ADJUDICATION OFFICER DECISION

Adjudication Decision Reference: ADJ-00004297

Complaints and Dispute for Resolution:

Date of Adjudication Hearing: 26/09/2016

Workplace Relations Commission Adjudication Officer: Patsy Doyle

Procedure:

In accordance with Section 41(4) of the Workplace Relations Ac under Section 7 of the Terms of Employment (Information) Act, 1994 under Section 27 of the Organisation of Working Time Act, 1997, and Section 13 of the Industrial Relations Act , 1969, following the referral of the complaints and dispute to me by the Director General, I inquired into the complaints and dispute,

Preliminary Issue:

The hearing was delayed as both parties were engaged in discussions aimed at resolving the claim. The Union, on behalf of the complainant then submitted that they wished the claim to be dealt with on a collective basis and sought an adjournment.

I heard the respondent on this request who expressed a stated preference to deal with each case individually given that all prospective complainants were not represented by the Union.

I explained to the parties that I had been delegated this case by the Director General of WRC and while I could highlight the fact that there were similar cases coming down the line, I intended to press on with the hearing on the day.

In light of a forthcoming TUPE situation due during the last week of October 2016, I gave an undertaking to issue my decision in advance of these dates to assist the parties. I asked the complainant to submit a written submission within 7 days post hearing.

Complainant’s Submission and Presentation:

The complainant is a Portuguese native. She commenced work with the Respondent business on 2 March 2015.She signed an Independent contractors agreement, but neither party have retained a copy.

The complainant understood that she had a permanent contract with the company, however she did not have the conditions of a permanent worker .She was based in a site on the north side of the city, working on the Portuguese language section of a project for a secondary company.

The complainant contended that she had never satisfied the “self employed contractor “title as all her duties met “employee status”

1 The complainant was provided with all work equipment (lap top and other office supplies) by the respondent.

2 The complainant was paid 8 hours per day inclusive of breaks. She was open to performance management issues which could lead to disciplinary action.

3 She had training from the company .There were three people on the Portuguese team ,two of whom were self employed ,one was an employee .All three were under the direction of the same supervisor. After three months , the employment status changed for the other “ self employed “ person on the team and the complainant found that she was the only “ self employed “ contractor .

4 The complainant was denied sick pay, if she took time off; it was at her own expense. PRSI payments were not made and she had to engage an accountant.

5 The complainant was a participant in Quality Tests along with her “employed “colleagues. She undertook training with the respondent over a 3-4 month period.

6 She submitted a monthly invoice for pay purposes, while the employees received a fixed monthly wage.

7 She cannot sub contract her work

8 The complainant is required to take holidays in collaboration with her other team colleagues.

The complainant seeks to rely on her “employee status “to ground a claim under the Terms of Employment Act for a failure by the respondent to issue her with written terms of employment as outlined in the Act.

The complainant was due 20 days annual leave by 11 November, 2015.She was entitled to Public Holidays from March 17, 2015. These are outstanding .The business was closed during each public holiday; therefore the complainant was unable to access the building. The complainant submitted all her issues under the IR Act, 1969, given that the initial claims may not fit neatly into the maze of her employment status.

The complainant had recently signed a 6 month fixed term contract with the respondent in preparation for a TUPE situation, in order to transition to the new company as a direct employee .She had been afraid to sign the contract previously as she understood that one of the clauses of the contract would waive any past rights.

She told the hearing that she had made application to SCOPE section of Department of Social Protection to ascertain whether she could be deemed an employee relying on their matrix?

She stated that she had not received any feedback from SCOPE by the hearing date. She stated that she had made the complaint to WRC first in time, i.e. July 20 2016, and her representative undertook to furnish the WRC with any report which might issue from the SCOPE Deciding Officer in the meantime.

The complainant told the hearing that she signed an Independent Contractors Agreement when she commenced with the respondent, however, it was her belief that she was an employee.

Respondent’s Submission and Presentation:

The respondent opened by submitting that the complainant was engaged on an Independent Contractors Agreement from 2 March 2015 -30 September, 2016. They submitted a template of the agreement but acknowledged that the respondent had mislaid the original agreement signed by the complainant.

