ADJUDICATION OFFICER DECISION

Adjudication Decision Reference: ADJ-00004395

Complaint(s)/Dispute(s) for Resolution:

Date of Adjudication Hearing: 08/11/2016

Workplace Relations Commission Adjudication Officer: Michael McEntee

Procedure:

In accordance with Section 13 of the Industrial Relations Act, 1969, following the referral of the complaint(s)/dispute(s) to me by the Director General, I inquired into the complaint(s)/dispute(s) and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint(s)/dispute(s).

For convenience in the text, the case in hand in this Adjudication is referred to as “The Broadcasting case”.

Attendance at Hearing:

Summary of Complainant’s Submission and oral Presentation:

Respondent’s Submission and Presentation:

Employment Status element

The Complainant has been associated with the Respondent radio Station since 1998. From 2003 to 2005 she worked for a competitor station but returned to the Respondent in 2005. Since then she had continued on a series of Independent Contractor contracts. In March 2016 she was informed that her Contract would not be renewed with effect from the 1^st January 2017 as from this date her show was being taken off air by the Respondent.

Through the period from 2005 all her contracts clearly stated that she was an Independent Contractor, she was free to do other work with TV stations and Newspapers, and she paid and arranged all her own Tax affairs. She never queried this relationship until quite recently when the issue of fee reductions arose – the Respondent had imposed fee reductions across the board on all Broadcasters during the period of economic recession.

The Respondent relied on the Mutuality of Obligation Test and the Enterprise Test in their submissions. Neither applied successfully to the Complainant.

The Respondent advanced the case that the Complainant had a unique position as a Broadcaster. The Respondent relied heavily on the Canadian Court of Appeal case of   Walden v Danger Bay Productions Ltd 114 DLR (4^th) 85 [1994] ILR 1-3081. The Complainant was analogous to an Actor and the Court had clearly found that an Actor was not an employee. Likewise, in this case the Complaint was a Broadcaster and not a traditional employee on a Contract of Service.

Considerable other legal precedent and much case law was also advance to support the Respondent’s case.

Arrears of Payment issue

By the time of the Hearing the current payment issue had been resolved, albeit at the lower levels of pay contained in the March 2016 contract. The Complainant still maintained that these rates were inappropriate but had accepted payment.

Recommendation

Section 13 of the Industrial Relations Act, 1969 requires that I make a Recommendation in this case.

Issues for Recommendation

Does the Complainant have a Contract of Service and is therefore an Employee or is she an Independent Contractor with a Contract for Service?

Legislation Involved and requirements of Legislation

Industrial Relations Act, 1969

Recommendation:

The question of Employment Status – Contracts Of or For Service is one of the most contentious issues and accordingly most often litigated matters in recent Employment Law

Possibly the best summary of the current legal position is set out in UD 1096/2014 – O’Hanlon v Ulster Bank Limited. It is worth examining closely.

In UD 1096 the Respondent's Representative submitted that the Tribunal did not have jurisdiction to hear the claim because the claimant was not an employee as defined in the Unfair Dismissals Act 1977 but that she was an independent contractor. The Tribunal could not rule on this application without hearing all the evidence relating thereto.

This was clear from a number of High Court decisions referred to hereafter, and the Supreme Court Case of John Barry, Conor O’Brien, Mary O’Connor, Michael Spratt, Ciara Dolan and The Minister for Agriculture and Food [Appeal No. 86/2011], (hereinafter “the Barry Supreme Court Case”).

The parties in UD 1096 agreed the following issues, as being relevant to the Tribunal’s decision: [was the claimant] in business on her own account and/or integration; relevant contracts; mutuality of obligation; the intention of the parties; control; actions of claimant; taxation. The Tribunal did not consider itself confined to the issues agreed between the parties and also indicated that it would have regard to the following: pension entitlements; sick pay; substitution; whether the profit which she derived was dependent on how she carried out her work; was she paid for holidays; did she have support staff; how and where she did the work; could she engage someone else to do the work instead of her. The Tribunal in UD 1096 did not close its mind to other factors which might arise during the hearing of the case.

Relevant Case Law considered in UD 1096 and equally applicable to the case in hand – for convenience called the Broadcasting case:

The High Court decision in the case of The Minister for Agriculture and Food V Barry and Others 1998 ELR 36 (7th July 2008) (hereinafter referred to as "the Barry Case") contains a detailed analysis of the jurisprudence on the tests which should be considered in deciding whether a person is working under a Contract for Service [Independent Contractor] or a Contract of Service [Employee]. The EAT felt that it was appropriate to examine ‘the Barry case’ in detail as it was relevant to the case brought by the claimant in UD 1096.

