FULL RECOMMENDATION
SECTION 8A, UNFAIR DISMISSAL ACTS, 1977 TO 2015 PARTIES: PBR RESTAURANTS LIMITED T/A FISH SHACK CAFE (REPRESENTED BY PENINSULA) - AND - MR PADRAIC HANLEY (REPRESENTED BY MICHAEL KINSLEY B.L., INSTRUCTED BY KEANS SOLICITORS) DIVISION:
SUBJECT: 1.Appeal Of Adjudication Officer Decision No(S) ADJ-00030290, CA-00040519-005 Mr. Hanley, ‘the Complainant’ set up a business in 2008. In December 2019, this was acquired by a holding company, following a period of examinership. From 9 December 2019, the Complainant became Managing Director of PBR Restaurant Ltd. t/a Fish Shack Café, ‘the Respondent’, having previously been Managing Director. In August 2020, the Complainant’s employment was terminated on grounds of redundancy. The Complainant contests that his job was redundant and lodged a complaint of unfair dismissal under the Unfair Dismissals Act 1977, ‘the Act’, with the Workplace Relations Commission, ‘WRC’, on 1 October 2020. An Adjudication Officer, ‘AO’, decided that the Complainant was not an employee of the Respondent prior to 9 December 2019. Therefore, it was decided that the Complainant lacked the service requirements of 12 months in s. 2(1) of the Act and that, accordingly, the AO did not have jurisdiction to adjudicate on the complaint. The Complainant appealed to this Court. The Court indicated to the parties that it would deal with the question of service as a preliminary matter and that it would only consider the substantive issues in this case in the event that it determined itself to have jurisdiction to do so. The parties were invited to make submissions on this matter. At the initial hearing of this matter by the Court, the Complainant’s representative argued that the Complainant had been dismissed due to having made a Protected Disclosure and, as a consequence, the 12 months’ requirement in the Act was not applicable. As this matter had not been argued at first instance, the Court asked the parties for submissions on whether the Court had jurisdiction to consider this argument. Accordingly, there are two preliminary matters for the Court to consider i.e. if it has jurisdiction to consider arguments that this case arises from a Protected Disclosure and, if not, whether the Complainant has the required service to claim the protections of the Act. Summary of Complainant position regarding the Court’s jurisdiction to hear arguments concerning an alleged Protected Disclosure. It is submitted that the dismissal of the Complainant arose wholly or mainly as a result of having made protected disclosures and that, therefore, he is not required to have 12 months’ service in order to avail of the protections of the Act. This is a de novo appeal and the Court has jurisdiction, as per s.44 of the Workplace Relations Act 2015, to hear all evidence relevant to the claim. The nature of the claim is the same as that before the WRC, i.e. that the Complainant was unfairly dismissed. Correspondence and disclosures to his employer are part of this case. The nature of a de novo appeal was set out by the Supreme Court inFitzgibbon v Law Society of Ireland (2015) !IR516 as having two requirements, firstly that the decision at first instance is irrelevant and secondly that the appeal body is required to come to its own conclusions on the evidence and materials properly available to it. Therefore, the Complainant is entitled to make the case at appeal stage and the Court is entitled to find, having heard the evidence in the case, that the matters raised by the Complainant with his employer are protected disclosures and that he can avail of the protections of the Act. Summary of Respondent position regarding the Court’s jurisdiction to hear arguments regarding an alleged Protected Disclosure. The Complainant lodged a complaint on 21 October 2020. He was legally represented. There was no reference in any papers to any Protected Disclosure. In the six months between then and the WRC hearing on 9 April 2021 at no stage was this raised. During the hearing by the AO on 9 April 2021, at which the Complainant was legally represented, there was no mention of a Protected Disclosure and there is no reference to same in the Decision of the AO. In the submissions sent to this Court in advance of the initial hearing, there is no reference by the Complainant to a Protected Disclosure. The first reference to a Protected Disclosure was at the Court hearing. The Respondent rejects the claim that the Court has jurisdiction to consider this matter. The complaint was one of unfair dismissal. The Complainant argued that the redundancy was a ‘sham’, which the Respondent denies, but at no stage mentioned a Protected Disclosure. This is a very late red herring in an attempt to create a position to artificially create protection for the Complainant. The AO could not have reached any finding regarding an alleged Protected Disclosure as the matter was not before him. The Complainant places reliance on the ‘Fitzgibbon’ case. However, correctly understood, that case does not support the position being argued. In fact, it supports the Respondent position. In that case