ADJ-00002060

Complainant

Respondent

Anonymised Parties

A Tour Representative

A Tour Company

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-00002798-001

23/02/2016

The Complainant commended 8 months seasonal employment with Tour Operator X in 2004. In late 2005 Tour Operator X got into financial difficulties and was taken over by the Respondent. The Complainant worked on the same seasonal basis for the Respondent, including being promoted to a managerial position in 2009, until the Summer of 2015. The Complainant now understood that the Respondent was changing its ground support arrangements and would not employ Representatives directly. Following a number of requests for clarification of her status she received an e mail dated the 20/11/2015 which informed her that she was not an employee of the Respondent Company.

This upset her greatly. She had never received any contract of employment from the Respondent, save a copy of the Contract issued to the Turkish Embassy in Dublin, or any forms of documentation relating to her salary or her expenses. She never received a Pay slip and was always paid in cash by a local handling Company in Turkey. The handling Company invoiced the Respondent for the exact amount of the Complainant’s wages. Local Tours away from the Resorts, which the Complainant organised in Turkey, were paid on the basis of Commission to her directly in Turkey.

In the VISA requirements of the Turkish Government, her applications sponsored by the Respondent to the Visa Section in the Dublin Embassy, Ireland always described her as an employee of the Respondent.

The Complainant was never an employee of the Respondent –instead she was an Independent Contractor operating under the auspices of the Ground Handling Agent – Agent A. The Respondent had no day to day control over her activities. The letters titled “contracts of employment” used to secure Turkish Visas were forms of convenience only and could not be attributed any great legal strength.

When the Respondent changed its ground handling arrangements away from Agent A in 2015 any purported connection with the Complainant ceased.

In addition the Respondent made the following detailed points

1)         Jurisdiction.

Two points

1. The Complainant was never tax resident in Ireland and no Irish PAYE or other charges were ever applied to her. She did not have an Irish Tax domicile.
2. The Provisions of the Rome Convention of 1980 of the law applicable to contractual obligations 41998A0126(02) at Article 4 and in particular at Article 6 apply and make it clear that that in an employment matter it is the “law of the Country in which the employee habitually carries out his work in performance of the contract, even if he is temporarily employed in another country”
3. The exemption in Section 2(3) of the Unfair Dismissals Acts applies.

“3) ( a) This Act shall not apply in relation to the dismissal of an employee who, under the relevant contract of employment, ordinarily worked outside the State unless—

(i) he was ordinarily resident in the State during the term of the contract, or

(ii) he was domiciled in the State during the term of the contract, and the employer—

(I) in case the employer was an individual, was ordinarily resident in the State, during the term of the contract, or

(II) in case the employer was a body corporate or an unincorporated body of persons, had its principal place of business in the State during the term of the contract. “ 

Clearly on the basis of these three arguments the Adjudicator has no jurisdiction to hear the case.

2)      Employment Status of the Complainant.

The status of the Complainant was that of a self employed contractor- a For Service arrangement as opposed to an Of Service contract. She was not an employee

3)      Need to identify the Correct Respondent

The Respondent maintained that the principal employer here, if an employment relationship was to be contemplated at all, was the Ground Handling Agent in Turkey, Agent A and not the Respondent in Dublin, Ireland. The Respondent identified Legal precedent (Lynch v Palgrave v Murphy [1964] and Walsh and others v Dunne’s Sores Limited [1995] and advanced the Control test to demonstrate that the Complainant was under the control of Agent A rather than then Respondent.

4)      Agent A as an “Employment Agency”.

The Respondent maintained that Agent A was not an “Employment Agency” as defined by the Protection of employees (Temporary Agency Work) Act, 2012. The Complainant could not use the provisions of this Act to establish a link to the Respondent.

5)      Mitigation

The Complainant failed to follow up on offers of employment suggested by the Respondent   and or Agent A with the new Ground Handling Agent – Agent B.

In contemplating this case it is necessary to first of all address the Jurisdictional issue.

3:1     Discussion of Jurisdictional issues. : Legal issues / Rome Convention of 2000

Section 2(3) of the Unfair Dismissals Act, 1977 quoted above by the Respondents, at first reading, excludes this claim – the work involved, that of a Resort Representative, took place in Turkey.

In considering the pertinent issues the situation is strongly influenced by the facts and witness evidence. In particular the witness evidence from the Owner/Manager of Ground Handling Agent A was interesting.

For the duration of the employment the only Employment Contracts for the Complainant were those provided by the Respondents to the Turkish Embassy in Dublin in support of the Work Visa applications of the Complainant.

These contracts are on Respondent headed notepaper and have an Irish Address – they are entitled “Contract of Employment as Resort representative in Kusadasi, Turkey”. They formed the legal basis of the Complainants work visa for Turkey. The correspondence between the Respondent and the Turkish Embassy in Dublin is clear in that it refers

“ The three girls are the same three girls who have worked for us for the past couple of years and who you have kindly helped with arranging their visas” ( E mail of 3^rd February 2014 from Respondent Turkey Programme Manager in Dublin to Turkish embassy in Dublin)

There can be no doubt from the evidence that these are Irish contracts.

