ADJUDICATION OFFICER DECISION

Adjudication Reference: ADJ-00028243

Parties:

	Complainant	Respondent
Anonymised Parties	A complainant	A respondent

Representatives

Stephen O’Donoghue BL, instructed by McCauley Adams Solicitors

Julie Breen Solicitor

Complaint(s):

Act	Complaint/Dispute Reference No.	Date of Receipt
Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977	CA-00036263-001	20/05/2020
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991	CA-00036263-002	20/05/2020
Complaint seeking adjudication by the Workplace Relations Commission under section 27 of the Organisation of Working Time Act, 1997	CA-00036263-003	20/05/2020
Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994	CA-00036263-004	20/05/2020
Complaint seeking adjudication by the Workplace Relations Commission under section 7 of the Terms of Employment (Information) Act, 1994	CA-00036263-005	20/05/2020
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991	CA-00036263-006	20/05/2020
Complaint seeking adjudication by the Workplace Relations Commission under Section 12 of the Minimum Notice & Terms of Employment Act, 1973	CA-00036263-007	20/05/2020

Date of Adjudication Hearing: 11/12/2020 & 19/02/2021

Workplace Relations Commission Adjudication Officer: Conor Stokes

Procedure:

In accordance with Section 41 of the Workplace Relations Act, 2015 and Section 8 of the Unfair Dismissals Acts, 1977 - 2015,following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints.

Background:

The complainant began a self-employed relationship with the respondent early in 2015. It is common case that she was an independent contractor for the initial year-long period. The working relationship continued until January 2020, this instant case revolves around the nature of that relationship from early 2016. The complainant submitted that it became one of employee/employer while the respondent maintained that complainant remained an independent contractor. A finding of employment or self-employment relating to the first complaint will determine the remainder of the complaints, as only an employee can have recourse to the other legislation under which the complaints have been taken.

This matter was heard by way of remote hearing pursuant to the Civil Law and Criminal Law (Miscellaneous Provisions) Act, 2020 and S.I. No. 359/2020 which designate the WRC as a body empowered to hold remote hearings.

Summary of Complainant’s Case:

CA-00036263-001 – unfair dismissal

The complainant submitted that she was an independent contractor for the first year of this working relationship. The complainant submitted that this relationship changed, and she became an employee in January 2016 and thereafter was an employee until her dismissal by way of an email dated 13 January 2020. The complainant submitted that following this change in 2016 she worked 20 hours per week at times fixed by the respondent. It was submitted that she was offered twenty-one days holidays per year and would be paid sick leave.

The complainant submitted that the respondent asked her to continue to submit invoices monthly. It was also submitted that a review took place in January 2017 whereupon the respondent increased the complainant’s salary to €40,000 plus a performance related bonus.

The complainant submitted that she was an integral part of the respondent’s management team and carried out a range of duties for the respondent connected with her role as Sales Manager. The complainant submitted that this range of duties indicated that the complainant was fully integrated into the management structure as an employee and that this integration contributed to her consideration as an employee. In support of this contention, it was also submitted that she took part on the company social gatherings, had fixed hours of work and attended regularly scheduled meetings.

CA-00036263-002 – unpaid wages

The complainant is seeking the sum of €33,013.69 in unpaid wages, €3,013.69 relates to unpaid salary for January 2020 and €30,000 relates to an unpaid performance bonus for 2019.

CA-00036263-003 – holiday entitlements

The complainant is seeking holiday entitlements from 1 – 22 January 2019

CA-00036263-004 – written terms of employment

The complainant submitted that she never received a written statement of her terms of employment.

CA-00036263-005 – change in terms of employment

The complainant submitted that the respondent sought to change the agreed terms of her employment in July 2019 and again in December 2019 without any notification in writing.

CA-00036263-006 – notice

The complainant submitted that she did not receive a payment in lieu of notice

CA-00036263-007

The complainant submitted that she did not receive her statutory period of notice nor a payment in lieu of notice

Summary of Respondent’s Case:

CA-00036263-001

The respondent submitted that the complainant provided services to the company since 2015 for 6 years on a self-employed basis carrying out the role of Sales Manager.

The respondent submitted that the agreement between the parties each year was for a maximum invoice value and the opportunity to invoice for the rest of the year should certain targets be met.

The respondent submitted that no fixed hours of work have ever been specified or any holiday allowances agreed.

The respondent submitted that the complainant has never been an employee and has never been included on a Revenue return.

The respondent submitted that in late 2019 it decided to dispense with the services of the complainant in relation to the Sales Manager role and looked to have the complainant undertake a different role. Ultimately however this did not happen.

The respondent submitted that the complainant has always submitted invoices and charged VAT on them, as appropriate. The respondent also submitted that the complainant represented herself on business oriented social networks as working for herself and identified herself as a consultant. It also submitted that there was nothing stopping the complainant from taking on additional clients when she was not undertaking the work that she was contracted to do with the respondent.

