Complainant

Respondent

Anonymised Parties

An Electrician

A Construction Company

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 39 of the Redundancy Payments Act, 1967

CA-00015608-001

6/Nov/2017

The complainant is seeking his entitlement to a redundancy lump sum payment. He claims that he has over 104 weeks as required by the Redundancy Payments Acts. The respondent denies the claim stating that the complainant was not an employee for the necessary time period to be covered by the Redundancy Payments Acts.

The complainant commenced working with the respondent on 27 January 2017 as an Electrician. He said that the respondent approached him after an acquaintance went to work for the respondent. He claims that he worked one year and 28 weeks before he was temporarily laid off on 17 July 2015. He said that he returned to work on 12 October 2015 and worked continually until 10 June 2016 – which is 34 weeks. Following that he was laid off for 9 weeks. He said that he returned to work on 10 August 2016 and worked there for 34 weeks until 20 January 2017, when he was made redundant. He claims that he worked for a total of 137 weeks and therefore is entitled to a redundancy payment.

The complainant, in reply to the respondent’s claim that during his first period of work from 27 January 2014 to 17 July 2015 he was self-employed, said he in reality worked every week, Monday to Friday, 8am to 4:30pm. He took orders from the foremen, was paid weekly, his income tax was deducted by his employer. He did not work anywhere else or on any other jobs. The amount he earned was determined exclusively by the respondent, he had a set fixed hourly rate of pay and he had no opportunity to improve on his profit.

The complainant said that to be considered self-employed, you have to own your own business, supply materials for the job to be done; be at financial risk carrying out suck work; be in a position to increase your profits; have control in how the work is done and be free to work for other employers. He maintained that was not the reality of his situation. He claims that when he crossed over to officially join the work force as a PAYE employee there was no change to his circumstances. It was a seamless change.

The complainant said that the relevant case that I should consider here is the decision in Henry Denny & Sons (Ireland) LTD V Department of Social Welfare [1997] IESC; [1998] 1 IR 34, where the Court found that the employee did not provide any independent input into the job from her own premises, providing equipment to investment. She was paid a basic rate of pay and she supplied labour only, and the amount that she earned was determined by the company. The complainant said that his case had similarities with this case.

The respondent is a construction company which usually employs construction workers in a contract of service capacity. It claims that the complainant and an acquaintance joined their workforce in and around the same time and had asked to remain as self-employed at the time. The respondent had very good records of the complainant’s history which showed that the complainant was categorised as self-employed up until 19 October 2015. It claims that both the complainant and his acquaintance who had started working with the respondent around the same time approached it and asked to revert to employees of the company which was done straight away and without any difficulties. It claims that over the period that the complainant worked with the company he was entitled to work his own hours as long as the job was done.

The respondent said that there were never any problems with the complainant, he was a good worker and it was happy to have him, it was unfortunate that due to circumstances that it had to let him go due to lack of work.

The Relevant Law

General right to redundancy payment.

7.— (1) An employee, if he is dismissed by his employer by reason of redundancy or is laid off or kept on short-time for the minimum period, shall, subject to this Act, be entitled to the payment of moneys which shall be known (and are in this Act referred to) as redundancy payment provided—

(a) he has been employed for the requisite period, and

(b) he was an employed contributor in employment which was insurable for all benefits under the Social Welfare Acts, 1952 to 1966, immediately before the date of the termination of his employment, or had ceased to be ordinarily employed in employment which was so insurable in the period of [ four years ] ending on that date.

(2) For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if [ for one or more reasons not related to the employee concerned] the dismissal is attributable wholly or mainly to—

(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or

[(b) the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or

(c) the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or

(d) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or

(e) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained,]

[(2A) For the purposes of subsection (1), an employee who is dismissed shall be taken not to be dismissed by reason of redundancy if —

(a) the dismissal is one of a number of dismissals that, together, constitute collective redundancies as defined in section 6 of the Protection of Employment Act 1977 ,

(b) the dismissals concerned were effected on a compulsory basis,

(c) the dismissed employees were, or are to be, replaced, at the same location or elsewhere in the State, (except where the employer has an existing operation with established terms and conditions) by —

(i) other persons who are, or are to be, directly employed by the employer, or

(ii) other persons whose services are, or are to be, provided to that employer in pursuance of other arrangements,

(d) those other persons perform, or are to perform, essentially the same functions as the dismissed employees, and

(e) the terms and conditions of employment of those other persons are, or are to be, materially inferior to those of the dismissed employees.]

(3) For the purposes of subsection (1), an employee shall be taken as having been laid off or kept on short-time for the minimum period if he has been laid off or kept on short-time for a period of four or more consecutive weeks, or for a period of six or more weeks which are not consecutive but which fall within a period of thirteen consecutive weeks.

