Complainant

Respondent

Anonymised Parties

A Solicitor

A Construction Consultancy Business

Representatives

Cillian McGovern, BL

Peter McInnes, Solicitor

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00057865-001

24/07/2023

The complainant is a qualified solicitor and she and AB were married in 2010.  Arising from the financial crash that started in 2008, a company that had been established by AB many years previously, went into liquidation.  In 2011, a new business was established, which, like the previous company, provides consultancy to construction projects and owners of apartment blocks and office buildings.  AB’s son, “MD,” is the managing director of this company, which is the respondent in this complaint.  AB’s job in the business is to price contracts. 

Around 2011, AB and the complainant moved from Dublin, where the business was based.  Their marriage ended in March 2020, and, at the time of this hearing in December 2023, they were in the process of a getting a divorce. 

In an opening submission on behalf of the respondent, Mr McInnes submitted that the only relationship the complainant had with the company was that she was married to AB and that she was on the payroll from July 2012 until May 2023.  Revenue documents submitted by the complainant show that, in 2021 her salary was €42,018 and in 2022, it was €41,494.  On the form she submitted to the WRC, she said that 80% of her wages were paid into her husband’s bank account and she received €200 net per week from the company.  There was no dispute about this at the hearing and Mr McInnes said that the payment of wages to the complainant was “solely for the purpose of facilitating the Complainant’s and her husband’s personal tax arrangements.”

It is the complainant’s case that she was an employee, working from home and providing legal advice to the company and supporting her husband in his role as pricing manager.  She claims that her employment ended on May 11th 2023, when the respondent ceased paying her €200 per week. 

It is the respondent’s case that the complainant was never employed by the company.  As a preliminary issue, I must determine if she has a right to bring a claim under the Unfair Dismissals Act 1977, and if her relationship with the company is consistent with the definition of an employee at s.1 of that Act.

Evidence of the Complainant

The complainant said that she and AB got married in 2010 and, in 2011, they moved from Dublin to a country town.  From then on, the complainant said that most of her work was by email or phone.  She said that she was in Dublin very rarely, although she called into the office occasionally to say “hello” but not to work.

From 2011, the complainant said that she was a 43% shareholder in the company.  She transferred the shares to her husband in 2015.  After their marriage ended in March 2020, she discovered that her husband had transferred the shares to his sons.

The complainant referred to a document from the Revenue Commissioners which was included in her book of papers for the hearing.  This shows that her start date with the company was July 9th 2012 and that her employment ceased on May 11th 2023.  For the year to May 11th 2023, the Revenue record shows that her gross cumulative pay was €14,307.20. 

On the form she submitted to the WRC, the complainant said that her annual salary was €52,000.  On the documents she submitted from Revenue for 2021 and 2022, her salary is stated to be €42,000.  When she was asked by Mr McGovern about this discrepancy, the complainant said that she spoke to her accountant about this and she was advised that the difference didn’t matter and that her husband “has the funds.”  She said that she didn’t mind about the discrepancy because she was happily married at the time.

The complainant referred to a copy of a contract of employment in the book of documents provided for the hearing of her complaint.  This shows that the company is located in an industrial estate in Dublin, and that the complainant worked from Monday to Friday from 9.00am until 4.30pm.  The contract indicates that her annual salary was €52,000.  The contract is not signed by the complainant or anyone from the respondent’s company, although the managing director’s name is typed on the signature line on the last page.  On that page, the contract is dated May 1st 2011.

The complainant said that she produced contracts for everyone in the company at that time, around 12 or 13 employees.  She said she has no idea how many are employed there now.

Initially, the complainant said that she did a “huge amount” of work, dealing with legacy issues from the previous company that went into liquidation.  She said that she was engaged with the liquidators and debtors and sourcing seed capital for the new business.  She said that she was involved in “everything to do with the office.”  She said that there were some days when there was little for her to do, and on other days, she did a lot.  She placed ads in trade magazines and she looked for a new premises.

The complainant described her work as “assisting my husband.”  She said that he did the pricing for contracts and she helped him to compose emails.  She said that most of the company’s employees are not in the office.  She named two employees who, she said are based in the office who she said “referred to me.”  She said that she had a supervisory and legal role and that she got involved in contract disputes. 

