Complainant

Respondent

Anonymised Parties

A Trainer (14)

A Training provider

Representatives

ReddyCharlton Solicitors

Tom Mallon B.L instructed byPhilip Lee, Solicitors

Act

Complaint 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-00004363-001

11/05/2016

The complainant is a medical practitioner in private practice who also undertakes work for the respondent.

In making this claim for a statement of his statutory terms of employment the complainant seeks to establish initially that he qualifies under the Act to be given that statement as ‘an employee’, which status is disputed by the respondent.

This is one of a number of complaints (approximately forty-eight) by colleagues of the complainant who say they are in the same or a similar position, and which will all be heard separate from this.

Decisions have already in similar cases and where appropriate here on the particular facts of the case I have followed my reasoning in that case (ADJ 19368) and later cases. This is one of two cases where the complainants were based in a specific region and where the terms of conditions differed from the generality of the previous thirteen cases heard as part of this cohort.

Since those decisions there has been an appeal to the Labour Court (Determination No TED 1918) involving an appeal against ADJ 16102 which found in favour of a member of the cohort and overturned a decision of another Adjudication Officer.

It issued after my earlier (and first) decision in ADJ 19368 and others and has a bearing on the complaint and it is considered in greater detail below.

The complainant commenced working with the respondent in April 2006 as an assistant programme director in its training programme. He is a highly qualified doctor with a postgraduate qualification in Clinical Education and, separately in Applied Dermatology .

He received a contract dated April 1^st 2006 which described his position as being ‘an independent contractor’ and stated that he ‘shall not be an employee’ of the respondent.

It contained details on the nature of services to be provided, the hours required (i.e. number of sessions), a restriction on subcontracting the work, and various other provisions, including provisions related to the termination of the contract. He has been in continuous employment since 2006.

He is paid a locum allowance.

He received correspondence dated August 6^th 2015 regarding taxation of the payments for his services.

This referred to the ‘Code of Practice for Determining Employment or Self-Employment of Individuals and stated that;

‘our tax advisors have advised us that, whilst there are some arguments in favour of self-employment, given the totality of facts in your case, your payments should be taxed thorugh the PAYE system to safeguard the [respondent] against income tax exposure’.

In the event, no action was taken on foot of this and the complainant’s tax status did not change and he is taxed by means of Withholding Tax.

He first sought an updated statement of his terms of employment on November 13^th and December 15^th, 2015 which was acknowledged on February 29^th, 2016 saying that the matter was being considered but nothing further was heard.

Further documentation was unearthed by means of a data request which showed that there was a proposal dated March 1^st, 2017 to give the complainant a Contract of Indefinite Duration. Again, nothing came of this either.

The complainant says that the employment relationship meets the criteria that define a contract of service.

He must undertake the work set out for him and may not make himself unavailable for work without sanction or repercussion, there is a continuing obligation on the respondent to make work available to him and there is a mutuality of obligation in the employment relationship.

This complainant is not on the respondent‘s payroll system (although all other complainants in separate cases outside this region are).  

The complainant has no discretion in relation to how he conducts the respondent‘s business, including when and how to perform any particular assignment. He is subject to fixed hours of work and may not determine when he performs the service provided.

He may not delegate or outsource his functions and he is fully integrated into the respondent’s business for that part of his work, notably in respect of where he carries out his work, although the timing of when he delivers the work may vary depending on the availability of premises.

The complainant makes returns in respect of his self-employment arising from his private practice but his income from the respondent is fully taxed at source.

He does not supply any equipment or materials; all of which are supplied by the respondent.

In respect of the respondent submission regarding the application of revised time limits the complainant relies on the decision in ADJ-00009820 in which it was held that the failure to provide a statement of the terms of employment is a subsisting contravention and where the statutory statement is not provided there is a continuing breach.

The complainant says he meets the criteria to be classified as being on a contract of service and therefore entitled to a statutory statement of his Terms of Employment.

The complainant’s Director gave evidence on his behalf. She says that she is paid as an employee, i.e. on a contract of service basis but does not understand why the complainant is not

Preliminary Issue; Time limits

The respondent replies initially that the complaints fall outside the time limits for making a complaint.

The Workplace Relations Act 2015 amended the Terms of Employment (Information) Act, 1994 in a way that is significant for this complaint.

Under the original provisions of the Act a complainant could make a complaint at any time following the alleged breach and up to six months after the termination of their employment.

However, section 41 of the Act of 2015 provides at subsection (6) that an Adjudication Officer shall not entertain a complaint if it has been presented after the expiry of six months beginning on the date of contravention to which the complaint relates.

