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ADJUDICATION OFFICER DECISION/RECOMMENDATION

Adjudication Reference: ADJ-00003437

Complaint(s):

Date of Adjudication Hearing: 19/09/2016

Workplace Relations Commission Adjudication Officer: Emer O'Shea

Procedure:

In accordance with Section 41 of the Workplace Relations Act, [and/or Section 8 of the Unfair Dismissals Acts, 1977 - 2015, ] 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).

Background:

PRELIMINARY MATTER OF JURISDICTION

The claimant’s representative submitted that the claimant was hired by the respondent in January 1988 as an area manager and later became a (SAD) a sales authorised distributor for the company.It was submitted that both roles were similar with the same duties and responsibilities , that the claimant never resigned from his employment and was never made redundant.It was submitted that the claimant was one of only 2 SAD’s and was not an agent for the respondent.The claimant’s colleague was based in Galway and when the Galway location was closed , he was offered an alternative role – the claimant was never offered an alternative.It was submitted that the claimant was fully integrated into the Sales Team during his 28 years of service with the company.The claimant used the respondent’s brand on his business cards and was issued with a handheld device by the respondent to record deliveries.It was submitted that the claimant operated under instruction from the company , was provided with sales targets to reach and reported daily to the regional manager.It was submitted that the claimant was prohibited from working for another company and had never been issued with an agreement for service as would be expected for a contract arrangement.It was submitted that he was paid in the same manner as other sales reps.It was submitted that the claimant worked under the company logo, branding and email which was controlled by the company - it was contended that this high degree of control was indicative of an employment relationship.

It was submitted that the claimant was redeployed as and when required to cover for colleagues and was fully under the respondent’s control. The claimant was reimbursed for travel costs when he had to travel outside his district to attend company meetings.It was contended that the company controlled the depot from which the claimant worked , installing a dock lever at their own expense and covered the annual costs for pest control and fire hydrants.It was submitted that while the claimant was never issued a contract for or of service , the work practise of the company suggested he was in fact an employee.

It was submitted that the claimant was paid in the same manner as all sales reps. – based on targets.

As regards mutuality of obligation, the claimant worked solely for the respondent.

The claimant’srepresentative invoked a number of authorities which it was argued supported the claimant’s contention that he was an employee ; including EAT determination on O’Hanlon vs Ulster Bank where it was determined that over time the “ working relationship between the claimant and the respondent drifted into a contract of service “; Minister for Agriculture and Food v Barry and Others , Henry Denny & Sons v Minister for Social Welfare, ESB v Minister for Social Community and Family Affairs , Ferguson v John Dawson & Partners and Castleisland Cattle Breeding Society v Minister for Social Community and Family Affairs.

In a later submission , it was clarified that the claimant “ did not have any documentation to provide which can confirm that his payment from the company was based on sales targets as he was never provided with pay slips from the company.It was contended that the respondent acknowledged that the claimant was once an employee but had produced no evidence to prove that the relationship changed or ended .

The respondent set out the background to the establishment of the company following an amalgamation of a number of regional bakeries.In the early 1990’s the company decided to change their distribution model – bread van salesmen who drove company van and were employees were made redundant and agreements were made with some of the ex-employees to operate as authorised distributors for the company- selling and delivering bakery products on various routes throughout the country. It was contended that the claimant was an authorised distributor for the company – he leased his own depot , hired his own employee and operated a distribution route driven by his employee. It was submitted that the authorised distributors in the county operated from the claimant’s depot in the county’s largest town. It was submitted that if the claimant was found to be a contractor , he had no remedy under the 3 Acts.

It was submitted that the preliminary matter of jurisdiction had first to be addressed.

It was submitted that a typical employee works for only one employer , arrives at and departs from their job at pre-ordained times and is paid an agreed fixed rate of pay , based on their hours of work.It was submitted that they take direct instruction on what work must be done and the respondent’s targets , objectives and time frames.It was advanced that the claimant was not constrained by this type of control.It was submitted that the respondent’s employees are hired on a contract of employment with terms covered by the company handbook.It was submitted that authorised dustributors are engaged on a contract for service.It was submitted that the claimant was a service provider and that this was supported by the taxation arrangements, the methodology of payment and day to day interaction.

The respondent asserted that the claimant operated his own business , was engaged as an Authorised Distributor in the early 90’s and was paid an agreed unit rate on volume sales on receipt of invoices.It was advanced that the quantum and frequency of invoices differed based on volumes.

