ADJUDICATION OFFICER DECISION.

Adjudication Reference: ADJ-00014654

Parties:

	Complainant	Respondent
Anonymised Parties	A driver	A fresh food producer

Representatives

Billy Wall, Operative Plasterers & Allied Trades Society of Ireland

Jennifer O’Connell BL instructed by Barbara Ceillier M. & B. Ceillier Solicitors.

Complaint(s):

Act	Complaint/Dispute Reference No.	Date of Receipt
Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997	CA-00019187-001	15/05/2018
Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997	CA-00019187-002	15/05/2018
Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994	CA-00019187-003	15/05/2018

Date of Adjudication Hearing: 26/06/2019

Workplace Relations Commission Adjudication Officer: Jim Dolan

Procedure:

In accordance with Section 41 of the Workplace Relations Act, 2015 following the referral of the complaint to me by the Director General, I inquired into the complaint(s) and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint(s).

Background:

The Complainant is a truck driver and commenced employment with the Respondent on 13th May 2008, he remained in the Respondent’s employment until 8th January 2018.

This complaint was received by the Workplace Relations Commission on 15th May 2018.

Summary of Complainant’s Case:

Preliminary Issue.

1. Precarious forms of employment have increased in years being evident in many sectors in the form of self-employment or false self-employment or as the media refers to it Bogus Self-Employment. The Government in January 2018 released a report titled “The use of intermediary-type structures and self-employment arrangements: Implications for Social Insurance and Tax Revenues January 2018”. The purpose of this report is to identify and estimate any potential loss of tax and Pay Related Social Insurance (PRSI) resulting from intermediate-type structures and certain self-employment arrangements. Where the use of self-employment is discovered, the report shows in monetary terms the loss to the state.

2. To establish as to whether the true employment relationship is that of a “contract of service” or a “contract for services” one must look at the facts of the day to day relationship that existed during the employment. The category a worker falls into depends on what they actually do, the way they do it and the terms and conditions under which they are engaged, whether written or verbal or implied. It is not simply a matter of a principal contractor or a subcontractor calling the engagement 'employment' or 'self-employment' to suit themselves.

3. The Superior Courts have identified a number of tests that can be used to identify the true nature of the employment. The in-business test, the control test, the integration test are just some titles put on the tests that can go to distinguish the employment relationship however no one test can be applied as to determine the relationship as the relationship needs to be looked at as a whole.

4. Market Investigations Ltd v Minister for Social Security [1969] 2 QB 173 applied the in-business test importing it from United States v Silke (1946) 331 US 704. The case involved market researchers whereby it was argued by the company that the workers could not be considered as employees due to the lack of direct control on assigned tasks and that they were not integrated into the business.

Cooke J rejected the suggestion that this was the fundamental characteristic of an employee:

“[T]he 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? If the answer to that question is yes, then the contract is a contract for services. If the answer is no, then the contract is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. 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 the 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 far he has an opportunity of profiting from sound management in the performance of his task." There have been a number of Superior Court cases which have given direction which goes to establish a workers employment status.”

Case Law.

5. The case law in Ireland surrounding the identification of a contract of employment has dealt with the actual employment relationship of each case separately as each employment differs. There are number of tests which have been established by the courts which go to prove employment status.

6. The control test, the integration test, the in-business test have all been established as ways of identifying employment status, however as previously stated, no one test can be used to outline or give effect to the employment relationship. It is a matter of reviewing the employment relationship or the day to day relationship that existed and consider all the facts before deciding. This can also include any written documents presented as contracts of employment or otherwise.

7. The earliest test being applied in employment cases was introduced through a revenue case Yewens V Noakes (1880) 6 QBD 520 where by Bramwell LJ noted that the employee was “subject to the command of the master as to the way in which he shall do his work”. This test was further considered in Cassidy V Ministry for Health [1951] 2 KB 343 where the Court of Appeal in England noted, that the employer could direct his employees in ‘how to work’.

8. The control test remained a major indicator as to the employment status of a worker and still does today. In Roche V P Kelly & Co [1969] IR 100 the test was developed further in that the employee must obey reasonable orders Walsh J stated;

[w]hile many different ingredients may be present in the relationship of master and servant, it is undoubtedly true that the principal one and almost invariably the determining one, is the fact of the master’s right to direct the servant not merely as to what is to be done but as to how it is to be done. The fact that the master does no exercise that right, as distinct from possessing it, is of no weight if he has the right.

9. As previously mentioned, the United States Supreme Court in its decision in United States v Silke (1946) 331 US 704, considered the employment status of lorry drivers. They introduced a second test, the in-business test. Itconcerned itself in what risks applied to the employment. The issues of assets if any owned by the workers, if the workers where limited in their earning capacity, whether or not they had the chance to profit or run a risk of financial loss, could they limit their costs and was it possible to delegate their work to others. It was the opinion of the court that the lorry drivers who made arrangements for the collection of deliveries amongst themselves, who could and did hire their own helpers, who decided as to whether or not they would make a delivery of coal, they never bound by an agreement to haul coal just for Silk, they were free to do as they pleased when they pleased, they were paid on the basis of weight being delivered. These were found to be small business owners and not workers for the purposes for the Social Security Act.

