UDD1716

• •Both the role of Interim of Co-ordinator and the role of Co-ordinator were paid positions;
  •75% of the funding for the Complainant's position was provided by the Kilkenny Leader Partnership. This funding would only be provided for marketing and co-ordination services and would not have been provided to pay for a full-time position.
  •In compliance with the Service Provision Contract dated 11thAugust 2014 the Complainant was obliged to raise invoices charging fees in respect of services provided to the Respondent as Co-ordinator/Interim Co-ordinator/Marketing Co-ordinator and he was paid a uniform sum of money on a monthly basis. This was solely a mechanism to secure funding for his employment through the grant system under the Kilkenny Leader Partnership.
  •The Complainant was at all times under the direct control of the School and was not engaged in business on his own account at that time.

• "A contract of service exists if these three conditions are fulfilled. (i)
  The servant agrees that, in consideration of a wage or other
  remuneration, he will provide his own work and skill in the
  performance of some service for his master. (ii) He agrees, expressly
  or impliedly, that in the performance of that service he will be subject
  to the other's control in a sufficient degree to make that other master.
  (iii) The other provisions of the contract are consistent with its being a
  contract of service.
  
  As to (i). There must be a wage or other remuneration. Otherwise there
  will be no consideration, and without consideration no contract of any
  kind. The servant must be obliged to provide his own work and skill.
  Freedom to do a job either by one's own hands or by another'sis
  inconsistent with a contract of service, though a limited or occasional
  power of delegation may not be"

• "The important thing to remember, however, thatisevery case must be
  considered in the light of the particular facts and itisfor the Court or
  Tribunal considering those facts to draw the appropriate inferences
  from them by applying the general principles which the Court have
  developed. That requires an exercise of judgement and analytical
  skills. In my view it is simply not possible to arrive at a correct result
  by "testing" the facts of the case in some rigid form formulaic way.

• •The Service Provision Contract issued to the Complainant clearly outlines therequirement to tender for work and that future"required services will be subject to tenderin the normal way.”
  •The Complainant regularly worked from his own premises and was free to provideservices to other parties.
  •Heprovided invoices to the Respondent and billed the Respondent for theuse of his own equipment.
  •TheComplainantset his own hours and was not required to report to the Respondent.
  •Heprovided updates at a monthly meeting, however, deadlines were not imposed on him and his working hours were not recorded.
  •The Service Provision Contract clearly specifies that theComplainantcould"use other persons in the performance of work under this agreement"and he"shall be responsible for their wages,income tax,social welfare contributions and any other levies required by law to be paid by an employer in respect of such persons"

• "If such mutuality is not present, then either there is no contract at all or whatever contract there is must be acontract for services or something else, but not acontract of service ... Moreover, in Carmichael v. National Power PLC, [1999] ICR,1226at 1230 it was referred to as"that irreducible minimumofmutual obligation necessary to createacontract of service." Accordingly the mutualityofobligation test provides an important filter. Where one party toawork relationship contends that that relationship amounts to acontractofservice, it is appropriate that the court or tribunal seized of that issue should in the first instance examine the relationship in question to determine if mutuality ofobligation is a feature ofit. If there is no mutuality ofobligation it is not necessary to go further. Whatever the relationship is, it cannot amount to acontract ofservice."

• "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 formofinvestment, 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".

• Mr Francis Nesbitt, the Complainant

• Mr Bob Jull, Chairman of the Board of Directors

The Applicable Law

An employee is defined under the Acts as:-

• "An individual who has entered into or works under (or where the employment has ceased worked under) a Contract of Employment".

• “The important thing to remember, however, is that every case must be considered in the light of its particular facts and it is for the court or tribunal considering those facts to draw the appropriate inferences from them by applying the general principles which the courts have developed. That requires the exercise of judgement and analytical skill. In my view it is simply not possible to arrive at the correct result by “testing” the facts of the case in some rigid formulaic way, and I do not believe that the Supreme Court ever envisaged, or intended to suggest, that it could be ….

  All potential aids to the drawing of the appropriate inferences from the primary facts as found stand in their own stead, and no one is subsumed by another. However, depending on the circumstances of the particular case, some aids may prove more helpful or more useful than others. In the words of Dillon L.J. “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 many ingredients may be present in the relationship of master and servant, it is undoubtedly true that the principal one, and almost invariably the determining one, is the fact of the master's right to direct the servant not merely as to what is to be done but as to how it is to be done. The fact that the master does not exercise that right, as distinct from possessing it, is of no weight if he has the right.

This so-called “control test” is now regarded as less relevant. In modern employment relationships employees are often expected to exercise a high degree of initiative in the performance of the work that they are employed to perform. Moreover, skilled employees often know a great deal more about the work that they perform than the employer. Consequently the degree of control exercised by the putative employer can no longer be regarded as conclusive.

