Complainant

Respondent

Anonymised Parties

Plasterer

Plastering Contractor

At

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 41 of the Workplace Relations Act, 2015.

CA-00019445-001

28/05/2018

The Complainant claims that he was in effect an employee. He has claimed that the provisions of the Sectoral Employment Order (SEO) should apply to him and he has claimed that he is owed wages.

The Respondent has rejected this claim and stated that this was not an employer/employee relationship.

It is alleged that the respondent failed or neglected to pay the full wages of the claimant amounting of €725. It is further alleged that the respondent either failed or neglected to provide the provisions of a Sectoral Employment Order enacted on the 19th October 2017.

The order provides for minimum terms and conditions of employment for the class type or group of workers mentioned in the order. Craft workers are one such category.

The Claimant began work on site on the 9th January 2018 whereby, he was contacted by another Plasterer TF who asked if the claimant wanted work. During the discussion TF informed the claimant who the main contractor was and the Plastering Contractor, the Respondent. He further discussed that the hours prescribed by the respondent and that the work was on a self-employed basis only. No details were given to TF with regards to PRSI numbers or insurance details or safety statements or method statements as required under the Safety Health Welfare at Work Act 2005. The claimant was also asked if he could bring others with him as a labourer and another Plasterer were required to carry out work on site for the respondent.

He commenced work and signed in the attendance sheet under the Contractor as directed. He was inducted onto the site by the main contractor where he identified himself as a worker for the Respondent as he was instructed to do. He worked on a continuous basis up until the 29th January where he refused to attend further in circumstances where he did not receive all his wages for work done to that date. TF, the claimant and others carried out work in accordance with the instruction of the respondent’s representative who attended site on a daily basis.

After one week TF stopped attending the site and was uncontactable. The claimant kept working as instructed. The claimant informed the site supervisor that he had contacted TF who informed the claimant that he had finished on the site and would not be returning. The supervisor instructed the claimant to invoice the respondent for the work done and keep working. The claimant carried out his duties as directed by the respondent.

The Union was contacted and engaged with the respondent on matters relating to this complaint. After a number of conversations payment was made by the respondent to the claimant in the amount of €3,000.00. The Claimant invoiced the respondent for an amount higher, that being €3,725.00. This amount was argued by the respondents Quantity Surveyor as being inconsistent with the respondent’s daily rates of pay for Plasterers that being €200 per day. What had been agreed was a rate of €260 per day. The respondent’s representative argued, that the claimant was not a sub-contractor of theirs but was a sub-contractor of TF’s and that they have no contract with the claimant whatsoever.

This was argued by the union in that, the claimant was a worker and the status of the employment pointed to that of employer and employee. The Union met with the respondents Director on the 15th March 2018 on the site. A discussion took place on the employment of the claimant and the respondent has at all times claimed that the claimant was not an employee of the company but merely an independent contractor, contracted into the site by another independent contractor, contracted into the site for and on behalf of the respondent. On that day, the respondent made an offer to pay, half the wages owed to the claimant to settle the issue. This was not agreeable to the claimant. The Union was contacted by the WRC mediation services and informed that the respondent had made an offer again to pay half the outstanding balance owed to the claimant and this was rejected.

Preliminary Issue:

Precarious forms of employment have increased in years and this is very evident in the construction sector 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. A Construction sub group was formed to examine issues in the sector. The report received submissions from interested parties and one issue evident was that. “in many cases, trades people do not have a choice with regard to whether they are engaged as an employee or self-employed worker and are being forced to take up self-employment rather than being engaged as an employee. The plastering and block-laying trades are specifically highlighted in this regard”[1]. We would further refer the commission the report from the Comptroller and Auditor General on the “Accounts of the Public Services 2017” where it was identified the issue of False self-employment in the construction sector as yielding a return of €60.2million as a result of joint investigations by a joint departmental investigation team. The report refers at 20.37 “In 2017, the construction sector featured prominently in joint investigation activity as well as Revenue’s own compliance interventions. As a result of that activity, the construction sector yielded €60.2 million in 2017 for Revenue. Payroll taxes were part of this. In 2017, Revenue led 855 unannounced visits to construction sites that included joint investigations with the Department and the WRC. Outcomes were interviews with 5,017 contractors, sub-contractors and employees. 484 sub-contractors were subsequently reclassified as employees. Also, 749 individuals were subsequently registered as new employees”. The report also makes the point at 20.13 that “employers are responsible for ensuring that their workers are correctly classified for PRSI when they commence employment” The report also identifies the tests applicable when considering as to the true employment relationship and mentions the code of practice agreed by the hidden economy monitoring group set up in 2001.