When her marriage ended in March 2020, the complainant said that she asked to be paid her full salary.  She said that her husband replied, “we’re not together anymore.”  She said that she offered to continue to work, but her husband left their home and she wasn’t given any work.

Concluding her direct evidence, the complainant said that she looked for temporary work after she was dismissed but she is 65 years old and she hasn’t been able to find an alternative job.  She said that she has had to rely on her children for financial support.

Cross-examining of the Complainant

In cross-examining, Mr McInnes referred to the complainant’s letter to MD on May 10th 2023 in which she asked for dividends on her shares and for her full wages.  The complainant said that she thought that MD and AB were joint managing directors.  She said that she looked up the Companies Registration Office and she discovered that her husband wasn’t a shareholder. 

Mr McInnes said that, if the complainant was an employee, MD was effectively her boss, but he never spoke to her about anything.  The complainant agreed that this was correct.  She said that MD and AB were on the phone to each other four or five times a day, and then her husband would speak to her and ask her “to do stuff.”

Mr McInnes referred to a letter the complainant sent to MD in November 2020, when she looked for a payment as a company shareholder.  There was no mention of wages in this letter.  The complainant replied that she was dealing with her husband regarding her wages and she expected him to speak to MD about this. 

Mr McInnes suggested to the complainant that she didn’t raise any concern about the issue of wages in November 2020 because she wasn’t concerned.  The complainant replied that six months later, she discovered that she wasn’t a shareholder.

Mr McInnes put it to the complainant that she knew how the wages situation worked from the day it started.  The complainant said that she is not disputing that she knew, but that it was very difficult when her husband left, and she couldn’t agree not to have access to any money.  She said that she gave her consent for her wages to be paid to into her husband’s account, but that when he left, she didn’t agree.  She said that she had to consider how she would live.

Asked about the reason for the delay from March 2020, when her husband left and she claims that she had no further work, until July 2023, when she submitted this complaint to the WRC, the complainant said that she was hoping for an informal outcome.  She said that Covid-19 also caused delays.

Mr McInnes put it to the complainant that she knew in 2020 that MD was the managing director of the company and it took her two and a half years to raise an issue about her employment.  The complainant said that this is “correct on paper,” and that she didn’t speak to MD, but to her husband.  She said that she found MD “not an easy person to deal with.”  She said it wasn’t a normal employer - employee relationship.

After March 2020, Mr McInnes said that the complainant received the same amount of money that she had been receiving before her husband left.  She received €200 in wages and €200 from her husband.  The complainant said that this wasn’t enough.  She said that she made it clear that she would continue to work, but she said that she didn’t know what was going on.  She said that she thought that the employees might have been laid off.

The complainant said that her contractually agreed salary was €52,000.  She said that she accepts that she didn’t get this amount and she is seeking the amount that is on her payslips.

Mr McInnes asked the complainant why she used a personal email address and not a company email address.  She said that she has “no idea.”  Mr McInnes said that, apart from one email from an employee in 2015, there is no evidence that the complainant was in contact with anyone in the company.  The complainant said that she didn’t directly communicate with the employees.  Mr McInnes suggested to the complainant that she didn’t know the names of the company’s employees and she replied, “when I was a shareholder, I knew.”  She said that she did whatever was required by her husband and that everything was done remotely and by telephone.  She agreed that when they moved from Dublin, “the dynamic changed.”  She said that nothing went on in the business that her husband didn’t tell her.

Mr McInnes asked the complainant if she accepts that the date of May 1st 2011 on the document which she claims is a contract of employment is not consistent with the start date of July 9th 2012 which is on the Revenue document.  The complainant said that she can’t explain why the July 9th 2012 date is on the Revenue record.  Mr McInnes suggested to the complainant that she was never issued with a contract of employment.  She replied that the contracts were done altogether at the same time and left in a file in the office.  She said that her copy isn’t signed but that the original version, which is in the office, is signed.  Mr McInnes said that the evidence of the respondent will be that there is no signed copy of a contract of employment for the complainant.

Mr McInnes referred to the fact that, from March 2020 until she submitted this complaint to the WRC in July 2023, the complainant did no work for the company.  The complainant replied that she thought that everyone was laid off and that she wasn’t given any work because of Covid-19.

