UD1575/2014

EMPLOYMENT APPEALS TRIBUNAL

CLAIM OF: CASE NO.

Chris Lavin – Claimant UD1575/2014

Against

Liberty Insurance Limited – Respondent

T/A Liberty Insurance Incorporating Quinn Direct Insurance Limited

under

UNFAIR DISMISSALS ACTS 1977 TO 2007

I certify that the Tribunal

(Division of Tribunal)

Chairman: Mr T. Ryan

Members: Mr C. Lucey

Mr P. Trehy

heard this claim at Dublin on 10th April 2017

and 24th May 2017

and 27th June 2017

Representation:

Claimant: In person (10th April 2017)

Philip Maguire, 13 Highfield Crescent. Swords, Co. Dublin (24th May 2017 and 27th June 2017)

Respondent: Ms Claire Bruton BL instructed by:

Arthur Cox Solicitors, Earlsfort Centre, Earlsfort Terrace, Dublin 2

The determination of the Tribunal is as follows:-

Background:

The respondent asserted that the claimant had not been an employee but was an independent contractor and therefore is not entitled to take a claim for unfair dismissal.

As the fact of dismissal was in dispute the claimant gave evidence first.

Claimant’s Case:

The claimant gave evidence that he started working for the respondent as a Regional Claims Manager (RCM) in October 2001. He is a retired Garda and a colleague told him about the job. He made an application and was interviewed at the Cavan office and he was told that he was an ideal candidate to join the team investigating road traffic accidents. The claimant agreed to cover North Donegal, Derry and Tyrone but turned down Sligo and Mayo. At that stage there was no mention of remuneration. Early in November he was invited to a meeting with 11 others, where the procedure was outlined. His role would be to investigate accidents and where necessary to settle claims. It was a young company and they would get the support they needed. At that stage, they were called field operatives and were responsible for their own outlays and expenses. They were also responsible for their own tax. They were told that they would each be given a camera but would have to obtain their own fax machines. Later they were offered blackberries and some people took one but the claimant himself did not.

His job was to fast track insurance claims. When a road accident occurred the details were faxed to him. He had 24 hours to contact the policy holder and arrange a meeting. If possible he would go to the scene. He would establish liability and get details of any passengers and estimate the damage done. If liability was established against them he would estimate the loss and arrange a settlement, and follow up by sending the details to HQ.

He had no authority to settle a case while the authority to do so came from higher up.

The claimant was not told that he could not work for someone else but he had the impression that he could not. A person who did outside work was let go. There were quarterly meetings. If there were problems with a case their Handler or the claims Manager would advise.

He could not delegate his work to anyone else. He was paid per case. He went out and investigated and if the settlement was accepted he earned a set fee.

The claimant was at no risk of financial loss but neither was he involved in the management of the business as a result of his position.

The matter of sick leave did not arise during his time with the respondent.

During cross examination of the claimant it was put to him that he had signed a service level agreement that clearly described him as a contractor. However, the claimant told the Tribunal that he always felt he was an employee.

The claimant did his own tax returns and claimed an allowance for his car. He agreed that this was something he did not do when he was an employee elsewhere before working with the respondent.

When asked about whether he took instruction from other companies the claimant said that he did about 5 or 6 cases for another company from December 2012 but then decided not to continue doing work for that company. When asked did he get permission from the respondent to work for the other company the claimant said that the Service Level Agreement (SLA) of 7th December 2012 allowed him to work for other companies. However, it was pointed out to him that this agreement was signed by him on 7th December 2012, but that he had taken on work with this other company on 6th December 2012.

At the time of signing the SLA (7th December 2012) the claimant was concerned and protested to Claims Handlers but he did not put anything in writing. The claimant received an e-mail stating that he would not get any further work if he did not sign the SLA and he now feels that he should have been advised at that time to get legal advice.

It was put to the claimant that at the beginning of each year he did not know what level of claims he would get and the claimant said that he had an idea of how much he would get.

The claimant recalled a meeting when he had started working for the respondent in 2001 at which someone asked if they could do “outside” work and were told that the respondent would give them enough work not to work for anyone else. The claimant felt that they could not work for anyone else.

The Tribunal asked the claimant if it was more beneficial for him to work as a contractor and the claimant said that he supposed so, in the long term.

The claimant had an office in his home and supplied his own fax machine and mobile phone. He did not employ others to do the work. The more cases he worked the more he earned.

When asked if he had ever asked the company to verify his status the claimant replied that he had not. When asked why he had not done so the claimant said it had never entered his mind.

A former colleague of the claimant (TOM) gave evidence. He commenced employment with the respondent in 2001 as was based in the O’Connell Street branch then moving to the Blanchardstown premises. He stated he was supplied by a desk, computer and swipe card by the respondent company and was subject “to management control” reporting to a Manager. He was part of a team of six.

TOM told the Tribunal he was in attendance with the relevant RCM when claims were brought to the court stage. The claim would be valued and it was the witness’s role to ensure the amount agreed would not be about a certain level. If it was higher, a call had to be made to HQ for clearance. However, most claims did not go as far down the route to the court system as the respondent wanted the claims sorted “quickly.”

TOM told the Tribunal that RCM’s were entitled to staff discounts of other products owned by the respondent company. Bonuses were paid when claims were finalised.

In December 2012 a new agreement came into place in the respondent company. All RCM’s were required to sign off on it or “they wouldn’t get any more work”.

When asked if RCM’s could contact claimants and advise them of liability on behalf of the respondent TOM replied that they could not. That was the duty of management.

Under cross-examination TOM stated he had not paid VAT when he was employed as an RCM.

When asked, he stated that he had not seen the claimant in the Dublin premises on a daily basis, the claimant was based in Donegal.

When asked, TOM stated that he did not have a home office but attended the respondent’s Dublin office daily

Respondent’s Case:

AH gave detailed evidence of his employment history with the respondent in 2006.

AH explained there were three departments with teams of staff in each. Each team consisted of four Handlers, one Team Leader and one Regional Claims Controller (RCC). These employees were located in an open plane office in the respondent’s premises. Managers were located in a different area of the building. RCM’s were based countrywide, worked from home and were not allocated a desk in HQ.

