Complainant

Respondent

Parties

Igor  Codrean

WDL Contracts Ltd. (In Liquidation)

Representatives

  self

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00053292-001

15/10/2022

The complainant commenced employment on 14/06/2021 with the respondent.  He was paid €2,6000 per fortnight.  The respondent went into liquidation.  He was not paid for a number of weeks and is seeking payment of €7,718.00.  The complainant submitted his complaint to the Workplace Relations Commission (WRC) on 15/10/2022.

The respondent or a representative on their behalf did not attend the hearing and did not notify the WRC that they would not be attending.

The complainant did not receive any pay for eight weeks.  The initial company, WDL Contracts Ltd went into voluntary liquidation.  When he commenced employment the agreed rate of pay was €26.00 per hour and worked 50 hours per week.  The complainant made contact with the respondent was advised that “we will be in touch soon” but he did not receive any payment.  The complainant provided the hearing with a document from the respondent which shows that he is owed the sum of €7,718.83.  The complainant in evidence confirmed that this is correct amount.  The complainant was not issued with any contract of employment of any details in relation to his terms and conditions of employment.  The complainant provided the hearing with documentation which confirmed that the respondent deducted withholding tax and then left it to the complainant to sort out his tax affairs with the revenue.  It is clear that the respondent in this case told the complainant that he was a sub-contractor but did not put in place any confirmation of this.  The complainant does not speak English and through the interpreter he told the hearing that of all the employees working for the respondent only the three English speaking employees were paid.

The respondent did not attend the hearing.  Having reviewed the file I am satisfied that the respondent was notified on 04/04/2023 of the date, time and venue of the hearing. 

Given the lack of documentation in relation to the complainant’s employment status it is necessary to examine the complainant’s status with the respondent.  The question of a worker’s employment status is a mixed question of fact and law. There is a considerable body of jurisprudence both in the superior courts and in the Labour Court which has evolved of the years.  The leading authority continues to the judgement of the Supreme Court in Henry Denny & Sons v The Minister for Social Welfare.  This case identifies the approach adopted by the superior courts when required to determine issues of employment status.

In that case the Supreme Court adopted an approach which is usually referred to as the “mixed test” or “reality test”.  This approach looks at the complex and many variations of an employment relationship and requires a decision maker to take into account, but not limited to, the degree of control exercised by the party for whom the work is being done over the party doing the work, the level of integration of the latter into the former’s business, whether or not the party doing the work has the marks of an entrepreneur in the way that he or she carries out the work in question such that it can be said that he or she is in business of his own account.  The Supreme Court noted that the emphasis to be placed on any one or more of these factors was to be determined by the particular facts of the case, in the light of the applicable legal principles.  The Court also emphasised that while it should have regard to the terms of any written agreement in place between, the parties to an employment arrangement, the terms of any such agreement cannot be regarded as determinative of the true meaning of their relationship.

The complainant’s uncontested evidence in this case was that he provided personal service during the period of his engagement with the respondent.  He told the hearing that he did not have any business of his own.  At all times he was working under the control of the respondent, and he was paid a fixed hourly rate of pay.  He could not subcontract the work assigned to him and he only worked for the respondent.  His hours of work were set, and he did not provide any materials for the work or provide any equipment other that very small tools.  The complainant was unequivocal in his evidence that at all times he was under an obligation to work for the respondent.

The degree of control was set out in the case of Denny & Sons (Ireland) Ltd. V Minister for Social Welfare [1988] 1 IR 34.  Keane J stated:

“It is, accordingly, clear that, while each case must be determined in the light of its particular facts and circumstances, in general a person will be regarded as providing his or her services under a contract of services and not as an independent contractor where is or she is performing those services for another person and not for himself or herself.

The degree of control exercised over how the work is to be performed, although a factor to be taken into account is not decisive.  Therefore, the question of control, though not determinative, is a factor to be taken into consideration in the analysis”.

In this case there are a number of facts that suggest that the respondent exercised total control over the complainant.  The respondent dictated the terms of his engagement and set the hourly rate of pay.

The complainant was also obliged to undertake the work which was outlined by the respondent.  It is clear that the respondent exercised total control over the work done and the manner in which the work was to be done by the complainant.  Control of this nature is indicative of a contract of service.

The next test is what is referred to as the “integration test”.  In the case of Stevenson, Jordan and Harrison Ltd. V McDonald and Evans [1952] 1 TRL 101, Lord Denning stated:

“One feature which seems to run through the instances is that, under a contract of service a man is employed as a part of the business, whereas under a contract for services, his work, although done for the business is not integrated into it but is only assessor to it”.