The Respondent was, clearly, to quote the section of the UD Act, 1977 2(3) (a) (II) referred to above a body corporate in the Irish State.

(II) in case the employer was a body corporate or an unincorporated body of persons, had its principal place of business in the State during the term of the contract. “. 

The Respondents relied on Article 6 of the Convention on the Law Applicable to Contractual Obligations, which was brought into force by the Contractual Obligations (Applicable Law) Act 1991.-known for ease as the “Rome Convention”. Their interpretation was that Article 6 –place of “habitual residence” governed the location of the Contract. 

A reference to Kerr’s Employment Law is useful here ( I mentioned at the hearing that I would consult the relevant Authorities) and in particular to the case of Mclwraith v Seitz Filtration (GB) Ltd UD 797/1995 (reported at [1998] E.L.R. 105),

“See also, Mclwraith v Seitz Filtration (GB) Ltd UD 797/1995 (reported at [1998] E.L.R. 105), where an issue arose as to the Tribunal's jurisdiction because the contract of employment was stated to be subject to the laws of the United Kingdom. It was submitted, however, on behalf of the claimant, and accepted by the Tribunal, that, pursuant to Article 6 of the Convention on the Law Applicable to Contractual Obligations, which was brought into force by the Contractual Obligations (Applicable Law) Act 1991, he was entitled to bring unfair dismissal proceedings in this (Irish) jurisdiction.  

Considering the Rome Convention further the EAT in Mclwraith v Seitz Filtration (GB) Ltd UD 797/1995 (reported at [1998] E.L.R. 105), stated in the Determination at Page 4 

“Further, having perused the Convention on the Law Applicable to Contractual Obligations, and having heard the submissions of the claimant's representative in this case it is our opinion that even if it were to be the case that the claimant was found to be employed in another country (in this case the United Kingdom), he is by virtue of the evidence given and the submissions made on his behalf, entitled to invoke Article 6 of the said Convention in support of his case. This 1980 Convention was brought into force in Ireland by the Contractual Obligations (Applicable Law) Act 1991.” 

In plain English I understood this to allow the EAT, (on full consideration of all the facts and cases will vary accordingly), to hear a case even if the actual physical locale of the work may be outside the Irish State. 

Accepting that the facts of each case may differ slightly Article Three of the Rome Convention under Freedom of Choice states 

“A contract shall be governed by the law chosen by the parties. The choice must be expressed or demonstrated with reasonable certainty by the terms of the contract or the circumstances of the case By their choice the parties can select the law applicable to the whole or part only of the contract.” 

Where difficulties arise as to what is meant by “consent” in this context Articles 8, 9 and 11 apply. Article 8(2) is relevant. 

“Never the less a party may rely on the law of the country in which he has his habitual residence to establish that he did not consent if it appears from the circumstances that it would not be reasonable to determine the effect of his conduct in accordance with he law specified in the preceding paragraph” 

Put in plain English the question as to which jurisdiction, Turkish or Irish applied was never discussed at any stage but it is clear that, by bringing the case in Ireland, the preference of the Complainant is Ireland. I would find it hard to believe that a Tour Representative believing that she was employed by an Irish Company would have willingly agreed to have her employment contract decided by the laws of a non Irish jurisdiction.

3:2       Habitual Residence question.

To consider where the “habitual Residence” of the Complainant was I considered the witness evidence of the Manager /Owner of Ground Handling Agent A. 

3:3       Evidence of Ground Handling Agent A –both written and oral at the hearing. 

A most detailed email dated the 15th October 2015 from Agent A to the Respondent in Dublin was exhibited.

In his evidence he strongly contended that the working arrangements for Resort Representatives were unusual. A quote from his mail of the 15th October which was supported by his Oral evidence. 

I accept that O ( The Complainant) status is a bit irregular as she does not have a formal contract from Respondent in Dublin and her salary from the Respondent is supplemented by commission payments initially from S and currently from Agent A. However as everyone knows this was always the way reps were employed by Tour Operators .Everyone knows this it is irregular and everyone turns a blind eye because it suits all parties – tour operators can pay low salaries   and minimal expenses because the Reps earn (local) commissions and get their salaries and commissions tax free” 

I took the essence of this to be that the Tour Reps had a very legally unusual employment situation. However Agent A went on to draw attention to the very, equally unusual, situation that pertained to getting the necessary Work Visas and suggested that the Respondent would need to offer clarification on this matter. 