The claimant, in his capacity as an RCM, was assigned work from a Handler based in HQ. It was up to the RCM to accept or decline any work offered by the Respondent. If the RCM agreed to do it they had to inform the Handler within 24 hours. The RCM was then paid on completion of their report. AH explained to the Tribunal the pay structure under which the claimant was paid.

AH explained to the Tribunal that RCM’s decided how much a claim was worth, there was no need to “ring the office for approval”. If injuries were incurred because of the incident calls could be made to HQ by the RCM to discuss the matter. However, most claims were minor.

AH told the Tribunal that he viewed 500 of the 2,000 plus reports submitted by the claimant to the respondent company for the purpose of this hearing. Of the 500 viewed 76% lead to an investigation only to determine if there would be a claim submitted or not. 18% regarded material damage caused because of the accident. These files had been closed within a week. 6% of the 500 reports viewed by AH concerned body injury claims.

Under cross-examination AH told the Tribunal that it was the decision of each RCM whether to carry out the investigations into the work offered to them by the respondent’s Handlers.

When put to him AH refuted the RCM’s were given a particular time slot during the week to contact HQ to discuss various issues they were dealing with.

When asked, AH stated RCMs were not allocated a certain amount of annual leave from the respondent but only informed HA when they were going on leave a few days beforehand. Handlers would then offer work to other RCM’s.

AH reiterated the claimant, as an RCM, was not paid as the respondent’s employees were but on a “per claimant basis.” RCM claimed their own expenses and not paid any mileage incurred.

JW gave detailed evidence of his employment history based in Dublin with the respondent since 2003.

He explained that RCM’s were deemed as service providers by the respondent company, as were the Solicitors, Doctors and Loss Adjusters the respondent retained from time to time. RCM’s were paid on submission of their reports into the claims they investigated.

JW refuted, when put to him, that there was a three-hour window for RCM’s to issue a report to HQ. However, they did notify HQ within 24 hours if they would investigate the work offered to them by the claims Handlers.

JW told the Tribunal no one from the respondent company told the RCM’s what to settle the relevant claims saying “they genuinely didn’t put a figure on it”. Claims were usually agreed between €15,000 to €20,000. In 2012 this changed due to the Finance Act regarding VAT to be paid on amount over €50,000.

JW explained that during the early years the RCM’s were paid bonuses in relation to their output but this ceased in 2010. Bonuses continue to be paid to employees of the respondent to date. Employees also received shopping vouchers at Christmas but not RCM’s.

When asked JW agreed RCM’s changed their email addresses to that of the respondent but this was because of the sensitivity of some of the documentation submitted relating to claims.

Under cross-examination JW told the Tribunal that it had been a requirement for the RCM’s to sign off on an agreement introduced by the respondent company in 2012 due to “corporate governance”.

When put to him JW stated there were no restrictions for RCM’s to work elsewhere while carrying out investigations on behalf of the respondent company.

Determination:

At the commencement of the hearing the Respondent's Representative submitted that the Tribunal did not have jurisdiction to hear the claim because the claimant was not an employee as defined in the Unfair Dismissals Act 1977 but, rather, that he was an independent contractor. The Tribunal is the body which must decide a person’s employment status.The Tribunal could not rule on this application without hearing all the evidence relating thereto. This is clear from a number of High Court decisions referred to hereafter, and the Supreme Court Case of John Barry, Conor O’Brien, Mary O’Connor, Michael Spratt, Ciara Dolan and The Minister for Agriculture and Food [Appeal No. 86/2011], (hereinafter “the Barry Supreme Court Case”). The Judgement of MacMenamin J. in this case clearly puts to rest once and for all that:

“it was for the Employment Appeals Tribunal itself to determine, on the facts, whether or not an employment relationship existed between the parties”.

In the Barry Supreme Court Case the court also ruled that: “the case whether the vets were employed by the Respondent, or were instead self- employed persons doing shifts at the Mitchelstown meat plant is a matter of fact for the Employment Appeals Tribunal on the rehearing of the matter”.

Furthermore, the Tribunal took cognisance of the Supreme Court Case of Henry Denny and Sons (Ireland) Ltd v Minister for Social Welfare [1997] IESC 9, hereinafter “Denny” which stated, per Hamilton CJ that “Courts should be slow to interfere with the decisions of expert administrative tribunals… and should only do so where the conclusions are based upon an identifiable error of law or an unsustainable finding of fact”. Subject to this caveat it is clear that it is the EAT which determines the employment status of an individual.

The Tribunal considered, inter alia, the following factors/cases, as being relevant to its decision

The Barry Case (referred to above) and its eventful journey through Quasi Judicial and Judicial Fora;
Intention of the Parties;
Control;
Mutuality of Obligation
In business on his own account and/or integration;
Enterprise Test
Taxation;
Integration and/or in business on his account
Holiday Pay, Sick Pay, Pension
Substitution;

The Barry Case with Supreme Court Reference quoted above:

First Determination of the Tribunal

The issue between the Applicants (Barry and Others) and the respondent (the Minister), who had retained the Applicants as temporary veterinary inspectors, from the outset has been whether the Applicants were employees of the Minister under a contract of service, so as to entitle them to the statutory payments they have claimed, under the Redundancy Acts. When the matter was first before the Tribunal in 2006 it was decided that the Tribunal would determine, as a preliminary point, whether the Applicants “were employed under a contract of service or a contract for service” by the Minister. The Tribunal decided (by majority) that the vets were employees.

First Order of the High Court

The Minister appealed against the first determination on a question of law to the High Court pursuant to the Redundancy Payments Acts and the Minimum Terms Acts. The appeal, in which the Applicants were respondents, was heard in the High Court by Edwards J., who gave judgment on 7th July, 2008. The order of the High Court was made on 22nd July, 2008 (the First High Court order). This order, overturned the Tribunal’s Determination, and inter alia, ordered that the case be remitted to the Tribunal on the grounds that the Tribunal had erred in law and misdirected itself on the evidence.