The complainant agreed that, since March 2023, she receives €400 per week from her husband.  She described this as “spousal maintenance.”  She said that her financial loss is her full wages.  She said that she was never paid the correct amount.  When Mr McInnes pointed out that this situation persisted for 12 years, the complainant said that she has given evidence about the work she did and, if there was no work, she should have been made redundant.

Mr McInnes said that the respondent’s position is that the complainant “lent a hand” as the wife of AB.  He said that the complainant was involved in taxation, bankruptcy and liquidation issues related to a previous business, but that she was never employed.  The complainant replied that that is not true.

Since she has had no work with the respondent, the complainant said that she has had “chats with law firms” and that she registered with two recruitment agencies.  She said that she is “prejudiced by my age.”  She said that she would like to be reinstated with the respondent and that she will undertake any work that they give her.

Questions from the Adjudicator

At the conclusion of her evidence, I asked the complainant why she used an email address that has the word “legal” in the title.  She replied that AB asked her to work for his company.  She said that she used this email address to write to contractors that owed the company money.  She said that she thought this email address was useful because it gave the impression to people who owed money that the company had engaged a solicitor.

I asked the complainant who took over from her when, as she claims, she stopped working for the company in March 2020.  She said that she has no idea.  She said that most of the staff worked remotely but she got no calls during Covid-19.  She said that she has files and folders at home.

In his submission on behalf of the respondent, Mr McInnes said that, in her capacity as a solicitor, the complainant provided assistance when the respondent’s previous business was wound up and when the new business started up.   Mr McInnes said that this was done in the complainant’s capacity as the wife of AB.  He said that she sourced contracts and a staff handbook.  In 2012, the complainant was put on the company’s payroll.  From her gross wages of €800 per week, a net amount of €200 was paid into her bank account.  The remainder of her net pay was paid to her husband’s account.  She also received €200 per week from her husband.  Mr McInnes said that this persisted from 2012 until May 2023.  He said that, during this time, the complainant did not work for the company.  Mr McInnes acknowledged that the wages arrangement raises questions for the respondent.  

Mr McInnes said that the complainant was never in the company’s office in Dublin.  Throughout her marriage to AB, she lived with him in a different county.

In March 2020, the couple separated.  The complainant continued to receive €200 per week from the company.  On May 10th 2023, she wrote to her stepson, MD and asked to be paid what she claimed was her full salary plus arrears from March 2020 and dividends to which she claimed she was entitled as a shareholder.  Ms McInnes said that MD did not want to be involved in his father’s affairs and he immediately ceased the payment of €200 per week.

Mr McInnes submitted that there is no evidence that the complainant was in an employment relationship with the respondent.  Since March 2020, she has done no work, and he argued that she has done no work for many years.

Evidence of MD

MD said that he set up the company in 2011 with his father and his brother, who died in 2022.  They now have 70 employees, mostly working on construction sites.  Seven people work in the office.  The business is a “follow-on” from a company that his father established many years previously.  During the financial crash that started in 2008, the first company went into liquidation.  They then set up a new company.  MD said that the business has operated from the same premises for the last 30 years.  Although the complainant referred to sourcing a new premises, MD said that the business never moved and that they bought back their original premises from the bank.

MD said that he has been the managing director since day one of the new business.  He holds all the shares.  He described the structure of the business and the jobs of the seven employees who work in the office, including an office / accounts manager, a documents manager, a quantity surveyor and technical manager and a junior and senior commercial manager.  He said that the employees working in the company have service of between three and 12 years.  He said that he does all the pricing for contracts in Dublin and his father does pricing outside Dublin.  He said that he is not aware of any work that the complainant was involved in.  

When the new company was set up in 2011, MD said that, as a solicitor, the complainant gave them advice.  She sourced a handbook and employee contracts.  She dealt with a named employee, who was the office manager and gave her the contracts to issue to staff.  He said that he had no dealings with the complainant directly or indirectly.

MD said that, when he received the documents submitted by the complainant for this hearing, he saw the document for the first that she claims is her contract of employment.  He said that there is no file in the office in relation to the complainant.