It was emphasised that the claimant did not have access to a company car or the company pension and was not paid annual leave , sick leave or for public holidays.It was submitted that the claimant was never issued with a P60 and the respondent did not deduct tax or PRSI.A comparative table setting out the differences between an employee and the authorised distributors was submitted into evidence.The following additional criteria – over and above those already set out – were identified – the use of the claimant’s own phone, non reimbursement of phone bills, expenses or subsistence, no direct reporting relationship and the hiring by the claimant of an employee .The respondent invoked a number of EAT determinations in support of their contention that the claimant was not an employee – O’Riain v Independent Newspapers Ltd. UD 134/1978; Martin Conroy v Wincanton Ireland Ltd.UD 231/2011.

It was submitted that when the respondent wrote to the claimant in Dec. 2015 , advising that the authorised distribution contract with IP was now void and that it was hoped that new terms could be agreed with the respondent , the claimant never queried his relationship in terms of employee status. He did not seek to transfer over as an employee or query redundancy. When a meeting took place with the claimant to potentially renegotiate his contract for service, it was submitted that the only concern raised by the claimant was the availability of monies to “ sort out “ his employee.

In a post hearing submission , the respondent replied to the submission lodged on behalf of the claimant after the hearing and emphasised that the claimant leased his own depot, hired and paid his own employee and operated his own bread distribution service. It was asserted that no employee of the respondent engaged in such activities. It was submitted that the company’s area managers were not involved in checking and despatching products or for hiring and paying employees.The claimant had never sought the subsistence or expenses paid to area managers. The claimant operated his own sales network in a defined geographical area and was entirely responsible for the commercial aspects of his own business according to the respondent. It was argued that the handheld device supplied to the claimant and other authorised distributors kept records of products sold and returned and that this was normal in the context of a commercial agreement.It was advanced that the claimant had his own employee and did not take instructions from the respondent on the management and distribution of products. While it was acknowledged that the claimant may have used the company logo on his van , it was submitted that this was done entirely at his choice and was not a requirement of his contract for service. It was asserted that the company had no control over the claimant’s depot.The High Court determination on McAuliffe v Miniister for Social Welfare [1995]1 ILRM was invoked in support of the respondent’s contention regarding the matter of control.It was submitted that the Supreme Court Ruling in Denny & Sons v Minister for Social Welfare [1998] identified that the fundamental test to be applied is whether the person “ who has engaged himself to perform these services is performing them as a person in business on his own account………the inference that the person 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/she derives from the business is dependant on the efficiency with which it is conducted by him/her”.It was argued that this case established that a contract for service exists where an individual is in business on his or her own account.It was submitted that the instant case was clearly distinguishable from the authorities relied upon by the claimant including Helen O Hanlon v Ulster Bank Limited UD 1096/2014.It was submitted that in Denny , the Court noted that the degree of control exercised over the worker , while an important factor , could not of itself determine the issue of an individual’s employment status.It was advanced that the 2004 High Court case Seamas Lynch the Inspector of Taxes -v- Neville Brothers Limited dealt with the case of the delivery and merchandising of bread and confectionary and found that the contract that applied was a contract for service.

In a later submission , the respondent reemphasised that the claimant was never awarded any pay increases or company bonuses and detailed documentation was submitted setting out how the claimant was paid for his services. An explanation as to how the claimant was paid commission for each unit of product was detailed. An explanation as to how the claimant was credited for damaged or waste product was also set out.

The respondent disputed the claimant’s contention that he took on responsibility for the Donegal area following the death of the Area Sales Manager for the Western region.It was asserted that another employee took on responsibility for this region but because the value of business in the most northerly region did not warrant a full time Area Manager , “ the company agreed as part of the claimant’s service agreement that the claimant would carry out some of the work of” Mr.D for this portion of the region .It was submitted that in acknowledgement of the this additional work , it was agreed with the claimant at the time that there would be a rate increase on his commission to compensate him for these additional services to defray additional expenses that might be incurred by the claimant in taking on this responsibility.It was submitted that the claimant at all times was aware that he was an independent contractor and that he worked for himself.

Decision:

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint(s)/dispute(s) in accordance with the relevant redress provisions under Schedule 6 of that Act.

Dated: 30/11/2017

Workplace Relations Commission Adjudication Officer: Emer O'Shea