The respondent submitted that the complainant provided services to its Dublin offices from her Cork base, and that the complainant had a LinkedIn presence as an independent consultant. The respondent also submitted that the complainant was involved in annual contract negotiations surrounding the amounts which she invoiced the company for, initially for €11,000 p.a. rising to 54,920 plus VAT per annum.

CA-00036263-002

The respondent submitted that whilst there may be some outstanding amounts which may remain to be invoiced, the complainant was not an employee and accordingly is not in a position to pursue this element of the complaint under the Payment of Wages Act, 1991.

CA-00036263-003

The respondent submitted that the complainant was not an employee and accordingly is not in a position to pursue this element of the complaint under the Organisation of Working Time Act, 1997.

CA-00036263-004

The respondent submitted that the complainant was not an employee and accordingly is not in a position to pursue this element of the complaint under the Terms of Employment (Information) Act, 1994.

CA-00036263-005

The respondent submitted that the complainant was not an employee and accordingly is not in a position to pursue this element of the complaint under the Terms of Employment (Information) Act, 1994 .

CA-00036263-006

The respondent submitted that the complainant was not an employee and accordingly is not in a position to pursue this element of the complaint under the Payment of Wages Act, 1991.

CA-00036263-007

The respondent submitted that the complainant was not an employee and accordingly is not in a position to pursue this element of the complaint under of the Minimum Notice & Terms of Employment Act, 1973.

Findings and Conclusions:

CA-00036263-001

The complainant confirmed that she was initially an independent contractor but that following discussions in January 2016 she became an employee of the respondent. The respondent disputes that the complainant became its employee.

The complainant confirmed that she submitted monthly invoices, retained an Accountant to deal with her tax affairs, once she reached an exceeded the appropriate threshold registered for and charged VAT to the respondent. She also confirmed that she was an independent contractor during the initial year of the engagement with the respondent.

Although there was some dispute as to the complainant’s level of attendance at meetings in the Dublin, I am satisfied that it is common case that the complainant provided the bulk of her services to the respondent by way of remote working from her Cork base.

From the oral evidence given by the complainant, it would appear that she decided initially upon which hours she would provide services to the respondent (in order to facilitate her childcare arrangements) and has not suggested that the respondent sought to vary the hours that she dictated that she would work.

The complainants Accountant appeared as a witness to these proceedings. He outlined how he was the complainant’s accountant from the beginning in 2015. His evidence was that on a number of occasions he indicated to the complainant that he thought she should be classed as an employee. He confirmed through his evidence that when the complainant’s earnings exceeded €35,000 (the appropriate VAT threshold), he registered the complainant for VAT and thereafter she included VAT on the invoices submitted to the respondent.

The complainant outlined how she informed the respondent in advance when she would be away on holidays. Uncontroverted evidence was given that the other senior manager sought approval for annual leave in advance. The complainant noted that when she informed the other senior manager of her annual leave plans, he noted same, but did not hold the approval authority over the holidays taken.

The complainant submitted that she was an employee in that she was integrated into the respondent’s workforce and in that regard, she submitted amongst other elements, that she was included in a Christmas party trip organised by the respondent to Spain in 2017.

The complainant compared her employment relationship to the other Senior Manager, however she accepted that she did not know the manner of his employment. She gave evidence that the annual discussions were an appraisal but confirmed that no paperwork was written or kept for these meetings. Oral testimony was given by the Respondent that the other Senior Manager had to undergo a formal appraisal system including written notes being made and kept as part of the appraisal process.

A number of precedent cases have been cited by both parties including Henry Denny & Sons (Ireland) v Minister for Social Welfare [1998] 1 IR 34, Football Association Ireland v Hand FTF143, Ben O Sullivan v Liberty Insurance Incorporating Quinn Direct Insurance Limited UD1575/2014, Castleisland Breeding Society Limited v Minister for Social and Family Affairs, [2004] IESC 40.

The instant case differs somewhat from cases cited in that the starting place for this working relationship is accepted by both parties to have been one of an independent contractor. It was submitted by the complainant that this evolved into an employee/employer relationship. This is denied by the respondent. It is this evolution that is at the heart of the definition of this association. The respondent, in evidence, wondered why he would be so reticent to put the complainant on the payroll as it would have been a relatively simple matter - he already had other employees. He further suggested that if he was taking the complainant on board as an employee, as suggested by the complainant, there was nothing to be gained by not including her in its revenue returns and deducting social insurance contributions as was done for all other employees. This raises the issue of credibility as to what occurred during that meeting in January 2016.