(4) Notwithstanding any other provision of this Act, where an employee who has been serving a period of apprenticeship training with an employer under an apprenticeship agreement is dismissed within one month after the end of that period, that employee shall not, by reason of that dismissal, be entitled to redundancy payment.

[(4A) In ascertaining, for the purposes of subsection (2)(c), whether an employer has decided to carry on a business with fewer or no employees, account shall not be taken of the following members of the employer ‘ s family —

father, mother, stepfather, stepmother, son, daughter, adopted child, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother, half-sister.]

(5) In this section requisite period means a period of [104 weeks] continuous employment (within the meaning of Schedule 3) of the employee by the employer who dismissed him, laid him off or kept him on short-time, but excluding any period of employment with that employer before the employee had attained the age of 16 years.

The case for consideration for me is whether the complainant working situation qualifies him for a statutory redundancy entitlement.

I note the accepted facts of the case are that the complainant commenced work as an Electrician on 27 January 2014 and he finished work on 20 January 2017 due to redundancy situation. This is not in dispute. It is clear what has been established was that there was a definite change from a ‘contract for service’ status to ‘contract of service’ status in October 2015. The disputed facts relate to his de facto situation from January 2014 until October 2015.

I am satisfied that both sides have been very credible and have been honest and courteous throughout with their evidence.

I am satisfied that the courts have established a multitude of tests to be applied when assessing whether an individual has a contract for service or a contract of service. What is clear from the case law is that every case must be assessed on its own merits and individual facts. It appears to me that the courts always turn to one particular question, as to whether the complainant is in business on their own account and has an opportunity to make a profit or gain by the manner in which the work is carried out.

I note in the leading authority in Market Investigations v Minister for Social Security [1969] 2 QB 173, the Court in this case stipulated that firstly, that employment is determined by the degree and extent of control that a company exercises over the person’s performance of the task to show ‘a master and servant’ relationship. Secondly, that in order to distinguish between a ‘contract of service’ and ‘contract for services,’ the test to be applied is: whether the person is engaging the services “as a person in business on his own account.” So when considering the complete circumstances and contractual provisions, if the answer to the question is “no,” the person is an employee under a ‘contract of service.’

The complainant was employed by the respondent as an Electrician. He invoiced the respondent on a weekly basis. He reported into work each morning at the same time and left each evening except when he had to work overtime. He reported to a foreman and although the complainant could take leave he informed the foreman when he would be absent from work. I understand that when on leave the respondent just organised its other resources to maintain the work was done. I understand that the complainant did not organise others to “stand in for him” if he was absent. I understand the complainant was told when and where to work from job to job and he moved with the respondent from job to job. I note that the complainant only worked for the respondent in that time, his full working day was catered for by the respondent. I note that the respondent provided him with the main working tools and equipment to carry out his daily work. There was a definite level of control by the respondent over the complainant.

I note in Henry Denny & Sons (Ireland) Limited v Minister for Social Welfare[HC 1995] [SC1998] 1

IR 34 Keane J, at page 49, cited with the approval of Cooke J in the of Market Investigations case, “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?…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 a 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 he has an opportunity of profiting from sound management in the performance of his task’.   Keane J also cites the Irish case of Graham v Minister for Industry and Commerce that the Supreme Court “…had also made it clear that the essential test was whether the person alleged to be a servant” was in fact working for himself or for another person. Keane J, at page 50, goes on to say: “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”.

I find that the element of control necessary to conclude that a contract of services existed is very evident in this case. The complainant was essentially not his own master. He reported into work each day, and worked overtime when required and asked to do it. He reported his absence to the foreman when he was out and other workers, from the respondent, would fill in to cover his work, to get the job done. The complainant was totally under the control of the respondent, who directed how, when and where the work was carried out. The complainant supplied only his labour to the respondent. The complainant received a fixed hourly rate of pay from the respondent. The complainant did not sub-contract the work performed. The complainant did not supply material or his own tools for the job, they were mainly supplied for him. The complainant was not exposed to personal financial risk in carrying out the work, nor could he benefit from the sound management of the scheduling or performance of the work carried out by him. The complainant did not assume any responsibility for the investment and the management of the business. The complainant worked only for one business, and one business only, the respondent. There was a seamless change into the contract of service arrangement in July 2015, nothing changed. Accordingly. I am satisfied and I find that the foregoing demonstrates conclusively that the complainant was, in the relevant period, an employee of the respondent.

I award the complainant a redundancy lump sum payment under the Redundancy Payments Acts 1967 to 2014 based on the following details.

Date of Commencement:       27 January 2014

Date of Termination:             20 January 2017

Layoff periods:                       17/7/2015 to 12/10/2015; 10/06/2016 to 10/08/2016

Gross Weekly Pay                   €838.11

This award is made subject to the complainant having been in insurable employment under the Social Welfare Acts during the relevant period.

Redundancy Payments Acts - contract of service - contract for services - redundancy lump sum