Clarke J. noted; "It is sometimes argued that, by providing for a de novo appeal, what happened at first instance becomes entirely irrelevant and, indeed, inadmissible. That is not necessarily the case. First, it is important to recognise that the process at first instance may narrow the issues which truly remain alive in whatever adjudicative proceedings are under consideration. To take a simple example from the appellate structure of the courts, there is available what is in substance a de novo appeal to the High Court from almost all civil decisions of the Circuit Court. The High Court Judge considers the case afresh on the basis of the evidence presented on the appeal and without attaching any weight to the decision made by the Circuit Court Judge. However, what happened in the Circuit Court is not, in those circumstances, necessarily entirely irrelevant. The pleadings which were exchanged pre-trial in the Circuit Court may well have narrowed the issues between the parties so that, at least in the absence of leave to amend, the issues remain thus narrowed on any appeal. An appeal may not, by its terms, extend to the entirety of the decision made at first instance so that, in the example of an appeal from the Circuit Court to the High Court, the appeal may be brought only against the quantum of an award of damages made by a Circuit Court Judge and not against that judge's finding on liability. " He then went on to note; “... The process at first instance may have reduced the scope of issues which are properly before the appeal body. Likewise, that scope may be influenced by the terms of any appeal brought. " It is clear that a Protected Disclosure was never an issue at the WRC. The scope of the appeal lodged for this Court was an argument that the Complainant had the service required to be protected by the Act. That is the complete basis of the appeal. The Labour Court in the case ofTom Moloney Ltd t/a Squire Maguires v Thomas Keogh (2016) EDA1617 observed as follows; “The Complainant in this case did not submit an appeal but seeks to extend the de novo investigation to include decisions that were not appealed by the Respondent. The Court finds that there is no statutory basis for such an approach. The Complainant had the opportunity to appeal each of the decisions of the Equality Officer but did not do so. He cannot now circumvent the statutory time limits by seeking to compel the Court to hear appeals against those decisions on the basis that it is required to conduct a de novo hearing. That approach is misconceived and seeks to confer a jurisdiction on the Court that is not set out in statute. Only the legislation can confer jurisdiction on the Court. In this case the Court finds that it has not done so. The Court has jurisdiction to hear an appeal of the decision before it and no more. How it sets about hearing that appeal, i.e. de novo or otherwise, is a separate matter that cannot confer additional jurisdictions on the Court or otherwise avoid the time limits set out in the Act for the bringing of appeals.” It is submitted that in the present case the Court cannot extend the scope of the appeal and that similar to the Tom Moloney case the application is ‘misconceived and seeks to confer a jurisdiction on the Court’ that it actually does not have. The Respondent submits that the application by the Claimant should, accordingly, fail. The applicable law. Unfair Dismissals Act. Exclusions. 2.—(1) Except in so far as any provision of this Act otherwise provides This Act shall not apply in relation to any of the following persons: (a) an employee (other than a person referred to insection 4of this Act) who is dismissed, who, at the date of his dismissal, had less than one year’s continuous service with the employer who dismissed him Protected Disclosures Act 2014 (2D) Sections 3 and 4 do not apply to a case falling within paragraph (ba) of subsection (2) and that paragraph applies to a person who would otherwise be excluded from this Act by any of paragraphs (a) to (c) and (e) to (k) of section 2(1).”; Workplace Relations Act 2015. Appeal to Labour Court from decision of adjudication officer 44.(1) (a) A party to proceedings undersection 41may appeal a decision of an adjudication officer given in those proceedings to the Labour Court and, where the party does so, the Labour Court shall— (i) give the parties to the appeal an opportunity to be heard by it and to present to it any evidence relevant to the appeal, (ii) make a decision in relation to the appeal in accordance with the relevant redress provision, and (iii) give the parties to the appeal a copy of that decision in writing. (b) In this subsection “relevant redress provision” means— (i) in relation to an appeal from a decision of an adjudication officer undersection 41relating to a complaint under that section of a contravention of a provision of an enactment specified inPart 1or2ofSchedule 5, the provision of that enactment specified inPart 2ofSchedule 6, (ii) in relation to an appeal from a decision of an adjudication officer undersection 41relating to a dispute as to the