ADJUDICATION OFFICER DECISION

Adjudication Reference: ADJ-00005826

Complaints :

Date of Adjudication Hearing: 17/02/2017

Workplace Relations Commission Adjudication Officer: Patsy Doyle

Location of Hearing: Radisson Blu Hotel Cork

Procedure:

In accordance with Section 41 of the Workplace Relations Act, 2015 Section 8 of the Unfair Dismissals Acts, 1977 - 2015, Section 27 of the Organisation of Working Time Act , 1997 Section 79 of the Employment Equality Acts, 1998 - 2015, and Section 14 of the Protection of ( Fixed Term ) Employees Act , 2003 , following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints.

Background:

The case surrounds a claim by the complainant, a Croatian national; that his employment as a Data Analyst at the respondent Tech Company should be recognised as direct employment rather than the self employed contract he received in March 2015.

Based on a claim for recognition of “contract of service “, the complainant has lodged claims for unpaid holidays, public holidays, unfair dismissal and less favourable treatment under fixed term legislation.

Summary of Complainant’s Case:

The complainant commenced working as a Data Analyst on 23 March 2015 .He was engaged by way of an Independent contractor agreement. He submitted that he was at all times an employee of the respondent. He worked an average of 40 hour week and was paid €128 per day. When the complainant commenced working with the respondent, he was assigned to work on the Croatian market at an associate company. He also worked on the Canadian, United States, Turkish, Irish and other markets as the need arose.

The complainant submitted details in support of an employment relationship rather than the “label” of Independent contractor.

On 5 May 2016, the complainant was in Croatia when he received an email from the respondent notifying him of a meeting on “project requirements” the following day. He received a phone call from the company on May 6 and was informed that that the associate company had ended their requirement for a Croatian team and as a consequence, his employment was terminated from 3 June, 2016.

The complainant signed a letter of termination, and was not given an opportunity to take legal advice.

On 28 September,2016,the complainant followed up his “ lay off “ with the Hr Manager of the respondent company .He informed the company that he had sought a SCOPE determination on his employment status on the basis of been given a “ false contract”. He queried the rationale for the decision taken for his dismissal as:

“As me and my whole team had a heavy workload for the Canadian and US markets and also worked for the Turkish, Irish and any other market where the need occurred, I cannot see a justified reason why we could not continue to work in those markets, and if there was a reduction in resources why were we (the Croatian and Venezuelan) let go entirely?”

The complainant submitted that it was his first job in Ireland and he was not aware of his rights. He sought to withdraw his signature from his letter of termination and sought to open discussions to “settle the matter to a mutual satisfaction “.

The claims were referred to WRC on 4 November, 2016. The Department of Social Welfare determined the complainant an employee for social welfare purposes on 8 November,2016 .The complainants Solicitor wrote to the respondent on 24 January 2017 regarding his dismissal but did not receive a reply.

1 Preliminary Issue of employment status.

The complainant submitted that he was an employee of the respondent from the outset of his employment in March 2015.He asked that all the circumstances of the employment relationship be considered by the adjudicator and relied on the Supreme Court case of Henry Denny and Sons (Ireland ltd) V Minister for Social Welfare [1998] ELR 36 and a case from ECJ in Allomby V Accrington and Rosendale College [C-256/01}. The complainant also sought to apply the Code of Practice in determining employment status.

1. The complainant was under the control of the respondent, faced with set targets.
2. He was trained for a 2 month period and an assessment was a precursor to employment.
3. He submitted daily reports.
4. He did not provide tools for the business, nor assume responsibility for investment in the business.
5. He worked set hours and a 40 hour week,
6. He received a fixed wage of €128 per day and was responsible for his own statutory deductions. He did not profit from the business.
7. If ill, he had to notify Human Resources of his illness.
8. He could not subcontract his work.
9. He was subject to the policies and procedures in place for employees e.g. email policy.

The complainant sought a determination on employment status.

