Employment Status Revised PDF

Relationship Terry Gory Video Employment Law At the end this module students should Be able to distinguish between a contract for and of services Explain and apply the means the courts have of distinguishing between an employee and subcontractor. Understand the main advantages of a contract...

Relationship Terry Gory Video Employment Law At the end this module students should Be able to distinguish between a contract for and of services Explain and apply the means the courts have of distinguishing between an employee and subcontractor. Understand the main advantages of a contract of services(employee) Text Book Chapter 1, Essentials of Employment Law CIPD UK position How to determine status Terry Gory Video Employment Law  Who is an employee? Important to establish who is an employee and who is an independent contractor? The term 'employee' is generally defined as 'a person who has entered into or works under (or, where the employment has ceased, entered into or worked under) a contract of employment;' A subcontractor is employed under a contract for services. A simple distinction was always the chauffeur and taxi driver Chauffeur is an employee and has a contract of service with his boss. The employer has ongoing legal responsibilities such as pay, conditions of employment Taxi Driver is an independent contractor who has a contract to provide services for his / her passenger His customers have no obligations apart from payment for the service This example was turned on it’s head with the UK ruling in UBER case- See later slides Why is the distinction between contract for and of services is important?  CIPD UK position  A person working under a contract of service(an employee) has certain advantages over those under a contract for services 1. Statutory protection 2. Vicarious Liability 3. Preference in Winding Up 4. Tax and PRSI 5. Industrial Relations- protected by Trade Union Act How do you decide who is an employee? There is no legislation or legal definition. Reference should be made to Case law – Decisions based on four established tests How to determine status  https://www.workplacerelations.ie/en/what_yo u_should_know/employment_types/ Key Indicators 1. Tax situation do they pay PAYE? 2. Written evidence of terms and intention of the parties. – However the courts will look at the power relationship between employer and worker. – A written document will not alter the nature of relationship but can help courts decide Key Deciding case Status of casual supermarket demonstrators Henry Denny &Sons(Irl)ltdT/A Kerry Foods V Minister for social Welfare 1 IR 34  Uniforms provided by the company  Supermarkets chosen by Kerry Foods  Contract which they signed stated no PAYE or PRSI would be deducted by Kerry foods  Stated ‘independent contractors’  Unfair dismissal act does not apply was stated in contract  Court looked at the totality of the situation.  Employees or Contractors? The principle of the Denny case “each case must beconsidered in the light of its particular facts and of the general principles which the courts have developed”. Tests Control test:  The degree of control the employer has over the employee dictates whether it is a contract of employment.  ‘ The principle and determining test is the master’s right to direct servants as what is to be done and how to do it’  Workers subject to high level of control may not be employees  Integration test  Is employee integrated into, or part of the employer’s business?  Contract of service: integral to the business.  Contract for services: work is only an accessory to the business.  Is the individual entitled to what the company is offering to employees?  Social and recreational clubs, training,pension scheme, Co.Car/ parking,holidays ,sick pay  Trade union dues collected at source etc. Enterprise Test/ Entrepreneurial test  Personal Service: Is the person performing the services on their own account?  Is there capital investment required?  Is there a risk of profit or loss?.  If yes to above it is a Contract for services regardless of the level of control Enterprise Economic Test Ready Mix Concrete ltd V M. of pensions and National insurance 2 QB 497  Contract of lorry driver stated he was self employed. He owned, insured and maintained his own lorry.He bought lorry on lease from a company associated with Ready-mix. Painted the lorry the company colours. He was obliged to wear the uniform and he drove for the company up to max permissable hours. Payment was per mile and he hired other people to drive for him. He had to obey all reasonable orders from the company.  McKenna J- Found he was not an employee as he owned the assets, obligation to provide personal service did not exist and he could make profit/ loss. Mixed Test/ reality test Court asks the following questions 1. Is there the provision of personal service? 2. Is there freedom to do other work? 3. Is work done in consideration of remuneration/pay? 4. Level of freedom of worker? 5. Is capital and equipment supplied by worker? 