10. The claimant would further rely on Ready Mixed Concrete (South East) Ltd. v. Minister of Pensions and National Insurance [1968] 2 QB 497wherein it was alleged, that lorry drivers where, for the purposes of pensions and social insurances to be considered as employees as opposed to independent contractors. The claimants were the owners of the vehicles, they were free in their decision as to who carried out the upkeep on their vehicles and regulated the costs of such. The drivers were through operation of the contract, obliged to provide a driver of their vehicle when they could not attend themselves for any reason and they did so at such times. The drivers had a chance to profit and a risk of loss. During times of the year when a driver was scheduled to take holidays, it was previously arranged by all the drivers that a replacement driver would cover the work of the driver on holiday. The replacement driver was paid by the drivers themselves and not Ready Mix. As in Silk they were considered “small business men” the terms laid out in the contract where the actual reality of the employment relationship as in Silk.

11. The issue of written terms expressed in contracts was also considered by the UK Supreme Court in Autoclenz Ltd v Belcher [2012] IRLR 820 wherein car valeters claimed to be employees of the company as opposed to independent contractors as expressed in the contract. The claimants had no control over how their work was carried out, had no economic interest in organising their work and they could not source material to carry out their work as to a profit. The actual employment relationship was studied and it was the opinion of the Employment Tribunal deemed the workers employees. The EAT overturned that decision and the Court of Appeal and Supreme Court found in favour of the workers that they were employees because of the actual employment relationship that existed within the employment and not the expressed terms devised by the employer only.

12. In Ireland the leading authority is Henry Denny & Sons (Ireland) Ltd v Minister for Social Welfare [1998] 1 IR 34The case involved a supermarket demonstrator who worked under a yearly contract. The Company argued that there was no employee or full-time positions available and that Mrs. Mahon was employed on the basis of a “contract for services”. The employment was governed by written terms, she was to be paid by the day and if she was unable to attend at work she could substitute that work to another worker who was approved by the company to do her work. The company provided the necessary uniforms and equipment to enable her carry out her duties as prescribed within her contract.

Keane J, in a judgment with which Hamilton CJ and Murphy J agreed, said (at 50):

“… 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 employment 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, in 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.”

Having set out the principals applying in the case the Court then looked at the circumstances in which Mrs. Mahon worked. The employment relationship was studied and the Court said that she;

"was provided by the appellant with the clothing and equipment necessary for the demonstration and made no contribution, financial or otherwise, of her own and that the remuneration she earned was solely dependent on her providing the demonstrations at the times and in the places nominated by the appellant. The amount of money she earned was determined exclusively by the extent to which her services were availed of by the appellant: she was not in a position by better management and employment of resources to ensure for herself a higher profit from her activities. She did not as a matter of routine engage other people to assist her in the work: where she was unable to do work herself, she had to arrange for it to be done by someone else but the person in question had to be approved by the appellant.”

13. In Ó Coindealbháin v Mooney [1990] 1 IR 422 the claimant, a manager in an employment office claimed to be an employee of the Department. He had provided the offices for the employment center as well as the staff required to carry out its administrative function. He was paid according to the number of claimants registered with him and was allowed to hire staff. Blayney J in the High Court was satisfied that the conditions of self-employment were present placing particular emphasis on the fact, that:

“his profit is the amount by which his remuneration exceeds his expenses; the lower he can keep his expenses the greater his profit.”

14. The above case shows clearly that the complainant was in business on his own account. He could profit from reducing his costs. How he reduced his costs was a matter for himself to decide. He was in a position to hire his own staff. The premises from where he worked were rented by him. All the elements of self-employment were present in the above case which is counter to the instant case.

Mutuality of obligation.

15. Another factor or test to consider when establishing the employment status of workers is whether or not mutual obligations exists. A contract of Employment will only be recognised when the party offering the work commits to provide the work when it becomes available and the worker further agrees to commit to undertake the work when it is offered, the so-called irreducible minimum of “mutuality of obligation”. The principle is traced to Nethermere (St Neots) Ltd v Gardiner [1984] ICR 612, where two clothing workers argued that a contract of employment existed. On appeal to the Court of Appeal the Court accepted the argument that discretion to decline to work, or discretion on the part of the employer not to provide work, was inconsistent with the existence of a contract of employment.

16. Mutual Obligations existed in the instant case wherein, an obligation upon the respondent to offer work and a corresponding obligation upon the claimant to carry out that work was necessary to perform the contract. The claimant carried out the work each day as required by the respondent personally. It was never a case of that the claimant could refuse work or the respondent would deny him the work.

17. The claimant would deliver the respondents goods to the respondents existing customers. The respondent’s customers would sign the respondent’s delivery books in acceptance of those goods, and after the claimant’s shift was complete, he returned to the respondent’s premises where he informed the respondent of any differences in orders or deliveries made during his round by the respondent’s customers.

18. The respondent, running a business on their own account, hiring workers to deliver their products, to ensure that their products are delivered to their customers requires an obligation to exist between them and a worker and a worker and them in order for the respondent to retain their business relationship with their customers.

19. What labels the respondent’s attaches to the employment or terms expressed in a contract bears no weight as to the actual employment relationship that existed on a day to day basis. There were obligations on both parties to this contract. The obligation upon the respondent to give to the claimant their products for delivery every day, in order to fulfill their obligations to their customers and the corresponding obligation upon the claimant to perform the work required and necessitated by the respondent to deliver the respondents products to their customers.