Summary of Respondent’s Case:

The respondent disputed that the complainant was an employee and submitted that the WRC had no jurisdiction to hear the claims .The respondent submitted that the complainant had not raised his contractual status during the life time of his contract .The respondent set out the variances between an employee and a contractor in terms of tax. PRSI, Holidays and Public Holidays.

The respondent submitted some very helpful documentation on the genesis of the recruitment process involving the complainant .This evolved from January 2015 and involved an associate company on whose base the complainant eventually commenced work on March 23, 2015. This contract of self employment was to run to September 30, 2015. The respondent described that the Respondent had entered into a commercial agreement with the associate company to provide application testing services, in turn; the complainant was a member of this working team.

The respondent was clear that the complainant knew he was an independent contractor and represented himself as such to Revenue and Social Welfare Authorities .The respondent contended that a complainant” cannot approbate and reprobate” in the case of deciding to be an Independent contractor for tax purposes and then an employee when self employment becomes a liability .

Preliminary Issue Findings and Conclusions:

There are a number of similar claims currently before the WRC involving the respondent and colleagues of the complainant. On this occasion, I have had the benefit of being in a position to consider the evolution of this employment. This documentation was received post hearing and copied to the complainant’s representative.

On January 8, 2015, the documentation reveals the complainant applied for a Data Analyst position. He stated that he was referred by the Croatian localisation team. On 19 January, 2015, the Respondent HR gave an expansive background to the position being recruited, but critically did not distinguish it as a position of self employment.

“The salary offered is €128 per day plus a relocation package “

The interview for the position was hosted by the respondent and activated by a Manager from the associate company on 12 February, 2015. On February 26, the complainant was offered the position of

“Maps Data Analyst – Croatian speaking, working on contract through the respondent but based on site at the associate company “

A copy of the Independent Contract agreement was attached and questions were invited prior to signing.

Later that day, the complainant indicated that he looked forward to joining the team .He thanked the respondent for a smooth recruitment process .The complainant signed the contractor’s agreement and seems to have worked without incident until the circumstances of his termination of employment evolved while he was in Croatia in early May 2016.

I must consider both parties presentations on this topic as a Preliminary matter. This is an analogous case to that of ADJ 4297.

I must acknowledge that both parties entered into a contract for service in late February 2015 .This was not a contract of employment .The complainant was to have an autonomous role and was to 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 “.

I have found that this was essentially an outsourcing arrangement between the associate company and the respondent. This is a complex employment relationship and one that warranted a more extensive explanation to the complainant by the respondent.

I must accept that the actual reality of his employment relationship as it unfolded was in sharp variance to what was intended. The complainant was clearly obliged to work a standard week by way of mutual obligation .I have found that he was under the direction and control of both the respondent and the on site managers at the associate company .

I considered the extensive Contractor Handbook included in the complainant submission. I found an abundance of factors linked to employee status:

1 Grievance Disciplinary and Human Resource Procedures.

2 Potential for referral to company doctor

3 Medical Certificates to cover illness

4 Compensation under the Organisation of Working Time Act 1997 in the event of being “on call “and not called.

5 The company accepted responsibility as an employer to maintain , so far as is reasonably practicable , the safety and health of its employees/contractor and others who may be affected by its activities .

In particular, I was drawn to the description of the supremacy of the clients (associate company) policies in the event of conflict between the respondent and clients policies.

I can accept that this must have been confusing for the complainant during his first job in Ireland. I am however surprised that the complainant had not placed the respondent on notice of his claim to be an employee much earlier in the working relationship. I found that the contractor handbook was fully understood by the complainant.

I have taken consideration of the respondent submission that there was a lot of flexibility within the “contract for service” which incorporated working from home, inclusive of time spent at the complainant’s home in Croatia.

The respondent described a 20 year business relationship with the client company which incorporated a team of 150 engineers, translators and language testers, consisting of 35 languages across Europe, Asia and South America.