Therefore, the complaint has not been made within those statutory time limits.

The respondent also says that the contract document and his general awareness of his conditions given to the complainant when he commenced in April 2006 complies in almost all respects with the requirements of the Terms of Employment (Information) Act.

This renders it unnecessary to make a decision on the complainant’s employment status if there has been de facto compliance with its requirements.

Without prejudice to that submission, the respondent says that the complainant does not have a contract of service and is engaged on a contract for services.

Specifically, the letter proposing a change in the complainant’s tax status is of no significance in determining the complainant’s employment status. That letter makes it clear that it is a precautionary measure to ‘safeguard the [respondent] against income tax exposure’.

Similarly, the correspondence in March 2017 proposing a permanent appointment did not involve employee status.

The respondent submits (through cross examination of the complainant) that the work carried out for the respondent is an extension of the work of his private practice. The receipt of the locum allowance fundamentally alters the nature of the complainant’s engagement, as it establishes a relationship beyond that between the respondent and the complainant and which involves the complainant’s business.

The respondent made submissions on the various legal tests to be applied in determining employment status, noting that, as held in Minister for Agriculture and Food v Barry & others [2009] 1 IR 215 no single test is definitive, and the various tests are potential aids to identifying the nature of the working relationship; a view endorsed in the Supreme Court.

This approach is underscored by the emergence of the ‘multi-factorial’ test applied in O’Coindealbhain v Inspector of Taxes v Mooney [1990] 1 IR 442 and other cases.

The respondent says that the complainant is not an employee. The role undertaken with the respondent is no more than an extension of his role as a private practitioner and self-employed person.

Therefore, the complainant is not an employee of the respondent when performing the functions giving rise to the complaint. It is notable that as a GP in private practice and in receipt of significant income from the respondent, no question of his being an employee arises.

The respondent submits that the manner in which the information required by Section 3 of the Terms of Employment (Information) Act 1994 should be supplied is not specified in that Act, nor is it required in any specific format.

The respondent says that there has, in any event been substantial compliance with the Act and that the complainant is aware of his duties and what is expected of him in that regard.

Turning specifically to the decision of the Labour Court in Determination No TED 1918 the respondent says that it has a direct bearing on the complaint and the approach taken in that case must be followed by an Adjudication Officer.

The respondent also argued that the Court commented approvingly on its submission that the complaint was a misuse of process, as the motivation for the complaint arose from a wish on the part of the complainant (in that case) to have her status clarified for the purpose of a separate dispute, and this is the matter referred to in the first sentence of the extract from the Court’s decision which follows.

The Court said in its conclusion;

It is not the function of the Court to interfere in a dispute which is not before it. Rather, the role of the Court in a complaint under the Acts is to determine if the provision of the Acts have been complied with.

Having examined the Contract for Service documents supplied to the Court, the Court notes that the details of her contractual relationship with the respondent, outline in writing the terms and conditions of her engagement and concurs with Counsel’s view that they substantially comply with the provisions of Section 3 of the Acts.

The Court notes that the Complainant is anxious to receive written details of the changes which have taken place in her terms of engagement and seeks to have updated written details supplied to her. Mr Mallon gave a commitment to the Court that such details will be supplied in writing to the complainant with immediate effect.

In its determination it stated;

The Court finds that the respondent was not in breach of the Acts, the appeal succeeds, and the Adjudication Officer’s decision is overturned.

There are two key findings in the decision; one is that where there has been substantial compliance the de minimis rule applies, and secondly that the case was a misuse of process.

The respondent says that the complaint should be dismissed.

Preliminary Issue; Time limits.

The decision in ADJ-00009820 sets out an interpretation of the legal position in relation specifically to the Terms of Employment (Information) Act 1994. It has not been appealed to the Labour Court and has been followed by this Adjudicator and others as a correct statement of the law.

The following appears in that Decision.

Section 3(1) of the Terms of Employment (Information) Act is clear that an employer shall provide the employee with a statement within two months of the start of the employment relationship.

Where this is not provided, the employee has recourse to the Workplace Relations Commission where section 7(2) enables the adjudication officer to take steps to amend or add to a statement, to require a statement be provided or to award financial redress.

The multiplicity of interventions allowed by section 7(2) shows that the contravention of section 3 is a subsisting contravention that endures so long after the initial two-month period the employee remains an employee not in possession of a statement. If the respondent’s submission was correct, the Oireachtas would have clearly stipulated that the interventions permitted by section 7(2) may only be made for a contravention arising on a single day after the end of the initial two-month period of employment.

 If the respondent’s submission is correct, section 7(1) is superfluous.