entitlements of an employee under an enactment specified inPart 3ofSchedule 5, the provision of that enactment specified inPart 2ofSchedule 6and (iii) in relation to an appeal from a decision of an adjudication officer undersection 41relating to a complaint undersubsection (3)of that section, paragraph 2 of Schedule 2 to the Act of 2012. Deliberation. In the case ofDawn Country Meats Ltd v Hill DWT 141/ 2012,this Court observed; ‘In ade novoappeal a party is entitled to adduce any evidence they wish provided it is relevant and probative and so long as the nature of the claim remains the same as that dealt with at first instance. What is in issue in this case is not a question of adducing new evidence on some fact that was in issue at first instance. Rather, it is a case of the Claimant seeking to pursue an entirely new claim. If that claim were to be entertained by the Court it would be purporting to exercise an original jurisdiction that it does not have.’ The basis on which the Court offered this observation lay in the legislation as it then was and was explained by the Court as follows; ‘The scheme of the Act is to provide for the reference of a complaint alleging a contravention thereof to a Rights Commissioner and for an appeal by way of ade novohearing by the Court. Consequently for the purposes of the Act this Court is a Court of Appeal and it cannot exercise any jurisdiction other than an appellate jurisdiction. That jurisdiction is founded upon the decision of the Rights Commissioner.’ The Act referred to was not the Unfair Dismissals Act and, since that case, Rights Commissioners have been replaced by Adjudication Officers but, nonetheless, the principles enunciated remain unchanged. This Court’s jurisdiction under the Act is solely that of an appellate body from Decisions of Adjudication Officers, as per s. 44 of the Workplace Relations Act 2015 set out above. The Court has no jurisdiction to act as a court of first instance. In the case ofGalley Marine Enterprises Ltd v Abbassy DWT 2224,the Court referred to the Supreme Court judgment in ‘Fitzgibbon’ and noted that ‘..it is not permissible for an appellant to enlarge their claim on appeal’. The Protected Disclosures Act 2014 sets out, at some length, a process whereby employees are protected from retaliation by their employers for having made protected disclosures regarding relevant wrongdoing. The Court notes the total absence of any reference to a Protected Disclosure at all stages of the processing of the complaint regarding the Complainant’s dismissal, right up to the initial hearing of the instant case. Among the protections from retaliation due to having made a Protected Disclosure is the fact that a dismissal of an employee with less than 12 months’ service is covered by the Unfair Dismissals Act if it is deemed to have arisen because of a Protected Disclosure. It is, therefore, a matter of some legal significance. As a result, an employer who faces an accusation of having retaliated against an employee for having made a Protected Disclosure is entitled to the opportunity to defend themselves from such an accusation at first instance. The Complainant cannot rectify the failure to provide this opportunity by seeking to enlarge his claim upon appeal. As in the ‘Dawn Country Meats’ case, the Complainant is not seeking to adduce new evidence on some matter that was disputed before the AO. Rather, he is seeking to have the legal opportunities provided by the Protected Disclosure legislation to be applied to him. That is, by any definition, an entirely new claim and new claims must be heard at first instance. They cannot be introduced upon appeal. The issue for the Court is not whether the actions referred to by the Complainant amount to disclosures covered by the 2014 Act. The issue for the Court is whether it has jurisdiction to hear arguments on that matter. The Court is clear , for the reasons set out, that it does not. It would, therefore, be inappropriate for the Court, in summarising the arguments made, to refer to the specific nature of the actions that were argued by the Complainant to constitute acts covered by the 2014 Act, an Act which, by virtue of the Court’s role under s. 44 of the Workplace Relations Act, is not applicable to the appeal before the Court. The Court determines that it does not have jurisdiction to hear a claim under the Protected Disclosures Act and nor does it have jurisdiction to enlarge the scope of the appeal under the Unfair Dismissals Act to allow arguments, that were not made at first instance, that the Complainant was dismissed for having made Protected Disclosures, within the meaning of the Protected Disclosures Act. Summary of Complainant arguments regarding length of service. The Complainant disagrees with the Decision of the AO that he became an employee only in December 2019. The Complainant established the business in 2008 with two other individuals. He acted as Managing Director with the other members of the board employed as an Accountant and as a Chef. In December 2019, the Respondent acquired the company, transferring his shares to the