ADJUDICATION OFFICER DECISION

Adjudication Reference: ADJ-00007334

Parties:

Complainant           Respondent                    

Sales Consultant     E-Commerce Company  

Complaint:

Act            Complaint/Dispute Reference No.        Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977 CA-00009921-001 26/02/2017  

Date of Adjudication Hearing: 23/10/2017 Workplace Relations Commission Adjudication Officer: Eugene Hanly

Procedure:

In accordance with Section 8 of the Unfair Dismissals Acts, 1977 - 2015, 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.  

Background:

The Complainant was a Consultant from 12th June 2014 to 6th September 2016. He was not paid fees but had an understanding that he would receive a shareholding in due course. He has asserted that he was an employee and he has claimed that he was unfairly dismissed. He has sought re-instatement.

Preliminary Point Employer / Employee Relationship

Summary of Respondent’s Case:

The Respondent stated that the Complainant joined the company on 12th June 2014. He was at that time a senior executive of a leading firm in the city. The parties agreed that he would join as a consultant. He would receive no monetary compensation but instead he would receive an option grant under the company’s option scheme. The commitment was to be 5 hours per week, he was to perform media and PR services. He was issued with a consultancy agreement. He received no salary and no company equipment. He was only provided general parameters for work to be performed and was otherwise free to direct the manner in which the said services were provided. He operated as a consultant and was treated as a consultant. He was provided with two option grants as forms of compensation for services provided. He was not an employee and this claim for unfair dismissal is without merit.

Summary of Complainant’s Case:

The Complainant accepted that he had a consultancy contract but in effect he was an employee. While he was not paid a salary, he was given a share option ownership arrangement. He received expenses of €250 once. He accepts that he worked full time for another firm but that he provided significant time and energy to the company in his own time which was much greater than the 5 hours suggested by the Respondent. He attended events and that was why he sought expenses for the time he was there. He drove this working relationship. The Respondent controlled what he did for the them. He spent time at training and business meetings. He was known to the executives in this company. He was an employee of this company, they had control over what he did, he was integrated into their business and there was a mutual arrangement for the provision and delivery of services.

Findings and Conclusions:

I find that there was considerable conflict of evidence in this case.   I note that in the “Kerry Foods” case the Supreme Court decided that each case must be determined in the light of its own particular facts and circumstances.   I note that there is an amount of case law on this subject that will require attention in order to arrive at a decision on this matter.     The Code of Practice for Determining Employment or Self-Employment Status of Individuals issued through the Department of Social & Family Affairs helps to form an understanding of this complex matter. It states “The overriding consideration or test will always be whether the person performing the work does so ‘as a person in business on their own account ‘. Is the person a free agent with an economic independence of the person engaging the service? This economic test is paramount”.  I note that Langford in The Classification of Workers: Employees and Independent Contractors “ (1998) 5 (3) CLP 63 states, “The courts have over the years sought to decide the issue by reference to a variety of legal tests, traditionally the control test. More recently, the courts have tended to adopt a practical test such as that of economic reality, or to have regard to all the different features of the work relationship and to engage in a balancing exercise in relation to all the various factors. The modern tendency would seem to be not to regard any one issue as conclusive but to look at the whole picture of the work situation”.   I note that in the case of McAuliffe v Minister for Social Welfare, Barr J. said it was not possible to devise any hard and fast rule as to what constitutes a contract of service.   In Sunday Tribune Ltd [1984] I.R. 505 Carroll J. stated: “The Court must look at the realities of the situation in order to determine whether the relationship of employer and employee in fact exists, and it must do so regardless of how the parties describe themselves”.   I have decided that it is necessary to consider the evidence as presented at the hearing under a series of tests as set out in the varying court cases that have dealt with this type of matter in the past.   1)Contract I find that the Complainant was issued with a consultancy contract, not a contract of employment. I find that this was a contract for services, not of services and so I find that the Complainant, under this test was not an employee.   2)Salary / Consideration I find that there was no provision of a salary in this contract. There was a share option offered. I find that in any contract the four key aspects are offer, acceptance, consideration and capacity. In this contract, there was no salary so I conclude that this would be a most unusual term in any contract of employment. However, there was the consideration of the share option. I find that this test was inconclusive.   3) Taxation / VAT I note in the Henry Denny & Sons (Ireland) Ltd t/a Kerry Foods v The Minister for Social Welfare Kerry Foods case the demonstrator in question submitted an invoice yet it was deemed that she was an employee. I also note that in the Phelan case a VAT invoice was submitted and it was also decided that he was an employee. In this case, no invoice was issued as no consideration other than the share option existed. Under this test, I conclude that this was a contract for service and that the Complainant was not an employee.   4) Mutuality of Obligation In order for a contract of service to exist there must be mutual obligations on the employer to provide work for the employee and on the employee to perform work for the employer. So there is an ongoing duty to provide work and one to accept work. In a recent High Court case Minister for Agriculture and Food v Barry & Ors the mutuality test of obligation was endorsed by Edwards J. when he stated, ”The requirement of mutuality of obligation is the requirement that there must be mutual obligations on the employer to provide work for the employee and on the employee to perform work for the employer. If such a mutuality is not present, then either there is no contract at all or whatever contract there is must be a contract for services or something else, but not a contract of service”. In this case the Complainant was operating on a full time basis with a leading firm. He undertook to provide a minimum of time in his own time. I saw no evidence of a mutual obligation. I find that this was a contract for service. Under this test I find that the Complainant was not an employee. 5) Control Under this test the following matters needs to be addressed: deciding the thing to be done, way it is to be done, the means to be employed doing it and the time and place.   I note that there was a conflict of evidence regarding this matter.   On the balance of probability, I find that the Complainant operated and provided a very limited service and he dictated how this would be done. I found no evidence that there was control attributed to the Respondent. Under this test I find that this was a contract for service. I find that the Complainant was not an employee.     6) Integration I note that there was a conflict of evidence regarding this matter. I note that the Complainant asserted that he attended training/business meetings and was known within this business. I find that the Complainant provided services on a very limited scale to this company. Overall I did not find any evidence that he was integrated in to the business. Under this test, I find that this was a contract for service. I find that the Complainant was not an employee.   7) In business on own account I find that the Complainant was employed in a full-time capacity and provided service on a limited scale to the Respondent in his own time. I find that in respect of this arrangement he was in in business on his own account. Under this test I find that this was a contract for service. I find that the Complainant was not an employee.

Decision:

Section 8 of the Unfair Dismissals Acts, 1977 – 2015 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. I have reflected on the evidence and I have concluded from the facts as presented at the hearing that the Complainant was on a contract for service. I find that he was not an employee. Therefore, under this circumstances I do not have jurisdiction to deal with his complaint for unfair dismissal.    

Dated:     15/12/17

Workplace Relations Commission Adjudication Officer: Eugene Hanly

Key Words: Employer/Employee Relationship: Unfair Dismissal