This provision prevents an adjudication officer from hearing a complaint where the employer has complied with a previous direction or determination. This section would not be necessary if there could only be one contravention of section 3 arising on a single day. Instead, section 7(1) presents the contravention as a subsisting breach and prevents an employee from submitting a fresh complaint where the employer has complied with the outcome of a previous complaint.

 While the Terms of Employment (Information) Act, as amended by the Workplace Relations Act, is clear, in my view, that a breach of section 3 is a subsisting breach, this conclusion is fortified by the application of EU law.

First, the Terms of Employment (Information) Act, as amended, does not provide that the only date of contravention is the day after the end of the initial two-month period.

 Applying a conforming interpretation to section 3 does not, therefore, require an impermissible contra legem interpretation of the section.

Article 2 of the Directive requires that a statement be provided by the employer to the employee and does not limit this requirement to any time period within the employment relationship. Reading section 3(1) of the Terms of Employment (Information) Act in conformity with Article 2 of the Directive leads to the conclusion that the obligation to provide the statement subsists throughout the employment relationship.

Article 8 of the Directive requires that employees have recourse where there is a breach and this requires section 41 of the Workplace Relations Act to be read as referring to the failure to provide a statement as a subsisting breach.

 For these reasons, the Terms of Employment (Information) Act, as amended by the Workplace Relations Act, provides that a contravention of section 3 occurs where, after the expiry of the initial two-month period of employment, the employee has not been provided with a statement.

The contravention of section 3 is a subsisting contravention.

If no statement is provided at any stage during the employment relationship and this comes to an end, the employee may refer a complaint within six months of the last day of contravention, i.e. the last day of their employment.

Accordingly, I adopt and apply this to the current complaint and I find that an alleged breach of this Act is a subsisting and continuing breach and the complaint is within jurisdiction from the point of view of time limits.

Turning to the substantive matter, and initially the submission by the respondent that, as the April 2006 contract document given to the complainant largely complies with the requirements of the Act it is unnecessary to make a finding in relation to the employment status for the purposes of the complaint.

It relies on the Labour Court Determination referred to above in support of this case HSE v O’Kelly (TED 1918.)

Adjudication Officers may only make a decision on a complaint that is validly before them and within their jurisdiction.

If a person does not have legal status to bring a complaint in the first place, then by definition it is not possible to make a decision (that is to say a formal ‘Decision’ under the Workplace Relations Act, or other legislation) that there has been compliance with its provisions, which, after all derives only from the legal standing of a complainant to make that complaint.

I have carefully considered the Labour Court decision.

That was an appeal against GP Trainer v A Health Provider ADJ-00016102 in which the Adjudication Officer had made three key findings;

1. That the complainant worked under a contract of service,
2. That she was entitled to a statement of her Terms of Employment under the Act
3. And that she should be paid compensation of €4,000 for the failure to do so (and that she should be given the statutory statement of her terms of employment.)

As will be seen above, the Labour Court overturned the award of compensation on being given undertakings by Counsel for the respondent that any deficits in the statement would be made good.

In my earlier decisions, where the submission on this point was also made, it seemed to have been done so on the basis that, if there was some sort of approximate, or substantial (as the respondent submitted) compliance with the intentions of the Terms of Employment (Information) Act then an issue did not really arise under that Act, and especially the issue as to whether it was necessary to adjudicate on the employment status of the complainant as an employee.

I rejected that argument (on the basis of the point made above that an Adjudicator must still determine whether a complaint is within jurisdiction at all) and found that it did remain necessary to make a decision on the nature of the contract.

I also stated that if, having decided that issue, and activated a complainant’s right to make a complaint under the Act, the extent of any breach of the Act then becomes an issue again for the purposes of assessing compensation.

However, the two issues of an employee’s legal right to the statement and then the entitlement to compensation for any breach are separate matters which are considered below.

This is precisely what the Labour Court concluded in TED 1918 as will be seen in the extract above which is reproduced for convenience.

Rather, the role of the Court in a complaint under the Acts is to determine if the provision of the Acts have been complied with.

Underlining has been added for emphasis as this is the nub of the matter; it must be a complaint under the Act.

As the provisions of any Act are only activated in respect of a complainant who has locus standi, in this case one who is ‘an employee’ the finding that the respondent was not in breach of the Acts can only be interpreted as a reference to the degree of non-compliance found by the Court in its assessment of the compensation awarded by the Adjudication Officer.

It is not an endorsement of the approximate or accidental compliance concept suggested by the respondent as, in the Courts words there must be ‘a complaint under the Acts’.