I have listened carefully to the parties and considered both written submissions. I have found an overlap in the circumstances which formed the background  to the analogous case of ADJ 4297. I have found that the reality of the complainant’s employment relationship was totally separate to that of an Independent Contractor. While I have commented on the marked delay in advancing this claim, I cannot find that it was fatal to the claim.

Instead, based on the extensive evidence before me, I find that the complainant can safely be determined an employee from the outset of his employment, March 23, 2015. This, in turn permits him the locus standi to advance his claims before the WRC.

When the complainant lodged his complaint before the WRC on 4 November 2016, he submitted that he was to be unrepresented during the process. At the hearing, the complainant was represented by his Solicitor.

I believe that it is necessary to reflect the up to the minute situation as detailed by the respondent. Direct employment on a contract of service basis has subsequently been offered to and accepted by the majority of members of the localisation team at the respondent employment during the third quarter of 2016.

Decision:

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

Section 27 of the Organisation of Working Time Act 1977 requires that I make a decision in two of these complaints.

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.

Section 79 of the Employment Equality Acts, 1998 – 2015 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under section 82 of the Act. This case was withdrawn at hearing.

Section 14 of the Protection of Employees (Fixed Term) Act 2003, requires that I make a decision in relation to two of the complaints.

The complainant requested that the respondent compensate him for unpaid statutory annual leave and public holiday’s .He sought annual leave for 2015 and 2016 pursuant to Section 23(1) of the Organisation of Working Time Act 1997.

The respondent submitted that the claim was out of time and relied on the treatment of statutory time limits in the High Court case of HSE V John Mc Dermott [2014] IEHC 331.

Section 23. Compensation on cesser of employment

[(1)

(a) Where—

(i) an employee ceases to be employed, and

(ii) the whole or any portion of the annual leave in respect of the relevant period remains to be granted to the employee,

the employee, shall as compensation for the loss of that annual leave, be paid by his or her employer an amount equal to the pay, calculated at the normal weekly rate or, as the case may be, at a rate proportionate to the normal weekly rate, that he or he would have received had he or she been granted that annual leave.

I have considered both parties presentations in relation to this complaint. I have decided that the complainant has the locus standi to progress this complaint under the Act.

It is common case that the complainant worked for the respondent from 23 March 2015 to 6 May 2016. He was paid 4 weeks in lieu of notice and his employment officially ended on 3 June 2016.Section 2 of the Act determines that the annual leave year runs from April. I accept that the respondent had not retained the usual records on annual leave given their understanding of the complainant’s contractual position.

I find that the complaint is well founded in the context of censer pay. I award the sum of €2,816 as compensation for the loss of 22 days annual leave.

The complainant mentioned public holidays in this complaint, this is mirrored in the next aspect of the complaint and I propose to address the claim there.

2 CA-00008005-002 Public Holiday

The complainant sought payment for the bank holiday on 6 June 2016 on termination of his employment in accordance with Section 23(2) of the Act, given that he had worked for the respondent for the preceding 4 weeks leading up to his employment being terminated on 3 June 2016 .

The respondent submitted that any claim for public holidays was raised outside the statutory time limit and no argument for reasonable cause had followed.

I have considered both arguments. The complainant lodged his complaint with the WRC on 4 November, 2016, some 5 months following the termination date of his employment of 3 June 2016.I am bound by the parameters of Section 41(6) of the Workplace Relations Act, 2015 with regard to statutory limits.

I find that the complainant has however satisfied the rule set down in the Labour Court case of Gazboro ltd V BATU DWT 16/1999, this involved a measurement tool involving midnight of 18 December to Midnight on 24 December as a necessary precursor for recognition of payment of compensation of Christmas Day.

I find that the complainant is entitled to secure compensation of €128.00 for the public holiday of June 6, 2016.

3 CA-00008005-003 Unfair Dismissal

Respondent Position:

The respondent denied that the complainant had been unfairly dismissed and submitted that the dismissal was wholly related to the decision of the client, (associate company) to dispense with the requirements of a number of specific teams servicing particular markets including the entire Croatian team .There was no dispute that a genuine redundancy situation existed due to the “ever diminishing and significant shortage of work within the Croatian market”.

