Complainant

Respondent

Anonymised Parties

An IT Engineer

An Accountancy Firm

Representatives

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00028570-001

08/05/2019

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00028570-002

08/05/2019

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

CA-00029631-001

11/07/2019

This matter was subject to a previous hearing at which no evidence was taken, and the hearing was adjourned.

Complaints CA-00028570-001 and CA-28570-002 were withdrawn by the Complainant at the outset of this hearing.  

The Complainant submits that he is due a redundancy payment from the Respondent following the termination of his employment on 29^th March 2019.

The Respondent provided a detailed written submission.

The Respondent submits that the Complainant is not and was never an employee of Respondent.  The Respondent submits that it had never met the Complainant in person until May 2019, and only provided payroll services for the Complainant.

By way of background the Respondent submitted that it is an Accountancy Company, offering an invoicing, payroll and tax return facility to their clients.  The Respondent is not an IT Consultancy business, neither is it an Employment Agency within the meaning of the Employment Agency Act, 1971.

There has never been a vacancy for an IT Consultant within the Respondent Company nor has the Respondent ever interviewed for same. The Respondent has never offered a contract to secure the services of the Complainant as an IT Consultant.  The Respondent submits that the Complainant’s own LinkedIn page confirms he is an IT Consultant working for Company X, since April 2007 to April 2019. He deals exclusively with IT, not accountancy.  Nowhere in his profile does he mention working for the Respondent.  He is a member of the Professional Irish Computer Society.  He holds no qualifications in accountancy.

The Respondent submits that the Complainant commenced contract work in April 2007 as a proprietary director of Company A.  The Respondent Director was also a Director of this company as it was established as an umbrella company to facilitate the Complainant’s consultancy.  The Complainant worked on a client site, and the umbrella company billed Company B, a recruitment company, for his billable days.  This contract ended in May 2008.

The Complainant then negotiated a new contract with another company, Company C, in June 2008, remaining in the original client site. This contract ended in November 2009.  This contract was billed through Company A.

 The Complainant negotiated a new contract starting on 1^st December 2008 with Company B, which ended in November 2009, again this contract was billed through Company A.

The Respondent submits that the Complainant negotiated a new contract starting on the 30^th November 2009 with Company B.  Around this time, the Complainant rang the Respondent to say that he would prefer to pay Class A PRSI.  The Respondent complied with their client’s wishes and put him through payroll as a PAYE worker.  This contract ended on 31^st December 2010.  The contract was billed through the Respondent company.

The Complainant negotiated a new contract with another company, Company D, starting on 2^nd January 2011.  This contract finished on the 21^st March 2014.  This contract was billed through the Respondent company.

The Complainant then negotiated a new contract with Company E, starting on 25^th March 2014 working for the same client.  This contract was not renewed by Company E.  The Complainant’s last day was the 31^st March 2019.

The Respondent submits that at no time did it engage in the pursuit of a contract with any of the employment agencies referred to above; the Complainant alone negotiated and secured each of the contracts, acting alone, not as an agent or representative of the Respondent but instead in his own right as an IT Consultant.

The Respondent submits that the relationship with the Complainant was always a business relationship, where the Complainant would advise the respondent company of the amount to invoice the respective recruitment agency who would then bill \Company X, the end user.  The agency would then pay the Respondent who in return would pay the Complainant and deduct and charge a fee for the provision of the accountancy services, as has been the case since the start of the relationship between the Complainant and the Respondent.

The Respondent submits that it did not have any relationship with the party to whom the Complainant was contracted.  Nor did the Respondent have any responsibility or opportunity to mitigate the loss of the contract, because the Respondent was not the negotiating party. The Respondent never procured a contract for and on behalf of the Complainant.

The Respondent submits that every month the Complainant paid the Respondent for the services he provided.  This fee is shown in the Complainant’s pay details file for every month and every year the Respondent invoiced for him.  The Respondent questions why the Complainant would pay for such services if the Respondent was his employer.

