Topic 1 - Employee Status (edited) PDF

Preview

Summary

Lecture notes with my own notes added in from De Burca Book & the teachers podcasts...

Description

Topic 1: Employee status Texts: any of the following  Law Society of Ireland, Employment Law (3rd, OUP, 2010), Chapter 1 (1.2)  Cox et al, Employment Law in Ireland, (Clarus Press, 2009), Part II (Chapter 3)  Daly & Doherty, Principles of Irish Employment Law, (Clarus Press, 2010) Chapter 3  Regan (ed.), Employment Law (Dublin, Tottel, 2009), Part II Chapter 2  Meenan, Employment Law (Dublin, Round Hall, 2014), p.24-45. Note: further reading will be specified in the course Worksheets. Classification of workers:  Employee: employed under contract of service or ‘contract of employment’ (legislation) – has a general obligation to serve.  Independent contractor: employed under a contract for services – specific duties only.  Agency workers, trainees and casual workers – employees or not? Significance:  Employees attract protection of legislation (minimum periods of service required in some instances)  Employees are preferential creditors if company is wound-up  Employer can be vicariously liable for actions of employees  Employees treated differently for taxation purposes  Employees entitled to social welfare entitlements if unemployed or subject to a ‘disability’ 

Note however, increasing protections for the self-employed (Report of the European Parliament on Atypical Contracts, Secured Professional Paths, Flexicurity and New Forms of Social Dialogue Report A7-0193/2010 July 2010; Council Directive 1986/613 Equal Treatment: Self-employment; Council Directive 2010/41 Equal Treatment: Self-employment).

Distinguishing an employee from an independent contractor: Barr J., in McAuliffe v Min. for Social Welfare [1995] 2 I.R. 238: ‘it is not possible to devise any hard and fast rule as to what constitutes a servant and what constitutes an independent contractor. Each case must be considered on its own special facts in the light of the broad guidelines which caselaw provides.’

Contractual label is not decisive

1

Henry Denny & Sons (Ireland) v. Minister for Social Welfare [1998] 1 IR 34 -important also, supermarket promos, the department said she was an employee and that prsi should be paid out of her wages. A tax issue. -SC said that this worker could not routinely hire people to work for her unless she had the employers consent. This went the issue of personal service. Strong control aspect. May look at one factor but it won’t be the only issue. Massey v Crown Life Assurance [1978] ICR 590 Young & Woods Ltd. v West [1980] IRLR 201

Considerations or ‘Tests’ for determining employee status: Control test (has the employer control over Employee) Yewens v Noakes (1880) 6 QBD 530 - was an English tax law case which addressed the question of the division between master and servant. - The Court of Appeal held that a clerk who earned £150 a year did not fall within the definition of servant. - Lord Justice Thesiger said it was obvious that a salaried clerk was not a "servant" any more than were "the manager of a bank, a foreman with high wages, persons in the position almost of gentlemen." Patrick Roche v Patrick Kelly Ltd. [1969] IR 100 - it was held that the right of the master to direct the servants as to what and how the work is to be done was a main factor in determining the relationship between the parties. - The case arose out of an injury suffered by an individual during the construction of a barn for a farmer. - The question was whether the injured party was an employee of the farmer. - The right to interfere with how the individual carried out their work and the fact that the farmer did not exercise control over the individual were important findings and became known as the control test.

Organisation/Integration test (how integrated is employee into workplace) Stevenson Jordan & Harrison Ltd. v McDonald & Evans [1952] 1 ILR 107 Whittaker v Minister of Pensions [1967] 1 QB 156 - where the artist's job was seen to be an integral part of the circus business and was seen to be an employee.

2

-

Examples of employees that fall under this category are surgeons, pilots etc whose work is an integral part of the business.

Re Sunday Tribune [1984] IR 505 - The difficulties in the control test were recognised where skilled workers were told what to do but not how to do it. - In this case two journalists were doing similar work. The distinction was in how the work was done by each journalist. It was held that one was an integral part of the Sunday Tribune while the other was a freelance contributor. - Used control in the starting point but moved away from it

Entrepreneurial test (who bears the financial risk) Market Investigations v Minister for Social Security [1969] 2 QB 173 - One way of deciding whether a person is self-employed is to ask whether he can be said to be running a business of his own. Different tests may have to be combined to produce an overall answer. - The case established some important factors in considering if a contract of or for service exists, namely: • Does the person performing the services supply his own equipment? • Can he hire his own helper(s)? • Does he carry financial risks and to what extent? • What opportunity does he have to make a profit? • To what extent does he carry the responsibility for investment / management? - Clearly, if the individual supplies the equipment, the staff, takes the risk and manages the business he is acting in the capacity of self-employed and not as employee. - Cooke J - ‘The fundamental test to be applied is this: “Is the person who has engaged himself to perform these services performing them as a person in business on his own account?” If the answer to that question is “yes” then the contract is a contract for services. If the answer is “no” then the contract is a contract of service’.