The Court determined on appeal that no award was due.

This is a matter which falls to be determined on the facts of each case, as the degree of compliance or non-compliance falls to be assessed initially at adjudication and, on appeal by the Labour Court.

The Act provides at Section 7 (2) d) that an Adjudicator may;

‘order the employer to pay to the employee compensation of such amount (if any) as is just and equitable having regard to all the circumstances, but not exceeding 4 weeks remuneration in respect of the employee's employment calculated in accordance with regulations under section 17 of the Unfair Dismissals Act, 1977’.

This was considered in detail by the Labour Court in Irish Water and Patrick Hall TED 161.

This was a case when the only issue before the court was the claim for compensation for a failure to communicate changes in the statement of Terms and Conditions of Employment.

The Rights Commissioner/Adjudication Officer had found that there had been a ‘technical breach’ of the Act and directed the employer to furnish the complainant with a revised statement containing the amended particulars.

By the time the matter came before the Labour Court the revised document had been issued. The complainant had signed and returned the document without comment, despite being invited to make contact if he needed to discuss it or seek clarification on the revised terms.

The Court concluded that the complaints were ‘wholly devoid of any substantive merit’ and expressed strong criticism of the waste of public resources (and others) in the hearing which it described as;

 ‘grossly disproportionate to any value that could have accrued to the complainant if the technical infringements of which he complains had not occurred’.

The Court concluded that an award of compensation;

 ‘can only arise where the complaints made are well founded. Moreover, it should be emphasised that compensation, if any, must be within the bounds of what is fair and equitable having regard to the circumstances’.

In the case of Beechfield Private Homecare and Ms Megan Hays Kelly (TED 1919) issued some three weeks after Hall (TED 1918) the Labour Court assessed as appropriate ‘the maximum [compensation] permitted under the Act’; four weeks.

As noted above, the level of compensation that will represent what is ‘just and equitable having regard to all the circumstances’ will vary according to those circumstances, and this is illustrated by the decisions of the Labour Court referred to above and many others.

Arising from the decision in HSE v O’Kelly the respondent also sought to construe the decision as support for its contention that the motivation of the complainant in bringing a complaint is relevant and that the Court’s reference to the separate dispute supported this.

The Labour Court provides no such support; the Court merely quotes the submission of Counsel without giving any indication of its own view on that point (that the motivation of a complainant is a relevant factor in making a complaint under employment rights statutes).

The Court is merely stating that the dispute in question is not before it.

There is no legal basis, in general, for examining the motivation of a complainant submitting a complaint to the WRC which must be dealt with on its merits.

Accordingly, I find there is nothing in the decision of the Labour Court in HSE v O’Kelly TED 1918 to alter the approach taken in earlier decisions to the central principle in the complaint, although I do take account of it, and the submissions of the parties in my consideration of any award of compensation.

In this case the document on which the respondent relied was a letter of April 1^st, 2006 which was the original contract .

It contained some information on various aspects of the employment as outlined above in the complainant’s submission and these could be said to mirror some of the requirements of the Act.

However, they do not deflect from the requirement to determine the complainant’s eligibility to receive the statutory statement.

The Contractual Status

As the respondent noted there are a number of tests to determine whether a person is engaged on a contract of employment (‘of service’) or alternatively is what is generally referred to as ‘a contractor’ (engaged on ‘a contract for services’).

Some are decisive in either direction, some are more indicative. As noted in the respondent’s submission there is no single pass/fail type test which will determine a complainant’s status.

In the leading UK case of Market Investigations Ltd v Minister of Social Security [1969] 2 QB 173 a number of tests were formulated.

1)      Does the person performing the services supply his own equipment?

2)      Can he hire his own helpers?

3)      Does he carry any financial risks and to what extent?

4)      What opportunity does he have to make a profit?

5)      To what extent does he carry the responsibility for investment/management.

The Revenue Commissioners of Ireland have outlined similar tests in their Code of Practice for Determining Employment or Self Employment. These relate to whether the employee;

1)      Is under the control of another person who directs as to how, when and here the work is to be carried out,

2)      Supplies labour only,

3)      Received a fixed wage

4)      Cannot subcontract the work

5)      Does not supply materials for the job

6)      Does not provide equipment other than small tools of the trade

7)      Is not exposed to personal financial risk in carrying out the work

8)      Works set hours or a given number of hours

While determining the status of a contract of service has given rise to much legal difficulty, and especially more recently in the context of the so called ‘gig economy’ it will be obvious from the Revenue Commissioner indicators that the complainant comfortably meets each of the criteria required for a contract of service.