In the case of Re Sunday Tribune Limited [1984] IR 505 Carroll J gave a clear description of the integration test:

“The test which emerges from the authorities seems to me, as Denning L J said, whether on the one had the employee is employed as part of the business and his work is an integral part of the business, or whether his work is not integrated into the business but is only accessory to it”.

In order to establish to what extent an individual who works for a business is integrated into that business, one must identify the core activity of the business.

Based on the uncontested evidence of the complainant he worked for a plastering company, and he worked as a plasterer for that company.  The respondent’s core business was the provision of plastering services, and this was the very activity which the complainant was engaged to perform.  The complainant’s evidence that he was not in a position to undertake additional work over and beyond that which he performed for the respondent was credible and convincing taking into account his uncontested evidence in relation to the hours he worked on a weekly basis for the respondent.

In conclusion I find that the complainant was the subject of total control by the respondent in relation to the manner in which he performed his work.  The complainant was required to give personal service in so far as he could not sub-contract the work.  I am also satisfied that the work done by the complainant was a constituent part of the respondent’s core business.  Accordingly, he was an integral part of that business.

The complainant was at all times engaged by the respondent under a contract of service.

The respondent introduced appearances to create an illusion that the complainant was a sub-contractor.  I find that this was a sham arrangement for the benefit of the respondent and to the detriment of the complainant.  At no stage did the respondent provide the complainant with any documentation or any information in relation to this employment.  This must be viewed against the background where the complainant did not speak English.  

The complainant has brought his complaint under the Payment of Wages Act 1991.

In his claim the complainant submitted that the respondent made an unlawful deduction from his wages.  Section 1 of the Payment of Wages Act, 1991 defines wages as:

“wages”, in relation to an employee, means any sums payable to the employee by the employer in connection with his employment, including –

(a)    Any fee, bonus or commission, or any holiday, sick or maternity pay, or any other emolument, referable to this employment, whether payable under his contract of employment or otherwise,”

Deductions made by an employer from the wages of an employee are set out in Section 5 of the Act as follows:

“5 (1) “An employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless –

(a)    The deduction (or payment) is required or authorised to be made by virtue of any statute or any instrument made under statute,

(b)    The deduction (or payment) is required or authorised to be made by virtue of a term of the employee’s contract of employment included in the contract before, and in force at the time of, the deduction or payment, or

(c)     In the case of a deduction, the employee has given his prior consent in writing to it.”

Having carefully considered the circumstances involved in the within case I am satisfied that the failure to pay the complainant any wages for eight weeks represent a deduction from his wages.

Taking into account the application of Section 5 (1) (a) as outlined above, I am satisfied that the deduction was not required or authorised by any statute or instrument under statute.

Taking into account the application of Section 5 (1) (b) as outlined above, I am satisfied that there was no written contract of employment or any other document which explicitly required or authorised a deduction from his wages or makes any reference to the likely circumstances in which such a deduction might occur.

Taking into account the application of Section 5 (1) (c) I am satisfied that the complainant did not give his prior consent in writing to the deduction from his wages.

In view of the above findings, I must now consider the issue of redress which is outlined in Section 6 (1) of the 1991 Act as follows:

6 (1) “A decision of an adjudication officer under Section 41 of the Workplace Relations Act 2015 in relation to a complaint of a contravention of Section 5 as respects a deduction made by an employer from the wages of an employee or the receipt from an employee by an employer of a payment, that the complaint is, in whole or in part, well founded as respects the deduction or payment shall include a direction to the employer to pay to the employee compensation of such amount (if any) as he considers reasonable in the circumstances not exceeding –

(a)    The net amount of the wages (after the making of any lawful deduction therefrom) that –

(i)                  in case the complaint related to a deduction, would have been paid to the employee in respect of the week immediately preceding the date of the deduction if the deduction had not been made, or

(ii)                the case the complaint related to a payment, were paid to the employee in respect of the week immediately preceding the date or payment, or

(b)    If the amount of the deduction or payment is greater than the amount referred to in paragraph (a), twice the former amount.”

While the complainant’s evidence was uncontested it would appear from the documentation which the complainant received from the respondent there is no dispute between the parties in relation to the actual sum which was deducted from the complainant’s wages.   In that context I find the sum of €7,718 to represent reasonable and appropriate compensation for the complainant.     

Having carefully considered all of the evidence adduced and based on the findings and conclusions detailed above, I find that the complainant’s complaint under the Payment of Wages Act, 1991 to be well founded and I direct the respondent to pay the complainant the sum of €7,718 gross.  This amount is subject to the normal statutory deductions in relation to pay.  This amount is to be paid no later than six weeks from the date of this determination.

Employee status.  Wages.

Complainant

Respondent

Parties

Igor  Codrean

Jt Maxwell Ltd.