20. The respondent has for years advertised and prided itself on the fact that, their produce is fresh every day so to ensure fresh product for their customers. In order for the respondent to stand over that promise, they must have workers deliver their products to their customers each day without fail. This necessitates an obligation upon them to ensure that workers are obligated to provide their labour as the respondent is obligated to provide the work to ensure their promise to those who buy their products.

21. The respondent wrote to the claimant on the 13th May 2008 offering work on the understanding of the terms of the contract. On the 16th February 2011 the respondent again wrote to the claimant on the basis that the respondent “continues to offer you the business of providing a distribution service” the claimant accepted the work. The line referred, supports the ongoing offer of work to the claimant and by accepting that offer of work, the claimant continued his obligation to perform that work. The contract itself creates the irreducible minimum of mutuality of obligation.

22. Finally, we would refer to Firthglow Ltd (trading as Protectacoat) v Szilagyi [2009] IRLR 365 where a construction worker was engaged by the respondent to carry out work on buildings clients of Protectacoat. The company arranged for a partnership agreement with the claimant. The Court found in favour of the Claimant in that a contract of service was the true employment relationship. Smith LJ put the matter in context when she said:

“Protectacoat wanted the ha'penny of treating their installers as employees when it came to attendance and control and also wanted the bun of not having to give them the rights they would enjoy as employees ...”

23. It would appear that in the instant case the above quote was the intended position of the respondent.

The Contract.

24. The respondent on two occasions, the 13th May 2008 and 16th February 2011 presented a contract for signing by the claimant titled “TERMS OF SUPPLY TO DISTRIBUTORS” The document is intended to set out the relationship between the parties and it was not for negotiation.

25. Section one sets out the principal, section 2 defines distributors, section 3 is titled “Definitions” and refers to a number of terms throughout the contract. Section 4 refers that the Claimant is entitled to rights as defined within clause 3. Rights are defined at 3.6 as meaning “the right only to carry on the business in the defined area”.

26. Clause 5 refers to the rights of the Principal in that the principal shall operate discretion as to accepting orders from the distributor, that the principal may sell directly to customers and credit outlets, may appoint other distributors in defined areas, may vary the price of products, holds complete control over products and payments to the Claimant and may add or vary obligations to the Claimant from time to time.

27. Clause 6 sets out the role of the principal. The principal has absolute discretion in all matters relating to the products supplied to the distributors, whether support maybe offered to a Claimant or not. The principal has absolute discretion to select a Claimant for specific support and incentives to increase the sales and provision of services of products. The term “incentives” is undefined within the contract. 6.2 provides that the principal provides the goods on the basis of what is order through the distributor, 6.3 refers to credit terms of the principal, 6.4 refers that the principal will, upon appointment, decorate the distributors vehicle and is also entitled to change the livery from time to time, 6.5 sets out that the principal will supply trolleys for the performance of the distributors duties and will bear the cost of any loss or damage of same.

28. Clause 7 refers to distributor’s obligations.

§ 7.1 restricts the claimants’ power to sell products in another distributors defined geographical area,

§ 7.2 restricts the Claimant in carrying on business with other product providers of similar products,

§ 7.3 Requires the Claimant to keep clean the vehicle for supply of goods including boards trolleys and keep the vehicle in a road worthy condition,

§ 7.4 sets down conditions upon termination of contract in regard to the principal’s livery on the vehicle,

§ 7.5 seeks that the Claimant acknowledges and accepts that he is not an employee, that all documents clearly indicate that the products & services are being sold by the Claimant as a self-employed person of the principal however it requires the Claimant uses the delivery dockets of the principal,

§ 7.6 requires the Claimant to act in business on its own account with the principal, customers and credit outlets and is also responsible for any outlay in terms of insurance contributions and tax,

§ 7.7 refers that the Claimant may not pledge the credit of the principal in any way.

§ 7.8 requires the Claimant to conduct business in a business like fashion as to maximize the sale of products of the principal and to participate in all promotions regarding products

§ 7.9 require the Claimant and any agent or employee to comply with the principal’s safety handbook at all times.

§ 7.10 requires the Claimant to maintain adequate insurances in respect of employees or agent in their employment,

§ 7.11 & 7.12 requires the Claimant to indemnify the principal in totality against any claims arising from the contract,

§ 7.13 sets out as to how the claimant is to carry out duties assigned to him, it refers to placing orders, to collect or receive orders, to monitor and ensure delivery of the principals products to credit outlets, to display the principals products in credit outlets, to return delivery dockets verifying delivery to the principal, to accept any change in the operation of confirmation of delivery by a credit outlet, sets out how queries on product deliveries are or delivery quantities are processed.

§ 7.14 requires the claimant to make full disclosures of all material facts likely to influence the principal,

§ 7.15 restricts the claimant to appointing sub-distributors without prior written consent of the principal,

§ 7.16 deals with assignment and sets out the principals’ terms in that the claimant is not to assign, mortgage, or charge or otherwise deal with or dispose of any of its sub-contract without the principal’s consent. it further refers as to the operation of assignment upon certain circumstances and upon conditions laid down by the principal.