MD said that his father asked him to set up the wages arrangement for him and the complainant.  He said that this was a tax issue and that the arrangement was agreed with them.  He said that he has had no interaction with the complainant over the last number of years, apart from the emails that she sent to him in November 2020 and May 2023.  He said that he doesn’t recall the complainant participating in any of the conversations he had with his father.  He said that a named person was the office manager and that the complainant had no involvement in the business.

Mr McInnes asked MD about the letter he received from the complainant on May 10th 2023, a copy of which was included in the complainant’s book of documents.  In the letter, the complainant asked for payment of wages of €41,657 gross and not €200 per week.  She claimed that she was entitled to a net payment of €93,771 in respect of wages not paid to her from March 2020 until March 2023.  MD said that he contacted his father and told him that any payments to the complainant must be from him and not from the company.  He instructed his accounts manager to remove the complainant from the payroll.

Concluding his direct evidence, MD said that he has no doubt that the complainant provided assistance to the company at the time it was set up and that she helped his father over the years.  He said that she has provided this help “not as an employee.”  He said that he and the complainant haven’t “crossed paths” for more than 10 years.

Asked why the payments to the complainant continued, MD said that this was because his father had asked him to make the payments.  He said that they would have continued if the complainant hadn’t sent him a demand for money.

Cross-examining of MD

Mr McGovern asked MD if his father was doing all the work he had to do on his own.  MD replied, “he can do quotes,” and that he’s been in the business for 50 years.

Asked by Mr McGovern what he means by a “tax arrangement” between the complainant and his father, MD said that his father’s wages were split to reduce his tax liability.

Mr McGovern asked MD if it would be fair to say that the complainant was a personal assistant, a “PA” to his father.  MD said that he had no relationship with the complainant and that he wouldn’t have known if she was doing work for his father.  He said that they now have a HR company on contract, but that they still use the contracts that the complainant introduced in 2011.

Evidence of AB

AB said that his job is to price work all over the country.  He said that, in 2011, the complainant sourced the contracts for the employees at the time and gave them to the person who was the office manager.  He said that she hadn’t got a job in the company.  At the beginning, when the first company went into liquidation, AB said that the complainant “helped me a lot” and that he couldn’t have gone through the bankruptcy without her.  He said she helped him because she was his wife.  Over time, she gave him advice.  On one occasion, a company that they were dealing with owed them €10,000 and she contacted that company with a view to getting the debt paid.

With regard to the wages arrangement, AB said that he and the complainant came up with the arrangement.  By splitting his wages into his and the complainant’s wages, his tax burden was reduced.

AB said that he stopped being a shareholder in 2015.  He is not a director of the company.

AB said that the complainant never complained about not having work and that they never had a discussion about her not being paid her wages.  He said that in May 2023, his son told him that he wasn’t going to be involved in his divorce and he ceased the weekly payment of €200 to the complainant.  AB said that he wasn’t happy about this and he would have preferred if the payment had continued.  He said that, since then, he has paid the complainant €400 per week, instead of the previous weekly payment of €400.  He said that he wouldn’t describe the complainant’s role as that of a personal assistant, but that she was very helpful if he had a problem.

Cross-examining of AB

Mr McGovern referred to the time when AB was ill and asked him if the complainant helped him with pricing work.  He said that she didn’t help with his work.   He said that the complainant provided advice to him when his previous business went into bankruptcy and, apart from seeking payment from the company that owned them €10,000, this is all the work that she did for the company.

AB said they kept no documents or files in their home and that he doesn’t know what the complainant did on her computer.  He said that she was paid €200 per week by the company and that the rest was his wages.

Concluding his submission for the respondent, Mr McInnes said that there is no evidence that the complainant had an employment relationship with the respondent.  The only evidence of any connection with the company is an email from a departing employee in 2015.  Mr McInnes said that the complainant did no work for the three years prior to July 2023, when she submitted this complaint, and that, she did no work for many years.  She had no relationship with the person who has been the managing director since 2011.  Mr McInnes said that the money that was paid to the complainant prior to May 2023 continues to be paid to her by her former husband.

Mr McInnes referred to the five-part test set out in the Supreme Court decision in The Revenue Commissioners v Karshan (Midlands) Limited, trading as Domino’s Pizza[1], and he argued that the complainant’s relationship with the company does not meet that that test.