The Respondent submits that in May 2019, the Respondent Director met the Complainant (for the first time).  The Complainant stated that he wanted his 4 weeks’ notice pay from Company E.  The Respondent, in a gesture of goodwill he would pay the 4 weeks’ pay.  The Complainant requested a payment of €5,000 to pay for training.  The Respondent did not accede to this request.

In direct evidence the Respondent stated that the Complainant’s expenses had to be paid out of his pre-tax income.

In concluding, the Respondent submits that although the Complainant may well feel hard done by that he has lost his job it is unreasonable that he now attempts to process a claim for redundancy against the Respondent.

In his complaint form the Complainant submitted that at the end of March 2019 he lost his job of almost 12 years working as an IT Consultant at Company X as an employee of the Respondent, through different IT service providers.  The reason he lost his job was because the IT service provider lost their contract and the new IT service provider did not take him on.

The Complainant submitted that as he had been paying Class A insurance since December 2009 he should have received a statutory redundancy lump sum with his final payment.

As he only received three days’ notice that I was not transferring over the Respondent paid him a 20 days’ notice period in May 2019 as per the contract between the Respondent and the IT service provider Company E.  The Complainant submitted that the Respondent only agreed to do this if the Complainant agreed not to take a case against them or Company E through the WRC, which he agreed to, as he was very short of money and needed to support his family. 

The Complainant now knows it is not possible to sign away his statutory rights and he wants to claim his statutory redundancy payment that he believes he should have received with his final payment from the Respondent.

In direct evidence at the hearing the Complainant stated that the December 2009 change to Class A PRSI was a suggestion of the Respondent.  He also stated that the Respondent paid all his expenses.

The Complainant stated that he had sought a pay increase from an IT service provider but had not been successful.

The Complainant stated that the Respondent had paid him for the last nine and a half years and that he had never been paid directly by the IT service providers.

In conclusion, the Complainant stated that he believed he was entitled to a redundancy payment and as the Respondent was his employer they should pay what he is due.

I have considered this matter carefully. 

It is agreed by both parties that the Respondent is not an employment agency.

Therefore, the question to be answered in this case is, was the Complainant was employed by the Respondent. i.e. did a contract of service exist between the Complainant and the Respondent, was there a mutuality of obligation.

In Autoclenz Limited v Belcher and Ors   the Court focused heavily on the test to establish whether a contract of service exists as 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”.

In this case I do not believe that these three conditions were met:

(a)    The Respondent did not pay the Complainant’s wages, he merely processed them on instruction from the Complainant. The Complainant did not provide a service to the Respondent. 

The Complainant paid his own Employers’ PRSI.

The Complainant stated that he had at one time sought a pay increase from the IT service provider he was working at the time. That he did not seek a pay increase from the Respondent is indicative of the type of relationship that existed between the parties.

The Complainant did provide his own work or skill in the performance of some service for the Respondent, rather he provided his work and skill to another entity.

(b)    The Respondent had no control over the Complainant. The Complainant did his work for another entity and negotiated new contracts with new entities as Company X changed service providers.

(c)     No employer/employee contract, expressed or implied, ever existed between the parties.  

 For a contract to exist there must be a mutuality of obligation. The High Court in The Minister for Agriculture and Food V Barry & Ors [2009] 1 IR 215 described the requirement of mutuality of obligation;

“The requirement of mutuality of obligation is the requirement that there must be mutual obligations on the employer to provide work for the employee and on the employee to perform work for the employer.  If such mutuality is not present, then either there is no contract at all or whatever contract there is must be a contract for services or something else, but not a contract of service. It was characterised in Nethermere (St Neots) ltd v Gardiner [1984] ICR 612 as the ‘one sine qua non which can firmly be identified as an essential of a contract of service’.

I find there as no mutuality of obligation in this case.

I find the Complainant was not an employee of the Respondnet.

The complaint is not well-founded.

Employment status, self-employed, contract of employment, mutuality of obligation.