§ 7.17 sets out that the risk involved in the distribution of the goods pass to the claimant upon delivery or collection.

§ 7.18 refers that the claimant is responsible for the difference in products delivered to credit outlets and goods paid for by credit outlets and returns by customers to the principal.

§ 7.19 places a responsibility upon the claimant to accept these conditions upon receipt of the products,

§ 7.20 requires the claimant to pay promptly all sums due to the principal within the credit terms at clause 6.3.

29. Clause 8 sets out that the principal is free of liability for any loss or damage suffered by the claimant on the delivery or fulfilment of orders of the claimant for reasons beyond the Principals control. It further raises the matter of forced majeure as defined within the contract and places an obligation upon the principal but to merely notify the claimant of such matters.

30. Clause 9 deals with termination of contract by the principal. It places no obligation upon the claimant to give notice of termination. It further sets out actions by which the claimant’s employment may be terminated by the principal. It does not appear under the contract that the principal has afforded the claimant a right to represent himself under any condition of termination or a right to appeal a decision of the principal under any of the terms or termination.

31. Clause 10, 11, 12 and 13 refers to oral changes within the contracts and how they are to be treated. It further refers to remedy in relation to disputes. It refers at clause 13 that in the event of a dispute that the parties agree to go to arbitration.

32. Clause 14 deals with notices, clause 15 deals with provisions of the contract being found unlawful by a court of law or other competent authority and finally clause 16 refers that the principal may add to or amend the contract from time to time if deemed necessary by the principal.

33. The Claimant we believe was at all times working under a contract of service for reasons set out below.

· The claimant presented each morning for work as required by the respondent.

· He drove a vehicle supplied by the respondent for the purposes of delivering the respondents products.

· He was assigned a geographical area in which the respondent’s products would be delivered to various credit outlets and customers of the respondent

· By operation of the contract, the claimant could not through the introduction of sound management structures profit from his activities.

· He was further denied the opportunity by operation of the contract to sell other products of the respondent’s competitors.

· He was paid a pre-determined wage by the respondent based on the shifts he worked.

· He was not free to hire his own staff to drive for him as it was a requirement of the respondent that all drivers be it, employees, agents, sub-distributors etc… where required to be vetted by the respondent and further where required to agree directly with the respondent to be bound by the conditions of the Distribution.

· He carried out his work personally

· The roles and responsibilities assigned to the claimant where not just the distribution or delivery of the goods. 7.13 sets out the claimant’s roles within the employment.

· The respondent at all times insured the vehicle in which the claimant delivered the respondent goods.

· The respondent paid for the painting, upkeep, and any matters that would arise from time to time regarding the vehicle for the transportation of the goods.

· The respondent as per his letter dated 16th February raised all invoices on behalf of the claimant.

· He does not own his own business and was not obliged to hold insurance in regard to the respondent’s goods.

· The respondent decided as to when and where the claimant was to work.

· The claimant was fully integrated into the respondent’s business and carried out the instruction of the respondent. Upon the claimant taking annual leave, it was reported to the respondent and the respondent would ensure that the geographical area in which the claimant worked was covered for the duration of the annual leave.

34. The claimant wrote to the respondent on the 19th April 2018 for a copy of the data the respondent held on the claimant. The respondent replied thereafter and provided all data held by them. As per schedule 1 of that correspondence, the respondent outlined the data kept by them. It provides that no insurances were held in relation to the employment as per their contract. No invoices of the claimant are in existence and that a weekly service summary Memo was produced each week by the respondent. This service delivery memo was in effect a weekly timesheet.

35. The claimant was first employed by an agency who were contracted by the respondent for the delivery of their products. The Director of the agency suggested to the claimant that the Respondent was looking for drivers and he should approach the transport manager directly. He did so and the only offer of employment was that of self-employment.

36. The contract requires the claimant to deliver the respondents products to credit outlets or customers. This was not the case. The claimant delivered products to different depots within the respondent’s business anywhere on the island of Ireland.

37. The claimant was instructed on a daily basis where to deliver products.

38. The claimant at no time held any insurances required by the respondent in relation to the contract. He did not tax or insure any vehicle he drove and was never required to provide copies of any insurances to the respondent.

39. On a number of occasions accidents occurred. When these accidents occurred, it was reported to the respondent. The respondents Transport manager spoke to the claimant regarding the accident. A report was made and filed by the manager. At no time did the claimant suffer any loss of earnings whatsoever.

40. The claimant has never delivered any product of the respondents under his own name.

41. He has never paid from an account in his name, any monies to the respondent for any product of the respondents. He has never charged any business for products of the respondent, delivered by him, to that third party.

42. When delivering those products, he required the customer or depot personnel to sign for safe receipt of those products. The delivery dockets where the respondent’s delivery dockets and not the claimants.