Second Determination of the Tribunal

After the matter was remitted to it by the first High Court order, the Tribunal conducted a further hearing on 8th January, 2009 and heard evidence from various witnesses. It subsequently gave its determination on 31st July, 2009 (the Second Determination). In the Second Determination the Tribunal reversed its first determination of 12th March, 2007 and found that the Applicants were engaged under a contract for services with the Minister and that it had no jurisdiction to proceed with the hearing of the substantive issues under the Redundancy Payments Acts and the Minimum Notice Acts. The Tribunal determined that it felt bound to follow the specific directions of the High Court and reverse its previous decision.

The Second Order of the High Court

The appellants to the second appeal on a question of law from the Tribunal to the High Court, in which the Applicants were appellants and the Minister was respondent. It is quite clear from the summary of the reliefs sought by the Applicants on that appeal against the second determination of the Tribunal, as set out in paragraph 3 of the judgment of Hedigan J. delivered on 9th February, 2011, that at the core of the appeal was the Applicants’ contention that the Tribunal erred in law in acting on its misunderstanding of the First High Court order in (i) believing that it had been directed by the High Court to change its original determination due to its many errors in law in reaching that original determination, and (ii) failing to consider that, having heard additional evidence, it was entitled to apply the legal principles set out by the High Court in the First Judgment and to make its own determination having regard to the totality of the evidence.

In the Second High Court Order Hedigan J. did not identify or address this as the core issue, but rather entered on an assessment of the additional evidence, against the background of the declarations in the first High Court order, in particular, that at the first hearing before the Tribunal there was insufficient evidence on the basis of which a finding could be properly made that the Applicants were employed by the Minister under a contract of service. On the basis of his assessment of the evidence, Hedigan J. concluded (at para. 7.7) that no reasonable Tribunal would be entitled to conclude that the Applicants were employed other than under a contract for service. On that basis, he disallowed the appeal without addressing the real complaint of the Applicants, stating that it was not necessary for him “to consider the issue of express directions to the Tribunal as to the correct application of the law to the facts of this case”.

The Appellants (Barry and Others) appealed the Second High Court Order to the Supreme Court, which set aside the second High Court Order on the grounds that it was based on an erroneous failure by Hedigan J. to address the core issue on the appeal, namely, that the Tribunal, in making the Second Determination had not performed its statutory duty, in that it had wrongly acted on a misinterpretation of the First High Court Order in concluding that it had been instructed to reverse its First Determination, when it should have made a determination on the basis of the evidence then before it and the proper application of the relevant legal principles.

Intention of the Parties:

The Tribunal found the Denny case, in most part, particularly useful in considering its decision. It is worth setting out the facts of this case: A demonstrator had been engaged by Henry Denny and Sons Limited to demonstrate its food products in various supermarkets. She was employed under a series of temporary contracts which were renewed every year. Her contract clearly specified that she was not an employee rather she was an independent contractor. Some of these statements were:

"You are deemed to be an independent contractor",

"It shall be your duty to pay and discharge such taxes and charges as may be payable out of such fees to the Revenue Commissioners or otherwise",

"It is agreed that the provisions of the Unfair Dismissals Act1977 shall not apply etc",

"You will not be an employee of this company",

"You will be responsible for your own tax affairs"

However, her duties were to be carried out in a very specific way; she would be given a minimum period of notice before each job; if she could not do the job another person approved by the employer could do it for her; she had to wear a uniform provided; she was paid by the days she worked, payment being made on receipt of an invoice which was only valid if signed by the store manager. She submitted an invoice and payment was made each fortnight without deduction of tax or PRSI.The demonstrator was deemed to be an employee notwithstanding statements to the contrary in her contract.

The Judge in the Denny case felt that statements, such as "you are deemed to be an Independent Contractor" etc, in the contract should be disregarded, on the basis that they represent the opinion of the contracting parties but were of minimal value in deciding the work status of the person engaged. This is a somewhat unhelpful part of the Denny judgement, in that there is a view that all things being equal then one must look at the intention of the parties. However, in Denny the intention of the parties was that the relationship between them was one of independent contractor.

Terms of the Service Level Agreements

Under the terms of the SLAs of 2002 and 2012 the terminology used denotes independent contractor status. It is noted that the claimant was in charge of his own tax affairs and was clearly not defined as an employee. Under the Regional Claims Manager Service Agreement of 2002, signed by the Claimant in July 2002 the Agreement provided for:
No mutuality of obligation;
the Claimant was responsible for resolving claims at the most reasonable cost;
the Claimant was provided with delegated authority to investigate, agree settlement and repudiate claims and,
pay his own taxes and PRSI in relation to fees received,
there is no reference to payment of salary
there is no reference to payment for holidays,

The Tribunal is satisfied that the terms of both SLAs were clear and the Complainant was fully aware when he executed the SLAs in December 2012 that he was not an employee and rather was engaged as an independent contractor. The classification of the Claimant as self-employed continued from the 2006 Service agreement. It was consistent with the SLA of 2002 in terms of tax treatment and lack of mutuality of obligation.

The Tribunal notes that the claimant agreed to cover North Donegal, Derry and Tyrone. He declined to cover Sligo and Mayo. This refusal to cover Sligo and Mayo is inconsistent with the claimant being an Employee.

The Tribunal notes that SLA of 2012 provided the following:
Clause 3.1 – which allows for substitutes to be appointed by the RCMs on an unfettered manner and with no involvement of the Respondent.
Clause 3.2 – there was no obligation on the Respondent to provide any instructions to the RCM.
Clause 3.3 – the services can be provided during whatever hours suits the RCM.
Clause 3.4 – that the RCMs provide their own office and tools necessary for the provision of their services.
Clause 3.6 – the RCMs are entitled to provide similar services to other entities provided there is no conflict of interest.
Clause 3.8 – the RCMs have binding authority to investigate, agree settlement or recommend repudiation up to the value of €50,000 without any control or communication with the Respondent.
Clause 7.4 – the RCMs are responsible for all tax liabilities.
Clause 12.1 – clearly provided that the Complainant as a party to the SLA was an independent contractor and was not an employee or agent of the Respondent.
Appendix I provided for set fees for particular functions.
There is no reference to any sick pay, pension contributions or holiday pay.
There is no equipment provided by the Respondent, other than a fax machine and mobile phone;
There is no reference in the agreement to any insurance being provided by the Respondent.

