Complainant

Respondent

Parties

Peter  Maunsel

Glenpatrick Spring Water Company Limited

Representatives

Jamie Quane BL

Cathy Maguire BL

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-00040641-001

23/10/2020

The Complainant contends he was unfairly dismissed by the Respondent when he was told his work was going out to tender.  The Respondent contends that the Complainant was not an employee, that he was a contractor.

The Complainant commenced his employment with the Respondent in or around the 2001/2002, employed to carry out building, maintenance and repair for the Respondent for over 18years. During this time he worked at the Respondent’s plant and also on secondment at its sister plant or at the property of a senior person within the Respondent company.

The Complainant was initially paid a net daily rate of €80, rising after a year to €120. For the last four to five years of his employment he was paid a daily rate of €160.

The Complainant had no written terms of employment with the Respondent.

The Complainant’s hours of work were approximately 42 hours per week. These were the same as for the other factory staff apart from certain times when the Complainant was asked to work on weekends and bank holidays.

The Complainant’s work was supervised and controlled by the Respondent and he filled out work sheets for this purpose. The Complainant did not provide his own tools. They were provided by the Respondent. The Respondent paid for him to obtain qualifications to carry out certain kinds of work.

While seconded to the P plant, the Complainant continued to be paid by the Respondent. When directed to carry out works on property owned by a senior figure in the Respondent’s management, he was also paid by the Respondent and the materials were paid for by the Respondent.

The Complainant was paid on the basis of invoices, but these were generated by the Respondent’s staff based on the days the Complainant worked. They did not include VAT.

On the 26th May 2020, the Complainant was called to a meeting with the Plant Manager. Hewas advised that his hours were to change, that certain maintenance tasks would be added to his responsibilities, and that henceforth all his work would be put out to tender and he was welcome to tender for his own work.

The Complainant maintains that he was an employee of the Respondent and the that the Respondent was his employer.

The Complainant maintains that the Respondent was not entitled to require him to tender for his own job in order to continue in employment with the Respondent.

The Complainant maintains that the requirement to tender for his own job in order to continue to work for the Respondent terminated his contract of employment and constituted an unfair dismissal.

As a result of this meeting, the Complainant considered his employment with the Respondent to be at an end. He left work and has not returned to work for the Respondent.

Legal basis of claim

It is submitted that the Respondent’s requirement for the Complainant to tender for his own job constituted a fundamental breach and termination of the Complainant’s contract of employment, and an unfair dismissal.

It is submitted that said dismissal was unfair in circumstances where the Respondent had no good cause for the dismissal or any cause at all, and the dismissal was unreasonable in all the circumstances.

The Complainant will rely on Section 6(1) of the Unfair Dismissals Act, 1977 where it is submitted that there were no substantial grounds justifying the Complainant’s dismissal.

Fact of dismissal

It is submitted that this is a case of direct dismissal of the Complainant by the Respondent.

The said fundamental breach terminated the Complainant’s contract of employment on the 26th May 2020 immediately and automatically without any acceptance being required on the part of the Complainant. The requirement to tender was fundamentally inconsistent with the Complainant’s contract of employment. Any contract entered into as a result of a tender would, by necessity, have been a new contract.

The Complainant’s employment status

It is submitted that the Complainant was an employee of the Respondent under a contract of service and the that the Respondent was his employer.

Mutuality of obligation

It is submitted that the fact that the client worked normal hours at the company’s plants, exclusively, each day for over 18 years demonstrates that there was an obligation on the part of the company to provide work and for the client to carry out that work.

The control test

It is submitted that the Respondent exercised supervisory authority and control over the Complainant’s work. The Complainant worked standard hours, five days per week. He filled in time sheets and his personal presence at work was required by the Complainant. It is therefore submitted that the application of the control test indicates the presence of an employer-employee relationship.

The enterprise test

It is submitted that the Complainant is manifestly not a person in business on his own account.

The Claimant worked at the Respondent’s premises and was provided with tools by the Respondent. It is submitted that this is a strong factor in favour of his being an employee (Hogan v United Beverages (14 October 2005) CC).

Furthermore, the Respondent paid to provide training to the Complainant.

It is submitted that the Complainant was obliged to personally provide services to the employer and that this points towards the existence of an employment contract. Henry Denny & Sons (Ireland) v Minister for Social Welfare ([1998] I IR 34) is authority for the position that this points towards the Complainant being an employee. It is submitted that this is a strict limitation on the substituting of the person doing the work. It is further submitted that the stricter the limitation on the ability to substitute, the stronger the indication of an employment relationship, as held in ESB v The Minister for Social Community and Family Affairs and Others ([2006] ITR).

It is submitted that the fact that the Complainant worked exclusively for the Respondent five days a week during normal working hours strongly indicates that he was not free to work for others. Such freedom to work for others was identified as a factor indicating the existence of a contract for service in Castleisland Cattle Breeding Society Ltd v Minister for Social and Family Affairs ([2004] 4 IR 150).

