Complainant

Respondent

Parties

Alan  Ecock

Pundit Limited Kavanagh's Pub

Representatives

Setanta Solicitors

Bríd McCoy AMOSS Solicitors

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-00058579-001

30/08/2023

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

CA-00058579-002

30/08/2023

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

CA-00058579-004

30/08/2023

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

CA-00058579-005

30/08/2023

Complaint seeking adjudication by the Workplace Relations Commission under Section 12 of the Minimum Notice & Terms of Employment Act, 1973

CA-00058579-006

30/08/2023

Complaint seeking adjudication by the Workplace Relations Commission under Section 39 of the Redundancy Payments Act, 1967

CA-00058579-007

30/08/2023

The employment status of the complainant is a preliminary issue.

The respondent denies that the complainant is an employee saying that up to April 18th, 2023 (the date his employment terminated), he provided his services as a bartender and managed social media postings on the company’s accounts in return for commission payments, in his capacity as a self-employed service provider/worker.

This arrangement was never put in writing but was governed by the long-established custom and practice of engagement between the parties. The respondent accepts he had been a part time employee over twenty-five years earlier but that, around 1993, on getting a job with AIB, he asked to be removed from the payroll and to be engaged as self- employed, as there was a prohibition in his AIB contract on holding a second job.

This request was facilitated, andRevenuewasinformedofhiscessationasanemployee.

In support of its submission as regards the complainant’s employment status the respondent refers to the following extract from the Revenue Commissioners’ Code of Practice for Determining Employment Status (July 2021) and draws specific attention to the section ‘Determining Employment Status’ and the following extract:

‘In order to determine a person’s employment status, both the written or oral contract and the reality behind the contract must be taken into consideration. Although the intention of the parties and any written agreement is given due consideration, they do not on their own determine the employment status….…

Inspectorsandadjudicatorswillconsideranyformalcontracts,buttheywillalso consider how the work is actually carried out and will assess the relationship between the worker providing the service and the business paying for that service…..

Thetrueagreementwilloftenonlybeunderstoodbyanalysingintheroundallthe circumstancesandfactsofthecase.’

The respondent has operated with his agreement on the basis that he is self-employed.

The complainant had sole discretion as to his availability for work, dictated his preferred shifts and his own arrival time for work, was paid a set negotiated and agreed amount for shifts worked and an agreed commission for various self-directed social media postings. He controlled the method of his payment by taking the relevant amount payable to him in cash from till on a Sunday evening.

He also managedhisownleavearrangementsforwhichhewasnotpaid, he didnotseekandwasnotinreceiptofanypaymentduring the pandemic closure and didnotseekandwasnotprovidedwithapay slip. There was no obligation on him to work and there was no sanction if he failed or refused to work any shift and therefore a mutuality of obligationdidnotexistwiththecompany.

In similar circumstances, in the case of Karshan (Midlands Limited) Trading as Domino’s Pizza [2022] IECA 124, the Court of Appeal held that a mutuality of obligation did not exist as there was no obligation on the drivers to work or to turn up for an agreed shift, and there was no sanction if they failed to attend.

As part of the details for the first specific complaint made the Complainant claims that he: ‘…accepted social media responsibilities to market the business.’

Therespondentdeniesthatittaskedhimwithsuchresponsibilities.  He unilaterally and without authority opened social media accounts in the name of the respondent but linked these accounts to his own personal email address denyingtherespondentanycontrolovertheoperationofthese accountsortheircontent.Despiterepeatedrequests he refusedtoallowtherespondent accesstotheseaccounts,leavingtherespondentunabletocontrolordirectthepromotionand marketingofitsbusinessontheseplatforms.

These actions necessitated the respondent’s solicitors to instigate a formal process with each of the platforms to gain control over its accounts.  

Since he requested to go ‘off the books’ payments to him were made as gross amounts (i.e., without deduction of any payroll related tax or social insurance) on the understanding that he was registered for self-assessment tax returns and managed his own income tax affairs.

The complainant, being a sole trader in receipt of rental income and being a full-time bank employee cannot profess to be unaware of the differences between his employment status at AIB and his status as a non-PAYE worker with the respondent. He has never asked or informed the company of any requirement for his status as a non-PAYE worker to be changed.