Claims

Terms of Employment (Information) Act 1994/2015

43. We allege a breach of the provisions of the S.3-(1) of the Terms of Employment (Information) Act, 1994, wherein it is alleged that the respondent contravened the relevant section in circumstances that he either failed or neglected to provide the claimant with a written statement outlining the main particulars of the terms of his employment, within the time provided for in the Actthat is to say, not later than two months after the commencement of his employment with the respondent, and within which time the statement is required to be given within law

44. The purpose of this Act is to provide for the implementation of Directive No. 91/533/EEC of 14 October, 1991 of the Council of the European Communities on an Employer's Obligation to Inform Employees of the Conditions Applicable to the Contract or Employment Relationship, to amend the Minimum Notice and Terms of Employment Act 1973, and to provide for related matters and as such it is a Community Right enjoyed by the claimant, from which there can be no derogation.

Section 3; written statement of terms of employment

3.— (1) An employer shall, not later than 2 months after the commencement of an employee's employment with the employer, give or cause to be given to the employee a statement in writing containing the following particulars of the terms of the employee's employment, continues………….

Union Arguments

45. The Claimant has an entitlement under community law to be provided with a written statement of the main terms of his employment within two months of commencement of the contract of employment. The statement fails to comply with section 3 of the said Act which must include the following

a) the full names of the employer and the employee,

b) the address of the employer in the State or, where appropriate, the address of the principal place of the relevant business of the employer in the State or the registered office (within the meaning of the Companies Act, 1963 ),

c) the place of work or, where there is no fixed or main place of work, a statement specifying that the employee is required or permitted to work at various places,

d) the title of the job or nature of the work for which the employee is employed,

e) the date of commencement of the employee's contract of employment,

f) in the case of a temporary contract of employment, the expected duration thereof or, if the contract of employment is for a fixed term, the date on which the contract expires,

g) the rate or method of calculation of the employee's remuneration,

h) the length of the intervals between the times at which remuneration is paid, whether a week, a month or any other interval,

i) any terms or conditions relating to hours of work (including overtime),

j) any terms or conditions relating to paid leave (other than paid sick leave),

k) any terms or conditions relating to—

(i) incapacity for work due to sickness or injury and paid sick leave, and

(ii) pensions and pension schemes,

(l) the period of notice which the employee is required to give and entitled to receive (whether by or under statute or under the terms of the employee's contract of employment) to determine the employee's contract of employment or, where this cannot be indicated when the information is given, the method for determining such periods of notice,

m) a reference to any collective agreements which directly affect the terms and conditions of the employee's employment including, where the employer is not a party to such agreements, particulars of the bodies or institutions by whom they were made.

Section 3(1) Terms of Employment (Additional Information) Order 1998 (S.I. No 49 of 1998

In relation to an employee who enters into a contract of employment after the commencement of this Order, the employee's employer shall, within two months after the employee's commencement of employment with the employer, give or cause to be given to the employee a statement in writing containing particulars of the times and duration of the rest periods and breaks referred to in sections 11, 12 and 13 of the Act that are being allowed to the employee and of any other terms and conditions relating to those periods and breaks.

46. Any derogation from the prescribed time frame for the production of such statement is a breach of the claimants’ community rights. The compensation payable must reflect the gravity of the infringement and act as a disincentive against future infractions.

Public Holidays & Annual Leave.

Public Holiday

47. We further seek the commission to consider the claimant’s right to be paid for public holidays & given his annual leave entitlements that occurred during the period of employment. In accordance with section 21 of the Act;

21.— (1) Subject to the provisions of this section, an employee shall, in respect of a public holiday, be entitled to whichever one of the following his or her employer determines, namely—

(a) a paid day off on that day,

(b) a paid day off within a month of that day,

(c) an additional day of annual leave,

(d) an additional day's pay:

The days relating to Public Holidays are prescribed with schedule two of the Act.

Each of the following days shall, subject to the subsequent provisions of this Schedule, be a public holiday for the purposes of this Act:

(a) Christmas Day,

(b) St. Stephen's Day,

(c) St. Patrick's Day,

(d) Easter Monday, the first Monday in May, the first Monday in June and the first Monday in August,

(e) the last Monday in October,

(f) the 1st day of January,

(g) any other day or days prescribed for the purposes of this paragraph.

Annual Leave

48. The Claimant also seeks his entitlements under section 19 of the Act in relation to Annual leave which he would be entitled to as an employee.

Section 19

19.— (1) Subject to the First Schedule (which contains transitional provisions in respect of the leave years 1996 to 1998), an employee shall be entitled to paid annual leave (in this Act referred to as ‘annual leave’’) equal to—

(a) 4 working weeks in a leave year in which he or she works at least 1,365 hours (unless it is a leave year in which he or she changes employment),

(b) one-third of a working week for each month in the leave year in which he or she works at least 117 hours, or

(c) 8 per cent. of the hours he or she works in a leave year (but subject to a maximum of 4 working weeks):

49. We would seek that the full entitlement of annual leave be awarded.

Conclusion.

50. As set out in our submission, we are firmly of the view the claimant in this case was at all times and should have for the duration of the employment held to be an employee. As a consequence of the respondent only offering the work to the claimant on the basis that he works as an independent contractor, he suffered a loss in terms of employment rights as did the State in terms of employers PRSI and to a lesser extent tax based on PAYE.

51. Some example quotations from the Respondent’s web site were included at this point.

52. These are just some examples which in the view of the claimant goes to provide that in order for the respondents to ensure their promise to their customers there must be obligations upon them to provide work and corresponding obligation upon workers contracted by the respondent to perform that work. That being the delivery of fresh produce to the respondent’s customers by the claimant personally.