6. Is there a level of financial risk? 7. Is there an obligation to provide and accept work? 8. Is there mutuality of agreement 9. Is there substitution 10. Intentions of parties 11. Tax situation  Mixed Test McCurdy V Bayer Diagnostics Manufacturing Ltd., 1994  Doctor worked 21 years with Bayer also had own practice  Earning from Bayer declared as income of his practice no PAYE  Written document with specific duties and ‘ fulfil and obey all the lawful directions and orders of the company…’  Clause doctor would serve the company and be paid a salary  Company dismissed Dr. McCurdy and claimed he was never an employee  Is he an employee??? Apply the tests  Minister for Agriculture and Food v Barry IEHC 216; 1IR 215  Five temporary veterinary inspectors (TVI’s) were deemed to be employees and accordingly entitled to payments under the Redundancy Payments Acts and Minimum Notice Acts following the closure of the Galtee Meat Plant at Mitchelstown, County Cork.  On appeal to the High Court Edwards J found that the TVI’s were in fact independent contractors and looked at the “mutuality of obligation test” which was referred to in the Employment Appeals Tribunal decision.  It noted mutuality of obligation exists where the employer is obliged to provide work for the employee and the employee is obliged to perform that work as in normal employer/employee relationship.  The High Court agreed with the Department’s view that they had no control over the level of work available to the inspectors as this was within the control of Galtee.  Each time the inspectors were engaged they were entering a new contract which should be looked at on its own merits. The Gig Economy In general, gig workers are not considered employees under the current employment law provisions and are consequently excluded from the relevant suite of legislative protections. These conditions leave many gig workers financially insecure, working under difficult conditions and unable to better their positions through collective action or enforcing legislative protections. Gig Economy UK  Pimlico Plumbers  The most notable was the recent UK Supreme Court case of Pimlico Plumbers v Smith (  Mr Smith was allocated work by Pimlico Plumbers when it was available, though he had no guarantee of being offered work and he could refuse to accept any offer made to him. He also had a high level of control in relation to standard of work, how and where he worked.  He was laid off by the company and they asserted he was an independent contractor  Ultimately the supreme court held he was a ‘worker’  In essence, a hirer cannot create a situation where the worker is always on-hand (because the worker cannot attract other work due to the terms and conditions) but at arm's length for the purposes of statutory obligations  Irish courts have no ‘worker status’ Uk Uber case Uber Drivers- Uber drivers brought a claim for employment status. In the UK they were given the status of ‘Workers’ min wage and breaks hours of work. The decision was based on the fact the drivers were in fact under CONTROL when they signed on to the App. They were paid Uber rate, followed strict control and disciplinary process. Ireland has no status yet for ‘giggers’ Ireland High Court https://www.williamfry.com/knowledge/ employee-or-self-employed-high-court-delivers- first-judgment-on-employment-status-in-the-gig- economy/ Karshan (Midlands) Limited (t/a Dominos Pizza) v Revenue Commissioners IEHC 894 High Court appeal by Dominos of tax assessment Delivery workers were deemed by revenue to be employees and not independent contractors Dominos Workers https://www.rdj.ie/insights/contractor-or-employee- five-questions-for-determining-employment-status Dominoes appealed based on the interpretation of  mutuality of obligations;  substitution; integration;  terms of the written contract (the Concepts) These being the areas to be assessed under the guide to self assessment Dominos  Mutuality- The workers could not work anywhere else as they were required to fill out availability in advance  Substitution was through the ‘nomination’ of another ‘approved domino driver’ therefore wasn’t substitution  Integration- Drivers were seen as integral as they wore uniforms etc  Contract terms- as in Kerry Foods case the manner in which the contract was operated as opposed to the written terms was the key deciding factor  Held to be employees for tax purposed The Gig Economy Proposed EU Directive Propose a legal employment relationship between digital labour platforms and the worker. Issue is if the worker is controlled by the platform. The platform is deemed to exercise control over the worker when it meets two of the following criteria:  effectively determining or setting upper limits for the level of remuneration;  requiring the person performing platform work to respect specific binding rules with regard to appearance, conduct towards the recipient of the service or performance of the work;  supervising the performance of work or verifying the quality of the results of the work, including by electronic means;  effectively restricting the freedom, including through sanctions, to organise one's work, in particular the discretion to choose one's working hours or periods of absence, to accept or to refuse tasks or to use subcontractors or substitutes; and,  effectively restricting the possibility to build a client base or to perform work for any third party.