Respondent company and was appointed General Manager. In August 2020 the Complainant was dismissed due to an alleged redundancy that is disputed. The AO, in determining the preliminary issue, decided that the Complainant commenced as an employee only in December 2019. In examining ‘mutuality of obligation’ as one of the criteria to assess employment status, the AO stated that there is no evidence that the Complainant took instruction from the other directors or from any other person. However, the Complainant always considered himself to be an employee as he received a salary, took holidays and sick leave and was provided with a laptop and company car and also because he made no decisions without consulting his co-directors. The AO further stated that there was no evidence that the Complainant was subordinate to his co-directors or that he was supervised in the manner in which he carried out his work. However, the Complainant’s position was contingent upon the authority and direction of other board members and he was under the thrall of those members so his position was one of employment. It is submitted that the AO erred in only considering the Revenue criteria for self-employment without considering the criteria used to assess if an individual is an employee. The typical characteristics of an employee: Is under the control of another person who directs them as how, when and where the work is to be carried out, Supplies labour only, Receives a fixed hourly/weekly/monthly wage, Cannot subcontract the work, Does not supply materials for the job, Does not provide equipment other than the small tools of the trade, Is not exposed to personal financial risk in carrying out the work, Does not assume any responsibility for investment and management in the business, Does not have the opportunity to profit from sound management in the scheduling of engagements or in the performance of tasks arising from the engagements, Works set hours or a given number of hours per week or month, Works for one person or for one business, Receives expense payments to cover subsistence and/or travel expenses Is entitled to sick pay or extra pay for overtime, Is obliged to perform work on a regular basis that the employer is obliged to offer to them(this is known as ‘mutuality of obligation’) Has their tax deducted from their wages through the PAYE system. It is submitted that the Complainant’s position encompassed much of the Revenue criteria listed for him to be considered an employee. InKarshan (Midlands) Limited t/a Dominos Pizza v Revenue Commissioners (2019) IEHC 894,O’ Connor J. observed that ‘classification needs a careful and flexible understanding of relationships’. Careful consideration of the relationship in this case proves that the Complainant’s relationship was that of an employee. The Examiner appointed under the Companies Act prior to the company being taken over by the present owner was very clear that the Complainant was among the employees of the company and the Court is provided with the relevant documentation as evidence of same, including an email from the Examiner to the Complainant that the jobs to be saved included the Complainant. Summary of Respondent arguments regarding length of service. The Complainant was an employee from 9 December 2019. He lacks the required service in s.2 of the Act. Under the Code of Practice on Employment Status, somebody who owns more than 50% of a company cannot be classed as an employee for PRSI purposes and is a Class S PRSI contributor as they are classed as self-employed. InReddy v Hypertrust Limited,the Employment Appeals Tribunal held that’ …the Tribunal do not believe that the claimants are employees but rather directors and shareholders with such control over the Respondent that (they) could not be considered employees’. The evidence produced regarding the view of the Examiner was not produced until May 2023, although it was in the possession of the Complainant for four years and the email referred to, in June 2022, post dates significantly the initiation of these proceedings. This evidence should not be allowed as evidence or, if it is, the Respondent should have the opportunity of cross examination. The applicable law. Unfair Dismissals Act. Exclusions. 2.—(1)Except in so far as any provision of this Act otherwise providesThis Act shall not apply in relation to any of the following persons: (a) an employee (other than a person referred to insection 4of this Act) who is dismissed, who, at the date of his dismissal, had less than one year’s continuous service with the employer who dismissed him. Deliberation. In most cases that come before this Court in which the Court is required to consider the employment status of a complainant, the issue is whether the complainant was engaged on a contract of service, thus as an employee, or on a contract for service, in other words as an outside contractor. The difference in this case is that it is not in dispute that the Complainant was a part owner of the relevant company from 2008 but the issue for the Court is to determine if he was also an employee. The two are not, of