53. We ask that you, considering all the facts find, that the claimant for the duration of the employment was incorrectly classified as a self-employed worker and that the correct title of “employee” be afforded to the claimant. In making that decision we ask that you make the following decisions that;

54. In accordance with S. 7-(2) d of the Terms of Employment (Information) Act 1994, we would ask you to find the case well founded and order the respondent to pay the claimant an amount of compensation which is just and equitable in all the circumstances, and in this case to award the maximum award of four weeks remuneration, being cognisant of the decision of the ECJ in Von Colson and Kamann [1984] ECR 1891, so that the decision will reflect the gravity of the infringement and act as a real deterrent against future infractions of Community Rights.

55. In accordance with section 27 (3) of the Organisation of Working Time Act 1997, declare the complaint well founded and require the employer to comply with the relevant provisions.

56. We further seek the commission in accordance with section 27(3) of the Act, to require the employer to pay compensation of such amount as is just and equitable having regard to all the circumstances, but not exceeding 2 years remuneration in respect of the claimant’s employment.

Summary of Respondent’s Case:

The Respondent started in business nearly fifty years ago as a small producer of fresh product and from the day that they opened, their product has been sold through independent self-employed distributors who run their own businesses and call to the Respondent’s premises each day to collect their produce. It is an important feature of the Respondent’s business that produce gets delivered as soon as possible after it has been produced as it is a perishable product. The Respondents have relied upon the self-employed distribution model for 50 years as they believe that self-employed distributors are incentivised to get the work done as quickly as possible resulting in the delivery of the product in the freshest possible condition.

Distributors are clearly happy with the arrangement as currently 22 years is the average

length of time that a self-employed distributor works with the Respondent. Similarly, the Respondent has long relationships with their 200 employees with the average employee remaining in employment for over twenty years. A number of the Respondent’s self-employed distributors and

employees are second generation. The longevity of the average relationship between

the Respondent and the self-employed distributors demonstrate the positive experiences on the

part of distributors on the one hand and the Respondent on the other hand. Moreover, the fact that

the Respondent employs 200 people demonstrates that this is not a company with a culture that

avoids employment.

Initially all vehicles were owned by the distributors and this continues to be the position in

relation to the van drivers with all the van distributors owning their own vans. Some of them

drive the vans themselves, others have drivers employed to drive their vans and others have

their own sub-distributors who each own their own vans. With the development of the sales

of the product outside the greater Dublin area and the introduction of the larger trucks, the

cost of purchasing the larger trucks became prohibitively expensive and only one long distance

distributor could afford to own his own vehicles. In response to this issue,

the Respondent purchased a number of the big forty-foot trucks and rent them to the other long

distance distributors.

It was accepted by the Claimant’s advocate that Mr X (distributor owning his own truck) was “definitely self-employed”.

The following facts are relevant:

Mr X operates under the same terms and conditions as all of the other

long distance distributors.

The Complainant and Mr.X do the same work for the Respondent, delivering produce to

agreed locations.

Similar to the Complainant Mr. X is paid per service, save that because he owns

his vehicle, certain charges (such as rent and insurance) are not offset against his

service charge.

The Respondent prepare Mr. X’s invoices and receipts in the same way that

they do for the Complainant.

Mr. X’s truck carries the Respondent’s livery.

Mr. X’s truck is customised for delivering specific products.

Mr X is subject to the same degree of control and supervision from the

the Respondent’s transport managers as the Complainant.

Amongst other rights, Mr X exercises two critical contractual entitlements under the

Terms of Supply:

a. He owns his own vehicles;

b. He hires other drivers to carry out the work for him.

Having the right to invest in the business and to sub contract the work is wholly inconsistent

with a contract of employment. Unsurprisingly, the Claimant has accepted that Mr. X

is self-employed. Critically, the Complainant has the same rights under the Terms of Supply, albeit that he does not exercise them. The important fact is that he has these rights, that they are genuine

and not a sham. Where these rights are available under the contract, this arrangement simply

cannot be consistent with a contract of employment.

In response to the proposition that he was entitled to source his own vehicle, the Complainant implied that he was discouraged by the Respondent from doing so. He gave evidence that he had made enquiries in or about 2010/2012 with three or four leasing companies and he had identified a ten-year lease arrangement, the repayments for which he could meet. Under cross

examination, he was unable to give any details about the companies he contacted or the

amount of the lease payments.

Mr. B’s (member of Respondent Management Team) evidence was that this conversation never took place and for the Respondent, it was better when distributors owned their own vehicles. Mr. Be (member of Respondent Management Team) gave evidence that he had never heard of a lease extending beyond five years and a ten year lease was wholly implausible.

It is for the Adjudicator to determine whether this conversation ever occurred in the manner

described by the Complainant but it is the only evidence adduced by him to refute the proposition that under the Terms of Supply, he could source his own vehicle and invest in his business. The Complainant accepted that had he sourced his own vehicle, this would have increased his profitability.

As matters stand, under the rental arrangement with the Respondent the Complainant incurs the cost of running the big trucks and he pays for rental, maintenance, tax, insurance and diesel. These

charges are deducted from his service charges on a weekly basis. This enables the Complainant and

other long distance distributors, who would not otherwise have the financial wherewithal to

do so, operate as self-employed distributors.