The complainant has endeavoured in his communications with the company since the Termination Date to overstate his role and portray himself as having had a managerial role with control over its operations and that he was an integral part of the organisation. This is denied.

A WRC inspection took place on 13th July 2023 and questions raised with regard to the nature/status of the Complainant’s his role/engagement at the Company set out in email dated 17th July 2023 the WRC to Patrina Peacock (Director) and responses given by email from Ms. Peacock on 18th July 2023, with regard to the nature/status of his role/engagement at the company.

Following that, no further queries were raised, or directions given by the WRC on the complainant’s status and on 17th August 2023 the Company was informed that the WRC inspection exercise was concluded. Prior to the termination the complainant was generally assigned his preferred shift automatically unless he said that he would not be available.

On the termination date he was informed by Ms. Louise Peacock (Director) by telephone that the company had taken the decision to cease assigning shifts to him (and as explained throughout subsequent WhatsApp and email correspondence including by letter dated 15th May 2023) that this was taken as part of an overall cost cutting exercise in response to the need to implement cost saving measures.

His claims in respect of Terms and Conditions of Employment and holiday pay are without foundation and he has no entitlement to any redress in respect of his claims under the Terms of Employment (Information) Act, 1994 or the Organisation of Working Time Act, 1997 or the Payment of Wages Act, 1991 or the Minimum Notice & Terms of Employment Act 1973 in this regard.

Ms. Louise Peacock gave evidence on oath.

The witness is a Director of the company and spoke of the resumption after Covid in February 2022 and the difficulties faced by the company at that stage. In response to a question, she said that the complainant set his own hours and after Covid he said he just wanted to do some work on Thursday and Sunday based on his availability.

Regarding the complainant’s start time the witness said that she only asked him when he would be available. She confirmed that a discussion had been going on about cutbacks and a decision was made to terminate the complainant employment.

MS Katrina Peacock gave evidence on oath.

She explained that her background was as an accountant, and it became obvious to her that the business was facing serious financial problems and a number of steps had to be taken to address this.

This included selling significant assets, various other cuts and then they had to look at staffing. The witness said she told her sister Louise to speak to the complainant and tell him that his job was being terminated.

By way of further background, she explained that she and her siblings had become directors of the company in 2019. They held a regular monthly meeting and initial cost cutting options were discussed in the Christmas period before the complainant was dismissed.

A final decision was made at the meeting in March. Approximately three employees were dismissed following an examination of the business location by location. In fact, all three were what were regarded as contractors. There was a delay in communicating the decision to the complainant because her sister Louise had been ill.

In response to a question, she said that the complainant was one of the highest paid of their employees at €25 per hour and that other barmen were paid between €17.50 and €20.

That concluded the witness evidence.

In summing up the respondent stated that its general defence against the complaints was based on the complainant’s employment status, and that he did not have legal standing to make them. The complainant worked on his own terms, he only returned to work post Covid on a basis that suited him, and that his assertion that he did not know the nature of his true employment status was not credible.

The respondent also submitted that on the basis of his own evidence the complainant had not taken the necessary steps to mitigate his loss, and this should be reflected in any award.

Alan Ecock was employed as a lounge-boy by The Peacock Group in June 1988, and he was then employed full-time around June 1990. He was fourteen at the time. His employment ended by way of a telephone conversation on April 18th, 2023.

He was never given a contract of employment and altogether had over thirty-five years’ service. In October 1990, he reverted to part-time hours. His days were reduced to four shifts a week and was then paid £250 a week.

From 1994 he continued to work on a part-time basis. In March 2016, he agreed to reduce his nights from four to two shifts a week. His wages were adjusted to €200 a week, increasing to €250 per week when he undertook social media responsibilities to market the business.

The owners decided in 2019 to step back from day-to-day role in running the business and they transferred management of the business to their four children.

The complainant was instructed to report to Louise Peacock in 2019 and he received a call from her on April 18th 2023, to be told that he was being let go immediately. The reason was that these were ‘cost cutting measures’.

On April 24th, 2023, the complainant texted Ms. Peacock and requested a copy of his contract of employment, HR guidelines and a formal letter confirming the end of his employment. He was never provided with these documents. On April 28th, 2023, he sent a text in relation to returning the master keys he held.