The respondent contended that the complainant emailed the company to convey her acceptance of the contract, that she had read the contract carefully and was happy with everything .The complainant also completed the Contractors registration form to be part of a specific project. The respondent was satisfied that this amounted to an acceptance of offer.

The complainant was engaged by the respondent company, this involved her being effectively loaned to a company on the north side of the city. In June 2016, The Company offered a number of fixed term contracts to the Independent contractors at the company. The complainant replied to the offer on June 29 to confirm that she was happy with the offer and wanted to discuss some peripheral issues on health insurance and pension .The complainant had not signed the contract.

The respondent explained the forthcoming TUPE circumstances by stating that a particular company had been awarded the contract for services by the North side company , therefore all employees of the respondent company who were working on the Project were due to transfer on October 28. The respondent sought a response from the complainant whether she wished to convert her employment. The respondent notified the WRC that the complainant had decided to accept a fixed term contract on September 30. They reaffirmed that the complainant was offered a permanent contract, but this wasn’t accepted by her.

The respondent disputed all claims. They contended that the claim under Section 7 of the Terms of Employment Act 1994 could not succeed due to the complainant’s engagement on an Independent Contractors Agreement.

They contended that the claim under the Organisation of Working Time Act , 1997, must also fail as it is out of time ,They cited HSE v John Mc Dermott[2014]IEHC 331 as authority in support .

They submitted that the respondent had dealt with any issues raised by the complainant an there was no basis to the claim under the IR Acts.

The respondent sought the dismissal of all three claims.

In response to the complainant’s written submission, re affirmed the contractor status .They confirmed that some personnel were employed directly as employees but that was due to a requirement for work permits .This was not necessary for the complainant .In addition, there were some other exceptions where personnel with scarce language skills were incentivised to join the Project.

The respondent re-affirmed that an offer of a permanent contract was made to the complainant.

Decision:

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

The central question before me therefore, is what is the precise contractual status of the complainant?

The parties are in dispute on the exact spirit and intention of the contract when it was signed by the parties. Admittedly, the case is not helped by the absence of the foundation document in the case .I has had therefore to rely on the parties submissions and evidence .The respondent is relying on the wording in the Independent contract:

“ The Contractor will have sole control over the detailed method of performance of the services , the manner and method of performing same being under the sole control and discretion of the contractor , and the company’s only interest being in the results of such services “

The complainant stated that her work was managed by the supervisors on the site on the north side of the city and that she could not predetermine or control her work. She submitted documentary evidence of requests for holiday time being granted and time spent on training. She also gave a clear account of the differing employment status conveyed by the company within her team where there were three people engaged in an aspect of the programme, two of whom were directly employed. She submitted that a rule existed that time off had to be agreed between the team. There was a reference to a potential for disciplinary action if problems arose.

I find that there was a level of control exerted by the respondent on the complainants working life which may have varied from the projected autonomy provided for in the agreement .In Roche V P Kelly and Co [1969] IR 100 Walsh J remarked on what can be referred to under the Control test

“ ……is the fact of the masters right to direct the servant not merely as to what is to be done but as to how it is to be done “

I accept that an agreement was in place of a fixed term nature; however, there is a divergence of opinion, on whether it reflected the reality of the relationship.

The premise of “ contract for “ and “ contract of “ service has exercised the minds of all employment fora in Ireland and UK .In Minister for Agriculture and Food V Barry [2009] 1 IR 215 ,the High Court acknowledged that a single test was incapable of being applied to decide all the cases that arise on this challenge .

However in a recent Labour Court Case of St James Hospital v Dr Kevin O Flynn PTD 162, the Court determined that the complainant did not have locus standi to maintain proceedings under Part Time legislation.

The Court identified that “there are factors of the relationship between the complainant and the respondent which point in each direction .However, on balance the preponderance of evidence suggests that the complainant undertook a continuing arrangement to provide his own expertise in the emergency dept. of the hospital on a mutually convenient basis as to how and when he would work and that he did so in return for remuneration “

The Code of practice for determining employment or self employment status of individuals proves a useful algorithm in assisting in decision making, mindful that in Barry, 19 indicators of employee status did not generate a determination on contract of service. Nonetheless , in applying the code to the facts of this case ,the complainant satisfied all of the initial criteria for the employee test .In turn, I could not, based on the evidence before me establish whether she satisfied any of the criteria set down for the self employment test . In addition, I note the lengths taken by the base company to address the complainant’s early difficulties with air filtration in the office location.