The distributors who drive large vehicles are paid by the job or “service” and not by the hour

or the day. A service or set of deliveries is agreed with the individual distributor and comprises the collection of produce from the Respondent premises and its delivery to various

locations.

The drivers can opt to do additional deliveries - within the tachograph regulations - which

enables them to make more profit if they choose to avail of the offer of additional deliveries.

They are also free to backload the vehicles; by way of example some of the long distance

distributors have delivered product to their destination and transported confectionary on the

return journey for companies completely unrelated to the Respondent and, in so doing, make

additional profit.

The Complainant worked as a self-employed distributor for the Respondent from 8 June 2008 to 8 January 2018, he regularly completed the provision of his services each week in less hours than a regular employee of the Respondents, he took more days off than an employee would be entitled to and he had greater flexibility as to when he did or didn’t work. Moreover, as a self-employed distributor, he was paid a premium for his services and in excess of what he would have earned as an employed driver taking into account all statutory benefits, including holiday pay.

In the submissions filed on behalf of the Complainant there is a concern expressed about the “bogus

self-employed” and this calls to mind situations that have been uncovered in the construction

industry, with the gig economy and practices that were introduced in some instances in response to the Recession. That is not the case with the Respondent. Self-employed distributors

have been part of the Respondent’s business since it started in business 50 years ago. It costs the Respondent more to use the self-employed distributor model than it would to employ drivers.

During the ten years he provided services to the Respondent, the Complainant never complained to

about being an independent self-employed distributor, nor did he ever ask to become an employee. During the initial hearing on 2 April 2019 the Complainant acknowledged he had a good relationship with the Respondent and he described the distribution managers, as “gentleman” and with whom his “relationship wasvery good”.

The Complainant acknowledged the enhanced situation of a self-employed distributor with the Respondent in his own evidence when he stated the following:

“I look for further jobs, but even XXXXX pay a very small amount for drivers. I had to stay with

the Respondent It was not the best place, but I can pay my bills.”

During the course of his evidence, the Complainant also acknowledged the following important

benefits for him of being a self-employed distributor:

Due to his family commitments (his wife working in Dublin Airport, his childcare

responsibilities) the Complainant elected to do services in the greater Dublin area only

and refused longer journeys to Limerick, Cork, Kerry and Derry. Unlike an

employee, he had autonomy and choice.

He started his service after 9am as he wanted to drop his child to school. Unlike

an employee he didn’t have a start time and therefore he could do this.

The Complainant acknowledged that he had a high degree of flexibility with the Respondent.

The Complainant acknowledged that he worked less than 45 weeks in 2016 and 2017

whereas an employee of the Respondent is required to work 46.2 weeks per annum (the

remaining 5.8 weeks being holiday and public holiday entitlements).

Much has been made of the fact that the Complainant rented his truck from the Respondent and did not own it. The renting of vehicles to distributors was a solution that evolved due to the significant cost of the bigger trucks. Mr. X who carries out the same distribution work as the Complainant

and has the same rights and entitlements, does own all of his own vehicles.

It was submitted that the following factors demonstrate that the Complainant was self-employed:

The Complainant was able to refuse work and to decide what services he would provide to

The Respondent. He declined to do deliveries to locations outside of Dublin, such as Limerick

Cork, Kerry and Derry. He provided additional services occasionally until September

2016, but afterwards he wasn’t interested in doing deliveries outside of the general Dublin area. If he was an employee, he would not have had this autonomy and would not have been entitled to refuse to do these runs.

The Complainant was able to vary his working hours and was responsible for how long he took to do the service. He was able to and did vary his start and finish times from day to day within the constraints of the service he was providing. For example, he explained that when he dropped his son to school, he didn’t start work until after 9am. The length of time he worked was within his control and depended on whether or not he accepted the opportunity to do additional services, whether he took breaks, how quickly he loaded and unloaded the truck, whether he hired help, etc. While he was not required to work a minimum or a specified number of hours of work per week, full time employees have a standard working week of thirty-nine hours.

The number of days per week that the Complainant provided services were within his control, the Respondent was not in a position to insist that he attend on any particular day. An employee of is required to work 46.2 weeks (52 weeks less 4 weeks holidays and 9 bank holidays) and, except for absence due to reasons such as illness, is required to attend for work. In 2016 and 2017, the Complainant chose to work less than 45 weeks.

The Complainant was not subject to direction and control once he signed up for specific deliveries. How he decided to do the work was a matter for himself. He was free to choose the best route when making deliveries. For example, during the course of his evidence he described how the person he took over from was a smoker and took longer doing the deliveries than he was able to do them. He was free to take coffee and lunch breaks when he chose.

The Complainant could increase his profits in the following ways:

He could take on additional services for the Respondent,

He had the opportunity to do other work, including driving work, after he had provided his driving services to the Respondent and thereby increase his profitability.

He could purchase his own lorry or rent or lease a lorry from someone other than the Respondent.

He could appoint someone else to provide the service to the Respondent.

He invested in his business. he rented his vehicle for €66 per day and paid for maintenance, insurance, road tax and diesel. He also provided his own mobile phone and safety (PPE) clothing and his own CPC.

