ADJUDICATION OFFICER DECISION

Adjudication Reference:  ADJ-00053934

Parties:

Complaint

Date of Adjudication Hearing:  06/12/2024

Workplace Relations Commission Adjudication Officer:  Michael McEntee

Procedure:

In accordance with Section 41 of the Workplace Relations Act, 2015 and Section 6 of the Payment of Wages Act, 1991 following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.

In deference to the Supreme Court ruling, Zalewski v Ireland and the WRC [2021] IESC 24 on the 6th of April 2021 the Parties were informed in advance that the Hearing would normally be in Public, Testimony under Oath or Affirmation would be required and full cross examination of all witnesses would be provided for.

The required Oath / Affirmation was administered to all witnesses present. The legal peril of committing Perjury was explained to all parties.

No issue regarding confidentiality arose.

This matter was heard by way of a Virtual Hearing pursuant to the Civil Law and Criminal Law (Miscellaneous Provisions) Act 2020 and SI 359/20206, which designates the WRC as a body empowered to hold remote hearings.

Background:

1:        Opening legal Issue: Employment Status of Complainant

The Adjudicator undertook to consider this issue first in any Adjudication decision. The Oral Testimony from the Parties and their written Submissions would be studied closely. The Parties were advised that, while on first reading, the situation appeared to be straightforward. However, the issues of law involved were complex and would require careful consideration.

1:1:1       Respondent Arguments

The Respondent argued that the Complainant was not an “Employee” as defined in Section 1 Interpretation of the Payment of Wages Act,1991. The issue was legally the difference between a Contract OF Service (Employee/Employer Contract of employment) and FOR Service – self-employed business Contractor to Main Company.

The Respondent pointed to clause 17 of the Contract between the Parties, PSL (Aberdeen) Ltd (abbreviation to PSL) and Randridge International Ltd. (Abbreviated to RRI) 

Clause 17 of the Contract.

“The Sub Contractor as an independent limited Sub Contractor is not entitled to rights under employment law.”

It was argued that the relationship was not an Employer/Employee contract instead that of a commercial business relationship between a Company owned by the Self Employer Complainant to another more substantial Company, the Respondent in this case.

1:1:2      Complainant Arguments

The Complainant stated that he had been mostly familiar with the Sub Contractor to main Contractor business model - it had been his way of working for some considerable time.

He had accepted on entering the contract, without much complaint, that he was not an “Employee” as commonly understood.  The relationship with Randridge, the Respondent, had been uneventful for some four years.

 However, when he was left in late April 2024, with considerable outstanding unpaid payments, he had been forced to reconsider the relationship and hence his Payment of Wages Act,1991 claim.

He accepted that his claim under the Payment of Wages Act,1991 may not succeed but was seeking an Adjudication decision that would clarify matters. His relationship, in all matters, save his Personal Tax filings, had been effectively identical to that of a directly employed employee.

1:2       Adjudication Consideration

The Irish Supreme Court in Revenue Commissioners v Karshan Midlands (Ltd t/a Domino’s Pizza [2023] IESC 24 basically decided that the key question is

“Are the terns of the contract between the employer and the 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 , 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.”

In other words, evidence on the ground of the actual “day to day” working relationships is crucial. This needs to be looked at closely with the Contract being the main source of reference.

The Supreme Court noted in relation to written contracts.

“Where the agreement seeks to characterise the status of the parties, that description does not prevent the Court from determining what, as a matter of law the agreement actually is.”

1:2:1       Review of Evidence

Documents submitted in evidence demonstrated that the written contractual relationship was between PSL (Aberdeen) Ltd (abbreviation to PSL) and Randridge International Ltd. (Abbreviated to RRI)

At first reading this was an uneventful Contract FOR Service and not justiciable under the Payment of Wages Act,1991.

The Respondent pointed to the accepted Legal Tests and the recent Irish Supreme Court case of Revenue Commissioners v Karshan Midlands (Ltd t/a Domino’s Pizza [2023] IESC 24 where the issue of contracts FOR and OF service was comprehensively discussed.

