The Complainant is Romanian. She came to Ireland on foot of an advertised position on the internet for a Cleaner and was accommodated in the Respondent’s home for the first two months. She was required to clean homes of various clients contracted to the Respondent for such a service. She commenced on 19thJuly 2014 and terminated on 6thAugust 2015. There was no contract in writing between the parties.
The Complainant was paid by reference to the time spent cleaning the various houses in accordance with a schedule drawn up by the Respondent. The client paid €12.50 per hour for the service; the Complainant earned €8.00 per hour and was required to handover the remaining €4.50 as commission to the Respondent. If the Complainant was unable to carry out a particular cleaning duty for any reason, she was not paid for that duty and either rearranged the time with the house owner or the Respondent personally carried out the work.
Contract of Service / Contract for Service - Position of the Parties
Sworn oral evidence, with the assistance of an Interpreter, was tendered by the Complainant and on behalf of the Respondent, by Ms. Nadia Buju, one of the proprietors of the business.
The Respondent, who is a sole trader, told the Court that it had always treated the relationship between it and the Complainant as a sub-contractor business relationship under a contract for services and not a contract of service. Ms Alma Sopterean, on behalf of the Respondent, outlined the basis for that understanding:-
- •The Complainant has full control over the work she carried out; she was able to make her own arrangements with the customers in regard to the hours she worked. She could cancel days or move those days around depending on the understanding she had with the owners.
•The Complainant was taking instructions from the home owners in regard to the cleaning duties to be performed.
•The Complainant was supplied with keys to the houses she was cleaning.
•The Complainant was not provided with a uniform or with cleaning tools.
•The Respondent did not review her work.
•The Complainant was free to provide the same service to other customers at the same time.
•The Complainant was responsible for covering any damages caused.
•The Complainant collected money from the home owners for her services and paid a commission to the Respondent.
•When the business relationship ceased, the Complainant continued to provide services to some of the customers.
Mr Marius Marosan on behalf of the Complainant, stated that the Respondent had control over what the Complainant was required to do, how it was done, when and where it was done. The Respondent organised a schedule of times and places where the Complainant was required to carry out her cleaning duties, for which she was paid a fixed rate of €8.00 per hour. Mr Marosan submitted into evidence a document, purporting to be a type of indemnifying arrangement, whereby the Complainant was required to pay €300.00 as a deposit in the event of damages to client’s properties occurring in the performance of her cleaning duties and also indemnifying the Respondent from termination by the Complainant without notice. Mr Marosan indicated that this document refers to the Respondent as the “Employer”.
In her evidence the Respondent denied any knowledge of the document and denied that she was the author of such a document.
Conclusions of the Court
There is a very considerable body of case law on the various tests to be employed in distinguishing between a contract of service and a contract for services. This process of determining which is appropriate must be approached in two stages. The first stage requires the Court to decide if the alleged employer is contractually obliged to provide the person claiming to be an employee with work which that person is then required to perform, i.e. is there mutuality of obligations.
The Court notes that the Complainant normally commenced work at 8.00am Monday to Friday and at between 9.00am and 10.00am on Saturdays, there were no fixed finishing times and she could on occasions be required to work until 8.30pm. Times, duration and locations of work were directed by the Respondent. The Respondent negotiated service contract and fees directly with the home owners and paid the Complainant a fixed rate. She was paid only for the hours worked. She was required to undertake the work personally and could not delegate her duties.
The second stage in the process requires a determination as to whether the contract binding the parties is one of service (employer-employee relationship) or one for service (in business of her own accord). One of the fundamental tests for determining this question was set down in the English decision ofMarket Investigations v Minister of Social Security [1969] 2 Q.B 173. Here it was held that the Court should consider if the person was performing the service as a person in business on his own account. If the answer to that question is yes, than the contract is one for service. If the answer is no then the contract is one of service.
The leading Irish case isHenry Denny & Sons - v - Minister for Social Welfare(1998) ELR 36. The appellant was employed as a supermarket demonstrator under a yearly contract. Her contract described her as"self-employed". Denny's & Sons provided the equipment. If she could not do the job, only a person approved by Denny & Sons could do it for her. She had to wear the uniform provided. She was paid by the day. The question before the Court was whether the appellant was in insurable employment. The Company claimed that she was in business of her own account. However, the premises and equipment belonged to Denny & Sons, her profit did not depend on efficiency, therefore, even though there was a statement in her contract stating,"I am not an employee of Denny & Sons"the Supreme Court held that the assessment of employment status was based on objective terms, and found that the appellant was not self-employed, therefore, she was employed.
A self-employed person is characterised by a number of features - typically he/she owns the assets; he/she is not paid a predetermined wage. Instead he/she runs the chance of profit, or the risk of loss according to his/her own efficiency in limiting his/her costs; he/she is often not obligated to work personally, but may delegate the carrying out of a job to a third party. A self-employed person may be identified using this test.
The Respondent provided the Court with a copy of its internet advertisement which states“our independent cleaners….”and explains“we are not an agency; all our cleaners are independent, self-employed cleaners. All our clients are in a direct relationship with their cleaners.”
The various tests are helpfully encapsulated in a document entitled “Code of Practice for Determining Employment or self-Employment Status of Individuals”. This Code of practice was formulated by the Employment Status Group set up under the Programme for Prosperity and Fairness with the assistance of relevant Government Departments, Trade Unions and Employer Bodies, NERA and the Revenue Commissioners. While the provisions of this Code of Practice cannot be regarded as a definitive statement of the law in this area they are nonetheless of persuasive authority.
The Court brought this Code to the attention of both parties and directed them to address the Court having regard to the provisions of the Code in addressing the question in issue in this case. Having done so the Court finds that, on balance, the facts surrounding the Complainant’s engagement with the Respondent are more consistent with a contract of service than with a contract for service. In particular the Court has had regard to the fact that the Complainant was paid a fixed rate and that her earnings were dependent upon the schedule of duties assigned to her by the Respondent. She was personally required to carry out the duties assigned to her; there was no opportunity for her to invest in the "enterprise". The Complainant did not provide premises or equipment nor was her remuneration dependent on the efficiency with which she conducted her duties. She was responsible for her own transport and time in attending to the various locations however; there was no provision to recoup these monies. While the Respondent took the Complainant under her wing when she arrived in Ireland from Romania, she made no efforts to ensure that the Complainant was tax and Social Welfare compliant as a self-employed person.
Based on the facts presented, when considered in the light of the various tests, the Code of Practice and all the arguments advanced by both parties, the Court has come to the conclusion that due to the factors above including, in particular, the degree of control exercised by the Respondent over the performance of her duties, and that the Complainant was required to personally carry out the work, that she was employed under a contract of service. Accordingly, the Court finds that the Complainant was an employee of the Respondent and comes within the scope of the Act.
Determination
Having regard to all the circumstances of this case the Court has concluded that the Complainant was employed by the Respondent pursuant to a contract of service.
It is not disputed that the Respondent did not furnish a statement to the Complainant of the type required by Section 3 of the Act within a period of two months from the commencement of her employment, as required by subsection (1) of that section. Consequently, in accordance with Section 7(2)(a) of the Act the Court must declare the complaint is well-founded.
The Decision of the Rights Commissioner /Adjudication Officer is overturned. The Court awards the Complainant the sum of €1,400 in compensation of the breach of the Act. Accordingly, the Court finds that the within appeal is allowed.
The Court so determines.
Signed on behalf of the Labour Court
Caroline Jenkinson
14th of March 2016______________________
JKDeputy Chairman
NOTE
Enquiries concerning this Determination should be addressed to Jason Kennedy, Court Secretary.