He did not initially receive a response, but later communications assert the company’s view that Mr. Ecock was a self-employed contractor.

While the law is in a state of flux on the status of persons in Karshan -v- Revenue Commissioners, and which ultimate decision is awaited by the Supreme Court, that case, and similar cases, concern persons who expressly had a self-employment contract which was being challenged by Revenue as an artificial arrangement and that arrangement was to be looked through in determining that an employee relationship existed.

Thatisnotthecasehere,asthecomplainanthadnoself-employment, or anycontract. The functioning and performance of thecontract neverchanged from thestart oftheemployment relationship.

Even that would be open to challenge as to whether that employment status was valid but on the facts of this case the complainant was always an employee.

After the phone call on April 18th 2023, no further communication issued until solicitors’ correspondence was sent and at that point, a belated letter was sent explaining the reasons for the termination. No notice or statutory redundancy was paid was paid. He would have been entitled to eight weeks as a person with more than fifteen years’ service. 

In Henry Denny & Sons (Ireland) Limited v Minister for Social Welfare S.c No 378 of 1995 the Supreme Court affirmed the tests set out in the High Court and that the nature of the contract describing the relationship as one of a self-employed contractor was not determinative. Again, that is distinguished on the facts of this case.

The High Court in the Minister for Agriculture and Food concerned applications who were working as veterinary surgeons at a meat plant in Cork. The EAT held that they were employed under a contract of service and were employees.

The Court considered that there were mutual obligations on the employer to provide work and for the employee to perform work as an important filter but cautioned against testing the facts of any case in some rigid formulaic way and that questions of enterprise, control and integration may provide a court or tribunal with valuable assistance in drawing appropriate inferences.

In the words of Dillon L.J., "the same question, as an aid to appreciating the facts, will not necessarily be crucial or fundamental in every case". It is for a court or tribunal seized of the issue to identify those aids of greatest potential assistance to them in the circumstances of the particular case and to use those aids appropriately.

The case law points to a number of tests to be applied to the status of the employee being indecisive of an employee or self-employed. In the present set of facts,thecomplainantwasanemployee,thatisacknowledged.

He was performing the same work for thirty-four years. The respondent’s defence is that somehow, through means unknown that contract of service was converted to a contract for services, but this is both undocumented and unexplained.

The Unfair Dismissals Act at Section 6(1) states.

1.1.1.       Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.

The starting point is that redundancy is presumed to be unfair unless there are substantial grounds justifying the dismissal. No substantial grounds or any logic were presented for the Complainant’s dismissal beyond the cost cutting measures to justify these redundancies and no engagement thereafter.

The respondent may rely on redundancy existing to a claim of unfair dismissal, however there must be a genuine redundancy situation, the selection for redundancy must be fair and the employer must conduct itself reasonably and follow fair procedures during the consultation process with the employee.

Section 6(3) of the Unfair Dismissals legislation provides for fairness in selection for redundancy.

In Students Union Commercial Services Ltd v Alan Traynor [UDD 1726] the Labour Court stated that:

“In circumstances where redundancy is unavoidable, the employer is obliged to establish reasonable and objective criteria for selection and must apply those criteria fairly.”

In its decision of 26 April 2021 in A Sales Director v An IT Company [ADJ- 00023978], the WRC referred to cases where an employee is in a standalone position. The Respondent had submitted that there was a “pool of one” for the selection process and as a consequence that selection criteria was not required. The Adjudicating Officer held that in such a position:

“a particular responsibility then arises to ensure that the selection process is fair and objective, and that the sequence of events of identifying the post first, and the person second, is preserved to ensure the principle of impersonality is respected.

It is certainly insufficient on its own to submit that a person is automatically in a pool of one because she was the postholder in the position selected for redundancy.

It is necessary to show that there was something very specific about the skillset of the person holding the position that renders her unsuited for other positions, and something equally specific about the requirements of the position.”

The Labour Court, in Tanneron Ltd v Conolin [UDD 2151], also recently stressed, in July 2021, its concerns about the fairness of selection in circumstances where selection criteria was applied in the knowledge that it would result in a specific employee being made redundant.