The code also points to the direction given in the seminal Supreme Court case of Henry Denny and sons ltd v Minister for Social Welfare [1998]1 IR 34 that references in a contract to phrases such as “You are deemed to be an independent contractor ……..duty to pay own taxes ….you will not be an employee of this company ……” are not contractual terms and have little or no contractual validity “

I accept that this code does not address the concept of Mutuality of Obligation; therefore it is not determinative of employee status on a stand alone basis, as mutuality of obligation has been sought by the Courts in recent jurisprudence, namely Barry and Flynn.

The complainant signed a 6 month Independent contractors agreement with the respondent in March 2015, she submitted that she was obliged to attend work and requests for time off had to be submitted to a decision maker and were contingent on other members of the team being there to cover or vice versa .The complainant submitted that she had a direct reporting relationship. This was not disputed by the respondent. Clause 13.2 of the contract provided that “Contractor shall not assign any rights or delegate any obligations hereunder without the prior written consent of the company “.This points to a controlled employment context.

The concept of mutuality of obligation was recently considered in the UK employment fora in the case of Stringfellows Restaurants ltd v Quashie [2012] EWCA CIV 1735. This was an unfair dismissals case involving a Lap dancer who was paid directly by customers and who sought the protection of employment status .The Court of Appeal held that Stringfellows was not under obligation to pay Quashie anything; therefore, she could not reach the bar for a determination of employee status. Mutuality of obligation did not exist.

“….. It is trite law that the parties cannot by agreement fix the status of their relationship: that is an objective matter to be determined by an assessment of all the relevant facts. But it is legitimate for a court to have regard to the way in which the parties have chosen to categorise the relationship, and in a case where the position is uncertain, it can be decisive, as Lord Denning recognised in Massey v Crown Life Insurance [1978] 2 All ER 576, 578. To similar effect is the following observations of Lord Justice Ralph Gibson in Calder v H Kitson Vickers Ltd [1988] ICR 232,251:

"the fact that the parties honestly intend that between themselves the contract should be a contract for services and not a contract of service is not conclusive, but it is a relevant fact, and .. It may afford strong evidence that that is their real relationship."

In the instant case, the complainant came to work with the respondent having signed an independent contractor’s agreement. The respondent submitted that she was happy with the terms. This appeared to alter once she commenced employment. The complainant contended that she had the same attendance requirements as other team members .The complainant submitted that there was a very strong link in terms of mutuality of obligation in the form of direction on the composition of the working day .

The Union submitted an extract from a memo dated August 2015, where:

1. The working day was defined as 8 hrs , ( ½ hr paid meal break) . If 15 mins spent on separate break, it had to made up at the end of the day .

2. Team Leads,Project leads and managers were confirmed as having tools to track the working day .

3. In the event that the working day was not fulfilled ,it could become a performance management /disciplinary issue .

   This again points to variance on the “self determination “ alluded to in the Independent contractors contract .I note that this communication issued from a Manager at the respondent company .

   The respondent acknowledged that they lost the contract for provision of the map project and in preparation for relinquishing the contract; they began to focus on the contracts of the self employed contract workers and offered fixed term directly employed contracts from June 2016. The complainant signed this fixed term contract in September 2016 .The respondent is correct in the affirmation that a permanent contract was on offer during  the hearing and I am at a loss to understand why that was not actioned by the parties, going forward ?

   I am particularly struck by the complainant’s submissions on her perception on the right of passage to contract of service vs contract for service work at the respondent company .I am mindful of the respondents response where they referred to market forces as grounding the variation in practice on the contracts. I have reviewed this closely, mindful of the International Labour Organisation’s description of “disguised employment relationships”

   “ one which is lent an appearance that is different from the underlying reality , with the intention of nullifying or attenuating the protection afforded by the law or evading tax and social security obligations “

   Source: Tony Kerr, Handling employment law issues, 2013.

   I have no desire to suggest that avoidance measures have occurred here, however, I am struck by the gulf between the parties and the acknowledged variations in the contracts by the respondent on pension, private health insurance and protections in employment law in particular.