The Respondent submitted that the core elements of the SLA of 2002 and 2012 executed by the Claimant are the same: delegated authority, payment of fees for claims settled or investigated, responsibility for settling claims, self-employment status, mutuality of obligation and no entitlement to holiday pay or sick leave. The attention of the Tribunal was drawn to recent decision of an Adjudication Officer of the Workplace Relation Commission in a claim by a Regional Claims Manager, Patrick Joseph Maguire v Liberty Insurance ADJ00000680. The adjudicator rejected Mr Maguire’s claim that he was an employee for the purposes of various pieces of legislation including the Unfair Dismissals Acts 1977-2015. One of the findings made by the Adjudication Officer was that there was no substantial difference between the SLAs, being an earlier SLA and the SLA of 2012 (being the same SLA as entered into by the Claimant in the current case), provided to Mr Maguire. The Tribunal notes that this case is under appeal to the Labour Court.

The Tribunal notes the Supreme Court Decision in Castleisland Cattle Breeding v. Minister for Social Welfare [2004] I.R.150 which held that independent contractors knew of their status, there had been meetings with them where the arrangement had been explained and the claimants filed their own tax returns in determining the claimants were not employees. The Tribunal notes that the Claimant was an experienced person who should have been aware of what he was signing, and should have requested changes, which would have guaranteed him employee status, if that was what he wanted.

In addition in the Court of Appeal of England and Wales, Elias LJ held in Quashie v Stringfellows Restaurant Limited 2013I.R.L.R 99 as follows:

“the Employment Tribunal's conclusion was strongly reinforced by the fact that the terms of the contract involved the dancer accepting that she was self-employed, and she conducted her affairs on that basis, paying her own tax. In addition, and again consistently with that classification, she did not receive sick pay or holiday pay”.

The Tribunal also notes the observation of Lord Justice Ralph in Gibson in Calder v H Kitson Vickers Ltd 1988 ICR 232 251

“the fact that the parties honestly intend that between themselves the contract should be a contract for services and not a contract of service is not conclusive, but it is a relevant fact, and … it may afford strong evidence that that is their real relationship.”

Further in the decision of O’Coindealbhanin v Mooney [1999 IR 422] the High Court in its judgment noted that the terminology used in the contract was of considerable importance in determining its effects.

The Tribunal notes that the level of freedom provided to the RCMs in how they conduct their business is also consistent with the arrangement being one of an independent contractor relationship. Both SLAs provide considerable freedom for the RCMs in how they conduct their business and how they can make a profit from dealing with claims in a particular manner by virtue of the number of different fixed fees provided within the SLA.

The Claimant was not referred to as an employee of the Respondent on his business card and his identification cards contained no reference to his being an employee.

The Tribunal noted the Labour Court decision in Bord Gais Eireann v McGinley FTD092 which is instructive in considering the effect of the agreements in place between the parties:

“The Court fully accepts from the evidence submitted that the Complainant represented himself as S.M.G. Gas Services Limited t/a Gascall and is satisfied that at the signing of each of the contracts for service, the intent of the parties was for the supply of services from an independent contractor to the Respondent as distinct from an employer/employee relationship. The contracts are explicit in that regard and the Court notes that the Complainant was one of twenty-five such persons on similar contracts. Neither did he at any time, up to the period when it became clear that the contract was not going to be renewed did he seek to invoke employment rights.”

The Tribunal also considered the case of McCotter v. Quinn Insurance Limited 2013 24 E.L.R Mr McCotter, an RCM was found to be engaged as an independent contractor in spite of some elements of an employment relationship being present. This was in spite of Mr Cotter having business cards identifying him as a Regional Claims Manager with the Respondent and an email address within the Respondent. These factors were not sufficient to persuade the Employment Appeals Tribunal that Mr McCotter was an employee. In fact the examination of the factors conducted by the EAT in its determination and the finding that most of their points against an employment relationship must equally apply to the Claimant. He was an independent contractor, he was responsible for his own taxes, he was not classified as an employee by the Respondent, he was not paid when he was sick, he was not paid for holidays, he was not part of any pension scheme, he was not paid wage increases when employees were, he could work for others provided no conflict of interest arose and he submitted invoices for his work or was paid for the claims closed. At no time, did he receive a payslip from the Respondent evidencing the deduction of PAYE and PRSI.

Control:

Whilst the degree of control exercised by a person may provide guidance in deciding whether a contract is one "for service" or "of service". It is not always a satisfactory test to apply. This is clear from the cases referred to above and Cassidy V Minister for Social Welfare 1951 2 KB 343 et al. The Tribunal is mindful of the fact that in certain circumstances, an employer has very little control over a worker (to use a neutral phrase) yet that does not stop that worker being an employee. An example of this is a consultant in a hospital who decides when to do the work, how to do the work, when to operate, deciding which patients to see and in what order, and sometimes where to carry out the work. This does not stop that consultant being an employee.

The Respondent exercised little control over the Claimant and subject to certain requirements he was free to carry on as he saw fit and complete the settlement and investigation services. He was free to arrange his affairs in a manner which suited his own circumstances. He chose the areas or regions he covered.

The Claimant had discretion what to settle the claim for and at what reasonable level. In addition, the claims furnished to the Tribunal show no contact from the office regarding the level of settlement and no reference made therein by the Claimant.

In relation to Control, the Tribunal’s attention was drawn to the case of McGinley v Bord Gáis Éireann FTD 091, the Labour Court noted that the Respondent exercised “a great degree of control over the Complainant in terms of the allocation of hours of work and jobs to be performed”. However, that was not sufficient for an employment relationship to be established as the Labour Court was influenced by the judgment of Keane J in Denny where the Judge concluded:

“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.”