The complainant was not supplied with any objective criteria for selection for redundancy, nor was he informed why his role was being terminated. The respondent has failed to produce any documentation to prove that these cost cutting measures are valid, no alternative roles were put forward or appear to be considered and o appeal or engagement was offered.

Section 6(7) of the Unfair Dismissal Acts provides that when determining if a dismissal is unfair regard may be had to, inter alia, the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal.

Case law in this area stresses a clear requirement for the employer to demonstrate reasonableness of conduct when making employees redundant.

In the recent decision of the WRC in Production Line Lead v Employer [ADJ- 00024721] the complaint of Unfair Dismissal was upheld, notwithstanding the finding that a genuine redundancy situation existed.

The Adjudication Officer held that such consultation meetings as the respondent had engaged in with the Complainant did not constitute real and substantial consultation. The Adjudication Officer also referred to the fact that the complainant was provided with a list of available posts in the company, but they were all posts for which he did not hold the relevant qualifications. The Adjudication Officer concluded that:

“The consultation process engaged in was not real or substantial and there was no genuine attempt to identify suitable alternative posts for the complainant. I find that the complainant was unfairly dismissed because he was unfairly selected for redundancy.”

These decisions are directly analogous to the complainant's situation in this matter. A genuine consideration of alternatives to redundancy must also be considered by the employer during the consultation period. In Mulcahy v Kelly [UD/719/90] the Employment Appeals Tribunal noted that

“it is well established that there is an obligation on an employer to look for an alternative to redundancy.”

The complainant was not provided with any realistic alternatives to being made redundant or provided with a written statement of the core terms of his employment.

The complainant has over thirty-five years’ service since he was 14. Thirty-three years’ service is calculable from when the complainant attained the age of 16 which equates to 66 weeks plus one additional week which is 67 weeks x €250 which is €16,750

In respect of the claims under section 6 of the Payment of Wages Act 1991 and Minimum Notice of the Minimum Notice and Terms of Employment Act 1973, the complainant was not paid from the date of his termination onwards. He is entitled to minimum notice of eight weeks having more than 15 years’ service. This is €2,000.

The complainant was on a salary of €250 per week for working in the bar on weekends. He has a full-time role in AIB Bank but has not been able to secure another part time role. It is submitted he is entitled, on the finding of unfair dismissal to be paid the difference from the date of 18 April 2023 to the date of this hearing 17 October for loss of earnings of €250 per week. (26 weeks x €250) €6,500

Also, the complainant seeks compensation for the breach of the Terms of Information act.

We would also ask the adjudicator in the circumstances to make any such further award as appears just and equitable in all the circumstances in accordance with section 7 of the Unfair Dismissals Act given the length of period of service of the complainant.

Evidence of the complainant, Alan Ecock.

The complainant gave evidence on oath.

He confirmed the details regarding his service with the complainant initially as a lounge boy in 1988 and then for some years working during the summers and, following the conclusion of his education, he worked four nights a week.

He became employed with the bank in 1990 and said he needed to maintain both jobs in order to provide support to his family. He stated that he was a key holder and that his working hours most recently were from 6:00pm on Saturday to closing time and on Sundays from 8:00pm to closing time.

He said there were no rosters in the business, but each barman had two days off each week.

He denied that there had been any requirements in his contract with AIB not to have a second job. He said that no such conversation took place with the respondent in 1993 about his status or changing it.

He stated that it was always intended that he would be an employee and that a self-employed barman is unheard of in the Dublin pub trade.  There were no other self-employed barmen in the respondent’s business, and he never heard of one in his thirty-four years as a barman.

He recalled the events leading up to his termination. He finished his shift on a Sunday and the following Tuesday he got a call telling him that the company was cost cutting and that they were terminating his employment. The call was from Louise Peacock and it lasted about two minutes.

He says he expected much more and that he barely spoke five words in the course of the phone call. He said that he was ‘absolutely’ not expecting it.

In cross examination he was asked about his interaction with Ms. Rose Peacock after the termination to which he replied that he had not much and never had a conversation with her.

He also said in response to queries that he had never received a pay slip and again that his shift was from 6pm to closing time with some leeway for a later start.

But he said he only started later if there was a special reason to do so.