It is submitted that the Complainant had no opportunity to profit from sound management of his duties. He worked for the Complainant five days per week and his presence was required at all times. It was recognised in Henry Denny & Sons, that, if a person’s earnings from a party are determined exclusively by the extent to which their services are availed of by that party, and they cannot increase their profit by better management of employment of resources, this is a factor that points towards the relationship being an employment relationship. It is submitted that this pertained in the Complainant’s relationship with the Respondent and that he had no ability to profit from the management of his work, which was identified as in an important factor in Tierney v An Post ([2000] 1 IR 536).

It is further submitted that the Complainant was exposed to no financial risk or opportunity for investment as part of his duties.

The payment by the Respondent to the Complainant of a daily rate is consistent with the expectation that the Complainant provide all his time during the working day to the Respondent. Henry Denny & Sons (Ireland) v Minister for Social Welfare, O’Hanlon v Ulster Bank Ireland Limited (EAT Case No. UD1096/2014) and WRC Adjudications ADJ-00005588, ADJ-00003976 and ADJ-00005826 are examples of cases where an employment relationship was found to exist in circumstances where the employee was paid a daily rate.

Although the Complainant submitted invoices to the Respondent, this is not inconsistent with an employment relationship. The fact that the invoices were prepared by the Respondent suggests that great importance should not be placed on this fact, as does the fact that the client does not use a company name or charge VAT. Employment relationships have been found to exist in a number of previous cases despite the employee submitting invoices to the employer, e.g. Henry Denny & Sons (Ireland) v Minister for Social Welfare,O’Hanlon v Ulster Bank Ireland Limited, and WRC Adjudications ADJ-00001234, ADJ-00000821 and ADJ-00004297.

Similarly, an employment relationship can be held to exist in circumstances where an employee is responsible for his own tax affairs, as was the case in Henry Denny & Sons (Ireland) v Minister for Social Welfare, O’Hanlon v Ulster Bank Ireland Limited, Moyne Veterinary Clinic v Nowacki (Labour Court ADJ-00000026, 4 April 2019), and WRC Adjudications ADJ-00001234 and ADJ-00000821.

The Complainant respectfully requests a finding that his dismissal was unfair in circumstances where the Respondent dismissed the Complainant for no cause and required the Complainant to tender for his own job.  The Complainant seeks relief in the form of compensation.

Evidence from Complainant

The Complainant gave evidence that he was engaged at the Respondent’s premises involved in building, maintenance, repair  for upwards of 18 years. At the start he worked with Contractor Mr D, but he went “bust” and the Complainant was asked to take over from him.   He had no written contract with the company. He was initially paid €80 per day, approximately 1 year later it was increased to €120 per day and approximately 4/5 years ago increased to €160 per day. He was paid on invoices but  these invoices were generated by a staff member.

He was obligated to pay his own tax and did not receive any extra pay for overtime or working weekends. He received a flat rate of €160 per day. He did not charge VAT and believed the company dealt with that tax.  On some jobs, he had to take on others.  He did not like having to do this, as it was more trouble than it was worth.  In cross examination, he confirmed that he paid the men he took on, and sometimes he could make a profit and sometimes he made a loss.

He stated that his hours of work accorded with the hours of all staff in the factory other than when he was requested to work on weekends and bank holidays.  

He stated that the Company controlled the work that he did and gave him work sheets. The Company paid for him to obtain qualifications to operate a teleporter, a cherry picker, and also to carry out weed spraying. All the work he carried out was supervised. All tools for the tasks were supplied by the company or hired in by it.  He was told to work either in Plant A or Plant B depending on who “was in charge” of him.

He was asked to take a few weeks off when Covid happened.  Then on the 26th May 2020 he was called to a meeting and he was advised that his hours for the company would change in that they would accumulate a number of maintenance tasks and then he would be invited to tender for them.  He was very surprised by this as he couldn’t see how you could tender for jobs as different as for example, repairing cracked tiles and then more major jobs such as blockages.     He stated that he did not carry out other work for any other employer, he only took out professional indemnity insurance because he was told to and he did not remember signing a contractor code of conduct.     

The Complainant was engaged by the Respondent as an independent subcontractor i.e.

building contractor in or about the early 2000s. He was one of a number of contractors engaged by the Respondent.

He was briefed of the Respondent’s requirements in advance and asked to estimate cost and

resources. All building services carried out by him were assigned purchase orders by the

Respondent and the Complainant issued invoices for same. These services declined

significantly during the recession period of 2008 to 2012.

The Respondent suspended all non-essential building services since March 2020 due to Covid

19 and have only used minimal services from one of their existing building contractors since

then to minimise risk on site.

The Complainant was to complete services assigned to him to his own schedule. He

employed his own staff as required ranging from 2-5/6 employees. He had full control over

these employees. The Respondent did not direct the Complainant as to how the services were

to be carried out nor did the Respondent control the provision of the services. The

Complainant provided the materials used and charged the Respondent for same. The

Complainant provided his own tools which he sometimes left on the Respondent’s premises.

During the Covid lockdown he requested access to recover his tools which was facilitated.

The Complainant was required to provide his own insurance for the said building services

which he arranged himself. He was required to sign a contractor’s code of conduct by the

Respondent.