The respondent contended that Section 6(4) of The Unfair Dismissals Act applied

The respondent submitted that Section 7(2) (b) of the Redundancy payments Acts 1967-2007 applied .

The respondent argued that the situation applied to all 4 individuals who were engaged on the Croatian market and was due to impersonality and change as provided for in a redundancy situation. 4 members of Venezuelan and 1 member of the US markets were equally affected .The respondent had very limited scope to redeploy any of the Croatian Team.

The respondent submitted that the issue of group selection had not arisen as the same set of circumstances applied to the entire group who were all treated in the same way. The respondent had not received any concerns from the complainant in advance of his termination, nor had he sought to appeal the decision .The respondent continued in stating that no issue of unlawful selection for redundancy arose as both the complainant an his colleagues had all been selected to perform services for particular markets based on their local knowledge of the language and experience of living in the particular markets “, rather than their race or ethnic origin”. Their appointment was contingent of this 5 year rule.

The respondent submitted that it was open to the complainant to take legal advice between 6 and 9 May, 2016 .He had less than 104 weeks service and no entitlement to statutory redundancy arose. The complainant’s employment was terminated by way of activation of the early termination clause in the Independent Contractor agreement. The respondent was compelled to act on the decision of the Client as the external decision maker on the contract.

Evidence of Project Lead: Mr PL

There were 30 markets involved in the Maps Project .Criteria for inclusion was based on being a native of the country and having lived there for 5 years. From February 2016, work was limited on the Croatian markets and the team were asked to help on other markets. When this occurred, the complainant worked mostly on the Canadian and Turkish markets.

He learned on the termination of agreement with the associate company client on 28 April 2016.There was no other work available elsewhere apart from one Project Manager role which was filled externally .An appeal process was made available for direct employees .

Evidence of Ms A, liaison Manager .

Gave evidence of communicating the job losses for staff on site at 9.30 hrs on 6 May 2016. She gave details of phoning the complainant to inform him of the decision taken to terminate his employment at 12.30 hrs. He was the last to hear of his job loss .She stated that he was calm as if he knew it was coming. He did not raise any issues. There was no pressure exerted on the complainant to sign the termination agreement.

One appeal was lodged by an employee and the decision was upheld. There were no skype facilities available for communication with the complainant in Croatia.

Complainant Position:

The complainant’s representative submitted that the termination of the agreement entered into between the complainant and the respondent constituted an Unfair Dismissal.

The complainant was not afforded fair procedures with regard to the dismissal, He was not given notice that dismissal was in issue when the meeting to discuss “project requirements” was announced on 5 May .The complainant was in Croatia and his dismissal took place over the phone. He was not provided with an opportunity to appeal the decision .The Solicitors letter dated January 24, 2017 seeking a copy of the policy/procedures used in the dismissal was not met by a response.

The complainant was unaware of the criteria of the obligation on the complainant to be a native of any market he serviced .He understood that his employment was generic on application testing service.

The complainant submitted an EAT case Employee V Employer UD 207/2011 , drawing attention to the road map contained in that case on

1 Selection criteria for a redundancy situation “should be objectively applied in a fair manner”

2 Consultation should be real and substantial.

The complainant submitted that that he was denied a visible selection criteria or an opportunity to influence his destiny at the respondent company .The complainant submitted that the complainant was in reality employed on a fixed term contract and section 2(2) (b) of he Act had no application .The complainant did not waiver any course of action against the respondent by signing a termination agreement. He sought the loss to contract end from 3 June 2016 to 30 September 2016 of €10,240.00. He submitted evidence of loss and mitigation. The complainant stated that he resumed full time work on 1 February 2017.