He was questioned regarding his attempts at mitigation he said he worked in the Lark pub for a couple of nights but as an employee and on the payroll. He also said that he worked in a similar capacity in a GAA club, but he had to give it up because the hours were too long and demanding.

He was asked how his income from the respondent was returned and he replied that he assumed his income was declared by the respondent for tax purposes.

He was also asked about his contact with the management after the termination to which he said he did receive emails. He said he had no issues with Ms. Louise Peacock as they didn't really work together.

It was put to him that he was never disciplined or sanctioned because he was not regarded as an employee, he replied that this had nothing to do with his contractual status and more to do with his proximity to the family.

The status of the complainant is the critical determinant in respect of these complaints.

If, as the respondent submits, he was not employed on the basis of a contract of service at the time of the termination then he does not have standing to make the complaint of unfair dismissal, or any other complaint.

Both parties referred to the case of Karshan (Midlands Limited) Trading as Domino’s Pizza [2022] IECA 124, (this citation for the Court of Appeal), it being noted that the case was under appeal to the Supreme Court. The respondent relied on the decision in that case in respect of the mutuality of obligation argument.

In fact, the Supreme Court issued its judgment on October 20th, 2023, only three days after the hearing of this complaint. Prior to this decision there had been a number of tests as to whether a person is engaged on a contract of employment (‘of service’) or is what is generally referred to as ‘a contractor’ (engaged on a ‘contract for services’).

Some are decisive in either direction, some are more indicative, and these are reviewed below in the context of the recent decision of the Supreme Court.

There are three steps in approaching the adjudication of this complaint.

The first is to consider whether, again as submitted by the respondent, the complainant’s status changed at his request and by mutual agreement (it says) in 1993. It is not in dispute by either party that he had been on a contract of service prior to that date.

If it did change, the next question is whether that had an impact on the complainant’s actual contractual situation that materially and legally changed his legal status.

If it did not, he remained an employee on a contract of service up to the time of the termination of his employment, whatever the intention of, or agreement between the parties in 1993.

In any event I propose to review the complainant’s actual employment status at the time of the termination for the sake of completeness, despite the fact that it may not strictly be necessary to do so if the answer to the question above regarding the purported change in 1993 is in the negative, i.e. that his status did not change.

Following that, a positive conclusion on the complainant’s status as an employee would lead to a determination on the merits of the unfair dismissal and other complaints.

Looking first at the facts of the complainant’s case there are two issues to be examined. I will then turn to the applicability of the relevant tests to his position.

It is accepted by the respondent that the complainant was initially employed on a contract of service, i.e., he was an employee. The complainant submits that this contractual arrangement persisted throughout the employment relationship

The respondent says that this changed when the complainant became an employee at AIB and, in its submission, and because of certain requirements of the bank, he requested that his status be changed to that of a contract for services.

This gives rise to a number of considerations, perhaps the most decisive of which is that no evidence was offered by the respondent for this alleged change in status, and as submitted by the complainant, there was no fresh contract of employment created to take account of this alleged new relationship.

On the other hand, the complainant dismissed this; saying no such conversation with the respondent ever took place, and indeed that it was not a requirement of his contract with AIB that he should do so.

An equally important, but erroneous implication of this argument by the respondent is the contention that parties to a contract of employment are free to define its legal nature regardless of the factual position and the legal tests. (Also note that the Market Investigations judgment was handed down in 1969).

As a matter of law this is not the case.

Parties may not collude in such a way as to cause a worker to be denied his access to statutory rights, social welfare benefits etc or to bypass Revenue requirements as to how that person should pay their taxes.

See In re Sunday Tribune Ltd [1984] IR 508 in which the Court made it clear that it was necessary to look further than the parties’ own description of any contractual arrangement to the realities of the situation.

This was further emphasised in Henry Denny & Sons (Ireland) v Minister for Social Welfare [1997] IESC 9 [1998] 1 IR 34 in which the Supreme Court confirmed that ‘if the reality of the relationship is different to that expressed in the contract, an adjudicating body is entitled to draw its own conclusions from that reality’. (Per ‘Employment Law in Ireland, Cox, Corbett, Ryan, Clarus Press, 2009 at paragraph 3-30).