Henry Denny & Sons (Ireland) v. Minister for Social Welfare [1998] 1 IR 34 - various tests and criteria considered in determining the status of the contract. It introduced the economic test which examines if the individual is economically independent from the person requiring the work to be done. - The case related to the status of a supermarket demonstrator whose job was to offer free samples to shoppers. The demonstrator was paid by the supplier of the free samples. - Tests applied were • Control test – The demonstrator (she) was found to be under the control and direction of and could be dismissed by the employer. • Integration Test (Integral to the business) – she was an integral part of the supplier’s business.

3

• Own Business Test – she was found not to be in business. She could not profit from her services. • Economic Test – The engagement terms were consistent with those of a contract of service. She was not supplying equipment, or taking risk. -dennys sausages case Keane J stated that, ‘in general a person will be regarded as providing his or her services under a contract of service and not as an independent contractor where he or she is performing those services for another person and not for himself or herself’. Barry & Ors v. Dept of Agriculture and Food (RP237/2005) (2007) 4(3) IELJ 86 Mutuality of obligation test (English test, discriminates against agency or temporary workers) Nethermere v Gardiner [1984] IRLR 240 - The applicants (Mrs Taverna and Mrs Gardiner) sewed trouser flaps part-time in the factory of Nethermere Ltd. At different times they became pregnant and had an arrangement to work from home. Each worked 5 to 7 hours a day, and for all but 8 or 12 weeks a year. They used sewing machines provided by Nethermere Ltd. Their hours varied according to the employer's needs, they were paid according to the quantity of trouser flaps they made and they were not formally obliged to accept work. There was a dispute about an entitlement to holiday pay, and when the employer refused to give them the entitlement, they claimed they had been unfairly and constructively dismissed. - Ratio: The court considered what elements must be present to create a contract of employment - Dillon LJ said: ‘an arrangement under which there was never any obligation on the outworkers to do work or on the company to provide work could not be a contract of service’. - Case is cited by ready mix concrete Express & Echo Publications Ltd. v Tanton (Unreported CA, 11.3.1999) - Here you had a delivery driver and his contract said that he could hire. It was decided that the obligation of personal service was an essential product of employment, required a relationship of mutual trust between employees. Because of this clause, a substitute driver at his own expense, he was not an employee.

4

Mixed test Ready Mixed Concrete v Minister of Pensions [1968] 2 QB 497 (look at this case in depth) - is a UK labour law case concerning the definition of a contract of service, rather than a contract for services. - RMC was in the business of selling and delivering concrete. Previously they had hired a haulage contractor to deliver the concrete to the customers, but had terminated this contract. They created a system of contracting with individuals as owner/drivers, some of whom had previously worked directly for RMC (including Mr Latimer). - His contract bound him to purchase a delivery truck from a specified company under specified terms, and make this vehicle available to RMC at all times (52 weeks a year) for the efficient delivery of ready-mixed concrete within range of his base depot. When RMC applied to the UK government for a ruling on status for PAYE purposes, Mr Latimer was declared to be an employee. RMC appealed to the High Court, Queens bench. - MacKenna J reversed the original decision, and held that Mr Latimer was in fact a "small business man" and concluded that the contract was not of service, but of carriage. MacKenna J: ‘A contract of service exists if these three conditions are fulfilled. (i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service’.

Irish Position A mix of tests taking into account the entirety of the employment relationship, including control, levels of integration, employment of others, ability to make a profit. O' Coindealbhain (Inspector of Taxes) v Thomas B. Mooney [1990] 1 IR 442 - Control test first then look at the entrepreneurial test if you still don’t get an answer see is there an obligation of personal service. Blaney J – the answer was to be found in the terms of the contract, express and implied. 'In the context of the relationship it creates between the parties, the following appear to me to be the most important features of the contract:

5

(1) The respondent is not obliged to perform any of the work personally. (2) He is required to provide and furnish the office premises and employ a competent deputy and any clerical assistance which may be necessary. (3) His remuneration is not described as wages or salary; it is made up of allowances together with other payments related to the volume of work to be done. (4) The remuneration may be varied without the agreement of the respondent. (5) Clause 2 of the terms and conditions refer expressly to the remuneration and allowances covering the “provision” by the respondent of certain “facilities and services”, so part of the contract requires the provision of services by the respondent’. Phelan v Coillte Teo [1993] 1 IR 18 - During P’s employment, P suffered an injury from C, now C had worked with Coillte from 1968, over 20 years, in that time he had worked exclusively with Coillte, repaired machinery & tended forest, used his own tools, he got mileage and the hourly rate, hes not getting a fixed wage, did his own tax, used his own tools and got mileage and hourly wage & no holiday or pension rights. Coillte then claimed he wasn’t an employee. Is he on business on his own account? He also sends for a monthly invoice. Not really the characteristics of an employee, always has the option to go else where. How integrated is he? - It was said that C was a skilled tradesman, although control is not invariably a crucial factor. It is of major significance when the employer can direct the worker what to do. There would be no justification in holding an employer liable where they had no control whatsoever and would be fair to be held precariously liable. Strange decision.