   I must remark on the apparent inequity submitted by the complainant and not disputed by the respondent .This concerned the reference to sought after workers, who may have required work permits who were permitted to become employees. By nature of her EU citizen status, this presumably distinguished the complainant from this approach. Yet, all parties were on the same project.

   This would suggest to me that contracts of service were clearly within the gift of the respondent and were distributed selectively and not universally until the offers commenced in June 2016. I note the respondent correspondence which detailed their move to reverse the Independent contractor contracts by means of fixed term contracts to 56 workers .I presume that this was aimed at restoring equity in preparation for the TUPE regulations.

   I am therefore being asked to make a decision on the period March 2015 to the time of the lodgement of the claim on 20 July 2016.I am mindful of the “ letter of comfort “ from the respondent dated September 5, 2016, that co operation with the fixed term contract would not prejudice any claims before the WRC .

   I am guided by the persuasive value detailed in Firthglow ltd v Szilagyi [2009] IRLR 365 where Lady Justice Smith held that the Court must look at the” substance not the label” to determine the true legal relationship.

   Based on my analysis of the facts and circumstances of this particular case, I must find that that the label on the position commenced by the complainant in March 2015 differed markedly from its core substance and function in everyday reality .It is my opinion that the complainant was involved in the role and function of an employee from the beginning .

   Taken in conjunction with the eventual   conversion to direct employment, confirmed by the respondent as an administrative process, unaltering of the complainant’s job description. I find that based on these unique circumstances, the complainant has the locus standi to maintain her claims as an employee of the respondent company. O ‘Flynn, distinguished.

CA-00006059-001 Terms of Employment Complaint

In their written submission, submitted subsequent to the hearing , the Union on behalf of the complainant submitted that the complaint under this Act” did not fit neatly into the maze of the complainants employment status”, therefore submitted all issues under the Industrial Relations Act of 1969 seeking Adjudication . The respondent submitted that the complainant was initially engaged on an Independent contractor’s agreement and asked for the claim to be dismissed.

In accordance with Section 7 of the Act, I have heard both parties and considered the evidence presented. I find that the complainant has not officially withdrawn the presiding complaint under the Act. In accordance with Section 7 (c) I recommend that that the particulars referred to in the contract of service contract signed by the complainant be reflected in an analogous contract dated March 2, 2015.

CA-00006059-002 Organisation of Working Time Act complaint:

Section 6 of the Workplace Relations Act 2015 provides:

Subject to subsection (8), an Adjudication officer shall not entertain a complaint referred to him or her under this section if it has been presented to the Director General after the expiration of the period of 6 months beginning on the date of the contravention to which the complaint relates.

The instant claim was referred to the WRC on 20 July, 2016. The complainant has not withdrawn the claim under the Act. Subsection 8 refers to a reasonable cause argument which was not advanced at hearing. I accept the submission on behalf of the respondent that this claim is out of time and cannot succeed.

CA-00006059 -003 Industrial Relations Dispute

Section 13 (3) (a) Subject to the provisions of this section, a rights commissioner shall investigate any trade dispute referred to him under subsection (2) of this section and shall, unless before doing so the dispute is settled—

(I) make a recommendation to the parties to the dispute setting forth his opinion on the merits of the dispute, and

(ii) Notify the Court of the recommendation.

I have investigated this dispute and heard the parties in this case. I find that the respondent fully anticipated retaining a project for which they had hired staff. I must acknowledge the work done to regularise the complainant into direct employment. However, the complainant was compelled to spend a protracted period as a contractor and without the obvious protections provide for in employment law. I find that her complaint has merit and that she was treated in an unfair and inequitable manner in relation to her terms of employment. I did not receive any expansion on the claim in relation to air filtration in the office and I recommend that this matter, if still live is placed before the Health and Safety representative in the first instance.

I recommend that the respondent re-issues the offer of a permanent contract of employment immediately to replace the fixed term contract issued after the hearing. Given my finding that the complainant has been determined as an employee of the respondent. I recommend that the HR Representatives engage immediately with the Union to agree a transition plan to take account of the period of March 2015 onwards in terms of rectification of both parties’ social welfare payments, health insurance and pension.

Finally, I award 3,000 euro in compensation in respect of the inequitable approach adopted  by the respondent. I accept, however, that this was mitigated by the offer of the fixed term contract in June 2016.

Dated:   28/10/2016