In ‘the Barry case’, the Court allowed the appeal by the Department of Agriculture and Food against the decision of the Employment Appeals Tribunal (EAT) which had found that five Temporary Veterinary Inspectors (hereafter "the TVI's) were employees and accordingly entitled to payments under the Redundancy Payments Acts 1967-2003 and Minimum Notice and Terms of Employment Acts 1973-2001 following the closure of the Galtee Meats Plant at Mitchelstown, Co. Cork.

This case had an eventful legal journey with three hearings before the Employment Appeals Tribunal (“EAT”), two hearings before the High Court and a Supreme Court decision. EAT (1) On the preliminary point of whether the TVIs were employees or contractors, the EAT found that the TVIs were employees. It based its decision on the traditional tests set down in the Henry Denny case and other decisions of the Courts which identify a number of tests to be applied in determining whether workers are contractors or employees.

On appeal to the High Court (High Court 1) by the Minister on a point of law, Edwards J ruled that the EAT had “erred in law” by failing to have regard to all the possibilities in determining the nature of the working relationship between the parties. He also decided that the finding of the EAT that there was “mutuality of obligation” between the Minister and the TVIs (i.e. that the Minister was obliged to provide work to the TVIs and that the TVIs were obliged to carry it out), was made on a “flawed and untenable basis”. Furthermore, he found that the EAT had misinterpreted the decision in the Henry Denny case and should have used the full range of legal tests in coming to the conclusions that they did. The matter was sent back to the EAT (EAT 2) for re-hearing on the basis of the facts of the case and the judgment of Edwards J in the first of the High Court decisions. On that basis, the EAT felt compelled to hold that the vets were independent contractors.

This decision was appealed to the Supreme Court which overturned the High Court decision and held that the EAT was in error in its second determination. The matter was sent back to the EAT for re-hearing on the basis of the facts of the case and the judgment of Edwards J in the first of the High Court decisions.

The fact that this case was on going for eleven years is testament to the complexity of deciding whether a person is an employee or an independent contractor. It is extremely difficult to decide which is which. Some court/body has to decide it and the Supreme Court has clearly ruled that it is the Employment Appeals Tribunal or in this Broadcasting case an Adjudication Officer which must decide it.

Edwards J in High Court 1, considered the following relevant matters, which the Tribunal in UD 1096 /2014 found useful, in reaching his decision:

Mutuality of Obligation

This exists where the employer is obliged to provide work for the employee and the employee is obliged to perform that work as in a normal employer/employee relationship. Whilst the Court found that it was appropriate to apply the mutuality test, this does not mean that an implied contract of mutual obligation existed.

"The so called Enterprise Test"

Edwards J analysed the relevant jurisprudence in relation to "the so called Enterprise test". This test examines whether or not a person is in business on his/her own account. This test originated in a UK decision of Market Investigations –v- Minister for Social Welfare and was adopted by the Supreme Court in this Jurisdiction in the case of Henry Denny and Sons Ireland Limited V The Minister for Social Welfare (‘the Denny case’) and the application of the ratio decidendi in that case and in the subsequent decisions Tierney –v- An Post (2000); Castleisland Cattle Breeding Society Ltd –v- The Minister for Social and Family Affairs (2004) and the Electricity Supply Board –v- The Minister for Social Community and Family Affairs & Others (2006). Mr. Justice Edwards noted that a very important "particular fact" common to these cases was the existence of a contractual document stating that the relationship between the parties was a contract for services. The fact that the parties agreed that the description of their relationship should be considered a contract for services should not be considered decisive or conclusive. Mr. Justice Edwards considered the judgements in ‘the Denny case’ and referred to the statement of Keane J that when determining whether a particular employment relationship is to be considered a contract "for service" or "of service" [that] "each case must be considered in the light of its particular facts and of the general principles which the courts have developed" Edwards J quoted the following paragraph from Keane J in the Denny case:

"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"

Moreover, the Barry case further stipulated that in deciding whether a person is working under a Contract of Service or a Contract for Services a Court or Tribunal should have regard to the following:

(a) all possibilities should be investigated in determining the nature of the work relationship between the parties;

(b) the "so called enterprise test" is not determinative of the issue and that it is incorrect to assert that questions of control and integration are to be regarded merely as elements to be taken into account in applying the enterprise test;

(c) compare the question of enterprise to questions of control and integration as such a comparison will assist a court or tribunal with valuable assistance in drawing the appropriate inferences from the primary facts and no one factor is subsumed by another;

(d) there is no exhaustive list and there might be other factors which might also assist.