On behalf of the complainant, Mr McGovern described the respondent as “a family-run business with intricacies.”  He said that the complainant added value to the business and was paid for doing so.  She acted in the capacity of a personal assistant to her husband.  She was “taken off the books” in May 2023 and was paid directly by her husband from then on.  Mr McGovern said that the contract submitted by the complainant deserves to be given the benefit of the doubt.

The Contract of Employment

At s.1 of the Unfair Dismissals Act 1977, under the heading, “Definitions,” an “employee” is stated to be,

…an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment…

At the hearing, the complainant provided a document which, she claimed, is a copy of her contract of employment dated May 1st 2011.  She said that this contract was issued to her when she sourced contracts for employees at the time the business was set up in 2011.  I have some concerns about the authenticity of this document for the following reasons:

1.      In the first instance, the document that the complainant claims is a copy of her contract is not signed by her or by the managing director, whose name is typed on the last page.  The complainant is a solicitor and it is my view that she must understand the importance of confirming an agreement to the terms of a contract with the signatures of both parties.  The fact that signatures are absent, leads me to question whether the document was ever put in front of the parties so that they could confirm their agreement.   

2.      On the first page, the date is given as “May 1st” and, on the last page, the date is given as “May 1st 2011.”  It seems to me that any reasonable person who was a party to such a contract would have ensured that the date was consistent on all the pages, even by inserting the date in handwriting.  The fact that this was not done, leads me to conclude that the complainant was uncertain of her “start date.”

3.      If the start date on the complainant’s contract is intended to be May 1st 2011, this is inconsistent with the start date on the documents that she submitted from the Revenue Commissioners, which is given as July 9th 2012.

4.      The contract states that the complainant’s place of work is “various construction sites within the Republic of Ireland… or Europe.”  The requirement to work on construction sites all over Ireland or in places in Europe is not consistent with the role that the complainant claims that she held of office manager / legal advisor.  It is my view that, if the complainant was issued with this contract, she would have ensured that this clause was changed to reflect the fact that her place of work was her home.

5.      Under the heading, “remuneration,” the contract states that the complainant’s annual salary is €52,000.  The documents that she provided from the Revenue Commissioners show that, in 2021 and 2022, she is recorded as having earned €42,000.  If the complainant earned €42,000 in 2021 and 2022, it is unlikely that she earned €52,000 in 2011.  It seems to me that the complainant was uncertain of the amount in wages that the respondent put through the payroll in her name.  Such naivety regarding one’s wages is not consistent with being an employee.

6.       I note also that one of the benefits in the contract of employment is membership of the Construction Workers’ Pension Scheme.  If, in accordance with the terms of this contract, the complainant was a member of the Construction Workers’ Pension Scheme, she provided no evidence to this effect.  Such evidence would have gone some way to confirm the authenticity of the document she claims was her contract of employment.

For the reasons I have set out above, I am satisfied that the document submitted by the complainant is not a copy of her contract of employment and I am further satisfied that she was not issued with a contract by the respondent.

The Reality of the Relationship

I have considered the evidence of the complainant and I am not satisfied that she has demonstrated, with any degree of persuasiveness, that she was an employee of the respondent.  I have reached this conclusion for the following reasons:

In her written submission in preparation for this hearing, the complainant presented information which is not correct.  She was mistaken with regard to the ownership of the company; she was incorrect when she said that her former husband was a director and she was wrong when she named two people who she said were employees.  These errors of fact show that, apart from her marriage to AB, who is an employee, the complainant was detached from the respondent’s business.

In her evidence, the complainant referred to work she did to support the previous business when it went into liquidation and the work she did to help to set up the new business in 2011.  In his evidence, AB stated that the complainant was of great assistance to him at this time.  His position is that she provided this assistance as his wife and not as an employee.  It is my view that this collaboration between the complainant and her husband was entirely normal in the context of a supportive marriage.  It is unreasonable and not grounded in the reality of the situation, to seek to re-frame this support as a contractual employment relationship.   

Apart from her use of an email to collect a debt, the complainant did not refer to any specific task or piece of work that she was involved in on a daily, weekly or any regular basis.  The complainant did not use the company’s email address and she was not in contact with any employee in the company.  The most recent communication she presented as evidence of her connection with staff was a farewell email from an employee in October 2015, who must have also worked in the company that was liquidated, because she said that she had worked for the business for the previous seven years.  This is the most recent date that the complainant has of evidence of a connection with another employee in the business, apart from her husband.

