Complainant

Respondent

Parties

Clodagh Swanson

CS Beauty Training Ltd

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00016645-001

05/01/2018

The Complainant was the founder and original director of the Respondent company, a beauty therapy training business, which she formed in 1998. The Complainant’s husband subsequently joined the business. Sometime later, the Complainant resigned from the business but continued to work for the Respondent.

The Complainant’s complaint, taken under the Employment Equality Act, 1998, alleges discrimination in relation to conditions of employment and victimisation on the grounds of family status.

Background:

The Complainant stated that she was the founder and original director of the company and that her husband joined the business when he became unemployed. According to the Complainant’s evidence, from the commencement of his engagement with the business, her husband acted in a bullying manner which led to continued stress for her.

In support of her allegations in this regard, the Complainant stated that her husband would not pay her for work and when she asked for a small wage he refused to agree. The Complainant stated that she was consistently put down and her views were not regarded as valid. She was not allowed to withdraw money from the business. In evidence the Complainant stated that, despite it being her business, things eventually got so bad that she resigned from the business in March 2015.

However, the Complainant stated that, because the Respondent could not get experienced teachers, she became an employee. The Complainant went on to state that, she was consistently bullied despite her 25 years’ experience and the fact that she was the most valuable tutor on the team. The Complainant provided several examples to support her complaint in this regard. These included: not been allowed to deal with issues in relation to classroom management, consistently working under pressure of an accident to herself or one of the students as a result of poor safety standards with regard to electrical machines and equipment being used in the classroom and being berated for being ill on an occasion when she was not in a position to take classes.

The Complainant stated that, due to the unacceptable treatment she was receiving, she resigned from the business which she loved. In evidence, the Complainant stated that she then became an employee of the Respondent. According to the Complainant, during her last period of work with the Respondent, i.e. September 2016 to July 2017, she had two or three days work a week as an employed contractor. However, the Complainant stated that the alleged inappropriate behaviour continued to the extent that she eventually decided to leave.

Substantive Complaint:

During the Hearing, the Complainant presented evidence, both oral and documentary, in support of her complaint. The Complainant claimed that the Respondent had failed in his legal obligations towards her in relation to employment law. This included the failure to provide a contract of employment, failure to make payment for invoices through the PAYE system, failure to keep appropriate employment files and failure to deal appropriately with concerns raised by her in relation to safety and classroom management.

In addition, the Complainant also stated that the Respondent failed in his obligations under the Health and Safety at Work Act. In this regard, the Complainant stated that the Respondent did not prevent improper conduct or behaviour in the classroom, but in fact, in many cases, was the cause of it. According to the Complainant this, in turn, affected health and safety at work for both tutors and students alike.

The Complainant listed a series of allegedly inappropriate behaviour towards her by the Respondent, which included: use of abusive and aggressive behaviour, shouting, ignoring her concerns and undermining her by not allowing her to make decisions in her own business. The Complainant stated that raising issues with the Respondent would frequently end in a row.

Finally, the Complainant stated that she was not on a personal salary, as the revenue coming into the business was used to pay the mortgage. Consequently, the Complainant stated that she did not have a wage she could call her own.

With regard to her complaint for discrimination under the Employment Quality Acts, the Complainant stated that she was discriminated against because she was the Respondent’s wife. According to the Complainant, no other employee was treated in the manner in which she was.

Conclusion:

In conclusion, the Complainant stated in evidence, that, as a result of the treatment by the Respondent, she became unwell and had to seek medical attention. According to the Complainant, at the time she left the Respondent in July 2017, she would have had at least two days a week of work for a period of a year. She also claimed that her situation with the Respondent affected her getting other roles due to her ill-health.

The Complainant stated that, while the Respondent had agreed to pay her for her shares in the business, she never really wanted to sell these, but felt she had no option because he refused to leave the business. However, the Complainant stated that, despite receiving money for the shares, she was at a severe loss due to the consistent treatment by the Respondent both in her original capacity as a business partner and more latterly as an employee.

In conclusion, the Complainant stated that she was a highly qualified trainer, with a Masters Degree in business. She further states that, while she won most of the business, the Respondent continued to bully her despite knowing very little about the industry. The Complainant stated in evidence that she was effectively forced to resign, originally as a director, and later as a contractor.

In response to the complaint, the Respondent raised a preliminary issue with regard to the Complainant’s employment status. The Respondent stated that the Complainant was not an employee and that, since March 2015, any interaction with the Respondent’s business was in the capacity of a contractor.

In support of this position, the Respondent made the following arguments:

The Complainant resigned from the Respondent company in March 2015 of her own accord. According to the Respondent, the Complainant was, at the time of the resignation, on good working terms with the company. The Respondent provided documentary evidence by way of emails between the parties, at the time, in support of his contention in this regard.

The Respondent stated that, by her own admission, the Complainant was a contractor with the Respondent’s business between September 2016 and July 2017. The Respondent further stated that the Complainant issued invoices relating to all work during this period.   It was further stated that all invoices were paid in full in a timely manner. The Respondent provided documentary evidence, in the form of a series of invoices covering the period in question, to support his position in this regard.

According to the Respondent, the Complainant ceased her working arrangement as a contractor with the Respondent’s business in July 2017. The Respondent stated that this was clearly the Complainant’s own decision.

The Respondent stated that in the period from her resignation in March 2015, through to 2017, the Complainant operated her own coaching business. In support of this contention, the Respondent provided evidence which showed both the nature and extent of the Complainant’s work commitments beyond those to the Respondent.