Representatives

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00053292-001

15/10/2022

The complainant commenced employment on 14/06/2021 with the respondent.  He was paid €2,6000 per fortnight.  The respondent went into liquidation and the business was taken over by another company.  He was not paid for a number of weeks and is seeking payment of €7,718.00.  The complainant submitted his complaint to the Workplace Relations Commission (WRC) on 15/10/2022.

The respondent or a representative on their behalf did not attend the hearing and did not notify the WRC that they would not be attending.

The complainant did not receive any pay for eight weeks.  The initial company, WDL Contracts Ltd went into voluntary liquidation and the company was then taken over by another company who is the respondent.  The complainant was unsure if this was a liquidator.  When he commenced employment the agreed rate of pay was €26.00 per hour and worked 50 hours per week.  The complainant made contact with the respondent was advised that “we will be in touch soon” but he did not receive any payment.  The complainant provided the hearing with a document from the respondent which shows that he is owed the sum of €7,718.83.  The complainant in evidence confirmed that this is correct amount.  The complainant was not issued with any contract of employment of any details in relation to his terms and conditions of employment.  The complainant provided the hearing with documentation which confirmed that the respondent deducted withholding tax and then left it to the complainant to sort out his tax affairs with the revenue.  It is clear that the respondent in this case told the complainant that he was a sub-contractor but did not put in place any confirmation of this.  The complainant does not speak English and through the interpreter he told the hearing that of all the employees working for the respondent only the three English speaking employees were paid.

The respondent did not attend the hearing.  Having reviewed the file I am satisfied that the respondent was notified on 04/04/2023 of the date, time and venue of the hearing.  The contact person named on the correspondence (CD) is the same person that the complainant had been linking with to try and get payment.

Given the lack of documentation in relation to the complainant’s employment status it is necessary to examine the complainant’s status with the respondent.  The question of a worker’s employment status is a mixed question of fact and law. There is a considerable body of jurisprudence both in the superior courts and in the Labour Court which has evolved of the years.  The leading authority continues to the judgement of the Supreme Court in Henry Denny & Sons v The Minister for Social Welfare.  This case identifies the approach adopted by the superior courts when required to determine issues of employment status.

In that case the Supreme Court adopted an approach which is usually referred to as the “mixed test” or “reality test”.  This approach looks at the complex and many variations of an employment relationship and requires a decision maker to take into account, but not limited to, the degree of control exercised by the party for whom the work is being done over the party doing the work, the level of integration of the latter into the former’s business, whether or not the party doing the work has the marks of an entrepreneur in the way that he or she carries out the work in question such that it can be said that he or she is in business of his own account.  The Supreme Court noted that the emphasis to be placed on any one or more of these factors was to be determined by the particular facts of the case, in the light of the applicable legal principles.  The Court also emphasised that while it should have regard to the terms of any written agreement in place between, the parties to an employment arrangement, the terms of any such agreement cannot be regarded as determinative of the true meaning of their relationship.

The complainant’s uncontested evidence in this case was that he provided personal service during the period of his engagement with the respondent.  He told the hearing that he did not have any business of his own.  At all times he was working under the control of the respondent, and he was paid a fixed hourly rate of pay.  He could not subcontract the work assigned to him and he only worked for the respondent.  His hours of work were set, and he did not provide any materials for the work or provide any equipment other that very small tools.  The complainant was unequivocal in his evidence that at all times he was under an obligation to work for the respondent.

The degree of control was set out in the case of Denny & Sons (Ireland) Ltd. V Minister for Social Welfare [1988] 1 IR 34.  Keane J stated:

“It is, accordingly, clear that, while each case must be determined in the light of its particular facts and circumstances, in general a person will be regarded as providing his or her services under a contract of services and not as an independent contractor where is or she is performing those services for another person and not for himself or herself.

The degree of control exercised over how the work is to be performed, although a factor to be taken into account is not decisive.  Therefore, the question of control, though not determinative, is a factor to be taken into consideration in the analysis”.

In this case there are a number of facts that suggest that the respondent exercised total control over the complainant.  The respondent dictated the terms of his engagement and set the hourly rate of pay.

The complainant was also obliged to undertake the work which was outlined by the respondent.  It is clear that the respondent exercised total control over the work done and the manner in which the work was to be done by the complainant.  Control of this nature is indicative of a contract of service.

The next test is what is referred to as the “integration test”.  In the case of Stevenson, Jordan and Harrison Ltd. V McDonald and Evans [1952] 1 TRL 101, Lord Denning stated:

“One feature which seems to run through the instances is that, under a contract of service a man is employed as a part of the business, whereas under a contract for services, his work, although done for the business is not integrated into it but is only assessor to it”.