The respondent’s attempt to say that it was merely complying with the complainant’s wishes, even if this were true, offers it no defence whatsoever. Equally unhelpful to its case is the respondent’s attempts to rely on what it believes the complainant knew (or ought to have known) about his employment status.

The complainant’s opinion of his legal status has no bearing on what it may be on the basis of an analysis of ‘the realities of the situation’, as per In re Sunday Tribune, above.

More decisively, as already noted, the complainant stated in his sworn evidence that no such conversation about his status had ever taken place. He said that he was ‘always intended to be an employee and was never told he was self-employed’.  He went further to express the view that ‘a self-employed barman is unheard of’ in the Dublin bar trade.

I find therefore that the complainant remained an employee on a contract of service throughout the entire duration of his employment.

Given that finding, and while it is not necessary to do so, I will look for the sake of completeness at the nature of the complainant’s employment by reference to the traditional tests, now further clarified in respect of the mutuality of obligation argument by the Supreme Court. It is also important to note that there is no simplistic ‘pass mark’ in relation to these tests, and some are indicative as to status rather than definitive.

The complainant was primarily employed as a barman, with an additional role in relation to social media marketing. The respondent disputed aspects of the detail of this, for example whether he exercised a management role, but this is not relevant to a determination of his employment status.

The respondent also made much of the fact that the complainant did not avail of various benefits available to employees, including annual leave, the provision of payslips, the pandemic payment, etc.

A particularly weak argument was that the respondent thought that it had no obligation to make deductions of tax and other statutory obligations because it presumed that, as the complainant had other business interests, he was doing this.

But neither did it make any inquiry to test the veracity of this presumption, as it was required to do as an employer.

The complainant demonstrated an admirable if somewhat naïve loyalty to the enterprise, or at least to the previous generation of the family and clearly considered himself in a certain way as more of a family member than a regular employee. (In a side comment, he drew attention to the similarity in their surnames).

This was reciprocated by the previous generation owners (the parents of the current Directors) who appeared to repose great trust in the complainant. He had responsibility for making bank lodgements, for example. When it was put to him that he had never been disciplined, with the implication that as a contractor he was immune to the disciplinary process, he replied that this had nothing to do with his contractual status and more to do with his intimacy with the family, and the trust they placed in him.

So, rather than relying on the complainant’s refusal to seek the benefits on which the respondent argues to rebut his claim to employee status, they should perhaps be grateful for the time limits in the relevant legislation that prevent him from seeking retrospective correction of their failure to do so.

The pattern of the complainant’s attendance for work was regular and predictable. The respondent alleged that he made his own working arrangements but in fact he worked largely predictable shifts, with the same starting times and some variation in the finishing times, and in which arrangement the respondent completely acquiesced for many years.

If they had problems with the complainant’s attendance for work, they never gave any indication of it. The respondent argument that the complainant was in some way immune from correction or discipline was not credible.

Following the decision in Karshan on October 20th, 2023, the Revenue Commissioners issued the following statement.

‘The detailed judgment was delivered by Mr. Justice Brian Murray in The Revenue Commissioners v. Karshan (Midlands) Ltd. t/a Domino’s Pizza. The case was concerned with whether the delivery drivers were independent contractors under a “contract for service” and taxable under Schedule D of the Taxes Consolidation Act 1997, or employees under a “contract of service”, and taxable under Schedule E of that Act (PAYE). Revenue welcomes this judgment and the significant clarity it provides on these matters.

Justice Murray decided that the question of whether a contract is one “of service” or “for service” should be resolved by reference to the following five questions:

1.       Does the contract involve the exchange of wage or other remuneration for work?

2.       If so, is the agreement one pursuant to which the worker is agreeing to provide their own services, and not those of a third party, to the employer?

3.       If so, does the employer exercise sufficient control over the putative employee to render the agreement one that is capable of being an employment agreement?

4.       If these three requirements are met the decision maker must then determine whether the terms of the contract between employer and worker interpreted in the light of the admissible factual matrix and having regard to the working arrangements between the parties as disclosed by the evidence, are consistent with a contract of employment, or with some other form of contract having regard, in particular, to whether the arrangements point to the putative employee working for themselves or for the putative employer.