The Complainant approached the Respondent in or about 2013 seeking a position as a general

operative which position was not offered to him.

There was no mutuality of obligation between the parties.

The Respondent submitted in evidence the following:

Invoices which showed the Complainant’s invoices examples  “2 men – M-F €160 ea. €1,600”,   Certificate of Professional Insurance for Public Liability and Employer Liability in the Complainant’s name and an acknowledgement of receipt and understanding of the Respondent’s Contractors Code of Conduct signed by the Complainant.  

The Respondent argues that the Complainant was a Builder who employed a number of people.   He was engaged by the Respondent as an approved contractor on site for building works.  He charged the Respondent €160 per day for each man on the job.  What he paid to the men was not known to the Respondent.  Regarding the allegation of dismissal, the facts are that the Respondent changed its tendering in May 2020, and advised the Complainant that he would have to tender for the building works contract.   This was simply a formalising of the practice to date.                                         It is argued that the Complainant was not an employee of the Respondent and therefore the Unfair Dismissals Act does not apply.

The Respondent relies on case law in support of the argument that the Complainant cannot avail of the Act as he was not an employee.  The Tierney v An Post [S.C. 268 of 1998] case was quotedin respect of the argument that the Complainant was in business on his own account and could make a profit.  It was submitted that the Complainant in this instant case had employed people and had professional indemnity to the sum of €13m.  Castleisland Cattle Breeding v  Minister for Social & Family Affairs  was quoted in respect of the argument in relation to insurance and also the payment of taxes.

Evidence was given by the Operations Director that the Company employs Maintenance Teams for the day to day work.  It then engaged different contractors for painting, plumbing, cleaning etc. He stated that the Complainant was called in generally for small maintenance tasks, such as general building works and lists of jobs that may have been compiled following an audit.  The Complainant did turn down some jobs if for example, he considered they were too big.  A new system of tendering for contractors was introduced in 2020 and the new protocol was to be applied to all who would tender.  There were many other contractors on the site who complied.  There was no obligation on the Complainant to be in every day.  The Operations Manager always considered that the Complainant was an individual contractor who may have been carrying out other work for other businesses.

Evidence was given by the Managing Director that the Complainant was initially employed by the previous building contractor.   The MD works from the Group office.  He sometimes observed some of the Complainant’s men on the site but the Complainant himself was not on site every day - he might come in around lunchtime some days to check on the men working there.    In 2013, the Complainant came to him and said he was thinking of giving up the contracting business and they had a conversation in which the MD gave him some advice.  There was a requirement for the Complainant as a contractor to get professional indemnity insurance in 2019.  The MD stated that this may have been as a result of an audit.  He stated that there was no intention on the Respondent’s part to end the relationship with the Complainant.  The fact of the matter was that the Company was ending verbal quotes for jobs and putting contractors quotes on a more formal footing.   Regarding the May 2020 meeting between the Complainant and Manager Mr H, the MD recalled that following the meeting Mr H told him that the Complainant had a very negative reaction to the proposal to formalise tendering for jobs. 

The preliminary argument that the Complainant was not an employee is addressed in the first instance.  The definition of employee as contained in Section 1 of the Act as follows:

“employee” means an individual who has entered into or works under (or where the employment has ceased , worked under ) a contract of employment and, in relation to redress for a dismissal under this Act, includes, in the case of the death of the employee concerned at any time following the dismissal, his personal representative.”

The Terms of Employment (Information) Act 1994 defines a contract of employment as

“(a) a contract of service or apprenticeship..”

As both parties have pointed out, the law is extensive regarding the issue of whether an individual is deemed to have worked under a contract of service or a contract for services.  While the Courts have found that each case must be considered on its own facts, the basic principles of consideration or ‘tests’ can be looked at under the headings: Control, Integration, Enterprise (or Economic) and Mutuality of Obligation.  

In this case, the Complainant was given lists of jobs to be completed and I note that the times/days worked were signed off but I have not been presented with evidence of control in the usual construction of that term in an employer/employee relationship, in that his work was not supervised or controlled.  In relation to integration, the Complainant stated that he worked the same hours as those in the factory except for weekends and some bank holidays.          The fact that he worked hours outside the normal hours does not indicate integration in the business.  In relation to the economic reality, significantly, the Complainant took on others to assist him in the work.  He was paid a certain sum per person per day and, by his own evidence, he could pay the individuals he took on a different amount.  Although he indicated that he did not like this aspect and that he could make a profit or loss, it nevertheless indicates he was in a position to make a profit or loss in the business.     In relation to mutuality of obligation, the evidence points to the fact that the Complainant could and sometimes did turn down jobs.   While, I note that the Complainant was not happy with his situation and he did make an overture to the Respondent some years ago to make him an employee, I conclude that by the tests above and evidence, the Complainant was a contractor, albeit a reluctant contractor.  I conclude that as the Complainant was not an employee of the Respondent, he cannot avail of the provisions of the Unfair Dismissals Acts and his complaint is not well founded.

Unfair Dismissals Acts, Contractor, not an employee.