In addition, the Respondent provided documentary evidence to support the claim that the Complainant determined her work schedule with the Respondent’s business. The Respondent claimed that the Complainant was accommodated with regards these requests.

In conclusion, the Respondent stated that, as the Complainant was not an employee of the Respondent’s business, her complaint as submitted should fail.

The Complainant’s claim is based on her contention that she was discriminated against by the Respondent by means of victimisation with regard to her conditions of employment on the grounds of the family status. In response to this claim, the Respondent states that the Complainant was not an employee, but was a contractor who provided services into the Respondent’s business. The Respondent therefore contends that the Complainant is not covered under the Employment Equality Acts.

Consequently, before considering the substantive elements of the Complainant’s equality claim, it is necessary to consider the preliminary issue raised by the Respondent and determine whether or not the Complainant was an employee of the latter.  

The answer to this question lies in the contractual arrangement between the Complainant and the Respondent.   An employee will normally work under what is termed “a contract of service”, whereby the individual is retained on a contract of employment to perform a particular job or duties. The alternative contractual relationship is that of an “independent contractor” who typically provides services to a business under a “contract for services”. For the record, no evidence was provided in relation to the existence of any form of contract with regard to the contractual arrangement between the parties.

Having carefully considered all of the evidence adduced at the Hearing, it is clear that the Complainant formed the company in 1998 and was the original company director. At a later date, the Complainant’s husband (the Respondent in the within case) joined the business. It appears from the evidence presented that the business relationship between the parties did not go well and that this may have reflected parallel difficulties they were experiencing in their personal relationship. In any event, matters concluded with the Complainant’s resignation from the business in March 2015.

There is documentary evidence to show that following her departure from the Respondent’s business in March 2015, the Complainant operated her own coaching business throughout the remainder of that year and over the following two years. The evidence further suggests that, while continuing to conduct her own business, the Complainant returned to the Respondent’s business occasionally to provide service on a contractual basis.

Evidence provided by the Respondent, by way of email communication between the parties in relation to the arrangements being put in place with regard to work completed by the Complainant on behalf of the Respondent following the former’s resignation from the business in March 2015. In particular, in an email dated 3 September 2015, the Complainant made the following comment in relation to payment arrangements: “I suggest I do X hours weekly with a monthly billing or bi weekly and agree 14-day terms for payment of invoice”.

Further correspondence between the parties at this time, refers to a draft agreement having been exchanged. In addition, the Complainant refers to the fact that the arrangement with the Respondent, which was agreed would consist of four hours per week, would “detract from my own projects” and “I need to keep this to four hours as I’m too busy”.

While the arrangement between the parties may have been somewhat sporadic between March 2015 and August 2016, the evidence adduced clearly shows that a more structured arrangement existed between September 2016 and July 2017. During this period the Complainant provided services to the Respondent in ten of the eleven months involved. Evidence provided by the Respondent indicates that the Complainant issued monthly invoices covering all of this work. According to the Respondent’s evidence these invoices were paid in full in a timely manner.

In addition, further evidence supplied by the Respondent shows that the Complainant had at least six other clients to whom she was supplying services and/or was on a panel to provide such services.

Protections afforded under the various acts of employment legislation only apply to employees. Consequently, the status of a person carrying out work has frequently come before the employment tribunals and courts to have the matter determined.   As a result, the courts have developed a number of different test to determine the employment status of an individual. These include the “Mutuality of Obligation” test, which was applied by the High Court in the case of “Minister of Agriculture and Food v Barry & Others” [2008] IEHC 216 and the “Enterprise Test”, which was adopted by the Supreme Court in the case of “Henry Denny & Sons v   Minister of Social Welfare” [1998] 1 IR 34.

With regard to the Mutuality of Obligation Test, Edwards J, stated that “there must be mutual obligations on the employer to provide work to the employee and 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”.

Based on the evidence presented in the within case, I am satisfied that the mutuality of obligation is not present. There was clearly no obligation on the Complainant to provide services to the Respondent and her agreement to do so was, by her own evidence, as a result of the Respondent having nobody has qualified to deliver the classes in question. I also find there to be no obligation on the Respondent to provide work to the Complainant. Clearly a situation had evolved where the Respondent had a business need which the Complainant was happy to provide.

The Enterprise Test sets out to determine if an individual is providing the service as a person in business in their own right, in which case the contractual arrangement would be that of contract for service. The evidence adduced in the within case is overwhelming in this regard. From the very commencement of the arrangement in September 2015, it is clear that the Complainant was operating as a person running her own business. The Respondent was one of a number of clients the Complainant provided services to and the payment arrangements for the provision of such services was clearly based on the issuing of invoices.

Taking all of the above into consideration, I am satisfied that the contractual arrangement between the Complainant and the Respondent was consistent with that of a contract for services and not a contract of service as would be necessary for the Complainant to pursue her claim under the Employment Equality Act 1998.

Any case the Complainant might have had that she was an employee ceased in March 2015 when she resigned from the company. Consequently, any entitlement to protection under the Employment Equality legislation would also have ceased at that point in time.

Based on the conclusions as set out above, I find that the Respondent’s preliminary point is upheld and, as a consequence, the Complainant has no protection under the legislation. In that context, there is no requirement to proceed to consider the substantive element of the Complainant complaint.

Having carefully considered all of the evidence adduced and based on the considerations/findings as detailed above, I find that the Complainant was not an employee of the Respondent and, therefore, her complaint is not upheld.

Employment Equality Acts

Victimisation

Conditions of Employment

Family Status