Complainant

Respondent

Anonymised Parties

Salesman

Franchise Operator

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00006383-002

10/08/2016

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00006383-003

10/08/2016

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00006383-004

10/08/2016

Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994

CA-00006383-005

10/08/2016

The complainant alleged that he had been approached by the respondent to work for an operation that was being set up to market imported ice-cream in Ireland and the U.K. The complainant attended trade shows and sought clients for this operation. The situation lasted for four months from February 2016 until June 2016 during which some payments were made to the complainant. The respondent terminated the arrangement by way of email. The complainant and respondent were known to each other and had been on friendly terms prior to this matter arising.

The complainant was approached in early 2016 by two people that he knew to work with them as Sales/Account Manager in relation to the start-up of an agency that would import a certain brand of ice-cream.

The complainant attended trade shows in Stuttgart and London and met with Management of the manufacturer. He also visited locations in the U.K. and followed leads with a view to gaining customers.

A “Heads of Agreement” was drawn up between the parties detailing the complainant’s position and pay.

The product was sold at a food-fair in Dublin in June 2016 which the complainant attended and appeared to be successful.

The day after the food-fair ended the respondent sent an email to the complainant terminating his employment without notice.

The complainant received some payments but is owed a significant amount in outstanding wages and holiday pay. In addition he is due payment in lieu of notice.

The complainant never received a statement of employment as provided for under the Terms of Employment (Information) Act, 1994.

The complainant was known to the respondent and together with the accountant the three were best friends.

The respondent, with the accountant as advisor, had signed an agency agreement in relation to importing an ice-cream product.

The complainant’s existing business was in financial difficulties and both the respondent and the accountant decided to invite the complainant to get to know the operation that was being in the process of being set up.

The complainant would be paid expenses initially as he was facing bankruptcy and when that process was concluded he would then become an employee and be paid accordingly.

The job offer that contains salary details was a document that was drafted by the complainant for reasons to do with his own financial position.

The complainant was never an employee of the respondent.

The issue in dispute in this matter is whether or not the complainant was an employee of the respondent.

The Payment of Wages Act, 1991, and the Terms of Employment (Information) Act, 1973 define an employee as:

A person who has entered into or works under (or, where the employment has ceased, entered into or worked under) a contract of employment and references, in relation to an employer, to an employee shall be construed as references to an employee employed by that employer…

The Organisation of Working Time Act, 1997, includes a similar definition with the inclusion of “of any age” after the word “person”.

Contract of employment is defined as a contract of service or apprenticeship.

The complainant contended that an agreement existed between himself and the respondent in respect of a position as Sales Manager and detailing his salary in that regard.   The documentation supporting this contention was a letter addressed to the complainant from the respondent offering him a position as Sales executive with a salary of €26,000.00 per annum and 24 days annual leave. No other details were contained in this letter which was unsigned. It is clear, however, that the complainant was the author of this letter which was required by him for matters to do with his own personal affairs and that no written agreement in relation to employment existed between the parties.

Of course the lack of a written contract does not necessarily mean that an employee / employer relationship does not exist and it is necessary to examine the relationship in its totality. It is clear that in this case no arrangements were made in relation to any payments being made through a payroll system whereby those payments would be subject to tax and PRSI, etc. It is also clear that payments were not made on a regular basis. I have examined the payments that were made to the complainant and it appears that most payments were for the reimbursement of expenses. Some payments were made in respect of attendance at trade shows. None of the payments were the subject of deductions and were paid net.  

Consideration has to be given to the issue of mutuality of obligation as set out in Barry v Minister for Agriculture where Mr Justice Edwards 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.

It is accepted that the complainant had spent some time and effort in attempting to establish leads for the business but there was no evidence that the work that was performed was done in a planned, structured manner which was directed by the respondent.     Indeed part of the complaints raised by the complainant with the respondent following the termination of the business relationship was to the effect that he had never been given a business email account or phone.

Both parties gave evidence that there were discussions to the effect that if the agency became successful that the complainant would become the Sales Manager and would become an employee on the payroll. At the time to which the complaint relates the operation was still very much in its infancy however.

Having regard to the above matters I have concluded that the complainant was not an employee of the respondent.