The Tribunal’s attention was drawn to a recent decision of the EAT in Brosnan v Courier Post Limited T/A Fastway Couriers UD 259/2015 as being relevant to the case before it. In the Brosnan case a courier was found to have been subject to considerable control but this control was required to ensure brand protection and was not decisive in determining employment status. Rather the EAT noted, inter alia, that as the claimant was responsible for his own tax affairs, not entitled to holiday pay or sick leave, provided his own van and was responsible for insuring it, paid his mobile phone cost, the terms of the contract applied in reality, and the courier had the potential to profit from the contract, and as such, he was not an employee.

In the case before the Tribunal the Claimant provided his own vehicle (the costs of which were not reimbursed). The Claimant is by and large free to do the work as he saw fit.

In Castleisland, both the High Court and the Supreme Court criticised a Plaintiff for clearly and knowingly entering into a contract for services and availing of the advantages that designation offered, and later trying to claim employment status. In the case before the Tribunal the Tribunal notes that the claimant claimed reliefs against tax and allowances as a self-employed person at a very high level to minimise his exposure to tax, including claiming an apparent capital relief. He was able to deduct allowances to a high extent and minimise his tax liability, in a way that an employee is not. There is nothing wrong or improper with this. But it is more consistent with the claimant being an independent contractor and not an employee.

Mutuality of Obligation:

This exists where employer is obliged to provide work for the employee and the employee is obliged to perform that work as in a normal employer/employee relationship. The terms of the Service Level Agreements between the Claimant and the Respondent make it quite clear that there was no obligation on the Respondent to provide the Claimant with work or assignments or any particular amount of same and there was no duty on the Claimant to accept any assignments offered. There was no mutuality of obligation. There was no obligation on the part of the Respondent to provide work and the Claimant did not receive payments for times he did not provide his services. The Claimant accepted that no guarantee or promises of any level of work was given to him at the commencement of his engagement. He also accepted that he did not have to accept instructions. His salary also varied and he had no knowledge of the level of instructions he would receive.

1 The SLA of 2002 referred to the appointment of the Claimant “at its sole discretion and with no commitment in respect of any particular case or in respect of any volume of cases in any particular period to settle claims on its behalf”.

2 The SLA of 2012 provides:

“3.2 There is no obligation, explicit or implied, in this Agreement, on the Insurer to provide instructions to Service Provider Contractor, nor indeed is there any obligation, explicit or implied, on the Service Provider Contractor to accept any such instruction”.

3 The mutuality of obligation test requires an employer to provide work for an employee and the employee to perform that work. Neither party has any choice. There was in this case a choice on both sides. Once a claim was notified, the handling team would contact the RCM to ascertain if they are available to take the claim. In addition a Regional Claims Controller (RCC) may determine who to instruct. In Minister for Agriculture and Food v Barry 2009 1 IR 215, Edwards J stated in relation to the issue of mutuality of obligation:

“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. If such mutuality is not present, then either there is no contract at all or whatever contract there is must be a contract for services or something else, but not a contract of service. It was characterised in Nethermere (St Neots) Ltd v Gardiner, [1984] ICR 612 as the “one sine qua non,which can firmly be identified as an essential of the existence of a contract of service”. Moreover, in Carmichael v. National Power PLC, [1999] ICR, 1226 at 1230 it was referred to as “that irreducible minimum of mutual obligation necessary to create a contract of service.” Accordingly the mutuality of obligation test provides an important factor in deciding the employment status of the individual. Where one party to a work relationship contends that their relationship amounts to a contract of service, 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 of obligation is a feature of it. If there is no mutuality of obligation it is not necessary to go further. For the reasons set out below the Tribunal does not accept this. All of the evidence has to be considered as is clear from Denny and from Barry Supreme Court Judgement. The Tribunal, does accept that if mutuality of obligation is found to exist the mere fact of its existence is not, of itself, determinative of the nature of the relationship and it is necessary to examine the relationship further.

The Tribunal’s attention was drawn to two recent High Court judgements, which deal with mutuality of obligation.

In Mansoor v Minister for Justice, Equality & Law Reform & Others [2010] IEHC 389 Lavan J considered inter alia the status of the Plaintiff who provided medical services to An Garda Siochana in respect of taking urine samples from prisoners facing charges of allegedly driving under the influence of alcohol. Lavan J. held:

“In my view the mutuality of obligation test is not satisfied in this case and that it is not required to decide anything further on this matter. It is clear, that the defendants were not obliged to give the plaintiff work. Nor could the defendants possibly predict the number of drink driving offences that may occur on any given night. In addition, it was open to the defendants to call a number of general practitioners to assist them and although the plaintiff, along with a number of other G.Ps. may have been on a contact or duty list, were the plaintiff to declare that he was unavailable for work, he could face no sanction or rebuke from the defendants. He simply would not be paid. The plaintiff performed a set task for a fixed sum. Likewise, if the defendants elected to engage a different G.P. on any given occasion, the plaintiff would have had no reasonable grounds for objecting to this. I therefore find that the plaintiff was at all materials times an independent contractor, engaged by the defendants under a contract for services.”

The respondent submits that the Claimant was in precisely in the same situation as the Plaintiff in the Mansoor case. Here the Claimant was not required to accept work. The Claimant provided a service for a fixed fee per item. The Claimant had no reasonable grounds to object if someone else was assigned as RCM to a particular case, as opposed to himself.

Considering the issue of whether Dr Masood was an employee, Lavan J in the High Court stated that as follows:

“A number of important factors have been distilled from the case law which assists in determining whether a person is an independent contractor or an employee. These include, but importantly, not limited to: (a) whether this person is engaged in business on his or her account; (b) whether they are referred to as an employee in the contractual documentation; (c) whether the person is responsible for his or her own tax affairs; (d) whether the person is free to engage people or substitutes when he or she is not available; (e) the level of control exercised by the employees engaged by him or her; and (f) whether he or she is entitled to payments which normally accrue to employees such as pension contributions, sick pay, paternity leave, annual leave, etc.” On the case before him the learned High Court judge held that the mutuality of obligation requirement did not exist and the plaintiff was therefore an independent contractor, at page 570 he held “In my view, the mutuality of obligation test was not satisfied in this case and that the Court is not required to decide anything further on this matter. It is clear the defendants were not obliged to give the plaintiff work. In the work of the defendant it is impossible to predict the number of drink driving offences that may occur on any given night. In addition it was open to the defendants to call a number of general practitioners to assist them and although the plaintiff, along with a number of other general practitioners may have been on a contact or duty list, had the plaintiff declared that he was unavailable for work, he could face no sanction or rebuke from the defendant. He would simply not be paid. The plaintiff performed the said task for a fixed sum.”

The question of mutuality of obligation was considered in the High Court in McKayed v Forbidden City Ltd [2016] IEHC 722. Mr McKayed was an Arabic translator engaged by the Defendant in its interpretation and translations services business. He claimed he was unfairly dismissed and the High Court, on appeal from the Circuit Court, considered whether he was an employee at the time of his dismissal or whether he was engaged on a self-employed basis. Ní Raifeartaigh J held as follows:

“Further, I am not convinced by the argument on behalf of the plaintiff that an obligation to provide work to the plaintiff arose from the fact that work had in fact been given to him on a regular basis for a particular period by the defendant. If this approach were determinative of the issue, none of the previous authorities in which this issue had arisen could have reached any conclusion other than that the individuals in question were employees, be they veterinary inspectors, shop demonstrators, casual hotel workers, or home-workers for a clothes company, as they had all carried out work on a regular basis for a period of time; but that is not how those cases were approached by the various courts which examined them. In other words, the fact that work was given regularly for a period of time is not determinative of whether one party had a legal obligation to provide the other party with work.

Finally, the plaintiff asserted that he was 'on call 24/7'. In reality, what seems to me to be the position is that he was liable to receive a telephone call requesting that he carry out some work at any time of day or night. However, he was free to refuse that work if he chose to do so. No person could ever be 'on call 24/7' on a permanent basis, in the normal sense of the phrase 'on call', which means that the person has an obligation to work if so required. It may well be that if he had been telephoned, the plaintiff would in fact have responded affirmatively on every occasion because he needed the work. However, his factual dependence on the defendant company does not transform the working arrangements between them, legally speaking, into a contract of service.

In the circumstances, I am of the view that the defendant company was not under a contractual obligation to furnish the defendant with any, or any particular, volume of work into the future and that the requisite mutuality of obligation for an employment contract was therefore absent. Accordingly, the plaintiff’s situation vis-à-vis the defendant company was not one of an employee and in light of that conclusion, the plaintiff’s claim must be dismissed and no further determinations are required in this case. “

The Tribunal is also referred to a recent decision of an Adjudication Officer of the Workplace Relation Commission in a claim, arising from similar circumstances to the Claimant’s claim, against the Respondent by another Regional Claims Manager, Mr Patrick Joseph Maguire[1]. The Adjudication Officer rejected Mr. Maguire’s claim that he was an employee for the purposes of various pieces of legislation including the Unfair Dismissals Acts 1977-2015 and rather held that Mr. Maguire was an independent contractor. One of the factors which led to this decision was the clear finding that there was no mutuality of obligation between the Regional Claims Manager and the Respondent as he accepted that Mr. Maguire, if he desired, could decline or accept any individual insurance case or claim offered to him. This equally applies to the Claimant in this claim. This decision is under appeal to the Labour Court.

In circumstances where the SLAs (the first of 2002 and the second of 2012), being the contract performed by the parties and pursuant to which payment was received by the Claimant, expressly provided no mutuality of obligation was in place between the parties. It is submitted that the English Court of Appeal Stevedoring & Haulage Services Ltd v Fuller [2001] IRLR is highly relevant. This concerned dockers who had previously accepted voluntary redundancy terms were employed on an ‘ad hoc and casual basis’ with ‘no obligation on the part of the company to provide such work for you nor for you to accept any work so offered’. The Court of Appeal held that where the terms on which casual workers were engaged expressly negatived mutuality of obligation, there could be no global or overarching contract of employment. If there is no contract, one cannot be created by implying terms which dilute the effect of express terms in order to give sufficient mutuality of obligation to pass the test necessary for establishing a contract of employment.

The Tribunal does not accept that it must consider whether there is mutuality of obligation, and if there is not, then it must go no further.

It seems extraordinary that a Tribunal could come to any conclusion on mutuality of obligation without hearing all the evidence. The Tribunal notes the comment of Edwards J in the Barry High Court case that mutuality of obligation (paragraph 47) is “an important filter”. This is a long way short of it being a decisive test, which must be considered first, to the exclusion of all other matters. The Tribunal wants to place on record its acknowledgement that it is of course a relevant factor for consideration.

As stated in Denny “it was for the Employment Appeals Tribunal itself to determine, on the facts, whether or not an employment relationship existed between the parties”. It does not state that the Tribunal must consider firstly whether there is mutuality of obligation and if it does not exist then the Tribunal should go no further.

In the Barry Supreme Court case the Tribunal notes the Judgements of Laffoy J, (at paragraph 12) “it is for the Tribunal to determine on the basis of the evidence before it, as to whether, in accordance with the established principles, each of the applicants were or were not an employee of the Minister”; MacMenamin J (at paragraph 4) “it is for the Employments Appeals Tribunal itself to determine, on the facts, whether or not an employment relationship existed, between the parties”; Charleton J (at Paragraph 9) “it is for the Employment Appeals Tribunal to make that decision [whether a person was an employee or not] on analysis of the facts to each case….”

The High Court cannot “substitute its own view for that of the Tribunal” Barry Supreme Court case, Charleton J (paragraph 11). It follows on from this that it is for the Tribunal to decide, what evidence to hear, unfettered, and subject only to the qualification set out at paragraph 4, the next succeeding paragraph;

The Tribunal took cognisance of the Denny which stated, per Hamilton CJ that “Courts should be slow to interfere with the decisions of expert administrative tribunals… and should only do so where the conclusions are based upon an identifiable error of law or an unsustainable finding of fact”.

Neither the Denny Supreme Court case nor the Barry Supreme Court case gives any direction to the Tribunal (nor could it, and subject only the caveat in paragraph 4 above) that it must consider Mutuality of Obligation first, and if it deems none exist, go no further. Indeed in these Supreme Court cases there is no mention of mutuality of obligation except where it reviews the first High Court Order of Barry Charleton J in the Barry Supreme Court Case [Paragraph 9] case states that: “it may need to be factored into any such analysis that it can be, that a course of dealings over years, may turn from what was initially the engagement of self-employed contractor, to do work on a particular basis into an employment relationship”. This is at odds with Ni Raifeartaigh J in McKayed v Forbidden City Limited wherein she states that: “I am not convinced by the argument on behalf of the plaintiff that an obligation to provide work to the plaintiff arose from the fact that work had in fact been given to him on a regular basis for a particular period of time by the defendant”. A Tribunal cannot consider the engagement status of an individual, if it is required to make a preliminary determination solely on the issue of mutuality of obligation.

Integration and/or in Business on his own Account:

In the Barry High Court case Mr Justice Edwards considered that the appropriate test as to whether a person is engaged in business on his or her own account should consider, among other matters [see below], the following factors:

Whether the person provides the necessary premises, or equipment or some other form of investment.
In the case before the Tribunal the claimant did not provide premises, other than a home office, a fax machine, equipment or any investment. There was no evidence that the claimant met anyone at his house. Working from home does not necessarily make an individual an independent contractor, as many employees work from home either part time or full time;
Whether the person employs others to assist in the business.
The claimant did not employ others to assist in the business, and
whether the profit which he or she derives from the business is dependent on the efficiency with which it is conducted by him.
In its submission to the Tribunal the Respondent does not accept that the claimant was integrated into the Respondent’s operations in the way an employee would be. He only attended the company head office infrequently. The Tribunal notes the direct interaction between the Claimant and the Respondent were:
This is somewhat debateable and it seems to this Tribunal that he could have taken on more work and earned a higher payment. The Tribunal notes his refusal, to take on Sligo and Mayo, as his turning down of potential extra income.
Initial instructions;
Investigation and settlement of claims;
Completing reports and updates on investigation and settlement, including witness statements;
Advising on liability on files;
Determining whether to indemnify the policy holder; and
Deciding on liability and if appropriate settling the claim, to include the amount of settlement which was at the discretion of the Claimant.
In TEEU v Bord Gáis Éireann LCR 19750 the Labour Court noted as a relevant factor the lack of pension or sick pay for the service engineers in concluding they were not employees.It is noted that the Claimant did not attend the Respondent’s staff events frequently and was not included in staff circulars or internal emails etc. This is not in any way determinative of employment status.The reference to employees on vouchers is not indicative of the Claimant being an employee as RCMs were encouraged to use these vouchers to encourage settlements. He accepted he used vouchers to settle claims. The claimant accepted in cross-examination that he did not receive Dunnes’ Stores vouchers and the evidence of the Respondent is that such vouchers were received by employees. The Claimant gave evidence that he was under the impression that he could not delegate work to others but when questioned by the Tribunal accepted that he had no direct knowledge of this being the case and he had the impression personal service was required although he never asked the question. It is also the case that he could have transferred parts of the investigation service to others, such as photographing a locus, but did not do so.The Tribunal then considered the facts of the case before it with commentary of previous case law and taking into account the facts and realities on the ground. In doing so the Tribunal found some factors more helpful than others. The Tribunal notes the observations set out in Dillon L.J in Nethermere (St Neots) that:"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 in most cases it is obvious whether a person is an employee or self-employed, it can sometimes be difficult to assess whether an individual providing services to another person or business can properly be described as self-employed. The terms "employed" and "self-employed" are not clearly defined in law, but some guidance has been provided by the courts. It is necessary to look at what the worker actually does, the way the worker does it and the terms and conditions under which the worker is engaged. This will be in the mind of the Tribunal when it considers all the facts surrounding the working relationship between the claimant and the Respondent. The Tribunal considered existing case law in this contentious area, cognisant of the fact that it would be difficult to find a set of circumstances in a previously decided case that exactly mirrors "the particular circumstances" of the case in issue. Recourse is therefore made to cobbling ratio decidendi from a number of relevant cases to fit the circumstances of the case before the Tribunal.
The Enterprise Test":
This test examines whether or not a person is in business on his/her own account. This test originated in a UK decision of Market Investigations –v- Minister for Social Welfare and was adopted by the Supreme Court in this Jurisdiction in the case of Henry Denny and Sons Ireland Limited V The Minister for Social Welfare (‘the Denny case’) and the application of the ratio decidendi in that case and in the subsequent decisions Tierney –v- An Post (2000); Castleisland Cattle Breeding Society Ltd –v- The Minister for Social and Family Affairs (2004) and the Electricity Supply Board –v- The Minister for Social Community and Family Affairs & Others (2006). In ‘the Denny case’ Keane J stated that when determining whether a particular employment relationship is to be considered a contract "for service" or "of service" [that] "each case must be considered in the light of its particular facts and of the general principles which the courts have developed". Keane J goes on to say in the Denny case:"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"Moreover, the Barry case further stipulated that in deciding whether a person is working under a Contract of Service or a Contract for Services a Court or Tribunal should have regard to the following:
(a) all possibilities should be investigated in determining the nature of the work relationship between the parties;
(b) the "so called enterprise test" is not determinative of the issue and that it is incorrect to assert that questions of control and integration are to be regarded merely as elements to be taken into account in applying the enterprise test;

(c) compare the question of enterprise to questions of control and integration as such a comparison will assist a court or tribunal with valuable assistance in drawing the appropriate inferences from the primary facts and no one factor is subsumed by another;

(d) there is no exhaustive list and there might be other factors which might also assist.

The binding element of the Judgement of Keane J in the Denny case is that "each case must be considered in the light of its particular facts and of the general principles which the courts have developed". Therefore, the test regarding whether "a person is in business on their own account" is reduced from being the fundamental test to one of the many factors that have to be taken into consideration in light of the particular facts of the case. Perhaps the main point to take from the case is that the various tests in this area should be considered as useful, rather than fundamental or single composite tests. Furthermore, each case should be examined on its own facts, giving particular attention as to whether or not a written contract containing a statement of the purported nature of the contract exists (though not decisive), or where no clear written contracts exists, whether in fact one, or more contracts or an umbrella type of contract exists. The Tribunal must consider all the facts in the case before it and must not have a narrow focus.

In 'the Denny case' the Supreme Court held that in order to decide whether a contract is one for service or of service each case should be considered on its own particular facts and in the light of the general principles which the courts have developed McAuliffe V Minister for Social Welfare 1995 ILRM 421 considered.

Taxation:

The claimant was paid on submission of an invoice and he looked after his own taxation, VAT and PRSI. While this may indicate independent contractor status it is not decisive and the Tribunal notes that in the Denny casethe demonstrator paid her own tax and PRSI and submitted an invoice yet the Supreme Court held she was an employee.

The Tribunal notes that even Revenue do not accept the fact that because an individual has registered for self-assessment or VAT automatically makes that person self-employed. In the same way Revenue do not automatically accept that because a person is taxed under the PAYE system that the person is automatically an employee. This is clear from the 2010 document – Code of Practice for Determining Employment or Self-Employment Status of Individuals; 　

The claimant asserts that his tax status is not a relevant. The Tribunal does not accept this. His tax status is relevant but not decisive. In Mansoor the High Court held that the fact that Dr Mansoor was in charge of his own tax affairs as being a relevant factor in determining whether Dr Mansoor was an employee. Similarly in the Bord Gáis case, the Labour Court took particular note of the tax status of the claimant in that case and held that it was inconsistent with “the status of an employee to submit V.A.T. returns to the Revenue Commissioners; to be required to submit Tax Clearance Certificates and to offset traveling expenses from tax returns.” The Claimant furnished tax returns to the Revenue on a self- employed basis. He offset expenses and it is submitted that his tax status as a self-employed individual for the duration of his engagement with the respondent is an important factor to weigh against his now contention that he is was an employee of the Respondent. The importance of tax status was also considered by the Supreme Court in Castleisland Cattle Breeding v Minister for Social Welfare [2004] 4 I,R 150 to be of considerable importance. In this case the High court held that the person engaged to provide artificial insemination services was self-assessed for tax purposes, claimed allowances as a self-employed person, carried his own insurance and was not entitled to any pension from the appellant were indicative of the fact that he was an independent contractor.

The Tribunal accepts that the furnishing of invoices by the Claimant, as are referred to in his documentation, his tax returns being on the basis of being self-employed basis, the fact that he held his own insurance and held himself out as self-employed in correspondence with the Respondent, was engaged on a services basis are all important factors are all indicative of self- employed basis.

Pension Entitlements:

There was no contribution of pension by the respondent.

Sick Pay/Time off in lieu:

The claimant was not entitled to sick pay or time off in lieu, which is indicative (though not necessarily so) of self-employed status.

Holiday Pay Sick Pay:

The Claimant did not receive holiday pay, payment during periods of inactivity due to sickness and no financial contribution was made to an occupational pension on his behalf. This is very different to an employment relationship where such benefits are common and the Claimant accepted his time in An Garda Síochana was very different in terms of such treatment. He accepted that he received no training at the commencement of his engagement with the Respondent. In the recent decision Glennon v EBS UD 80/2014 the EAT took express account of the fact that the Complainant did not receive holiday pay, sick pay, was not a member of the company pension scheme and were taxed as self-employed in concluding those individuals were not employees. The claimants in that case also did not have a desk, office or telephone line similar to the Claimant. In Maguire v Liberty Insurance Company ADJ 00000680 (with similar circumstances to the claimant’s case) the factors considered above in Glennon were found to be relevant to Mr Maguire’s case and were indicators that Mr Maguire was not an employee. This position is consistent with the approach of the High Court in Re Sunday Tribune Ltd LCR 19750 where the payment of an equivalent to holiday pay was one of the reasons for finding an employment relationship existed between the parties. Whilst the Claimant provided notice of holiday leave, he was not required to seek permission for such absence. Again this is very different to an employment relationship. In TEEU v Bord Gáis Éireann LCR 19750 the service engineers where not required to gain permission before they made themselves unavailable for work once notice was given and that relationship “was very different to that which prevails in a normal Employee/Employer relationship”.

Pension:

The claimant was not a member of a pension scheme.

Substitution:

The claimant was not entitled to engage another person to work on his behalf.

Conclusion:

Whether a worker is an employee or self-employed depends on a large number of factors. The Tribunal wishes to stress that the issue is not determined by adding up the number of factors pointing towards employment and comparing that result with the number pointing towards self-employment. It is the matter of the overall effect which is not necessarily the same as the sum total of all individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another. When the detailed facts have been established the right approach is to stand back, and look at the picture as a whole, to see if the overall effect is that of a person working in a self-employed capacity or a person working as an employee in somebody else's business. If the evidence is evenly balanced, the intention of the parties may then decide the issue. The intention of the parties clearly states that the working relationship between the parties was one of Contract for Service.

In summary, there is no single test. Each case must be considered in the light of its own particular facts.

The Tribunal must look at the totality of the relationship in reaching its decision on the employment status of the claimant. Standing back and looking at the working relationship as a whole, and mindful of the law and the legal principles set out in the cases referred to above, the Tribunal determines that, for the reasons set out above and, summarised hereunder, the working relationship between the Claimant and the Respondent was a Contract for Service:

The contractual documentation clearly stipulated that the relationship between the parties was a contract for service. While not determinative of the issue, the Tribunal must take note of this as representing the intention of the parties;
The claimant made no effort to clarify the status of his engagement/employment with the company, during his time with the company;
The respondent was not obliged to provide work for the claimant and the claimant was not obliged to accept any work offered. This did not change for the duration of the working relationship between the parties;
The claimant could, and did, refuse work on at least one occasion. Save for the most exceptional circumstances an employee cannot refuse work;
There was no entitlement to sick pay;
The claimant did not receive holiday pay;
The claimant was responsible for paying his own taxes;
The claimant was not part of any pension plan;
The claimant was not integrated into the respondent’s business.
Accordingly, the Tribunal does not have jurisdiction to hear the claim under the Unfair Dismissals Acts, 1977 to 2007.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)