In summary on the “Habitual Residence” point I came to the view that the Complainant was intentionally in a very irregular situation. From reading the Turkish Embassy correspondence I came to the view that if the Complainant was a “habitual Resident” in Turkey the type of “extended visitor visa” she was proposed for by the Respondent would not have applied . On the balance I came to the view that the Complainant, while working in Turkey for the Summer, was not legally a “Habitual Resident” in Turkey. By default she had to be an Irish resident, tax issues not withstanding. 

Accordingly and noting that the Respondent has pointed to the non payments of Irish payroll taxes and the substantial periods of time spent physically outside the Irish State each year I have come to the view that an Irish Contract existed (Turkish Visas of the type applied for would have been impossible otherwise). 

Accordingly and noting the legal precedents quoted I find that it is allowable to bring a claim under the Unfair Dismissals Act, 1977 in this State. 

3:4     The Substantive Case.

3:5     The nature of the Employment / “For” or “Of Service” / Control.

From the evidence it was clear that the Complainant had two sources of income – firstly her locally (Tukey) generated Commissions from day trips arranged to places of interest in Turkey and secondly her basic Representative Salary.

The first source was, in my view a case of “For Service” but the Substantive Representative Role was clearly that of an Employee “of service”.

3:6     Control. / Proper Identity of Employer.

Oral and written evidence was given by the manger of the Ground Handling Company Agent A to which the Complainant reported. His role appeared to be that of a local “go to person” if needed in a situation that could possibly require quick action in Turkey – he had a long commercial and Business history with the Principals in the Respondent Company and his exact legal relationship was a bit ambiguous.   He resolutely denied that the Complainant was an employee of his Turkish Company. From copies of e mails and the evidence of the manger it was clear that the real control over the Complainant on any matter of a substantial nature , her having a Company financed car for example, rested with the Respondent Turkey Programme Manager for in Dublin.

This evidence was open to cross examination by the Respondent. I took the view that it was largely uncontested or certainly not clarified to any great degree by the Respondent’s Representatives at the Hearing.

3:7     Agency Status of Ground Handling Agent A

I agreed with the Respondent –Agent A was not an “Employment agency” as defined in the Protection of Employees (Temporary Agency Work) Act, 2012. 

3:8     Substantive Issues governing the Ending of the Employment. Natural Justice.

1. and the rules of Natural Justice as set out by Mr. Justice Flood in Frizelle v New Ross Credit Union [1997]IEHC 137 have to apply. I quote from Mr. Justice Flood.

“1.

The complaint must be a bona fide complaint unrelated to any other agenda of the Complainant.

Where the Complainant is a person or body of intermediate authority, it should state the complaint, factually, clearly and fairly without any innuendo or hidden inference or conclusion.

The employee should be interviewed and his version noted and furnished to the deciding authority contemporaneously with the complaint and again without comment.

The decision of the deciding authority should be based on the balance of probabilities flowing from factual evidence and in the light of the explanation offered.

The actual decision, as to whether a dismissal should follow, should be a decision proportionate to the gravity of the complaint, and of the gravity and effect of dismissal on the employee.

Put very simply, principles of natural justice must be unequivocally applied.”

In the case in hand the Complainant made substantial efforts to establish her situation – e mails exhibited in evidence. No comprehensive reply was forthcoming until the 20th November 2015 when it was made clear that the Respondent felt that no employment relationship had ever existed.

No consultations or formal opportunity to make her case were ever afforded to the Complainant. It appeared that various Senior Respondent personnel had visited Turkey during the late Summer but had, for various reasons, no direct contact with the Complainant despite her request to meet the individuals concerned. 

3:7     Concluding Summary

The entire employment situation of the Resort Representatives was open to considerable ambiguity-this appeared, initially, to suit all concerned.

The clear legal situation regarding the Turkish Embassy in Dublin and the Visa Applications pointed to Irish Employment Contracts and ,despite the time on the ground in Turkey, a legal Irish Habitual Residence .To have suggested a Turkish Habitual Residence would have placed the Respondent in a very questionable factual situation with the Embassy.

I considered the Rome Convention on Contracts, initially exhibited by the Respondents. I felt that on balance it favoured the Complainant

On balance and having considered all the evidence I cam to the view that The Unfair Dismissal Act, 1977 applies to this case. An Adjudication Officer has the necessary jurisdiction to hear this case.

Regarding the Substantive case, the Complainant had a two strand contract – a contract “for Service” as a seller of local Tours in Turkey but a substantial Contact “of service” as Resort Representative. From the evidence and the testimony of Agent A I came to the view that the effective control of the Representatives responded in Dublin. Agent A was in effect the local supervisor with an equally ambiguous relationship, for historical reasons, with the Respondent in Dublin.

The Taxation arguments I considered but felt that some of the issues being raised here were more proper to clarification from the relevant Revenue Authorities in both jurisdictions.

The rules of Natural Justice as applied in Unfair Dismissal case were not applied to an acceptable degree.

Accordingly I found the Dismissal to have been Unfair.