Although, since 2020, many employees have changed their working arrangements and some never go into their offices, remote working would have been very unusual between 2012 and 2020.  I do not accept that the complainant worked for the respondent from home for all this time. 

When she claims that she stopped working for the respondent in March 2020, the complainant said that she didn’t hand over her responsibilities to anyone, a situation which indicates to me that she had no responsibilities.  She said that she thought that everyone was laid off because of Covid-19.  She was uncertain about how the company managed during Covid-19.  If she held the role of “office manager and legal advisor,” she would have continued to work from home and connected with people remotely and by telephone.  It is likely that, if she was a legal advisor and office manager, the onset of the pandemic would have resulted in her being extremely busy, but this was not the case, and she accepted that, from March 2020, she did no work.

Mutuality of Obligation

Where there is a question about whether an individual is an employee, most of the precedents, including Karshan, concern the difference between a contract of service and a contract for service; that is, the difference between an employee and a self-employed contractor.  This is not the issue in question here.  The complainant argues plainly that she was an employee, in opposition to the respondent’s position that, apart from the support she provided at the start-up of the business in 2011, she did no work under any heading, but that she was on the payroll so that one of the principals could reduce his income tax liability.

The principle known as “mutuality of obligation” recognises the relationship between an employee and an employer as one where the employer provides work and directs how it is to be carried out and, in return for an agreed wage, the employee provides their skill and knowledge to do the work.    This reciprocal arrangement was described by the British House of Lords in Carmichael v National Power plc[2] as the “irreducible minimum obligation” between an employer and an employee.  In that case, Ms Carmichael was employed on a “casual as required basis” as a tour guide, but if she didn’t make herself available “when required,” there was no penalty.  She was determined not to be an employee because there was insufficient “mutuality of obligation” in the relationship. 

In the instant case, the respondent didn’t provide any work to the complainant, and she didn’t look for work.  She was not involved in the business on a day-to-day basis.  She never went to the office, she didn’t know how many were employed or the names of any of the employees and, on the date of this hearing in December 2023, she hadn’t spoken to the managing director for more than 10 years.  It is clear from her evidence that her involvement in the business was confined to the advice she gave at the start-up, her effort to have a debt repaid on some unknown date and her assistance to her husband with writing emails.  This degree of contribution, over a period of 11 years, is entirely insufficient to show that the complainant had an obligation to work for the respondent, or that the respondent was obliged to provide her with work.

In her argument that she was an employee, the complainant places considerable weight on the fact that, from July 2012 until May 2023, she was on the respondent’s payroll.  This is a reasonable argument which I must consider.  The complainant was registered with the Revenue Commissioners as an employee of the respondent’s; for all intents and purposes, she paid tax, PRSI and USC and she is, or was, eligible for the social welfare entitlements associated with being an employee.  In her evidence, she said that she was paid €200 net per week, and that the remainder of her net pay was paid into her husband’s bank account.  She said that she agreed to this arrangement when she was married but that, when her marriage ended, she needed her full salary.

Technically, it is irrelevant, in my view, which bank account the complainant’s wages were paid into.  The important fact is that she was not required to do any work in return for her wages, and that she colluded with the respondent to create a false impression with the Revenue Commissioners that she was an employee.  The fact that the respondent enrolled the complainant on its payroll to create a false impression that she was an employee does not demonstrate that it had an obligation to pay her wages.

Returning to the “irreducible minimum obligation” of an employer, on the one hand, to provide work in return for an agreed wage, and an employee on the other hand, to do the work, I find that, in the relationship between the complainant and the respondent, this obligation did not exist.

Conclusion

I have considered the evidence of the complainant regarding the question of her relationship with the respondent as an employee and I have examined the submissions presented on her behalf by Mr McGovern.  Based on there being no obligation on the complainant to do any work for the respondent, and no obligation on the respondent to provide her with work, I have concluded that she was not an employee and that she lacks the standing to have a complaint investigated under the Unfair Dismissals Act 1977. 

For the reasons I have set out above, I decide that this complaint is not well founded.

Definition of employee, s.1 Unfair Dismissals Act 1977