The binding element of the Judgement of Keane J in the Denny case is that "each case must be considered in the light of its particular facts and of the general principles which the courts have developed". The Tribunal or Adjudicator must consider all the facts in the case and must not have a narrow focus.

The Judge in the Denny case felt that statements, such as "you are deemed to be an Independent Contractor" etc., in the contract should be disregarded, on the basis that they represent the opinion of the contracting parties but were of minimal value in deciding the work status of the person engaged.

In 'the Denny case' the Supreme Court held that in order to decide whether a contract is one for service or of service each case should be considered on its own particular facts and in the light of the general principles which the courts have developed McAuliffe V Minister for Social Welfare 1995 ILRM 421 approved;

Whilst the degree of control exercised by a person may provide guidance in deciding whether a contract is one "for service" or "of service" it may not always be a satisfactory test to apply Cassidy V Minister for Social Welfare 1951 2 KB 343 and Queensland Stations Property Limited V Federal Commissioner of Taxation 1945 70 CLR 539 considered. The degree of control is not decisive. Market Investigations Limited V Minister for Social Security 1968 3 AER 732.

The inference that a person is engaged in business on their own account is more readily drawn when they provide their own premises or equipment, where they employ others to assist them in their business and where the profit is dependent on the efficiency with which they conduct their business.

The Tribunal in UD 1096/2014 then considered the facts of the case before it with commentary of previous case law and taking into account the facts and realities on the ground. In doing so the Tribunal found some factors more helpful than others. The Tribunal notes the observations of Edwards J in Dillon L.J in Nethermere (St Neots) that:

"the same question as an aid to appreciating the facts will not necessarily be crucial or fundamental in every case. It is for a court or Tribunal seized of the issue to identify those aids of greatest potential assistance to them in the circumstances of the particular case and to use those aids appropriately".

While in most cases it is obvious whether a person is an employee or self-employed, it can sometimes be difficult to assess whether an individual providing services to another person or business can properly be described as self-employed. The terms "employed" and "self-employed" are not clearly defined in law, but some guidance has been provided by the courts. It is necessary to look at what the worker actually does, the way the worker does it and the terms and conditions under which the worker is engaged.

The Tribunal in UD 1096/2014 then proceeded to consider the evidence adduced in UD 1096, taking into consideration all the factors relating to the working relationship between the Claimant and the Respondent. These factors were set out in summary hereunder, some supportive of the contention that the claimant in UD 1096 was engaged as an Independent Contractor and others supportive of the claimant having employee status.

In considering the Broadcasting case it is useful to follow this template.

In Business on her own Account and/or Integration

In the Barry High Court case Mr. Justice Edwards considered that the appropriate test as to whether a person is engaged in business on his or her own account should consider, among other matters [see below], the following factors:

Whether the person provides the necessary premises, or equipment or some other form of investment.

In the case before the Tribunal, UD 1096, the claimant did not provide premises, equipment or any investment. Furthermore, the claimant had no involvement with the ownership or rental of the building. A similar situation could apply in the Broadcasting case but we need to return to this issue later – the definition of what is “equipment” in a Broadcasting context is relevant. It could be argued that the “Equipment” is the Personality and Radio Presence/Engagement with Audiences of the Broadcaster. The Radio station supply the physical electronics to broadcast but the “tools of the trade” are unique to the Broadcaster.

Whether the person employs others to assist in the business.

In UD 1096 the claimant did not employ others to assist in the business and likewise in the Broadcasting case.

Whether 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 claimant in UD 1096 could not have earned extra money by working harder or conducting the business differently. The pay she received was the same, which was paid on submission by her of an invoice.

In the Broadcasting case, under consideration, the performance of the Complainant has a definite bearing on the future earnings of the Complainant. Her JNMR ratings, the number of listeners, her public profile generated all influence her potential future fee earning position unlike in UD 1096.