The transport managers interacted in the same manner with the Complainant and Mr.X. Making the deliveries is time sensitive as there is a limited window of time to get fresh produce into the marketplace for sale. If a distributor was providing a good service and no issues arose or complaints had been received, it would not be unusual to have no communication between distributors, including the Complainant, and the transport management for weeks, if not months.

The rate for the services provided by the Complainant, as with all distributors, was negotiated and agreed on an individual basis with him. Factors that would influence the rate negotiated included the distance travelled and the number of deliveries. A separate rate was agreed and paid for any additional services he provided.

While the motor insurance policy was in the name of the Respondent because they owned the vehicle that the Complainant rented, he reimbursed the Respondent for the cost of same. In the case of Mr.X, who owned his own vehicles, the insurance policies were in his own name. Ownership of the vehicle determined the name on the insurance policy however both the Complainant and Mr. X paid for their insurance.

The Complainant did not give any notice when he ceased working as a self-employed distributor. He informed the Respondent on the 8th of January 2018 by text message that that was his last day providing services and no notice period was given or required. The Complainant exercised his entitlement to terminate without notice under the Terms of Supply whereas, had he been an employee, he would have been obliged to give the required period of one week’s notice under the Minimum Notice and Terms of Employment Act, 1973 to 2001.

The Respondent did not provide any services in respect of the Complainant’s tax returns. He employed his own accountant and filed tax returns for the last decade stating that he was self-employed and claimed his allowances as self-employed under the self-assessment tax system.

The Complainant was registered for VAT for the services he provided to the Respondent and represented to the Revenue that he was self-employed in this regard during the entire period when he provided services to the Respondent.

During the ten-year relationship he had with the Respondent the Complainant never raised any issue in relation to his status and it is only since his departure that he has made a complaint.

Findings and Conclusions:

Preliminary Issue.

As stated by the Complainant’s representative, to establish as to whether the true employment relationship is that of a “contract of service” or a “contract for services” one must look at the facts of the day to day relationship that existed during the employment. The category a worker falls into depends on what they actually do, the way they do it and the terms and conditions under which they are engaged, whether written or verbal or implied.

The Superior Courts have identified a number of tests that can be used to identify the true nature of the employment. The in-business test, the control test, the integration test are just some titles put on the tests that can go to distinguish the employment relationship however no one test can be applied as to determine the relationship as the relationship needs to be looked at as a whole.

The Control Test.

The earliest test being applied in employment cases was introduced through a revenue case Yewens V Noakes (1880) 6 QBD 520 where by Bramwell LJ noted that the employee was “subject to the command of the master as to the way in which he shall do his work”. This test was further considered in Cassidy V Ministry for Health [1951] 2 KB 343 where the Court of Appeal in England noted, that the employer could direct his employees in ‘how to work’.

The control test remained a major indicator as to the employment status of a worker and still does today. In Roche V P Kelly & Co [1969] IR 100 the test was developed further in that the employee must obey reasonable orders Walsh J stated;

The In-Business Test.

The United States Supreme Court in its decision in United States v Silke (1946) 331 US 704, considered the employment status of lorry drivers. They introduced a second test, the in-business test. Itconcerned itself in what risks applied to the employment. The issues of assets if any owned by the workers, if the workers where limited in their earning capacity, whether or not they had the chance to profit or run a risk of financial loss, could they limit their costs and was it possible to delegate their work to others. It was the opinion of the court that the lorry drivers who made arrangements for the collection of deliveries amongst themselves, who could and did hire their own helpers, who decided as to whether or not they would make a delivery of coal, they never bound by an agreement to haul coal just for Silk, they were free to do as they pleased when they pleased, they were paid on the basis of weight being delivered. These were found to be small business owners and not workers for the purposes for the Social Security Act.

The claimant would further rely on Ready Mixed Concrete (South East) Ltd. v. Minister of Pensions and National

Insurance [1968] 2 QB 497wherein it was alleged, that lorry drivers where, for the purposes of pensions and social insurances to be considered as employees as opposed to independent contractors. The claimants were the owners of the vehicles, they were free in their decision as to who carried out the upkeep on their vehicles and regulated the costs of such. The drivers were through operation of the contract, obliged to provide a driver of their vehicle when they could not attend themselves for any reason and they did so at such times. The drivers had a chance to profit and a risk of loss. During times of the year when a driver was scheduled to take holidays, it was previously arranged by all the drivers that a replacement driver would cover the work of the driver on holiday. The replacement driver was paid by the drivers themselves and not Ready Mix. As in Silk they were considered “small business men” the terms laid out in the contract where the actual reality of the employment relationship as in Silk.

Once the issue of salary has been determined, and it has in the instant case, then the status test may be applied in two stages. The first question to ask is whether there is control. This is a necessary but not sufficient test. It must then be determined whether the provisions of the contract are consistent with its being a contract of service. There may be indications, for example, that a worker is an entrepreneur rather than an employee. In this event the fundamental test to be applied is whether the person who has engaged himself or herself to perform particular services is in business on his own or her own account. Where the business is already well established, that will be a significant, though not a decisive, factor. The process of classification is regarded as a mixed question of fact and law.

To counter the arguments presented by the Complainant the Respondent representative includes the following points: