Complainant

Respondent

Anonymised Parties

A plasterer

A construction company.

Representatives

Billy Wall Operative Plasterers & Allied Trades Society of Ireland

Respondent Directors.

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00019890-002

20/06/2018

Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994

CA-00019890-003

20/06/2018

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00019890-004

20/06/2018

Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997

CA-00019890-005

20/06/2018

Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994

CA-00019890-006

20/06/2018

The Complainant is a plasterer who was employed by the Respondent from 01/05/2018 until 05/06/2018.

This complaint was received by the Workplace Relations Commission on 20th June 2018.

When the union referred the matter to the WRC the appropriate complaint form did not cater for complaints regarding Sectoral Employment Orders. As such the union wrote in the following in the comments box:

“I was employed as a plasterer at one of the Respondent’s sites in Dublin. I am entitled to the provisions of S.I.455 of 2017 (Sectoral Employment Order (Construction Sector)) for which the Respondent has failed or neglected to provide me. …………..

There was no doubt at the hearing but that everyone present was aware that the complaint was an alleged breach of the Sectoral Employment Order. There were no objections raised in this regard.

Preliminary Issue.

Precarious forms of employment have increased in recent years and this is very evident in the construction sector in the form of self-employment or false self – employment.

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”.

To establish as to whether the true employment relationship is that of a “contract of service” or a “contract for service” 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. It is not simply a matter of a principal contractor or a sub-contractor calling the engagement ‘employment’ or self-employment’ to suit themselves’.

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 differs. There are a number of tests which have been established by the courts which go to prove employment status. The Control Test, the Integration Test and the in-Business Test (commonly referred to as the Entrepreneurial Test) have all been used to establish employment status. However, 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.

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 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”.

In ÓCoindealbhain 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 particularly 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 the Complainant earned was based on a fixed figure imposed by the Respondent, that being €180 per eight-hour day. The Respondent at all times remained in charge of when where and how the work was to be done. The Respondent directed his workers as to what times the work was to be carried out and on what site. The Complainant was acting for the Respondent at all times and never acted for himself. He never presented himself as a person in business on his own account.

Mutuality of Obligation.

Another factor or test 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 so-called irreducible minimum of “mutuality of obligation” requirement. The principle is traced to Nethermere (St Neos) 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 existence in the instant case where, there was an obligation upon the Respondent to offer work and a receptible obligation on the Complainant to carry out that work. The Complainant was fully integrated into the Respondent’s business.

The Complainant’s representative then referred to the case of Firthglow Ltd (trading as Protectacoat) v Szilagyi [2009] IRLR 365 where a construction worker was engaged by the respondent to carry out work on building clients of Protectacoat. The company arranged for a partnership agreement with the complainant. The Court found in favour of the complainant 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 was contended by the Complainant’s representative that in this instant case the above quote was the intended position of the Respondent.

In further consideration of the above, we firmly believe that the Complainant is entitled to the provisions of SI 455 of 2017 which gives him rights to pension entitlements, death in service and sick pay. In order for the Complainant to receive those benefits and for the Respondent to comply with the legislation, it is necessary for the Respondent to employ the Complainant on a contract of service.

The Respondent claims that the Complainant accepted their offer of employment on a self-employed basis. This offer was accepted and the Respondent helped in setting the Complainant up as self employed with the Revenue Commissioners.

The Respondent informed the hearing that they did not control the Complainant’s hours of work, on one occasion he informed the Respondent that he would not be on site the following morning because he had another ‘cash job’ to be done. At all times the Complainant decided what time he would start and finish work.

The Respondent also informed the hearing that payments would be made to the Complainant’s bank account when he submitted invoices for his work.

He was classified as a sub-contractor.

In looking at the tests referred to by the Complainant’s union representative I find that the Complainant accepted the offer of work on a self-employed basis and was set up for Revenue purposes as a subcontractor. His taxation documents were addressed to Mr xxxx xxxx xxxxxxx T/A A and B Plastering (proper names redacted).

The Complainant had a level of discretion when it came to working times, he would decide what times he started and finished work.

The Complainant was free to take on other unrelated work and admitted at hearing to doing some ‘cash work’.

The Complainant was paid on foot of submitting invoices to the Respondent.

Work was allocated to the Complainant as it became available, no one was supervising him or directing him as to how the work was to be done.

My decision is that the Complainant was a subcontractor who was self-employed, he was not an employee.

The Complainant has lodged complaints to the Workplace Relations Commission under the following:

Section 6 – Payment of Wages Act, 1991.

Section 27 – Organisation of Working Time Act, 1997.

Section 7 – Terms of Employment (Information) Act, 1994.

All three of these Acts refer to employees. As I have decided that the Complainant in this instant case was not an employee I do not have jurisdiction to consider the complaints as outlined by the Complainant.

I do not have jurisdiction to hear the complaints as outlined.

Employment status.