Evidence of the Complainant:

The complainant accepted that work had been limited from February 2016 and he had worked on the Canadian, US market, Turkish and Irish markets as the need arose. He believed that he could have been retained in employment to service the South African market as he had lived there for 5 years in his earlier life .He wasn’t aware of his rights .He submitted that he was eligible to compete for the Project Manager position but was not notified of positions.

As time passed post his termination of employment, he formed the view that he had been mistreated and actioned his complaints to SCOPE and WRC.

Findings and Conclusions

I have already found that the complainants contract for service was in fact transformed to a contract of service in light of the particular facts of this case and in particular , the hallmark of mutuality of obligation ,which I found in my judgement of the facts presented by the parties .

In a recent case of the Irish High Court, Monnie McKayed V Forbidden City ltd T/A Translations [2016] IEHC 722, a claim for unfair dismissal by an Independent Contractor was rejected on the absence of sufficient mutuality of obligation.

I have listened to and considered both parties presentations in this case and once again, I am struck by the large role played by the client (associate company) in the genesis of the initial contract for service in early 2015.The respondent was clear that any entry to a Maps Data Analyst position was contingent on having lived five years in the native market.

I established from the “screening documents “presented post hearing that the question was certainly asked by the respondent from the outset.

“The position would be covering region of ………Can you advise how long you lived there? “ I am satisfied that the reference to a 5 year residency prerequisite did not find its way in any overt way into the recruitment procedures which followed that early question. The complainant did apply for a position of Data Analyst as referred by the Croatian team

The position offered on February 26, 2016 was that of “Maps Data Analyst “Croatian speaking. By operation of the contract, it was accepted by the parties that market forces compelled a spread in markets for the complainant from early February 2016; work had reduced considerably in the Croatian market.

I cannot accept the argument that the complainant acquiesced to being an Independent contractor and this some how debarred his capacity to chase employment status. The difficulty in the case arises, in my opinion on the retrospective “rear view mirror “analysis of the employment relationship now applied to the claim for unfair dismissal. I find that the complainant did not waiver his rights to challenge his employment relationship with the respondent.

In turn, it is not lost on me that the respondent described its own subsidiary role in the decision making regarding the reduction in markets operating on the Maps Project and the narrow timeframe within that decision was taken by the associate company before communicated for activation by the respondent. I accept the commercial reality of this circumstance .

The respondent was, however aware of the presiding legislation of the Unfair Dismissals Act in such a circumstance as it amended the plan to curtail a parallel market. I have found that the respondent addressed the situation of termination of the Croatian market by the associate company by way of the Independent contractor agreement and provided for a four week notice prior to termination (,50% paid by the associate company) and flights home .That was a reasonable approach based on the knowledge available at the time . However, the approach to be adopted to an employee in a comparable circumstance is varied.

I considered the case as submitted by the complainant: UD 207/2011. The EAT was clearly dissatisfied that the respondent had sought to disguise a redundancy as a dismissal linked to performance issues. I accept the evidence given by the respondent that performance was not a consideration in this case and that redundancy was the main reason for dismissal.

However, there is a heavy onus on employers to prove that they acted reasonably and fairly towards the employee selected for redundancy. I have found some overlaps to the present case in an EAT determination of Gerry Fennell V Resource Facilities Support ltd UD 57/2009, where the EAT determined that while a genuine redundancy situation existed, the employer failed to treat the employee fairly in all the circumstances.

Redundancy Law Review , Dermot Casserely , IELJ 2010,7(3).

In the instant case, the complainant was notified of a meeting regarding the Project one day in advance. He was in Croatia and not available for the meeting .The respondent did not reach out by way of consultation , contingency, exploration of alternative options or reasonable means of face to face communication . There was no sense of urgency or imminent consideration of termination of employment communicated to the complainant in advance of May 6.

As reflected in Casserlys academic article, there is no statutory obligation to consult with an employee; however it is properly reflected in the overall duty to act reasonably.

I accept that a genuine redundancy situation existed following the decision taken by the associate company to cease the entire Croatian Team of 4 workers, employed by the respondent .The agreement between the respondent and the complainant was thus varied. However, I have found that the respondent failed to treat the employee fairly in all the circumstances.

