Complainant

Respondent

Parties

Alex  O'Brien

ODBC Consultants Ltd Elite Stocktaking

Representatives

  Self

Caroline Lyons The HR Suite

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00043362-001

01/04/2021

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

CA-00043362-002

01/04/2021

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

CA-00043362-003

01/04/2021

This Decision deals with the employment rights elements of complaints brought by the Complainant against his former employer. These were addressed by way of a public hearing in which evidence was taken under affirmation from the Complainant, the Respondent-Mr O Dowd and two witnesses called by the Complainant a Mr Cunningham and Mr Armstrong with cross examination where requested. The parties also made written submissions.

The Complainant submitted two separate complaints under Section 7 of the Terms of Employment Act.

The Complainant contended that his employment commenced on 29 June 2020. He cited journeys made on behalf of the Respondent and work performed from June onwards after they had reached a verbal agreement regarding his role as founder, his rate of pay and his prospects as a shareholder with the Company which he did set up on behalf of the Respondent. Evidence was provided of a trip to the UK in August and other meetings with the Employer in July 2020 and the purchase of a laptop and meetings involving others prior to the end of September 2020 when the employer claimed the employment relationship commenced. The employee provided evidence of a €300 per week payment to his wife’s bank account commencing in August which was agreed as a way of paying for his work while he was on job seekers benefit and before being placed on the payroll at the end of September. This payment, which ceased when he was placed on the payroll at the end of September at which time he also ceased claiming jobseekers’ benefit.

In one complaint he stated he had not received his core conditions of employment as required within five working days of commencement of employment which was of a duration of more than one month.

In the second complaint he stated that he had not received a contract of employment despite repeated requests. He sought clarification of his role and responsibilities but never received anything in writing.

Organisation of Working Time Act 1997

The Complainant submitted that he had regularly worked more than sixty hours per week while in the employment, in breach of the Organisation of Working Time Act.

The complainant submitted that he had worked on multiple Sundays between June and November 20th, 2020.

Evidence was given by witnesses on his behalf that they had attended meetings with the Respondent and the Complainant in July/August 2020 and another had heard the Respondent in conversation with the employer on a Sunday which confirmed that the Complainant was working on a Sunday.

The Respondent contended that the employment relationship commenced on September 28th, 2020 as evidenced by the payroll records and correspondence with the Complainant at that time. The Complainant wanted to stay on job seekers benefit as he had a cause with a previous employer which meant he could not work for a competitor. He did speak to the Respondent about experiencing financial hardship and the Respondent agreed a payment of €300 per week as a loan to be repaid in 2021.

Regarding the complaints under the Terms of Employment Act-the Respondent submitted that as the Complainant was not in the employment for two months he was not obliged to issue a full statement of terms of employment. It had been his intention to provide the written statement of terms to the Complainant at meetings proposed in November, but the Complainant would not attend.

Organisation of Working Time Act 1997

Regarding the complaint of excess working hours, this was rejected. Nobody including himself was required to work these kind of hours.

Regarding the complaint of payment for working on Sunday-there was one Sunday worked during the period of the employment relationship-this was November 8th -on a stock check -and this was compensated by a day in lieu on Friday November 13th.

The first matter to be decided in this case is when the employment relationship commenced for the purposes of the complaints under the Terms of Employment Information and Organisation of Working Time Act.

The Complainant states that the relationship commenced at the end of June whereas the Respondent states that it commenced at the end of September 2020 when the Complainant was placed on the payroll as evidenced by payroll records and emails.

The basis of the Complainants contention regarding the commencement of the employment relationship relies mainly on his own evidence regarding the transfer of €300 per week to his wife’s bank account by agreement with the Respondent. This arrangement was reached because the Complainant was on job seekers benefit which he continued to receive until he was placed on the formal payroll at the end of September. This was described on each transfer as a loan which the Respondent contends was just that-a loan to be repaid in 2021.

What is being asked here is that a mechanism created by two parties for the purposes of evading tax and social welfare contributions while allowing for jobseekers’ allowance to be claimed, be regularised by the WRC so as to enable the Complainant to claim compensation under certain employment statutes. In effect to give legitimacy to an employment relationship based on social welfare fraud. If it were merely a ‘loan’ as claimed by the respondent, why not transfer the payment to the Complainants account on that basis if it were not designed to deceive the State through the social welfare authorities.

In Red Sail Frozen Foods v Companies Acts 2007 18 E.L.R 246 Justice Laffoy found:

In cases where the contract of employment is neither entered into for an illegal purpose nor prohibited by statute, the illegal performance of the contract will not render the contract unenforceable unless in addition to knowledge of the facts which make the performance illegal the employee actively participates in the illegal performance. It is a question of fact in each case whether there has been a sufficient degree of participation by the employee.’