These tests are useful in assessing how integrated the claimant was in the working relationship between the parties. In UD 1096 the Complainant was clearly part of the Office Staff establishment while in the Broadcasting case now before the Adjudicator the Complainant, notwithstanding having a Respondent PC, Business Cards and an Internet Address generally only attended the Respondent premises at the weekend for her Broadcasting commitments.

That the Employment Status issue it is not confined to these three tests is clear from Mr. Justice Edwards’s reference to "among other matters". The "other matters" which the Tribunal in UD1096 also considered were (The Template is adopted for the Broadcasting case)

Relevant Contracts/Intention of the Parties:

In UD 1096 the claimant commenced working for the Respondent in July 2006 through her IT Consulting Company. In the Broadcasting case in hand the Complainant commenced on an Independent Contract in 2005 and remained so, through a series of renewals, to the ending of the contract in 2016.

The language of the Contracts in the Broadcasting case, all presented in evidence, was clearly those of an Independent Contractor. The Complainant did not initially raise any objections but began doing so when the fee curtailments by the Respondent, in response to the Financial Crisis of recent years began to impact.

 Mutuality of obligation

In UD 1096 the Tribunal was satisfied that the employer (Respondent) was obliged to provide work for the employee (claimant) and the employee was obliged to perform that work. In the Broadcasting case the Mutuality of Obligation argument was advanced by both parties. In the final analysis it rests of the interpretation of what the “work” of a Broadcaster is. This will be considered below.

Control:

Whilst the degree of control exercised by a person may provide guidance in deciding whether a contract is one "for service" or "of service" it may not always be a satisfactory test to apply. This is clear from the cases referred to above and Cassidy V Minister for Social Welfare 1951 2 KB 343 et al. The Tribunal considered the question of "control" in UD 1096 and found that the Respondent exercised certain control over the claimant’s work. She was allocated the work which she then did.

In the Broadcasting case in hand the degree of Control is very dependent on the interpretation that is placed on the “Work” of the Complainant. The Respondent provides the Broadcasting studio, technology etc.

The Contracts have a high degree of Control over housekeeping matters, legal obligations, copyright issues etc. but the Complainant is personally responsible for the “on air” presentation of the show which is the key factor in the Contract.

Actions of the Complainant

In UD 1096 the Tribunal was satisfied that the claimant worked to a Contract for Service initially through her company up to 2010 or thereabouts. In the Broadcasting case the Complainant worked on Independent Contracts from 2005 to 2016. There can be no doubt that the Broadcasting Independent Contractor status was understood by the Complainant. There was EW mail evidence to this fact. In evidence it was also clear that she used the freedom of her status to secure other Broadcasting work and Supermarket Chain promotional work.

 Taxation

The Tribunal noted that even Revenue do not accept the fact that because an individual has registered for self-assessment or VAT it does not automatically makes that person self-employed. In the same way Revenue do not automatically accept that because a person is taxed under the PAYE system that the person is automatically an employee. This is clear from the 2010 document – Code of Practice for Determining Employment or Self-Employment Status of Individuals. In the Broadcasting case the complaint looked after her own tax affairs for the period 2005 to 2016.　

 Pension Entitlements:

There was no contribution of pension by the Respondent in either case.

 Sick Pay/Time off in lieu:

In UD 1096 there were some informal sick pay arrangements –in the Broadcasting case no sick leave applied and the question of Holidays was strongly contested by the parties. 

Substitution: In both cases, UD 1096 and the Broadcasting case the claimant could not use another person to substitute for her – she had to perform the work allocated to her. Neither was there any provision for the claimant to sub-contract her work.

 Whether the profit she derived was dependent on how she carried on her work?

In UD 1096 the Tribunal did not believe that if the claimant worked harder, or differently, that she could have earned more money. There was no bonus entitlement. She was paid a standard amount, which did not change.

In The Broadcasting case the evidence points to the conclusion that the Broadcaster –the Complainant could significantly improve her prospects by becoming a “Radio Star” so to speak. Her fee potential from either the Respondent or a Competitor Radio station could rise or fall significantly due to her performance on air.

In business on her own account:

In UD 1096 no credible evidence was presented to the Tribunal that the claimant was in business on her own account. In O'Coindealbhain (Inspector of Taxes V Mooney) [1990] IR 422 the critical question was considered to be whether the person was performing the relevant services as a person in business in his/her own account.  In the Broadcasting case there was evidence that the Complainant was in business on her own behalf –she secured Supermarket Chain promotional activities, had a Newspaper column and when the opportunity arose did TV work on other stations or on the Respondent main TV channels.  The E mail traffic ,presented in evidence, in relation to the German/Irish Supermarket chain in 2016 was clearly that of an Independent Contractor.