I was particularly struck by the respondent admission that an appeal process was provided for employees and not contractors. This demonstrated a working knowledge of the company obligations for reasonableness under the Unfair Dismissals Act. I found that the complainant was disenfranchised by this process as he was not heard on possible alternative markets which may have been viable in the aftermath .He was denied an opportunity to influence or self determine his future.

I was not satisfied either in the lack of weighting or consideration given to the fact that both parties were aware that this was the complainant’s first job in Ireland and I was totally dissatisfied by the notification of dismissal communicated by phone.

Section 6(7) without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if the adjudication officer or the Labour Court, as the case may be, considers it appropriate to do so —

(a) To the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal, and

(b) to the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure referred to in Section 14(1) of this Act or with the provisions of any code of practice referred to in paragraph (d) (inserted by the Unfair Dismissals (Amendment) Act, 1993) of Section 72) of this Act.

I uphold the respondent contention that this was a genuine redundancy; however I must find that the dismissal was procedurally unfair and the complainant was unfairly dismissed.

I have considered both parties submissions on the remedy sought in the case and having regard for the duration of the contract.

I award the complainant compensation of €5,000 under Section 7 of the Act.

5 CA-00008005-005 Fixed Term Work

Complainants Position

The complainant submits that he was treated unfairly during the course of his employment compared to other employees who were not on fixed term contracts

1 He was engaged in the same work as other employees, but was not provide with a contract of indefinite duration.

2 Permanent employees were permitted annual leave.

3 He was not permitted the protection of the Redundancy Payments Acts and the Unfair Dismissal Acts.

4 He was not afforded the opportunity to apply for a permanent position, whereas, employees who worked in other markets, German, Austrian and Swiss were given such opportunities.

Respondent Position:

The respondent submitted that both complaints were out of time and disputed the complainants employee status necessary to ground these claims .The respondent submitted that Section 101A of the Employment Equality Act 1998-2015 precluded the claim .

The respondent drew the attention of the hearing to the lack of a named comparator in the claim.

The complainant was not a veritable interchange with the employees serving the German, Swiss and Austrian markets as he did not have the language or local knowledge .These markets had shortages of skills, permitting an objectively justifiable direct hire whereas the Croatian market did not.

The respondent disputed any breach of Section 10 of the Act in relation to notification of vacancies.

Findings and Conclusions:

Section 41 (6) of the Workplace Relations Act ,2015, 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 complainant gave evidence that he had not raised the claim for access to direct employment within the course of his employment from March 2015 to June 2016 .The instant complaint was lodged with WRC on November 4, 2016, some 5 months post employment . Ironically and unusually, there was provision contained in the staff handbook (Independent Contractor) for submission of a grievance with the respondent. I found no evidence to support that this had been actioned by the complainant. I have addressed the complainants concerns on annual leave, redundancy and Unfair Dismissal in earlier complaints.

I am bound by the statutory limits set down in Section 41(6) of the Workplace Relations Act 2015.The time limit is clear and can only be set aside where reasonable cause is shown.

I find that the complaint has been lodged outside the statutory time limit and I did not hear an argument rose on reasonable cause, Section 41(8). I do not have the jurisdiction to hear the claim. .

The complainant submitted that he was not notified of transparent criteria for obtaining a promotion.

The respondent sought that the claim be dismissed on time limits and submitted that no breach of the legislation had occurred.

I find that the complaint was lodged on November 4, 2016 with the WRC .The complainant referred to a stated interest in a project manager promotional position in January 2016, which was then closed.

I find that the complaint has been lodged outside the statutory time limit and I did not hear an argument raised on reasonable cause ,Section 41(8) .I do not have the jurisdiction to hear the claim .

Total Compensation awarded : €7,944.00 .

Dated:  

Workplace Relations Commission Adjudication Officer: Patsy Doyle

Key Words: