Complainant

Respondent

Anonymised Parties

A Study Supervisor

A Board of Management

Representatives

Richard Grogan Richard Grogan & Associates

Mason Hayes & Curran Solicitors

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994

CA-00018309-001

28/03/2018

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00018309-002

28/03/2018

Complaint seeking adjudication by the Workplace Relations Commission under section 77 of the Employment Equality Act, 1998

CA-00018309-003

28/03/2018

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00018309-004

28/03/2018

Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994

CA-00018312-001

03/04/2018

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00018312-002

03/04/2018

Complaint seeking adjudication by the Workplace Relations Commission under section 77 of the Employment Equality Act, 1998

CA-00018312-003

03/04/2018

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00018312-004

03/04/2018

The complainant withdrew CA 18309- 002, CA18312- 001 and CA CA18309-003

The complainant is not an employee of the respondent. The ‘After School Study’ group, whilst it does benefit the respondent, is a privately run operation.  This facility allows students to remain on in the School premises and avail of supervised study time. There is a charge associated with the facility. The parents of each child signs the child or children up on a term by term basis and pays the fee in advance of the terms. Payment in the form of cheques are made out to the school. Cash payments are given directly to the complainant. He does submit those payments to the accounts department. They in turn pay the complainant and the other teachers. There is a direct correlation between the number of students in attendance and the amount paid to the complainant. The complainant has been running the After School Study group since 2003. He determines the hours, the numbers, the teachers required to supervise the children. He submits the rosters and time sheets to the account staff in the school. They in turn process payment based on the numbers of hours worked. The school pay any income tax due on the revenue collected from the study group.

The complainant does operate out of the school premises and does so without a licence or lease. The Board of Management are in the process of rectifying this oversight.

Neither the Board of Management or the Principal, who is not a member of the Board of Management have anything to do with the Study group. They do not have any control over the hours, teachers, numbers etc. In 2017 the Board of Management were made aware of a potential industrial relations issue, with regard to the study group. Newer members of Staff felt that they were being excluded from the opportunity to participate in the Study group. The Principal was asked to speak to the complainant about the issue. He did. He told the complainant that there was a potential Industrial relations issue looming and asked if he could do anything about it went rostering teachers for slots. The principal had no authority to direct the complainant to deal with the issue. The complainant now claims that as a result of having to roster more teachers, who happen to be younger, his hours have been reduced and that has had a knock-on effect on his income.

The respondent has no control over the teachers who participate in the Study group. Should an incident of a disciplinary nature arise, the respondent has no authority to deal with that.

The complainant’s legal representative took issue with the fact that he was not furnished with a copy of the respondent’s submission until this morning. He stated that he intended to post is grievance on Linkedin quoting the ADJ name, the name of the respondents and their solicitor together with the name of the adjudicator. Furthermore, he stated that he would make an issue of it before the Labour Court should the decision not be in his client’s favour.

The complainant states that the respondent named herein is the correct respondent. He was a teacher in the school, employed to teach and to run the after- school study group both under the direction of the respondent. He did arrange the numbers and the teachers for it but did so under their direction. At one stage he was approached by the principal and was asked to give more hours to certain teachers as there was the risk of industrial unrest. As a result of that, he lost some hours. He accepts that he did organise the study group and decided how many teachers would be needed depending on the number of children. He put up a sheet in the teacher’s room and asked for those who were interested in doing the study group to put their names on the sheet. He decided who got the hours and who did not up until 2018 when he was informed of potential industrial unrest. The complainant was paid by the school but accepts that the payment was directly linked to the number of students in attendance each terms. The respondent paid the tax. The complainant is in receipt of two p60 annually. One from the department and one from the respondent for his income from the after school study group. The complainant gave an undertaking to submit the p60 in relation to the after school study group  

The complainant’s representative submits that the manner in which he was given the respondent’s submissions amounted to an ambush. He was given, by me, as much time as he felt he needed ( an hour, a day, a month) to consider the submissions before commencing the hearing. Without looking at the respondent’s submissions, he opted to commence the hearing immediately.

It is settled law that the question of whether a contract is one of services or for services is dependent on the particular facts, rather than a straightforward application of a clear test. However, it is submitted that there is one critical question that the courts always turn to, namely, whether the individual is in business on his or her own account and has an opportunity to make a profit or gain by the manner in which the work is executed.   In Market Investigations v Minister for Social Security   Cooke J stated:

“the fundamental test to be applied is this; if the person has engaged himself to perform these services performing them as a person in business on his own account’

If the answer to that question is ‘yes’, then the contract is a contract for service. If the answer is ‘no’ then the contract is a contract of service.

In Autoclenz Limited v Belcher and Ors   the Court focused heavily on the test to establish whether a contract of service exists set out by McKenna J in Ready Mixed Concrete (SE) Limited v Minister of Pensions and National Insurance    where he stated;

“I must now consider what is meant by a contract of service. A contract of service exists if these three conditions are fulfilled.

(a)   The servant agrees that, in consideration of a wage or other remuneration, he  will provide his own work and skill in the performance of some service for his master.

(b)   He agrees, expressly or implicitly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master.

(c)    The other provisions of the contract are consistent with it being a contract of service”.

McKenna J further states:

Condition (c) is sometimes called an “enterprise test” and it focuses on the typical characteristics of an entrepreneur ‘that is a person who is in business on his own account’. Per Cooke J in Market Investigations:

“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 or how far he has an opportunity of profiting from sound management in the performance of his task”.

The Supreme Court in Autoclenz added to those propositions the following:-

i. That there must be an irreducible minimum of obligation on each side to create a contract of    service

ii. That a genuine right of substitution will negate an obligation to perform work personally    and is inconsistent with employee status; and

iii. If a contractual right, as for example the right to substitute exits, it does not matter that it is not used.

In the case of O’Coindealbhain v Mooney , Blayney J commented that the power of dismissal, while inherent in the master servant relationship, could also equally be found in a contract for services. The case related to a contract that Mr Delaney had entered into with the Department of Social Welfare to act as a branch manager of a labour exchange. In this case, Blayney J stated;

“The second test to be applied “is whether the respondent is in business on his own account.” In my opinion he is. I have no doubt that he is running a business, the nature of the business being to provide a particular service for the Minister. His profit is the amount by which his remuneration exceeds his expenses; The lower he can keep his expenses the greater the profit”.

In the seminal case of Henry Denny & Sons (Ireland) Limited v Minister for Social Welfare     Keane J upheld the adjudication of the social welfare appeals officer who was

“entirely correct in holding that he should not confine his consideration to what was contained in the written contract but should have regard to all the circumstances of {the demonstrator’s} employment”

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”.

In the case of Tierney v An Post [2000] , the Court concluded that even a modest capacity to regulate or influence earnings or profit was a vital factor in determining that the contract in question of the postmaster was a contract for services. The postmaster was stated to be under the control of the regional manager of An Post and the permission of the head postmaster was required before an assistant could be hired. The premises had to be kept to a certain standard and he was directed to provide certain facilities for the public to use. There was substantial control relating to the running of a post office and the Court found that Mr Tierney was bound by the rules contained in certain rulebooks subject to any amendments or additions. It was common case that the rules were contained in a loose leaf folder entitled ”Postmasters Manual”. The rules were divided into thirteen sections and comprised in all almost 100 pages. They covered every aspect of a sub- Postmaster’s work in detail. Notwithstanding this level of detailed control the Court found that he was employed on a contract for services. The Supreme Court stated:

“It is true that under art 2.25 the authority of the head postmaster is required for the employment of any person at a sub-office. It is not surprising to find that the respondent has, as it were, a right of veto over the appointment of persons who for any reason it might not be appropriate to employ in a post office: the fact remains that it is not normal to find in a contract of service that the employee can hire assistants to perform the work which he or she is employed to do.”

Counsel for the applicant relied on clause 2.5 of the Postmaster’s Manual which provides that:- “Postmasters are under the control and direction of the regional manager and are also subject to the immediate direction of their respective head postmaster, to whom in case of doubt arising on any point, reference should be made for instructions….”

As to the right of the respondent to control and direct his operations, it has frequently been emphasised in the authorities that, while the degree of control exercised by the other party is always a factor to be taken into account, it has long since ceased to be regarded as the only factor to be taken into account.

It is also relevant to consider how the parties view their own relationship and how they behave. This may extend to tax treatment. Accordingly, in Stringfellow Restaurants v Quashie   the individual’s remuneration came from customers of the restaurant, not from the putative employer, and she was treated (by the employer and by herself) as self-employed for tax purposes. The Court of Appeal (Elias LJ) made the point that:

The Employment Tribunal’s conclusion [that the claimant there was not an employee] 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. It is trite law that the parties cannot by agreement fix the status of their relationship: that is an objective matter to be determined by an assessment of all the relevant facts. But it is legitimate for a court to have regard to the way in which the parties have chosen to categorise the relationship, and in a case where the position is uncertain, it can be decisive, as Lord Denning recognised in Massey v Crown Life Insurance [1978] 2 All ER 576,578. To similar effect is the following observations of Lord Justice Ralph 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.”

“It follows in my judgment, that the fact the parties here intended that the dancer should have self employed status reinforces the conclusion of the employment judge in this case”

In McCotter v Quinn Insurance Ltd     the claimant was retained under a contract as a regional claims manager for the provision of insurance investigation and claims services and was a director and 100% shareholder of a company called AI limited. The respondent brought the attention of the employment appeals Tribunal to a particular clause in the contract to the effect that “the contractor will not be prevented or restricted by virtue of its relationship with QI from providing services to any other clients subject to no conflict-of-interest arising”. The EAT noted the following facts, which emerged during the hearing, some of which were supportive of his having been engaged as an independent contractor and others of the claimant being an employee- the claimant considered himself as an employee since 2004 and was responsible for paying his own taxes, which he did as a self-employed person. The claimant stated that it was more tax efficient to trade as a limited company rather than as a sole trader and requested that all payments be made to the company of which he was 100% owner. He was not paid sick pay, holidays or pay increases; he was not a member of any pension scheme: he submitted invoices and could not delegate his functions; and he was given business cards and an email address by the respondent. The tribunal, having obtained the details of the arrangement between the parties, applied to the High Court judgement of Minister for Agriculture and Food v Barry , where the tribunal summarised the appropriate tests as set out in the case. The tribunal considered that the correct approach was to stand back and look at the picture as a whole to see if the overall effect was that of a person in a self-employed capacity or a person working as an employee. If the evidence was evenly balanced, the intention of the parties may then decide the issue. It was considered that the working relationship was one of a contract for services and the claimant was working as an independent contractor.

It is submitted by the respondent’s that, at all times, the Complainant was in business on his own account. The respondent states that the complainant set up the after- school study group, organised the children, the costs and the timetable. The more children he had in attendance, the more money he made. Furthermore, He was not and could not be disciplined by the Respondent in relation to anything that happened during the study group. He was not granted a licence by the respondent but they accept that this was an oversight. The complainant collects the revenue from the group and submits it to the school office wherein it is processed and the complainant is paid the amount due, depending on the number of children, net of tax.   The rules governing the group were drafted by a Principal many years ago. The complainant states that he must act under the supervision/governance of the school. An example of that was when he was obliged to take on certain teachers after the school principal spoke to him about potential industrial unrest. The complainant’s representative stated that the complainant was in receipt of two P60’s annual. One from the Department of Education and one from the respondent in relation to the after- school study group. After making submission on the p60 and its content, it transpired that the complainant’s representative had not seen the p60. An undertaking was given to submit same. A letter was furnished to the WRC purporting to enclose the p60 however no such p60 was enclosed. It is on that basis that I am not taking account of that p60’s when deciding this case.

I find that the respondent had very little control over the complainant’s running of the after- school group. In any contract for service type relationship there is always going to be some element of control. That element of control usually exists to preserve the reputation or recognition of the entity for which the person is carrying out a service. No one factor determines the relationship between the parties. The complainant placed significant weight on the tax element of his case. I find that it would not be that unusual for an entity for whom someone is carrying out a service to pay the tax and submit a payment to the individual net of tax. The paying into the office of the moneys received is akin to invoicing the respondent. In all the circumstances I do not attached the same weight to this part of the claim as the complainant does.

One matter that stands out in favour of the respondent’s argument is the ‘profit‘ test. There is no doubt that the complainant income from the study group was dependant on the number of children in attendance and that he was completely in control of the number of children who could attend.

One test that is very relevant based on the specific facts of this case is the “dismissal” or disciplinary test. The risk of discipline or dismissal is something that nearly always exist in an employer/employee relationship. That element is missing from the complainant’s argument. I am satisfied that the complainant’s behaviour during the hours of the study group could not be the subject of the respondent’ disciplinary process. That, for me, is a very important factor based on an analysis of the facts of this matter.

Having considered the evidence of the parties, the submissions made and the relevant the case law, I find that the complainant provided an after school service to the children who attended the respondent school pursuant to a contract for services. On that basis I do not have jurisdiction to determine the matter.