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, 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.

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.

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 worker’s employment status.”

For the most part, the Supreme Court have had the benefit of reviewing the expressed terms of contracts as to the intended employment relationship. However, words alone do not go to distinguish the actual employment relationship.

In this case the claimant, a craft worker, was asked to carry out work personally on a building site for the respondent, on a State funded project to build houses under a procured contract. The Main Contractor was awarded the contract and they sub-contracted the Plastering package to the respondent. In turn, the respondent employed workers to carry out the works for the in order to profit. The respondent, a company in business on its own account, signed a contract with the main contractor. They also take on financial risk in carrying out the contract. If they employ the wrong people and they carry out work that is not acceptable to the main contractor, they may have to employ further workers to redo the work. Their contract is a commercial one.

The respondent is engaged by the main contractor to supply materials, carry insurance, employ workers, pay wages not owing more than one month, comply with all employment law and comply with further requirements set out in the contract supplied to the main contractor by the awarding authority, in this case DLR Council.

The requirements for both the main contractor and the sub-contractor are listed in clause five of the contract.

5 CONTRACTOR’S PERSONNEL

5.1 Contractor’s Personnel to Carry Out Contractor’s Obligations.

The Contractor is liable for the acts and omissions of Contractor’s Personnel [including Specialists and any design they do] as if they were the Contractor’s acts and omissions.

5.2 Qualifications and Competence

The Contractor shall ensure that the Contractor’s Personnel are suitably qualified and experienced and are competent to carry out their respective tasks.

5.3 Pay and Conditions of Employment

5.3.1 The Contractor shall prominently exhibit copies of this sub-clause 5.3 for the information of persons at the Site. In this clause 5 worker means an individual employed by, or otherwise working for, the Contractor or the Contractor’s Personnel on or adjacent to the Site.

5.3.2 The Contractor shall ensure that the rates of pay and the conditions of employment, including pension contributions, comply with all applicable law and that those rates and conditions are at least as favourable as those for the relevant category of worker in any sectoral employment orders, employment regulation orders or registered employment agreements implemented under the Industrial Relations Acts 1946 to 2015 (including any such agreements registered prior to the Industrial Relations (Amendment) Act 2015, which have not otherwise been superseded). This applies to workers who are posted workers (within the meaning of Directive 96/71/EC of the European Parliament and the Council of the 16 December 1996 as amended by Directive 2014/67/EU concerning the posting of workers in the framework provision of services), except that the Contractor’s obligation to make pension contributions in accordance with any sectoral employment orders, registered employment agreements or employment regulation orders implemented under the Industrial Relations Acts 1946 to 2015 does not apply to posted workers who already contribute, or whose contributions are paid, to a supplementary pension scheme established in another member state of the European Union. The obligations in this sub-clause 5.3 apply regardless of what rates the Contractor has tendered for adjustments to the Contract Sum.

5.3.3 The Contractor shall in respect of

(i) workers employed by, or otherwise working for, the Contractor and

(ii) all other workers, ensure that their employers, or the persons for whom they are working, do all of the following:

(1)          pay all wages and other money due to each worker

(2)          ensure that workers’ wages are paid in accordance with the Payment of Wages Act 1991 and are never more than 1 month in arrears or unpaid

(3)          pay all pension contributions and other amounts due to be paid on behalf of each worker

(4)          make all deductions from payments to workers required by Law, and pay them on as required by Law

(5)          keep proper records [including time sheets, wage books and copies of pay slips] showing the wages and other sums paid to and the time worked by each worker, deductions from each worker’s pay and their disposition, and pension and other contributions made in respect of each worker, and produce these records for inspection and copying by any persons authorised by the Employer, whenever required by the Employer

(6)          produce any other records relating to the rates of pay, pension and other contributions, deductions from pay and their disposition, conditions of employment of, rest periods, and annual leave for inspection and copying by any persons authorised by the Employer, whenever required by the Employer

(7) respect the right under law of workers to be members of trade unions

(8) observe, in relation to the employment of workers on the Site, the Safety, Health and Welfare at Work Act, 2005 to 2014 and all employment law including the Employment Equality Act 1998 to 2005, the Industrial Relations Acts 1946 to 2015, the National Minimum Wage Act 2000 and 2015, and regulations, codes of practice, legally binding determinations of the Labour Court and sectoral employment orders, employment regulation orders or registered employment agreements implemented under those

What is clear is that the respondent a sub-contractor of the main contractor is an independent contractor acting on their own account. They can organise labour, buy materials, provide insurance and the can benefit from sound management structures which they apply to their workforce on their sub-contracted work.

The claimant was contacted by a worker who at the time was working for the respondent on the site. He advised that the respondent was paying €260 per day for Plasterers and €125 for labourers. The claimant was asked if he could bring along anyone else as the respondent needed the work done. He did so and brought along two other workers, one plasterer and one labourer.

Whilst on the site working for the respondent, they carried out their duties in accordance with the respondent instructions who appeared on site on a regular basis. They signed into the site using the respondent’s name, Coyne Group, and to site management appeared as Coyne group workers.

The claimant could not profit from introducing, sound management structures, he could not substitute his work as he performed it personally, he was paid a predetermined wage, he was under instruction from the respondents agent, he was not in business on his own account but rather the respondents, He could not supply materials for the job, he is not exposed to financial risk and he is entitled to extra pay for overtime. He is entitled to a pension, sick pay and a death in service benefit all coming from the employment.

Case Law.

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 is different. In Ireland the leading authority is Henry Denny & Sons (Ireland) Ltd v Minister for Social Welfare [1998] 1 IR 34. The case involved a supermarket demonstrator who worked under a yearly contract. The Company argued that there were 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 in which it set out Mrs Mahon as self-employed, she was to be paid by the day and if she was unable to attend at work she could substitute 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.”

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 centre 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.”

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.

Considering the Denny case and the instant case, the only difference between both was that the respondent in this case did not provide clothing as it wasn’t necessary to do so. The claimant as would be normal supplied his own overalls as is custom and practice within the sector.

The amount of money he could earn was based on a fixed figure imposed by the respondent. The respondent at all times remained in charge of when where and how the work was to be done. He directed his workers as to what times the work was to be carried out. The claimant was acting for the respondent at all times and never acted for himself. He never presented as a person in business.

Mutuality of obligation.

Another factor or test to consider when establishing the employment status of workers is whether or not the irreducible minimum of “mutuality of obligation” existed. 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 principle is traced to Nethermere (St Neots) Ltd v Gardiner [1984] ICR 612, where 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.

The irreducible minimum of Mutuality of Obligation was in existent in the instant case where, there was an obligation upon the respondent to offer work and a receptacle obligation on the claimant to carry out that work. The claimant was fully integrated into the respondent’s business.

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 ...”

It would appear that in the instant case the above quote was the intention of the respondent.

The claimant in this case earned an amount of money purely based on the extent to which his services were availed of personally by the respondent. He could not make a higher profit from employing better management structures, he did not engage the services of other workers to carry out work and if needs required a request would be made to him by the respondent to seek others to work on site as needs require. This was done early on in the employment before he started. He acted purely as a pay master for the two other workers who were invited onto site to work.

As is the case on building sites today, the claim by employers that if you bring someone to a building site you are their employer. This is quite simply incorrect and misleading. In this instant case the claimant may have acted as a pay master only but did not act as an employer. The claimant is not registered for PAYE or PRSI payments.

With regards control, the respondent held over the claimant whilst employed on site in this case we believe hold little or no value. Plasterers have for hundreds of years carried out their role within the sector without their supervisor or employer watching over their shoulder. In this case the claimant carried out his work/duties in accordance with the instructions from the respondent’s agent. In the Henry Denny case Mrs. Mahon would carry out her function in stores as directed by the company. No company agent would instruct her constantly on how she was to do her job. In a circular from the company “while there was no continuous and direct supervision, a circular letter from Ms Campbell dated the 17th February, 1993, to all the demonstrators gave detailed instructions to them as to how they should do their job”

Whilst there was no correspondence issued to the claimant in this case regarding his function and that there was no continuous supervision on behalf of the respondent, the claimant carried out his duties as normal as he would on any building site. The respondent’s agent called to the site each day or subsequent day checking on the work and advising of where or what areas where to be completed next. The respondent remained in full control of the claimant.

Secondly, the claimant is entitled to the provisions of S.I. 455 of 2017 whereby he is a craft worker to whom the order applies. We argue that the supporting legislation, the Industrial Relations (Amendment) Act 2015, provides each worker of the class, type or group of worker as expressed in the order, is entitled to the minimum terms and conditions as expressed therein.

The Act is to make further and better provision for promoting harmonious relations between workers and employers and, in particular, to make provision for a system of registered employment agreements and sectoral employment orders; to amend and extend the Industrial Relations (Amendment) Act 2001; to amend and extend the Industrial Relations (Miscellaneous Provisions) Act 2004; to provide for certain interim relief for certain persons in respect of actions taken by them in relation to investigations of trade disputes and, for that purpose, to amend the Unfair Dismissals Act 1977; to amend the Workplace Relations Act 2015 and certain other enactments; and to provide for related matters

The act refers to workers and as such the SEO complies with that requirement. In accordance with section 5 (Definitions) it refers to the definition of a worker, as having the same meaning as Part III of the Act of 1990.

23.—(1) In the Industrial Relations Acts, 1946 to 1976, and this Part, “worker” means any person aged 15 years or more who has entered into or works under a contract with an employer, whether the contract be for manual labour, clerical work or otherwise, whether it be expressed or implied, oral or in writing, and whether it be a contract of service or of apprenticeship or a contract personally to execute any work or labour including, in particular, a psychiatric nurse employed by a health board and any person designated for the time being under subsection (3) but does not include

The section continues to outline the categories of workers to whom the section does not apply to, Plasterers are not included in section 23 nor are craft workers. “On a true construction of the said Section 23 a natural person providing services personally to another on a contract for service is a worker[2]”

In accordance with section 15(b) of the Act it requires that the order applies to “all workers of the particular class, type or group and their employers in the economic sector in respect of which the request is expressed to apply”,

Section 15(c) requires that “it is a normal and desirable practice, or that it is expedient, to have separate terms and conditions relating to remuneration, sick pay schemes or pension schemes in respect of workers of the particular class, type or group in the economic sector in respect of which the request is expressed to apply,

Section 15 also sets out the requirements for those who wish to be heard on any application to the court for a Sectoral Employment order for an economic sector.

Section 16 then sets out the requirements necessary for making a recommendation the Minister and it should have regard to a number of matters

Section 16(2)

(a)    the potential impact on levels of employment and unemployment in the identified economic sector concerned;

(b)    the terms of any relevant national agreement relating to pay and conditions for the time being in existence;

(c)     the potential impact on competitiveness in the economic sector concerned;

(d)    the general level of remuneration in other economic sectors in which workers of the same class, type or group are employed;

(e)    that the sectoral employment order shall be binding on all workers and employers in the economic sector concerned.

A recommendation to the Minister under section 16(3) shall specify the class, type or group of workers and the economic sector in relation to which the recommendation shall apply.

Section 19 provides for the Adaptation of contracts of service consequential upon sectoral employment orders. Section 19(1) sets out who the order shall apply to and upon where a sectoral employment order is introduced into an economic sector that contracts shall be amended.

19. (1) A sectoral employment order shall apply, for the purposes of this section, to every worker of the class, type or group in the economic sector to which it is expressed to apply, and his or her employer, notwithstanding that such worker or employer was not a party to a request under section 14, or would not, apart from this subsection, be bound by the order

It’s clear on who the order is applicable to and that is every worker of the class type or group in the economic sector to which it is expressed to apply and his or her employer. Upon the order applying to a worker of the class type or group, his or her contract with the employer must be amended in accordance with subs 19(b)&(c) of the Act, that is to say; (2) If a contract between a worker of a class, type or group to which a sectoral employment order applies and his or her employer provides for the payment of remuneration at a rate (in this subsection referred to as the “contract rate”) less than the rate (in this subsection referred to as the “order rate”) provided by such order and applicable to such worker, the contract shall, in respect of any period during which the order applies, have effect as if the order rate were substituted for the contract rate.

&

(3) If a contract between a worker of a class, type or group to which a sectoral employment order applies and his or her employer provides for conditions in relation to a pension scheme or a sick pay scheme (in this subsection referred to as the “contract conditions”) less favourable than the conditions (in this subsection referred to as the “order conditions”) fixed by the order and applicable to such worker, the contract shall, in respect of any period during which the order applies, have effect as if the order conditions were substituted for the contract conditions.

The consequences of section 19 are that, if the workers of a particular class type or group are not in receipt of a minimum rate of pay or a pension or sick pay scheme as laid out in the order, the contracts must be amended for the orders conditions and rates of pay as applicable in the order to take effect. Section 20 of the Act refers to the penalisation of a worker under a number of conditions and it specifies protections afforded to workers in respect of an SEO. The order provides for minimum rates of pay, overtime, pension provision, sick pay and a death in service benefit as set out below.

General Operative Grade B to consist of Skilled General Operatives with More than 1 Year’s Experience working in the Sector

General Operative Grade A to consist of the following categories of Skilled General Operatives, Scaffolders who hold an Advanced Scaffolding Card and who have four years’ experience; Banks operative, Steel Fixers; Crane Drivers and Heavy Machine Operators.

Craft Workers in the following trades Bricklayers/Stone Layers; Carpenters and Joiners; Floor Layers; Glaziers; Painters; Plasterers; Stone Cutters; Wood Machinists; Slaters and Tilers; together with a pro rata rate of pay applicable to Apprentices in these trades.

Category 1 Worker                                          €17.04 per hour

Category 2 Worker                                          €18.36 per hour

Craft Worker                                                   €18.93 per hour

Apprentice                                                        Year 1 33.3% of Craft rate

Year 2 50% of Craft Rate

Year 3 75% of Craft Rate

Year 4 90% of Craft Rate

New Entrant Worker                                      €13.77 per hour

The Court then looked at unsocial hours payments and in accordance with the Courts recommendation set out he following that applies in the Construction Sector

Monday to Friday                                                             normal finishing time to midnight time plus a half.

Monday to Friday Midnight                                          to normal starting time double time

Saturday              (1) First four hours from normal starting time                                      time plus a half

                             (2) All subsequent hours till midnight                                                      double time

Sunday all hours worked                                                                                                               double time.

Public Holidays All hours worked double time plus an additional day’s leave.

Normal working time in the Construction sector for the grades of workers as defined in the SEO have been 8.00am to 4.30pm Monday to Thursday and 8.00am to 3.30pm Friday. Anything outside those hours have been considered, unsocial hours.

The Court looked at a Pension and sick pay scheme that would apply to the sector and it outlined the conditions that that a pension scheme and sick pay scheme must adhere to. The pension scheme is to provide no less favourable the terms, including both employer and employee contribution rates, than those set out in the Construction Workers Pension Scheme be included in the Sectoral Employment Order.

Employer €26.63 per week

Employee €17.76

Total Contribution weekly into the scheme per worker €44.39

Death In Service Contribution

               Employer €1.11

Employee €1.11

Total contribution per worker €2.22

The Court then set out the terms and conditions applicable to the Sick pay scheme for the sector.

The Court noted the serious threat to the health and safety of workers, the precarious nature of employment and that a sick pay scheme to finance workers though such periods of injury or illness should be a mandatory requirement on all employers in the sector. The Court recommended that a scheme in line with the Construction Industry Sick Pay scheme, including no less comparable benefits and contributions by both workers and employers, be included in an SEO[3].

It set out he contribution rates for the employer and worker as follows.

Employer €1.27

Employee €0.63

Total €1.90

The Court then recommended a disputes procedure applicable to workers and employers in the sector. The disputes procedure is only concerned with disputes of a nature contained within the SEO for the sector. It provides for both individual and collective disputes and it is applicable to both workers and employers.

There are two appendices attached to the SEO outlining the terms and conditions a Pension and Sick pay scheme applicable to the order.

Worker.

The term or definition of the word worker has been considered on numerous occasions and it has been found by the Superior Courts to be wide enough to cover workers working as self-employed workers or independent contractors.

The Labour Court considered the term in its application with Registered Employment Agreements in Patrick McKevitt V BATU REA 0595 The Court noted as part of its decision that the REA was applicable to workers of the class type or group mentioned in the REA. In making its decision it referred to Building and Allied Trades Union & Anor v. Labour Court [2005] IEHC 109 (15 April 2005)[4] 

The Court under Judicial Review considered the term worker and referred to section 8 and Section 23 of the Industrial Relations Act 1990. Section 8 defines a worker for the purposes of trade disputes.

The court upon considering section 23 of the Act said the following at para19, Such workers are not defined as employees. It seems, accordingly, that a 'worker' is wide enough to include an individual sub-contractor. The sub-contracting company, on the other hand would appear to be an employer as defined by s. 8 of the Act. Accordingly, both a worker as an individual sub-contractor or sub-contractor as an employer of workers would appear to be within the ambit of the Registered Employment Agreement of 1967.

Employers are defined as follows; "A person for whom one or more workers work and have worked or normally work or seek to work having previously worked for that person."

Appendix 1 of the SEO requires “Every employer to whom the SEO applies shall participate in an SEO pension scheme that meets the pensions requirements of the SEO”.