Each of the above indicators can be answered in the affirmative in respect of the complainant.

He received a fixed payment based on the contracted shifts and nothing he could do would alter his earnings. The respondent supplied all the necessary materials.

The complainant in this case presents regularly at the place of work, in circumstances generally controlled by the respondent although he has some flexibility in this, in rather the way a university lecturer might.

The position in respect of this complainant is anomalous in a number of respects in that colleagues performing the exact same work in other regions (and it seems in his own region) are on the respondent’s payroll, subject to PAYE and other statutory deductions, and in some case make pension contributions.

Those colleagues also enjoy annual and sick leave benefits and in one case maternity leave.

While these entitlements formed an important part of the complainant’s submissions underpinning the case regarding the other complainants the respondent acknowledged in respect of those cases that the payroll and tax status etc were not determinative, and I agree.

I find that this complainant’s position is in the first place a sort of regional anomaly but in any event it does not place the complainant outside the range of tests set out above, notably in that he receives a fixed and regular income and meets four square the tests set out by the Revenue Commissioners.

In respect of the integration test it is clear that the complainant is fully integrated into the respondent’s activity; indeed he is indispensable to, and central in the delivery of all of its core activities of teaching, mentoring, supervision and much of the administration.

Conversely, the indicators in the Market Investigations case which go to define a contract for services are all conspicuously inapplicable.

While there is a steering committee, and external curriculum oversight bodies; none of this alters the essential nature of the complainant’s contract of employment) and again, analogy with third level institutions is relevant here.

A person may have to exercise some initiative in the actual delivery of his duties and it is easy to think of many examples of this (the ‘captain of the ship principle’), but this will not of itself undermine a complainant’s claim in respect that he is employed on a contract of service if he is not ‘in business on his own account’.

The respondent sought to connect the complainant’s other and undisputed, self-employed work activities to his role with the respondent. In particular it was argued that the payment of a ‘locum allowance’ marks out the contractual relationship of the complainant in this role as different from a normal employment relationship where such payments do not arise and connects the complainant’s role in this context to that of the private practice.

This argument has no merit. The legal tests are those set out above and it is by reference to these that the employment contract must be assessed, whatever the remuneration arrangements might be, unless of course a case can be made out that those arrangements fall within the Market Investigations criteria set out above.

In this case they do not; indeed none apply to the complainant as noted above.

The point was also made by the respondent that a GP in his general practice can make no claim on the Respondent to be classified as an employee even though there are many similar benefits to aspects of their commercial relationship. This may be true but no such claim was being made and it is not necessary to distinguish the position of the GP in private practice with that of the same person in this complaint.

I do not accept therefore that the payment of a locum allowance, whatever the recipient chooses to do with it, affects or alters the substance of the employment relationship between an employee and an employer which must be considered by reference to the tests set out above.

I do not accept therefore that the payment of a locum allowance, whatever the recipient chooses to do with it, affects or alters the substance of the employment relationship between an employee and an employer which must be considered by reference to the tests set out above.

In Hall (Inspector of Taxes v Lorimer [1994] IRLR 171 the court endorsed an explanation approved by the lower court (whose judgement was on appeal to it);

‘In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person’s work activity. This is not a mechanical exercise of running through items on a checklist to see whether they are present in, or absent from a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details.’

Applying this approach, I have no hesitation in concluding that the complainant met the criteria for the former; a contract of service and falls within the jurisdiction of the Terms of Employment (Information) Act 1994.

Accordingly, I uphold the complaint and find that the complainant works under a contract of service and is entitled to be given a statement of his terms of employment that complies with the requirements of the Terms of Employment (Information) Act 1994.

In respect of the appropriate sanction I have further reviewed the position having regard to the submissions of the parties and the Labour Court decision referred to above.

In particular, there must be some room for a distinction to be drawn between the position of an employer on whom a clear obligation falls to provide a statutory statement, or notification of changes to it, and who has failed to do so, and the current respondent whose breach of the Act arises for the first time as a consequence of the finding in this case.

Therefore, in this case I do not consider there are ‘just and equitable’ grounds to make an award of compensation retrospectively and therefore I do not do so arising from my findings.

I find that complaint CA-00004363-001 is well founded on the basis of my preliminary findings that the complaint is properly made within the time limits specified and that the complainant’s employment status is that of a contract of service.

On the basis of Section 7(2) (c) of the Terms of Employment (Information) Act, 1994 I direct that the respondent should provide the complainant with a statement of terms and conditions of employment containing the particulars specified in Section 3(1) of the Act.

For the reason set out above I make no award of compensation.

Employment status, Terms of Employment information.