The complainant submits that she became an employee but continued to invoice the respondent, going on to register for VAT and adding this to her invoices when she reached the VAT threshold. She retained an accountant to assist with her accounts. No evidence was given of approaching a HR function to pursue these matters, but that she suggested that she simply asked the Respondent Director, who said that he was prepared to take the chance by leaving her submitting invoices.

If as the complainant suggests, she became an employee in January 2016, I cannot see what benefit leaving an employee to submit invoices would serve the respondent, given that it was simply a matter of assigning an additional employee to the payroll and allowing all the norms of its employment to flow to the complainant.

The complainant, for her part, continued to invoice the respondent and indeed, when the invoice amounts went over the threshold, registered for VAT and passed it on to the respondent as is the norm for all businesses. She provided her own ‘tools of the trade’ in that she used her own laptop and worked the hours she had dictated to the respondent from the outset.

This case turns on the account of the complainant as to when this became and employer/employee relationship and on the respondent’s denial that such an action occurred. There is no written contract which can be considered as one of service or one for service, and so this aspect comes down to the credibility of the two witnesses around the transition or otherwise of the status of the complainant from that of independent contractor to that of employee. The complainant submitted that she had annual salary reviews and appraisals while the respondent contends that these were simply contract negotiations. The respondent outlined what annual appraisals looked like (in relation to the other senior management member cited during oral evidence) and outlined how that manager sought and was granted leave which was not the same system used by the complainant who, it seemed, simply notified the respondent of when she would be unavailable.

The complainant submitted that she carried out a range of duties, attended social gatherings, had fixed hours of work and attended regularly scheduled meetings and that this means that she was an employee. However, these elements were all present during the 2015 – 2016 period when neither party disputes that the complainant was an independent contractor. I can find no evidence that the position put forward by both parties in relation to the complainant’s status during the initial period was not that of an independent contractor. Apart from the alleged evolution from contractor to employee, the only element that appears to have changed in early 2016 was that the complainant was informed that the respondent would no longer pay expenses but that she would be entitled to a pay-related bonus.

In relation to the elements present during the 2015 – 2016 period, it appears that the intention of the parties was that the complainant would be working as an independent contractor. No evidence was given regarding the level of control that the respondent exercised over the complainant or over her responsibilities or that this element had materially changed between the first and second period of the relationship. In terms of the mutuality of obligation, as there is no written contract, it is difficult to ascertain the extent, if any, that this aspect exists, save to say that the complainant invoiced the respondent on a monthly basis for the work she carried out, the level of remuneration for which was agreed on an annual basis. This element existed during the initial period and appears to have continued throughout the period of association of the parties.

At some point, the complainant engaged the services of an Accountant and registered for VAT payments, this would appear to indicate that she was in business on her own account. I note that the complainant indicated that when she was not well, the respondent continued to pay her, however, it appears that she continued to invoice for the full amount and did not form sick pay. The complainant confirmed that she has always raised her own invoices and since going over the VAT threshold, has charged VAT on them. The complainant also appears to have been responsible for her own taxation payments and no deductions appear to have been retained by the respondent in this regard. The complainant suggested that she was not permitted to substitute anyone else into her responsibilities while the respondent indicated that this possibility was neither discussed nor precluded.

Each of the elements of the relationship appear to date from the outset of the relationship, i.e. during the 2015-2016 period when both parties agree that the complainant was self employed and very little seems to have changed in the period when the complainant asserts that she became an employee.

Having regard to all the information provided by both parties, on balance, I prefer the respondents account which appears both credible and coherent and I find that the relationship did not evolve from one of contractor to that of employee. As the complainant is not an employee, she cannot seek to rely on the Unfair Dismissals Act, 1977.

CA-00036263-002

As I have found that the complainant was not an employee, I find that the complainant does not have recourse to the Payment of Wages Act, 1991.

CA-00036263-003

As I have found that the complainant was not an employee, I find that the complainant does not have recourse to the Organisation of Working Time Act, 1997.

CA-00036263-004

As I have found that the complainant was not an employee, I find that the complainant does not have recourse to the Terms of Employment (Information) Act, 1994.

CA-00036263-005

As I have found that the complainant was not an employee, I find that the complainant does not have recourse to the Terms of Employment (Information) Act, 1994.

CA-00036263-006

As I have found that the complainant was not an employee, I find that the complainant does not have recourse to the Payment of Wages Act, 1991.

CA-00036263-007

As I have found that the complainant was not an employee, I find that the complainant does not have recourse to the Minimum Notice and Terms of Employment Act, 1973

Decision:

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaints in accordance with the relevant redress provisions under Schedule 6 of that Act.

Section 8 of the Unfair Dismissals Acts, 1977 – 2015 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.

CA-00036263-001 – Unfair Dismissals Acts, 1977 - 2015

My decision is that the complainant was not unfairly dismissed.

CA-00036263-002 - the Payment of Wages Act, 1991