The Order is similar to the Registered Employment Agreement as it has universal application to the class type or group of workers to whom it is to apply within an economic sector. One difference between REA’s as defined in part three of the Industrial Relations Act 1946 and SEO’s is that, the SEO must be laid before the houses of the Oireachtas. The REA’s were never required to come before the Parliament. The SEO has now replaced REA’s in their application in the construction sector.

As the provisions of the SEO apply to the claimant as he is a worker to whom the order applies and the respondent, it is necessary for the respondent to treat the claimant as an employee for the purposes of ensuring that the claimant is covered by an occupational pension scheme and sick pay scheme as set out in the SEO. Occupational pension schemes are governed by the Pension Act 1990 (as amended) and the revenue commissioners regulates the tax treatment of pension arrangements in Ireland.

In order for the respondent to comply fully with the terms of the SEO, he must threat the claimant who is of the class, type or group as defined therein, as an employee. An employer cannot by merely designating his or her workers as self-employed workers evade his or her responsibilities under the order. In the McKevitt case as mention previously the Labour Court concluded the following; Those working for the Respondent provide their services personally. Even if they are engaged on a contract for service, as contended for by the Respondent (and not on a contract of service as claimed by BATU) they are nonetheless workers within the meaning of Industrial Relations Acts 1946 to 2004 and are thus encompassed by the Agreement. It follows that the Respondent, to whom they provide their services must be regarded as their employer for the purposes of the Agreement and is thus liable to provide the workers with the benefits prescribed by the said Agreement.

We would also rely on the Code of Practice on employment status introduced by the Revenue Commissioners to assist on these matters.

Conclusion.

We conclude and respectfully submit that the claimant in the instant case was and should have been declared an employee by the respondent. This would have enabled that claimant receive entitlements granted under the SEO for the construction sector. By not employing the claimant as an employee, we allege that the respondent contravened the Order.The Respondent is a company in business on its own account and it presents itself to the world as it tenders for contracts from main contractors and others. It is open to financial risk and it employs others to carry out work for it in order to profit.We ask that you make an order that the claimant is a worker to whom a Sectoral Employment order applies. That he is a craft worker and has an implied term within his employment contract that provides him with entitlement to the provisions set out in S.I.455 of 2017 which includes an occupational pension scheme and that the order applies to him regardless of his tax status.We ask that you find the case well founded and that the respondent failed or neglected to pay to the claimant his wages owing in the amount of €725, as was owed on the last day of the employment that being the 29th January 2018, the date of contravention. We would ask that in accordance with section 23 of the Industrial Relations (Amendment) Act 2015 that you do one or more of the following and find the case well founded and require the employer to comply with the provision in respect of which the complaint concerned relates and, for that purpose, require the employer to take a specified course of action, or require the employer to pay to the worker compensation of such amount (if any) as the adjudication officer considers just and equitable having regard to all the circumstances, but not exceeding 104 weeks’ remuneration in respect of the worker’s employment calculated in accordance with regulations under section 17 of the Unfair Dismissals Act 1977.

Introduction

KB Plastering Service was engaged by the respondent company as a subcontractor to carryout plastering work on site. KB Plastering Services was engaged by the respondent to complete plastering work on a block of apartments from 9 January 2018. The claimant completed that block in 12 days. The respondent was on that site for another nine months and additional plastering work, that could have gone to KB Plastering Services, became available when each block was at the plastering stage. The plastering work on this site was not continuous. After completing the plastering work on that particular block, a dispute arose over payment and the claimant confirmed that the contract was terminated. The claimant was not engaged as an employee and there was no relationship of employer and employee between Respondent and KB Plastering Services.

Facts

The claimant was engaged by TF Plastering on the site. After a fall out between the claimant and TFl Plastering, the claimant approached the respondent seeking work as KB Plastering Services. He sought the same terms that he had been in receipt of with TF. The claimant confirmed that he was working 10 hours per day with TF Plastering and he was in receipt of €260 per day. As requested, the respondent agreed that the claimant would receive the same terms.

The respondents did not have direct control over the claimant. The claimant could have substituted the work. He did not need permission to do so. Commencement times, finishing times and rest breaks were whatever suited KB Plastering Services. The claimant did not take instruction from the respondents. He supplied his own equipment. The claimant was free to provide his business to other companies at the same time. The claimant was free to engage workers himself and he did so. The claimant had a labourer working for him on the site for five out of the 12 days. The claimant invoiced the respondent as KB Plastering Services. He also sent a text confirming that he is on “zero % rate”. It was the claimant’s responsibility to ensure that he deducts all necessary taxes etc. from wages and to ensure that those deductions are remitted to the revenue commissioners.