course, necessarily mutually exclusive as evidenced by the fact that many employees hold shares in their employing companies. However, it is axiomatic that employment law offers protections only to employees and that it is not the intention of the Act to provide protections to individuals who are not employees. If the Complainant was not an employee before December 2019, then he does not have the protections of the Act as he is excluded from same by s.2(1). A determination that a complainant is or is not protected by the Act cannot be taken lightly and requires considerable consideration by the Court. The traditional test for determining if an individual was an employee was to examine the extent of control.The earlier cases indicate that that the degree of control which the putative employer exercises in directing the work to be done is a decisive consideration. InPatrick Roche v Patrick Kelly and Co Limited[1969] IR 100 Walsh J said the following, at page 108: -
There is no evidence, as the AO noted quite correctly, that anybody controlled the work carried out by the Complainant prior to December 2019. However, this so called ‘control test’ is now regarded as less relevant. In modern employment relationships employees are often expected to exercise a high degree of initiative in the performance of the work that they are employed to perform. Moreover, skilled employees often know a great deal more about the work that they perform than the employer. Consequently, the degree of control exercised by the putative employer can no longer be regarded as conclusive. In more modern times the Courts have tended to apply what is referred to the entrepreneurial or mixed test. That test was set down in the English decision ofMarket Investigations v Minister of Social Security[1969] 2 Q.B 173. Here it was held that the Court should consider if the person was performing the service as a person in business on his or her own account. If the answer is no then the contract is one of service. That approach was adopted in this jurisdiction by the Supreme Court inHenry Denny & Sons v Minister for Social WelfareIR 34. Here Keane J (as he then was) quoted with approval the following passage from the judgement of Cook J inMarket Investigations:
It is clear from the decision of the High Court inMinister for Agriculture and Food v Barry and Ors[2009] 1 IR 215 that there is no single test that can be applied to decide all cases and that the facts of each case must be considered in terms of their overall significance. That case determined that a contract of service required ‘mutuality of obligation’, in that an employer is required to provide work for an employee who is required to perform it. Barry J. observed that if there is no mutuality of obligation, ‘..it is not necessary to go further’. No decisive evidence has been put to the Court to support an assertion that the Complainant was obliged to carry out work for an employer prior to December 2019. Indeed, it is impossible to imagine who would place such an obligation upon him as he was part owner with a substantial share and Managing Director of the company. The fact of the existence of a board does not alter the fact that the Complainant was a beneficial owner running the business day to day and with all the de facto authority to do so on his own behalf. The fact that the Complainant was classed by Revenue in that period as self employed is not determinative, of itself, and has to be viewed in the context of other ‘tests’. That is equally true of the Examiner’s classification of the Complainant as an employee, something that is, like PRSI classification, indicative but not a decisive determination to be followed blindly without regard to other factors, as set out above. The Court did take the Examiner’s view into account, as requested by the Complainant and despite the strong objections of the Respondent, who made the reasonable argument that the evidence concerned could have been, and should have been, produced much earlier in the process of determining this appeal. However, even having taken that evidence into account, the Court is satisfied that the Examiner’s opinion of the Complainant’s status, no matter how sincerely held, does not have greater weight than the outcome of the tests applied. For the sake of completeness the Court notes that, under the so called ‘contract test’, the Complainant never issued himself with a contract of employment that could help to establish his status in the relevant period as an employee. Taking all of the above into account, the Court cannot be satisfied that the Complainant was an employee prior to 9 December 2019. Unfortunately for him, it follows that when he lodged his complaint under the Act, he was covered by the exclusion under s.2 of the Act as set out above and he does not have the required standing to pursue a complaint under the Act. Accordingly, the Court lacks jurisdiction to hear the appeal. Determination. The Decision of the Adjudication Officer is upheld.
NOTE Enquiries concerning this Determination should be addressed to Clodagh O'Reilly, Court Secretary. |