The Respondent argued that the First Test – Exchange of Renumeration for Work – was between two Commercial entities based on submitted invoices. Payment was made to PSL (Aberdeen) Ltd and not to the Complainant personally. The issue of Substitution was raised – it was stated by the Complainant, in questioning, that a limited possibility was possible for PSL to substitute another person for the Complainant directly, but it was limited and had never arisen. Section 6 of the Contract refers.

The issue of Control was looked at – the Complainant was a senior Professional carrying out Document controller functions. Day to day micro control over how he achieved his work was not possible in this professional context.

However, reading the contract closely the degree of control over the Complainant was quite explicit.

Contract Sections 5, 25.2, 27 and 30 were of note.

Section 5

The Sub Contractor will make all reasonable attempts to work within an overall agreed deadline, will observe Health and Safety regulations and will comply with all reasonable operational requirements relating to working hours and security.

Other Control issues were also worthy of note (Clause 25.2– Daily Clocking In/Out on Employers’ Time Clocking system, (Clause 27).

Travel to remote sites was budgeted for by a Travel /Flight Allowance of €250 and a Food Allowance of €20 per day.

Clause 30 required that the “Sub Contractor provide a certificate of medical fitness if requested to do so.”  

In normal business operations these are requirements of employees. It would not be normal to ask a self-employed Contractor operating as a Business Company for a Certificate of Medical Fitness. Compensation for Travel / Food Allowance is a normal employee/employer characteristic.

In the Supreme court case, the issue of “Being in business as of their own right” and a Complainant “freedom” to undertake other work as possible was considered. Section 7, below, does not sit well with consideration of a degrees of freedom question that is helpful if determining if a Relationship is a Contact OF Service (An employee) of FOR Service – (a subcontractor).

Section 7

The Sub Contractor shall not undertake other contracts for Services for other parties at any time during or concurrency with his Contract for Services. The Sub Contractor shall undertake that it will not approach Company Customers and employees and /or participate in nay projects or provide any services outside the scope of this agreement during the currency of this agreement and for a period of twenty-four months thereafter.

(Underline by Adjudication Officer)

The Intent of the Parties is also a consideration – clearly from the start in July 2020 -it was accepted that it was a Contact FOR Service i.e., an Independent relationship. Clause 10 of the contract refers with Clause 17 excluding Employment Law rights. However, and as noted above and repeated below the Supreme Court stated

“Where the agreement seeks to characterise the status of the parties, that description does not prevent the Court from determining what, as a matter of law the agreement actually is.”

Taxation was paid by the Complainant and no holiday/Standard or Public were paid directly but were stated to have been “Included in the rate” Clause 26.

To a detached observer, such as the Adjudicator the “Inclusive Rate” is an item more commonly found in a standard Employee/Employer Contract.

1:3       Adjudication Conclusion

On balance having considering all the crucial direct day to day factors and conscious of the Supreme Court overview in Revenue Commissioners v Karshan Midlands( Ltd t/a Domino’s Pizza [2023] IESC 24 the Adjudication view is that, irrespective of the written clauses in the contract, the relationship on a day to day basis, the “Working Relationship” referenced by the Supreme Court was on, the balance  of all probabilities, that of Employee to Employer – A Contract Of Service .

Accordingly, the Payment of Wages complaint is justiciable.

2: Summary of Complainant’s Case:

3:        Summary of Respondent’s Case:

4:        Findings and Conclusions:

5:        Decision:

CA-00065925-001

Section 41 of the Workplace Relations Act 2015 andSection 6 of the Payment of Wages Act, 1991 Section 6 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under Schedule 6 of that Act.

Under Section 6(1) of the Payment of Wages Act,1991 the Adjudication decision is that the Complaint is “Well Founded”.

Redress of a Deduction, in this case €8,500 is warranted.

The sum of € 8,500 is to be paid to the Complainant within six weeks of the publication of this Adjudication decision.

Dated:   14th February 2025

Workplace Relations Commission Adjudication Officer:  Michael McEntee

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