Claim under section 6 of the Payment of Wages Act, 1991

The claimant set out in his claim papers that the respondent breached the Construction Sectoral Employment Order S.I. No 455 of 2017 (SEO). Had the respondents engaged the claimant under a Contract of Service, he was on site for 96 hours over 12 days. He received €3,000. This equates to €31.25 per hour. Under the SEO a craft worker is entitled to a rate of €18.93 per hour. The claimant received well in excess of the SEO remuneration requirements. Therefore, it is difficult to understand the basis of the claim.

The Law

In accordance with the Supreme Court case of Henry Denny & Sons (Ireland) Ltd v Minister for Social Welfare, [1996] 1 ILRM 418, each case is determined on a case by case basis in accordance with its particular facts. While the degree of control exercised over the employee should be considered, it is not decisive, and inference should be drawn that a worker is self-employed where the person is engaged in business on his or her own account.

The claimant was in business on his own account and therefore under a contract for service. He approached the company as KB Plastering Services and he invoiced the respondent under that company name. He had his own equipment. If he was on the same terms when working with Tony Farrell Plastering, he was working on a contract for services with other companies. He sourced his own labour and had a labourer working with him for five out of the 12 days.

In Minister for Agriculture and Food v Barry [2009] 1 IR 215, the High Court held: “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 there is no mutuality of obligation, it is not necessary to go further, whatever the relationship is, it cannot amount to a contract of service. However, if mutuality of obligation is found to exist the mere fact of its existence is not, of itself, determinative of the nature of the relationship and it is necessary to examine the relationship further.”

There was no mutuality of obligation in this case. The respondent did not have continuous work to guarantee the claimant. They offered KB Plastering Services a contract for services to complete plastering work on a block of apartments. When the next apartment block was at plastering stage, the respondents would have invited KB Plastering Services to complete this additional work. However, the claimant ended the contractual relationship and refused the additional work. It was up to K B Plastering Services how they were to get the work done. The claimant could have substituted the work to another without permission from the Respondent. The claimant hired a labourer to work alongside him. He invoiced the Respondent for the work done. As no mutuality of obligation existed the claimant was self-employed.

Conclusion

A genuine subcontracting relationship existed. The claimant was in business on his own account. The claimant approached the respondent on behalf of KB Plastering Services on a contract for services basis. The claimant organised a business for his own benefit and sought the terms of the agreement. At no time did the claimant seek direct employment with The Coyne Group.

There was no mutuality of obligation. As the nature of the work was not continuous, The Coyne Group could not guarantee work or when the work would arise. The claimant was free to subcontract the work and hire labour. He could also refuse the work.

Had the claimant been engaged on a contract of service basis, he received well in excess of the SEO remuneration requirements. Therefore, we request that this case is not well founded.

I find that there was considerable conflict of evidence in this case.

I note that in the “Kerry Foods” case the Supreme Court decided that each case must be determined in the light of its own particular facts and circumstances.

I note that there is an amount of case law on this subject that will require attention in order to arrive at a decision on this matter.  

The Code of Practice for Determining Employment or Self-Employment Status of Individuals issued through the Department of Social & Family Affairs helps to form an understanding of this complex matter. It states “The overriding consideration or test will always be whether the person performing the work does so ‘as a person in business on their own account ‘. Is the person a free agent with an economic independence of the person engaging the service? This economic test is paramount”.

I note that Langford in The Classification of Workers: Employees and Independent Contractors “ (1998) 5 (3) CLP 63 states, “The courts have over the years sought to decide the issue by reference to a variety of legal tests, traditionally the control test. More recently, the courts have tended to adopt a practical test such as that of economic reality, or to have regard to all the different features of the work relationship and to engage in a balancing exercise in relation to all the various factors. The modern tendency would seem to be not to regard any one issue as conclusive but to look at the whole picture of the work situation”.

I note that in the case of McAuliffe v Minister for Social Welfare, Barr J. said it was not possible to devise any hard and fast rule as to what constitutes a contract of service.

In Sunday Tribune Ltd [1984] I.R. 505 Carroll J. stated: “The Court must look at the realities of the situation in order to determine whether the relationship of employer and employee in fact exists, and it must do so regardless of how the parties describe themselves”.