In the case of Re Sunday Tribune Limited [1984] IR 505 Carroll J gave a clear description of the integration test:

“The test which emerges from the authorities seems to me, as Denning L J said, whether on the one had the employee is employed as part of the business and his work is an integral part of the business, or whether his work is not integrated into the business but is only accessory to it”.

In order to establish to what extent an individual who works for a business is integrated into that business, one must identify the core activity of the business.

Based on the uncontested evidence of the complainant he worked for a plastering company, and he worked as a plasterer for that company.  The respondent’s core business was the provision of plastering services, and this was the very activity which the complainant was engaged to perform.  The complainant’s evidence that he was not in a position to undertake additional work over and beyond that which he performed for the respondent was credible and convincing taking into account his uncontested evidence in relation to the hours he worked on a weekly basis for the respondent.

In conclusion I find that the complainant was the subject of total control by the respondent in relation to the manner in which he performed his work.  The complainant was required to give personal service in so far as he could not sub-contract the work.  I am also satisfied that the work done by the complainant was a constituent part of the respondent’s core business.  Accordingly, he was an integral part of that business.

The complainant was at all times engaged by the respondent under a contract of service.

The respondent introduced appearances to create an illusion that the complainant was a sub-contractor.  I find that this was a sham arrangement for the benefit of the respondent and to the detriment of the complainant.  At no stage did the respondent provide the complainant with any documentation or any information in relation to this employment.  This must be viewed against the background where the complainant did not speak English.  

The complainant has brought his complaint under the Payment of Wages Act 1991.

In his claim the complainant submitted that the respondent made an unlawful deduction from his wages.  Section 1 of the Payment of Wages Act, 1991 defines wages as:

“wages”, in relation to an employee, means any sums payable to the employee by the employer in connection with his employment, including –

(a)    Any fee, bonus or commission, or any holiday, sick or maternity pay, or any other emolument, referable to this employment, whether payable under his contract of employment or otherwise,”

Deductions made by an employer from the wages of an employee are set out in Section 5 of the Act as follows:

“5 (1) “An employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless –

(a)    The deduction (or payment) is required or authorised to be made by virtue of any statute or any instrument made under statute,

(b)    The deduction (or payment) is required or authorised to be made by virtue of a term of the employee’s contract of employment included in the contract before, and in force at the time of, the deduction or payment, or

(c)     In the case of a deduction, the employee has given his prior consent in writing to it.”

Having carefully considered the circumstances involved in the within case I am satisfied that the failure to pay the complainant any wages for eight weeks represent a deduction from his wages.

Taking into account the application of Section 5 (1) (a) as outlined above, I am satisfied that the deduction was not required or authorised by any statute or instrument under statute.

Taking into account the application of Section 5 (1) (b) as outlined above, I am satisfied that there was no written contract of employment or any other document which explicitly required or authorisesed a deduction from his wages or makes any reference to the likely circumstances in which such a deduction might occur.

Taking into account the application of Section 5 (1) (c) I am satisfied that the complainant did not give his prior consent in writing to the deduction from his wages.

In view of the above findings, I must now consider the issue of redress which is outlined in Section 6 (1) of the 1991 Act as follows:

6 (1) “A decision of an adjudication officer under Section 41 of the Workplace Relations Act 2015 in relation to a complaint of a contravention of Section 5 as respects a deduction made by an employer from the wages of an employee or the receipt from an employee by an employer of a payment, that the complaint is, in whole or in part, well founded as respects the deduction or payment shall include a direction to the employer to pay to the employee compensation of such amount (if any) as he considers reasonable in the circumstances not exceeding –

(a)    The net amount of the wages (after the making of any lawful deduction therefrom) that –

(i)                  in case the complaint related to a deduction, would have been paid to the employee in respect of the week immediately preceding the date of the deduction if the deduction had not been made, or

(ii)                the case the complaint related to a payment, were paid to the employee in respect of the week immediately preceding the date or payment, or

(b)    If the amount of the deduction or payment is greater than the amount referred to in paragraph (a), twice the former amount.”

While the complainant’s evidence was uncontested it would appear from the documentation which the complainant received from the respondent there is no dispute between the parties in relation to the actual sum which was deducted from the complainant’s wages.   In that context I find the sum of €7,718 to represent reasonable and appropriate compensation for the complainant.     

Having carefully considered all of the evidence adduced and based on the findings and conclusions detailed above, I find that the complainant’s complaint under the Payment of Wages Act, 1991 to be well founded and I direct the respondent to pay the complainant the sum of €7,718 gross.  This amount is subject to the normal statutory deductions in relation to pay.  This amount is to be paid no later than six weeks from the date of this determination.

Employee status.  Wages.