5.       Finally, it should be determined whether there is anything in the particular legislative regime under consideration that requires the court to adjust or supplement any of the foregoing.

In this case, Justice Murray found that the Tax Appeal Commissioner was entitled to conclude that the drivers were employees for the purposes of income tax. Businesses are responsible for ensuring that the correct taxes are deducted from their employees’ pay (which includes both salary payments and any notional pay received) and remitted to Revenue under Schedule E (PAYE), at the right time.

 27/10/2023

Prior to the Karshan decision, the case in which the criteria were best set out  was the leading UK case of Market Investigations Ltd v Minister of Social Security [1969] 2 QB 173. In that case a number of tests were formulated. Those following address in particular the question of whether a person is what is colloquially described as a contractor, i.e., engaged on a contract for services.

1)      Does the person performing the services supply his own equipment

2)      Can he hire his own helpers?

3)      Does he carry any financial risks and to what extent?

4)      What opportunity does he have to make a profit?

5)      To what extent does he carry the responsibility for investment/management.

The Revenue Commissioners of Ireland had outlined similar tests in their Code of Practice for Determining Employment or Self Employment (since revised following the Supreme Court decision in Karshan) These relate to whether the employee.

1)       Is under the control of another person who directs as to how, when and here the work is to be carried out,

2)       Supplies labour only,

3)       Received a fixed wage

4)       Cannot subcontract the work

5)       Does not supply materials for the job

6)       Does not provide equipment other than small tools of the trade

7)       Is not exposed to personal financial risk in carrying out the work

8)       Works set hours or a given number of hours

Interestingly, and with the benefit of hindsight and, more relevantly as informed by the decision of the Supreme Court in Karshan, there is no explicit reference to mutuality of obligation in these criteria.

As a matter of justice, and indeed law, an employer cannot expect to rely on its failure to discharge the obligations to honour the statutory rights of an employee as evidence that that person was not an employee; this would be perverse and utterly contrary to both logic and law.

In this case, apart from the complainant’s role in social media marketing he was in every respect an employee. He attended for regular shifts, (with admittedly some variation in the closing times which would be unsurprising in the bar trade) and he was paid a fixed sum and this arrangement continued for over thirty years.  Indeed, he ‘ticks all the boxes’ in the eight points set out above.

Therefore, whether based on the continuity of the original contract (which contract was not disputed by the respondent) or a review of his current status, I have no hesitation in finding that the complainant was employed on a contract of service and is within the jurisdiction of the Unfair Dismissals Act, and the other legislation under which he brings his complaints.

This therefore brings us to how the termination was carried out.

Having regard to the complainant’s long and loyal service the manner in which it was effected was especially heartless, to say nothing of being completely unlawful.

The respondent apparently did not consider it necessary to grant the complainant the courtesy of having the news of his dismissal conveyed to him in person. All he got was the briefest of telephone calls on April 18th, 2023, to advise him that he was being dismissed as part of ‘cost cutting measures’.

Evidence was given of the very real challenges facing the business at that time, but such challenges do not relieve an employer of the obligation to carry out cost cutting measure or redundancies, for example, in accordance with the law and the relevant procedures, (and again, with some respect for the dignity of its employees).

The employer failed to apply even the most rudimentary version of these; consultation, exploration of possible alternatives etc and in doing so has been guilty of a quite egregious breach of the Act.

For that reason, the complainant’s dismissal was unfair and that complaint, CA-00058579-001 succeeds. I also address complaints CA-00058579-005 and 007 in making my award of compensation.

Complaint CA-00058579-005 under the Payment of Wages Act was related to his loss of wages following the termination but this is more properly addressed under the redress provisions of the Unfair Dismissals Act. The complainant limits this claim to the period between the termination and the WRC hearing, but the Act provides for a wider redress than this.

In relation to Complaint CA-00058579-007 under the Redundancy Payments Act, Section 7 of the Unfair Dismissals Act defines ‘financial loss’ for the purposes of that Act as including. 

‘… any actual loss and any estimated prospective loss of income attributable to the dismissal and the value of any loss or diminution, attributable to the dismissal, of the rights of the employee under the Redundancy Payments Acts, 1967 to 1973, or in relation to superannuation.’ 