I have decided that it is necessary to consider the evidence as presented at the hearing under a series of tests as set out in the varying court cases that have dealt with this type of matter in the past.

1)Contract of Employment

I find that no contract of or for service was issued.

I find that this test is inconclusive.

2) Taxation / VAT

I note in the Henry Denny & Sons (Ireland) Ltd t/a Kerry Foods v The Minister for Social Welfare Kerry Foods case the demonstrator in question submitted an invoice yet it was deemed that she was an employee. I also note that in the Phelan case a VAT invoice was submitted, and it was also decided that he was an employee.

I note the Complainant’s evidence that he was obliged to provide invoices if he wanted the work.

I note the Respondent’s position that he presented himself as self-employed.

Therefore, I find in this case that the submitting of a VAT invoice and the responsibility for his own tax returns does not conclusively prove that the Complainant was self-employed therefore I must rely on other tests as well in order to arrive at a decision.

3) Control

Under this test the following matters needs to be addressed: deciding the thing to be done, way it is to be done, the means to be employed doing it and the time and place.

I note that there was considerable conflict of evidence regarding this matter.

I note that the work to be done was decided by the Site Supervisor. It was not offered as a job lot but the work was allocated daily / weekly and he was paid a daily rate for the work provided.

I find that the Site Supervisor exercised a degree of control over the work and its allocation.

I note that in the Denny case Mrs Mahon carried out the function in the stores as directed by the company.

I find that this test would indicate that this was an employer / employee relationship.

4) In business on own account

I note that the work was decided by the Site Supervisor.

I find that the work was allocated on a daily / weekly project and not a plastering contract to be decided by the Complainant.

I note that he earned wages purely based upon the work that he did. He could not make a higher amount from employing better management techniques. He acted as a paymaster for other workers that assisted him.

I note the Respondent stated that he was free to replace himself without seeking permission.

Commencement breaks and finishing times were decided by the Complainant.

Despite the conflict of evidence, I find that on the balance of probability the Complainant was not in business on his own account.

I conclude that this test would suggest that this was an Employer/Employee relationship.

5) Mutuality of Obligation

In order for a contract of service to exist there must be mutual obligations on the employer to provide work for the employee and on the employee to perform work for the employer. So there is an ongoing duty to provide work and one to accept work.

In the High Court case Minister for Agriculture and Food v Barry & Ors the mutuality test of obligation was endorsed by Edwards J. when he stated ”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 a 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”.

I find that the work offered and accepted by the Complainant resembled that of a employer / employee relationship.

I did not find that the offer was a contract job, rather it was work allocated on daily/weekly basis under the control of the Site Supervisor.

On the balance of probability, I find that there was a mutuality of obligation. The Respondent provided work for the Complainant and he performed it.

I find under this test that this was an employer/employee relationship.

6) Integration

I note that there was a conflict of evidence regarding this matter.

I note the circumstances on the site.

I did not find any evidence of an integrated workforce as each section got on with their work.

I find that this test is inconclusive.

Overall, I have concluded that this was an employer/employee relationship.

Claims

1)application of the SEO S.I.455/2017

I find that this was an employer /employee relationship.

I find that the Complainant is entitled to benefit from the provisions of the SEO for the construction industry.

2) Wages owed

I note that the Complainant is seeking the payment of €725.

I note the Respondent states that the Complainant worked a total of 96 hours over 12 days. This equates to €31.25 per hour and the terms of the SEO is €18.93 per hour. They state that he was paid well in excess of the SEO for the construction industry rates and so there is no basis for this complaint.

I note that this was not a complaint under the Payment of Wages Act.

I find that if the Complainant is seeking to have the provisions of the SEO for the construction industry applied to him then he can’t cherry pick from elsewhere.

Based on the sought provisions of the SEO for the construction industry I find no basis for the monies claimed.

1)Employer / Employee Relationship

I have decided, based on the above tests, that this was an employer / employee relationship.

On the balance of probability, I have decided that the work was offered in such a manner that it obliged the Complainant to act as a self-employed contractor despite the fact that it appears to be a regular employment relationship.

I have decided that an individual can’t decide their own status. This must be done by another person(s). For example, an individual cannot suddenly change their nationality themselves, there are mechanisms to deal with that scenario.

In this case I have decided that the Complainant cannot decide for himself that he is a self-employed contractor in an operation that I believe is the opposite to that. That is a regular employment relationship.

2) Application of the provisions of the SEO for the construction industry

Employer/Employee relationship, wages owing