Henry Denny & Sons (Ireland) v. Minister for Social Welfare [1998] 1 IR 34 Held: ‘…….In general, a person will be regarded as being employed under a contract of service and not as an independent contractor where he or she is performing services for another person and not for himself or herself. …That the degree of control exercised over how the work was to be performed, although a factor to be taken into account, was not decisive. The inference that the person was engaged in business on his or her own account can be more readily drawn from where he or she provided the necessary premises or equipment or some other form of investment, where he or she

6

employed others to assist in the business and where the profit which he or she derived from the business was dependent on the efficiency with which it is conducted by him or her’. The 'Alternative' Labour Force: Agency workers Minister for Labour v. PMPA Insurance Co. [1986] JISLW 215 - which deemed that the agency temp was not an employee of the hiring company and thus did not have the protection of legislation. - The Unfair Dismissals Amendment Act 1993 overturned this decision but only for the purposes of unfair dismissals and provided that the end hirer/user is to be considered as the employer for the purposes of the Unfair Dismissals Acts. So for the purpose of the Unfair Dismissals Acts the employer is the person for whom the agency worker works, i.e., the end user. Protected under:  Unfair Dismissals Acts 1977 – 2007 (employer is the person for whom the person works and not the agency)  Redundancy Payments Acts 1967-2007  Minimum Notice and Terms of Employment Acts 1973-2005  Organisation of Working Time Act 1997  Payment of Wages Act 1991  Maternity Protection Acts 1994-2004  Employment Equality Acts 1998-2011  Social Welfare (Miscellaneous Provisions) Act 2003 – person who pays the wages is the employer  EU Directive on Temporary Agency Work 2008/104/EC, implemented in Ireland by the Protection of Employees (Temporary Agency Work) Act 2012. Trainee workers Sr. Dolores v Min. Social Welfare [1962] IR 77 - Can’t find any facts to this? Wiltshire Police Authority v Wynne [1980] CA - A female cadet tried to claim unfair dismissal, which required proving that she was an employee. Although she had been on many attachments, was paid on a wage, could do no other work and had set hours. She was only undergoing and had a view to become a police officer so was not employed. - one of the leading English cases. Wynn dealt with a question as to whether a police cadet was an ‘employee’ under s30(1) of the Trade Union and Labour Relations Act 1974 and thereby enabled to make a claim for a remedy for unfair dismissal. In argument, it had been pointed out that in many instances the services rendered to employers are not very useful.

7

Casual workers Mailway (Southern) Ltd. v Willsher [1978] ICR 511 - find facts in a book there’s none of the web. Byrne v Gartan Ltd. UD 1048/83 - described as permanent casual. PAYE & PRSI were deducted from the wages. If she is unavailable too often they would stop ringing her to come in for shift work. She argued that she was an employee, she doesn’t offer work. They also do not have to give it to her. Mutual Obligation test comes into play here. Is she integral. More shifts/more earnings. The right to refuse work was meaningless. Integral part of the test doesn’t help either - Uber relates closely with this case, due to its arguably exploitative nature.

Notes: Atypical employee relationship Increased casualisation of the workforce Can you apply the same sort of tests in the traditional employment contracts as you can in temp & agency employment? Employment law is always playing catch up, but there is increased protection for agency workers. This new ‘Gig Economy’ such as Deliveroo and Uber drivers. Agency workers are historically problematic; were they employed by the agency, the service user or at all? Minister for Labour v PNPA -typist was hired for temp work. PNPA (the employer) didn’t comply with holiday work regulations. Most legislative protections only apply to employees. She worked in the same manner as her co-workers. Apply the control test. But her rights and duties wither quite different. Ms. Nulty (the typist) had no obligations to PNPA, just agency. Therefore she wasn’t an employee, rather it was a sue genesis contract. Agency doesn’t contract agent day to day, gap year in agency legislation. Subsequently a directive was introduced. Temp Agency work directive 2008, implemented in Ireland in 2012. Temp workers must have equal treatment from day one. Breaks, annual leave, pay, any employment equal measures, equal access to childcare facilities etc. Any availability of full time positions must also have notified to those temp workers. Trainee workers: - teachers, solicitors, apprentices, nurses. Practical on the job training. Sister delores v Minister for social welfare: student nurse case, she said she was an employee. Appealed to the high court. J Budd said she wasn’t an employee, cause of traineeship.

8...