The complainant’s rights under the Redundancy Payments Acts were stated to be €16,750 and €17,250, with the former figure explained by reference to the calculation under the Redundancy Payments Acts and therefore the one I will use.

His losses attributable to the termination are €1,000 per month. Having regard to what would constitute ‘just and equitable’ compensation I would have placed it at one year’s income; €12,000, subject to what follows regarding mitigation.

The Unfair Dismissals Act (Section 7) sets out the various factors to be considered in making an award of compensation. It provides for an Adjudication Officer (and the Labour Court) to consider such redress as is considered appropriate ‘having regard to all the circumstances’.

The requirement to have regard to all the circumstances is repeated in Section 7(1)(c) in relation to the assessment of what will constitute ‘just and equitable’ compensation.

What constitutes ‘all the circumstances’ may be gleaned from reading Section 7(2) (a) to (f) and these six itemised criteria include the conduct of the employer (including their compliance with fair procedure), and the conduct of the employee and their contribution (if any)  to the dismissal.

Section 2(c) deals with the requirement placed on the complainant to make efforts to mitigate his loss in assessing the level of compensation. 

The complainant gave evidence of his attempts at mitigation. While he made some effort to do so and succeeded in gaining a couple of jobs they were not convincing and did not fully meet the threshold of effort to satisfy the standard set by the case law  on this matter.

Nonetheless, in measuring the weight to be attached to these various components of the termination in Section 7 of the Act, the requirement placed by the statute on an Adjudicator to have regard to ‘all the circumstances’ (emphasis added) provides an overarching framework and is required to be taken seriously.

In this case, the peremptory and harsh treatment of an entirely innocent complainant with a total disregard for his constitutional rights stands out by far as the most significant of those circumstances and is a particular breach of Section 7 (2) (d) and (e).

Therefore, in assessing ‘all the circumstances’ as required by the Act the inadequacy of any efforts by the complainant to mitigate his loss must be properly weighed in the context of the full requirements of Section 7.

There is nothing in the Act to suggest that failure to mitigate should be elevated beyond any of the other five criteria set out there. Indeed, given that three of the five relate to the employer’s conduct and conduct of the termination process, a contrary case could be made.

I assess the complainant as incurring actual and prospective loss of €12,000 for his loss of wages under the Act, and I discount this by 50% to take account of the inadequacy of his efforts at mitigation.

I assess ‘the value of any loss or diminution, attributable to the dismissal, of the rights of the employee under the Redundancy Payments Acts, 1967 to 1973’ in this case as being €16,750 and I therefore award him a total of €22,750 in respect of complaint CA-00058579-001. (A higher figure of €17,250 was also referred to but the lower figure is based on a correct multiplier of the entitlement under the Act.)

It follows that I decide that complaints CA-00058579-005 and -007 are not well-founded.

In respect of the other complaints the respondent’s only defence was that the complainant was not eligible for various payments because he was not employed on a contract of service. Having found that he was, in fact, so employed I proceed to make the following findings.

Complaint CA-00058579-002 under the Terms of Employment (Information) Act, 1994 is also well founded and I award him €1000, being four week’s wages.

In respect of Complaint CA-00058579-004 under the Organisation of Working Time Act, 1997 I note that while this appeared on the various complaint forms submitted by the complainant, a note was also added as follows; ‘I have received my outstanding holiday/annual leave pay pursuant to my termination’. Accordingly, this complaint is not well founded.

Complaint CA-00058579-006 under the Minimum Notice and Terms of Employment Act is well-founded &, based on his service I award the complainant a payment equivalent to eight weeks pay in the amount of €2,000.

The dismissal was unfair, and I uphold complaint CA-00058579-001 and, for the reasons set out above, I award the complainant a total of €22,750.

Complaint CA-00058579-002 under the Terms of Employment (Information) Act, 1994 is also well founded and I award the complainant €1.000, being four week’s wages.

Complaint CA-00058579-006 under the Minimum Notice and Terms of Employment Act is well-founded &, based on his service I award the complainant a payment equivalent to eight weeks pay in the amount of €2,000.

Complaints CA-00058579-004, CA-00058579-005, and CA-00058579-007 are not well-founded.