In this case, it is evident that the Complainant sought and entered into an arrangement entirely to suit his own circumstances with the deliberate purpose of engaging in social welfare fraud. His relationship with the Respondent at that time-the end of June 2020 to the end of September 2020- was very strong and his was not a role of a junior person in the relationship-he was by his own account, to be a significant shareholder and described as the founder of the Company. He was in charge of operations and drew up the contracts of employment for other employees, advising the Respondent on the contents of those terms. Thus, contrary to the evidence in the Red Sail Case-there is undeniable evidence that the Complainant knew of the fraudulent arrangement through providing a third party’s bank details to facilitate that payment. In doing so, he actively sought and facilitated the arrangement. This arrangement goes to the root of the claim that the Complainant was an employee from a date in June 2020. The illegal payment arrangement was designed to hide from the authorities that there was an employment relationship and as such, it cannot now be reasonably relied upon to create the employment relationship retrospectively so as to claim compensation under legislation. In effect, such was the illegal basis of the contract between the Complainant and the Respondent, it renders the remainder of the contract unenforceable as a contract of employment under the terms of the Terms of Employment Information Act or the Organisation of Working Time Act for the period June to September 28th, 2020.

Based on the forgoing conclusions, the Complainant commenced employment with the Respondent on September 28th, 2020. His employment ended on November 22nd, 2020 and as such he does not have two months service for the purposes of a complaint that he had not received a full statement of his terms of employment. The related part of the complaint under Section 7 of the Terms of Employment Act 1994 cannot succeed.

This finding also impacts on the complaints under the Organisation of Working Time Act 1997 seeking payment for weekly hours and Sundays worked.

Continuing with the complaint under the Terms of Employment Act as amended, requires that a short statement of terms be provided to an employee within five days of the commencement of employment.

(1A) Without prejudice to subsection (1), an employer shall, not later than 5 days after the commencement of an employee’s employment with the employer, give or cause to be given to the employee a statement in writing containing the following particulars of the terms of the employee’s employment, that is to say:

(a) the full names of the employer and the employee;

(b) the address of the employer in the State or, where appropriate, the address of the principal place of the relevant business of the employer in the State or the registered office (within the meaning of the Companies Act 2014);

(c) in the case of a temporary contract of employment, the expected duration thereof or, if the contract of employment is for a fixed term, the date on which the contract expires;

(d) the rate or method of calculation of the employee’s remuneration and the pay reference period for the purposes of the National Minimum Wage Act 2000;

(e) the number of hours which the employer reasonably expects the employee to work—

(i) per normal working day, and

(ii) per normal working week.

The breach of this section of the 1994 Act is admitted by the Respondent. The assertion that it was intended to provide the Complainant with a copy of these terms at meetings offered in November 2020 is not accepted as a valid explanation. At no point did the Respondent confirm any terms of employment to the Complainant in writing. The complaint under the section of the Act relating to the non-provision of the short statement under Section 7 succeeds and two weeks payment by way of compensation is considered reasonable in the circumstances.

Regarding payment for excess hours claimed and hours worked on Sundays-the witness evidence provided in support of the Complainant together with all but one of the dates referenced both by the witness and the Complainant in relation to Sunday working refer to the period where this Decision finds the Complainant was not in what is found to be an employment relationship for the purposes of his complaints.

This leaves Sunday 8th November 2020 which the Respondent acknowledges was a day worked by the Complainant but for which the Respondent contends he received a day off in lieu.

In rejecting the Respondents contention in this regard, there is no evidence that the employer advised the Complainant that the Friday November 13th was a day in lieu of the Sunday. Moreover, the respondent began emailing the Complainant at 8 30am on the Friday regarding work matters to which the Complainant replied and there was a response from the Respondent without any acknowledgment that this was a work free day. Compensation is the appropriate remedy in respect of that one day. Given the value of the work and the rate of pay of the Complainant a rate of approximately time and one half as the premium to be paid for that day by way of compensation.

In general, the Respondent cannot rely on a claim of an all-encompassing rate of pay including Sundays-when he did not provide such terms or clarification in writing at any stage.

Regarding the claim of working 60 hours per week-it is accepted that, like everything else about this unwritten employment relationship, there was no arrangement in place for recording working hours-and no understanding of what represented working hours-particularly hours spent while travelling. The failure to keep records is a criminal offence and not one which in and of itself gives rise to an award of compensation by the WRC under the Organisation of Working Time Act. Given the decision regarding the duration of the employment relationship for the purposes of the complaints-the Complainant cannot establish a reference period of four months for the purposes of calculating his average hours during that period. In any event, given the low level of actual business during the period September to November and the extent to which the Respondent himself began to engage in the work of the business in stocktaking, to the chagrin of the Complainant, together with absence of ongoing  engagement between the parties about work matters which the Complainant noted commenced in October 2020, it is considered consider  that the Complainant was working the kind of hours he has claimed during the period September to November 2020.

CA -00043362-001 Terms of Employment Information Act 1994

The complaint that the Respondent failed to provide a statement of core conditions is well founded.

The Respondent is to pay the Complainant €1346 in compensation in respect of this complaint.

CA-00043362-002 Terms of Employment Information Act 1994

The Complaint that the Respondent failed to provide the Complainant with a full statement of terms of employment is not well-founded.

CA-00043362-003 Organisation of Working Time Act 1997

The complaint that the Respondent required the Complainant to work average hours in excess of the statutory regulations is not well founded.

The complaint that the respondent did not recompense the Complainant for one Sunday worked-8 November 2020- is well founded.The Respondent is to pay the Complainant €202 in compensation in respect of work performed on that day. For the avoidance of doubt-all other aspects of the complaint regarding Sunday Working are not well founded.

Duration of contract/social welfare fraud; hours worked; Sunday premium; failure to provide a statement of core terms; failure to provide a full statement