Holidays:

In neither case was annual leave paid but the Broadcasting Complainant contested that the gaps in the Broadcasting schedule between the ending of one contract and the commencement of another equated to annual leave. This was strongly contested by the Respondents.

Support Staff: At times directly employed bank staff in UD D1096 reported to the claimant in relation to project work. In the Broadcasting case no Respondent staff reported directly to the Complainant in a Superior/Reporting relationship.

Preliminary Conclusions:

Whether a worker is an employee or self-employed depends on a large number of factors. The Tribunal in UD 1096 stressed and I agree, following many quoted High Court judgements, that the issue is not determined by adding up the number of factors pointing towards employment and comparing that result with the number pointing towards self-employment.

It is the matter of the overall effect which is not necessarily the same as the sum total of all individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another. When the detailed facts have been established the right approach is to stand back and look at the picture as a whole, to see if the overall effect is that of a person working in a self-employed capacity or a person working as an employee in somebody else's business.

A key factor in the above considerations, having reflected on the Tests put forward and applied to the Broadcasting case, is the nature of the “Work” involved.

Nature of Entertainment Broadcasting work

Is a Broadcaster of an entertainment Radio Show an employee in the traditional sense? A useful question to ask is – could anyone else of reasonable competence do this work?

The answer to this is clearly No. Radio & TV schedules in recent years are full of “personalities” who simply did not make the connection with audiences and whose shows were closed early by broadcasting stations. The Complainant in the Broadcasting case is a unique Radio “Product”.

The Respondent Employer cited parallels with Actors and quoted Davies v Braithwaite [1931] 2 KB 628 and the Canadian case of Walden v Danger Bay Productions Ltd 114 DLR (4th) 85 [1994] ILR 1-308.

In essence the cases cited pointed to the contention that an actor/actress was in effect carrying out a series of artistic engagements or performances and not a permanent employment. The Respondent drew the parallel with Broadcasters on entertainment radio programs such as that of the Complainant.

In Oral evidence the Director of Radio for the Respondent explained the very fluid nature of radio work and the constant need for Stations to rapidly adapt and change formats – the concept of “Independent Contracts” was the norm –in other words the Presenter rose or fell on audience reaction as demonstrated by JNMR studies and other feedback channels. The Station, he contended, had the right to change Presenters and formats as they felt the need to and a Presenter could never have the view that they had a guaranteed role on a particular show or Radio/TV station.

In this context the Station commissioned Presenters for short contracts and it was up to the Presenter, with full Station assistance, to make a success or not of their Broadcasting opportunity. In an employment context the Industry norm was for the Broadcasters to be Independent Contractors, offering their unique talents and skills to all radio stations and having the freedom to do other work as well either for other media outlets or other employers.

In the Canadian case cited Legg J.A stated

“Control has been the test of longest standing. It is particularly difficult to define or measure, in my view, when some form of art is at the centre of the relationship. Art must by its nature be somewhat unique”

In the Broadcasting case before us the Complainant is an entertainment show Radio presenter – she has unique talents and aptitudes for this role – she is an “Artistic product” in herself. She markets herself as such on Social Media and seeks work wherever suitable opportunities arise either on TV or Radio shows. The parallel is with an Actor seeking engagements from various Theaters etc.

In this context a form of Permanent Contract of Service with long term commitments to one or any Broadcaster/the Respondent would be completely inappropriate for either the Broadcasting Company or the Presenter (the Complainant). Public tastes in Entertainment change rapidly and an Entertainment show presenter is both the winner today and the looser tomorrow in this environment. The Complainant faces losing her current radio Show in 2017 but may well reemerge in a different format as public tastes change.

This is the fundamental principle that underlies this case. It underlies the series of Independent Contracts between the Respondent and the Complainant between 2005 and 2016 –differences in fees notwithstanding.

Final Conclusion/Recommendation

Accordingly in final conclusion having reviewed the legal Precedents, applied as far as possible the Legal Tests cited and given serious consideration to the question of what type of work Entertainment Broadcasting is, I have to Recommend that the Complaint was engaged on a series of Independent Contracts for Service and was not an employee as claimed.

Dated:   27^th February 2017