A further approach looks at the extent to which the person whose status is at issue is integrated into the business of the putative employer or is only accessory to that business. That so-called “integration test” was applied by Carroll J inRe Sunday Tribune Limited[1984] IR 505.

In more modern times the Courts have tended to apply what is referred to the entrepreneurial or mixed test. That test was set down in the English decision ofMarket Investigations v Minister of Social Security[1969] 2 Q.B 173. Here it was held that the Court should consider if the person was performing the service as a person in business on their own account. If the answer to that question is yes, then the contract is one for services. If the answer is no, then the contract is one of service.

That approach was adopted in this jurisdiction by the Supreme Court inHenry Denny & Sons v Minister for Social WelfareIR 34. Here Keane J (as he then was) quoted with approval the following passage from the judgement of Cook J inMarket Investigations:

• “The observations of Lord Wright, of Denning L. J. and of the judges of the Supreme Court suggest that the fundamental test to be applied is this: 'Is the person who has engaged himself to perform these services performing them as a person in business on his own account '. If the answer to that question is 'yes', then the contract is a contract for services. If the answer is 'no', then the contract is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task."

• 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.

• There is nothing unlawful or necessarily ineffective about a company deciding to engage people on an independent contractor basis rather than on a “servant” basis but as this court has pointed out inHenry Dennyand other cases, in determining whether the new contract is one of service or for services the decider must look at how the contract is worked out in practice as mere wording cannot determine its nature. Nevertheless the wording of a written contract still remains of great importance. It can, however, emerge in evidence that in practice the working arrangements between the parties are consistent only with a different kind of contract or at least are inconsistent with the expressed categorisation of the contract.

Conclusions of the Court

In arriving at a decision in this case, the Court notes the following facts:

• •It is clear to the Court that the Service Provision Contract issued to the Complainant on 11th August 2014 was expressly one for services. While this is not in itself a determinative consideration the decision inCastleislandindicates that it is a matter of great importance. InCastleislandGeoghegan J held “It seems quite clear that these Inseminators fully understood the position in 1990 and in no sense did they enter into a bogus contract, whether as a consequence of exploitation or otherwise”.The Court is satisfied that thefactors identified by Geoghegan J apply equally in the instant case. The Complainant’s contract clearly stated that he was an independent consultant providing specialist and technical assistance to the Respondent and that nothing in the contract would have the effect of making him an employee of the Respondent. He complied with the practical aspects of this arrangement, declared himself as self-employed for the purposes of tax assessment and made VAT and income tax returns on that basis.

  •The evidence adduced in the course of the appeal indicates that in practice the working arrangements between the parties were consistent with the expressed characterisation of their relationship. The Respondent exercised little day-to-day control over the Complainant. While this is not in itself a decisive consideration, the Complainant organised his work in a manner that suited his own circumstances. Also consistent with the characterisation of a contract for services is the fact that the Complainant took out professional indemnity insurance, invoiced the Respondent and charged VAT at the rate payable on professional services.

  •While he said that his work on behalf of the Respondent left him little time to pursue his other business interests there was no impediment to him generating income from other sources. Prior to and during his role as Project Co-ordinator the Complainant submitted fee invoices from Croan.ie for web development work in June 2014 and in June 2015 he submitted an invoice for “Brand Generation and Development” work at a cost of €5,000 plus VAT. These invoices for commercial work done by the Complainant’s business were submitted alongside similar invoices for his work as Project Co-ordinator which was costed at €4986 plus VAT per month. All invoices were paid from “Rural Development Programme County Kilkenny Leader Partnership Company Limited”.

• •It is equally significant that other terms of the Complainant’s engagement were also consistent with its classification as one of a contract for services. Unlike employees, the Complainant was instrumental in drawing up the tender document for the Project Co-ordinator role. He was involved in the short-listing stage for selection and decided on the level of payment the position would receive. In its opening paragraph the tender document itself stated“This is not an offer of employment. The contractor will be self-employed and responsible for their own tax affairs. Applicants must have a current tax clearance certificate and professional indemnity insurance”.

• •The Complainant was fully aware of the reasons for the change in his status when he became Manager of the School on the completion of the construction and set-up stage. He negotiated an increase in remuneration and sought to have to have the title “Chief Executive” of the School which was finally agreed as “Manager” of the School. He was fully aware of and complied with the practical consequences of this change and signed and accepted terms as an employee in an employer/employee relationship in May 2015.

  •In the Court’s view it is also of great importance that prior to his dismissal in July 2015, there was no dispute between the parties regarding his employment status. The Court is of the view that the Complainant cannot seek to"approbate and reprobate”i.e. it cannot be ignored that he claimed to be self-employed when it was to his advantage and yet he subsequently attempted to disclaim his self-employment status when it may have been a liability.